- As the coronavirus costs more and more people their income, many are demanding a rent freeze for the month of April.
- Some cities, like New York and Los Angeles, where rent is especially high, have already placed a moratorium on evictions, but renters fear this will not help them out in the long run as bills stack up.
- Some politicians have also backed this idea, with Rep. Alexandria Ocasio-Cortez asking how it could be “reasonable” to expect people to pay rent right now without aide relief or a moratorium.
- Critics of this fear that a rent wipeout will have a ripple effect that could ultimately lead to a banking crisis.
What States Have Done So Far
As April first looms around the corner, many across the country are unsure how they will pay their rent. Widespread business closures have left millions without income, causing tenants and politicians to demand a rent freeze to protect people during these uncertain economic times.
Some cities and states have taken steps to protect renters and homeowners in some capacity, but activists fear it is not enough. Last week, New York Governor Andrew Cuomo suspended mortgage payments.
California Governor Gavin Newsom took similar measures Wednesday night, by getting four out of the five major U.S. banks to agree to delay mortgage payments and stop foreclosures for 90 days. Bank of America will do so for only 30 days.
But this still leaves renters, who are in many cases the most economically vulnerable, in a tricky position.
While cities like New York and Los Angeles have halted evictions, rent payments are still on the calendar. If they cannot be met, costs will only pile up as the pandemic continues, leading to potential evictions and debt further down the road. In Los Angeles, more than 60% of the population spends at least 30% of their income on rent. Some spend more than 50% of their paycheck on housing.
Calls to Cancel Rent
Because of these severe financial burdens, many have taken to Twitter with the hashtag #CancelRent to encourage leaders to forgive April rent payments.
“How can you possibly justify not giving rent relief right now?” one Twitter user asked Newsom. “Your orders forbid us from making income.”
“Deciding between life saving medications and food/rent is highly problematic,” said another.
Politicians on both a local and national scale have expressed their support as well. New York State Senator Mike Gianaris said he believes rent should be canceled for 90 days because of the virus.
Representative Alexandria Ocasio-Cortez also asked how it could be reasonable to expect people to pay bills and rent without aid or relief.
Franchises and Others Push for Leniency
Companies have also felt the economic weight of the coronavirus and have also gotten involved in the discussion of rent. The Cheesecake Factory announced on Wednesday that it would not be paying rent at any of its locations because the decline in restaurant traffic has been a severe blow to them.
“We have to take both into consideration in terms of understanding the nature of our rent obligations and with respect to managing our financial position,” they told Eater in a statement. “We have very strong, longstanding relationships with our landlords. We are certain that with their partnership, we will be able to work together to weather this storm in the appropriate manner.”
Online, this move was received pretty well. Many who have been calling for a rent freeze saw it as a strong example, with some even saying that the restaurant was now “leading the revolution.”
Other restaurants are also trying to be flexible about rent this month. McDonald’s, which does not have its locations pay rent to a local landlord, and rather acts as its own by collecting rent from its franchises itself, is considering deferring rent. Other chains that function this way, like Wendy’s, Taco Bell and Pizza Hut are deferring rent for their locations, according to Business Insider.
Outside of businesses, some landlords have decided to cut tenants some slack on their own, including Kristen Bell and Dax Shephard. The Hollywood couple owns and rents two properties in Los Angeles, and is waiving rent for their residents for the month of April. A representative for the two told Entertainment Tonight they informed tenants over the weekend.
“The message expressed empathy and encouragement, and promised to work with residents going forward as best as possible as everyone learns to adjust to the public health crisis,” the representative said.
Opposition to Rent Freeze
On the other side of this, there are people who do not see a rent strike as the solution to the economic issues created by the coronavirus. While some places have lifted mortgage payments or other kinds of debt relief, that is not the universal case, meaning that solving the rent problem could mean creating a mortgage one. A Bloomberg opinion piece suggested that freezing rent could “ignite a mortgage crisis.”
“There’s pretty much no way around people eventually paying what they owe, ideally with the help of the U.S. government, or else risk ‘turning a health crisis into a banking crisis,’” the piece said.
See what others are saying: (Business Insider) (Los Angeles Magazine) (KQED)
Donald Trump and Eldest Three Children Hit With Fraud Lawsuit From New York AG
AG Letitia James says that the former president “falsely inflated his net worth by billions of dollars to unjustly enrich himself.”
