Tomorrow is the first day of a new month. Specifically, the second 'first day' of a new month since COVID-19 took over much of our lives.
And while we'd like to make a bunch of "It's gonna be May" jokes as we might in other years, this May 1 has a wildly different feel for many Canadians.
In the past seven or so weeks since emergency measures were put in place, millions of Canadians have lost their jobs, millions more expect to, and more than one in four Canadians have applied for financial assistance from the federal government.
All of this continues to happen while we don't even have an idea of when things will start to return to (anywhere close) to 'normal.'
Which raises the question: Could May be the month we see a rental crisis?
April 1
In March, we heard many calls for the possibility of an April rent strike,; in actuality, some 75% of Canadian tenants ended up paying their April rent in full, while another 10% paid in part.
READ: Real Estate of the Union: Taking Stock of the Industry in the Time of COVID-19
According to John Dickie, president and CEO of the Canadian Federation of Apartment Associations (CFAA), during a 'normal' month approximately 300,000 landlords are short a "significant amount of rent" out of a total of 4,000,000 households in the private rental market. So somewhere around an average of 7.5%, which means that, while the April 1 total of 85% (full and part rent paid) is certainly significant, it was hardly the strike that was being called for.
The Time Between
In the weeks since the outbreak began in March, federal, provincial, and local governments have been called upon to help residential tenants whose sources of income have disappeared. The response has received mixed reviews, with some claiming the rollout was too slow to help, and others approving of the $2000 monthly CERB payments made available by the federal government.
On March 13, Prime Minister Justin Trudeau said, "No one should have to worry about paying rent, buying groceries, or additional child care because of COVID-19. We will help Canadians financially.” Despite this, the federal government has yet to announce any measures that specifically tackle residential rent-related issues.
On a provincial level, most premiers have frozen evictions until further notice, including in Ontario, and some have suspended rent increases. But so far only BC has implemented a temporary rent supplement of up to $500 a month (paid to landlords) to help support renters.
READ: What Will Toronto’s Real Estate Industry Look Like in a Post-COVID World?
In the meantime, since his March 13 statement, the Trudeau's message has shifted. Rather than supplying direct rent-relief (which he says is up to the provinces), his government is now reminding Canadians to use their Canadian Emergency Response Benefit (CERB) money to pay for bills, including rent, during the pandemic.
“These are meant to replace income that Canadians won’t have coming in over the course of this economic slowdown and that can be used for rent, for groceries, for a range of things,” Trudeau said.
Since the CERB opened to the public last month, nearly 10 million Canadians have already applied to receive their weekly payment, amounting to $24.25 billion. Those not receiving the CERB may qualify for EI, or could perhaps be covered through the Canada Emergency Wage Subsidy (CEWS), which provides eligible employers with a subsidy of 75% of an employee’s wages for up to 12 weeks (up to $874 per week). Even with this support, many will still be unable to afford their upcoming rent.
Consider this: the average rent of a new one-bedroom apartment in Toronto is currently $2,250 a month. Someone living on their own in Toronto who recently lost their job due to COVID-19 and is now relying on the CERB to make ends meet still will not be in a position to pay their rent.
Expensive one-bedroom in Toronto or not, the reality for millions of Canadians right now is that there simply isn't enough money to cover all their bases.
May 1
In the lead up to the new month, tenant advocates and housings groups have been sounding the alarm that an increasing number of renters will not be able to pay rent on May 1. ACORN Canada recently released the results of its “State of renters during COVID-19” survey, which included responses from more than 1,100 tenants across the country. The results paint a grim picture of tenants’ ability to pay May rent.
Even with the government's financial support, Canadians are falling through the cracks. The survey found that while 70% of respondents have been impacted financially by COVID-19, only 42% of people actually qualify for CERB or EI. What's more, almost 35% of tenants say they don’t have enough money to pay the rent on May 1, while 15% of respondents say they have already been threatened with eviction if rent is not paid.
READ: OFL Calling for $2,500 per Month Rent Relief from Ford Government
While millions of Canadians are currently without work, most are now receiving some form of financial support, which is why April's potential 'rental crisis' was adverted, and nearly 85% of Canadian tenants paid at least a portion last month's rent, says Dickie.
This is coupled with the fact that there are a number of groups that have not been financially disadvantaged by COVID-19.
According to Dickie, the groups that haven’t been hurt financially include people working for governments; people working for government-funded organizations (such as hospitals, nursing homes, public schools, colleges or universities); people working in essential businesses (such as food retailers, drug stores); people working full hours from home; and retired people.
Dickie says these factors that kept rent payments at a reasonably good level in April will still apply in May.
Looking at the new month, Dickie says, "to be completely safe, I would suggest that if 85% of people were able to pay a portion of their rent in April, this number could sit between 80 and 90% in May."
"I'm cautiously optimistic about May, for the most part," says Dickie. "The CFAA will continue to encourage federal and provincial governments to provide rent assistance or subsidies to those that the CERB doesn’t work for."
For those who are struggling financially, Dickie says it's best to start a conversation about your current situation with your landlord so you can come up with a feasible solution — whether that entails paying a portion of your rent with your CERB money now and then the rest later on, rather than not paying altogether and having to deal with a much bigger expense at the end of this.
Locally, with less than 24 hours to go, it remains the City of Toronto's position to simply hope landlords and tenants work it out:
Which is another reminder that even with a full month to consider and implement strategies for both tenants and landlords alike, absolutely nothing has changed.
So, will May end up being the month we remember for its rental crisis? We won't have to wait long to find out – it's gonna be May tomorrow.