Lawsuit Filed Against Trump
New York Attorney General Letitia James announced on Wednesday that she filed a civil lawsuit against former president Donald Trump and his three eldest children over allegations that they fraudulently inflated asset valuations within the Trump Organization.
Donald Trump Jr., Eric Trump, and Ivanka Trump are all listed alongside their father in the lawsuit. Executives Jeffrey McConney and Allen Weisselberg, the latter of whom recently pled guilty to tax crimes, are also listed alongside other Trump businesses.
“Donald Trump, with the help of his children…and senior executives at the Trump Organization, falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things,” a press release announcing the lawsuit claimed.
The Attorney General’s office claims that between 2011 and 2021, Trump and the Trump Organization made 200 false and misleading claims about asset values on annual financial statements.
The lawsuit was filed Wednesday in a State Supreme Court in Manhattan.
“The complaint demonstrates that Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the system, thereby cheating all of us,” James said while announcing the complaint.
Her office is seeking to permanently ban Trump and his children from serving as an officer or director in any New York corporation and to bar Trump and his organization from entering into any New York real estate acquisitions for five years. The office is also seeking to recover $250 million in penalty payments, among other forms of relief.
The Office of the Attorney General has also referred the matter to the federal attorneys in New York and to the IRS for criminal investigation.
“There aren’t two sets of laws for people in this nation: former presidents must be held to the same standards as everyday Americans,” James added in a statement on social media.
“Trump’s crimes are not victimless,” she continued. “When the well-connected and powerful break the law to get more money than they are entitled to, it reduces resources available to working people, small businesses, and taxpayers.”
Trump Allegedly Inflated Key Assets
According to James’ release, Trump “made known through Mr. Weisselberg that he wanted his net worth on his statements to increase every year.”
“And the statements were the vehicle by which his net worth was fraudulently inflated by billions of dollars year after year,” the release continued.
Among the assets Trump and his organization allegedly inflated was the Trump Tower Triplex, an apartment Trump allegedly claimed was 30,000 square feet when it is just around 11,000 square feet. Because of its ballooned size, the property was valued at $327 million in 2015, roughly three times as much as the sole apartment in New York City to ever sell for over $100 million at the time.
For further comparison, the highest sale for a listing in Trump Tower at the time was only $16 million.
Trump also allegedly claimed Mar-a-Lago was valued as high as $739 million based on the “false premise” that the property could be developed and sold for residential use. The lawsuit claims that Trump actually signed deeds donating those rights, limiting the property’s use to a social club. James and her office claim its value would fall closer to $75 million.
Inflated Clauations Cannot Be “Excused”
“The inflated asset valuations in the Statements cannot be brushed aside or excused as merely the result of exaggeration or good faith estimation about which reasonable real estate professionals may differ,” the lawsuit states, adding that instead, they are the result of improper methodology intentionally meant to falsely boost Trump’s net worth.
The investigation into Trump’s alleged fraud began nearly three years ago, and the former president has repeatedly called it a politically motivated witch hunt. His attorney, Alina Habba, doubled down on that rhetoric in a statement Wednesday.
“Today’s filing is neither focused on the facts nor the law – rather, it is solely focused on advancing the Attorney General’s political agenda,” Habba said. “We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General’s meritless claims.”
For his part, Trump has blasted the lawsuit on Truth Social, calling James a “fraud” and a “crime-fighting disaster.”
Trump previously tried to impede the probe but was ultimately ordered by a judge to sit for a deposition and turn over subpoenaed documents. Reports say he pled the fifth hundreds of times during his deposition.
See what others are saying: (Bloomberg) (The Washington Post) (Reuters)
Hurricane Fiona Causes “Catastrophic” Damage in Puerto Rico, Leaving Many Without Power
While power has been restored to some, more than a million remain without it as continued rainfall, flooding, and landslides are expected to cause further damage across the island.
Hurricane Fiona Wreaks Havoc
Hurricane Fiona made landfall in Puerto Rico Sunday, bringing heavy rains, flooding, and landslides, while also knocking out power for the entire island and killing at least one person.
Photos and videos posted on social media show floodwaters consuming major streets and engulfing cars. Some pictures show an entire bridge flooded, making it impassible. Other footage shows a different bridge entirely uprooted and a metal barrier ripped away from the road and floating down a river of floodwater.
Officials have said conditions are still too dangerous to fully evaluate the extent of the crisis. In remarks to the public, Puerto Rico’s governor, Pedro Pierluisi, described the damage as “catastrophic.”
He asserted that the storm has been one of the most significant since Hurricane Maria — which hit the island almost exactly 5 years ago to the day — killing more than 3,000 people, leaving many without power for months, and causing destruction that the island is still recovering from.
Pierluisi noted that Puerto Rico has received over 30 inches of rain and that some areas have even gotten more rain than during Hurricane Maria. As of Monday afternoon, the National Gaurd has led 30 rescue operations so far, saving more than 1,000 stranded residents in 25 municipalities, according to the governor.
Pierluisi also added that more than 2,000 people were in the island’s 128 shelters, with officials further saying there is plenty of shelter space for those who need it. On Sunday, President Joe Biden approved an emergency declaration for Puerto Rico, which will allow federal agencies to coordinate disaster relief.
Continued Issues As Storm Rages On
Meanwhile, Puerto Rico’s water authority has confirmed that just over 70% of the island is still without water. According to poweroutage.us, more than 1.3 million customers were still without power as of Monday morning.
The power company LUMA also stated that electricity had been restored to around 100,000 customers over the course of Sunday night, though it previously warned that the full restoration of power could take several days as the storm has created “incredibly challenging” conditions.
While Hurricane Fiona has passed through Puerto Rico, having now made landfall in the Dominican Republic, officials and experts say that heavy rains and further flooding are still to be expected for the next few days.
The National Weather Service has warned that “life-threatening and catastrophic flooding” as well as mudslides and landslides are expected to continue across the island. As a result, Pierluisi has urged Puerto Ricans Monday to remain home and in shelters so that officials can continue to respond to others in need.
He also noted that the areas most impacted by the hurricane include the southern part of the island, the southwest, and the mountains.
After moving through the Dominican Republic, Hurricane Fiona is expected to head towards Turks and Caicos Tuesday. The National Hurricane Center has said that the storm will continue to grow and by Wednesday, it is set to become a major hurricane — which means a Category 3 or higher.
See what others are saying: (The New York Times) (The Washington Post) (CNN)
Government Aid Cut Child Poverty in Half During Pandemic, Data Shows
The reduction occurred similarly across geography, race, family type, and citizenship status.
Largest Drop in Half a Century
The United States’s child poverty rate sank to the lowest level on record last year, primarily thanks to pandemic relief measures and other government programs, according to an analysis of census data released Tuesday.
The Center on Budget and Policy Priorities analyzed data from the Census Bureau’s supplementary poverty measure, which accounts for safety net programs and tax credits as well as regional differences in the cost of living.
From around 11% in 2019, the percentage of kids living below the poverty line fell to 9.7% in 2020 and 5.2% the year after that.
In just two years, nearly 5.5 million kids were lifted from poverty, marking an almost 60% drop in the child poverty rate.
The Center’s researchers gave most credit to the federal government’s numerous interventions in the economy, from stimulus payments and the expanded child tax credit to eviction moratoriums and expanded unemployment insurance.
Without government intervention, poverty in 2020 would have experienced its second-largest recorded increase, the Center claimed, but instead, it underwent the largest single-year decline in over half a century.
Especially impactful was the expanded child tax credit, which sent up to $300 per child to households with children every month between July and December 2021.
According to the analysis, this policy alone pulled nearly three million kids out of poverty.
But the tax credit’s expansion expired at the end of the year despite Democrats’ efforts to prolong it with Biden’s signature Build Back Better bill, which was blocked by Sen. Joe Manchin (D-WV), who reportedly told colleagues he was concerned that families might use the payments to buy drugs.
Poverty Before COVID
Child poverty has fallen by 59% since 1993, when it sat at around 28%, according to another analysis published Sunday by The New York Times and the nonpartisan group Child Trends.
They found that the decline occurred across all 50 states and D.C., as well as in different levels of poverty.
It similarly affected nearly all subgroups of children, — white, Black, Asian and Hispanic, single-parent and two-parent, immigrant and non-immigrant.
The causes driving the pre-pandemic decline included general economic improvement — low unemployment, a higher labor force participation rate among single mothers, and growing state minimum wages — but the researchers pinned government welfare programs as the dominant factor.
They specifically mentioned the earned income tax credit, social security, unemployment insurance, and nutrition and housing assistance.
Despite the positive trend, more than eight million children still live below the poverty line, and that number excludes those who live just above it but still struggle to meet basic needs.
The current poverty line sits around $29,000 for a family of four in a location with typical living costs.
Moreover, disparities still persist, with Black and Latino children about three times as likely as their white peers to be poor.