2020 has been a challenging year for property managers, as the COVID-19 pandemic has put a considerable financial strain on both property managers and their tenants. The U.S. has lost roughly 22 million jobs due to the pandemic, and less than half of those jobs have been recouped.[i] This can put a potential strain on the tenant-property manager relationship, as renters have often been in a position where they could not pay rent and managers actions were restricted by the CDC’s eviction moratorium.[ii]
While everyone has been affected by the pandemic in some way, one group that has faced some of the greatest financial challenges are millennials, which encompasses those born between 1981 and 1996. According to a recent survey, 30% of millennials have suffered pay cuts or lost income due to COVID-19 and the economic recession, and this is already following the Great Recession of 2007.[iii]
Property managers need to be aware of the unique challenges that their millennial renters are facing and take steps to manage their relationships with them during the pandemic.
[i] Minkin, R., Bennett, J., &; Parker, K. (2020, September 24). “Economic Fallout From COVID-19 Continues To Hit Lower-Income Americans the Hardest.” Pew Social Trends. Retrieved from https://www.pewsocialtrends.org/2020/09/24/economic-fallout-from-covid-19-continues-to-hit-lower-income-americans-the-hardest/
[ii] See our recent series of blog posts on the eviction moratorium, starting with COVID-19 and the Eviction Moratorium: Part One – Stimulus Bills, found here: http://iicarr.com/2020/09/covid-19-and-the-eviction-moratorium-part-one-stimulus-bills/
The Millennial Situation
First, it’s important to consider that millennials have been hesitant to rent a home in the first place. A recent survey from TD Ameritrade found that half of young millennials plan to move back with their parents for at least a year after they finish college, largely due to the financial strain of student loan debts. [i] These debts have caused many to delay making major life decisions: nearly 30% of young millennials will delay moving out of their parents’ home, while only 47% are planning on buying a home.[ii]
Additionally, research continually shows us that the millennial generation is marrying older and having children later.[iii] Millennials are also putting off building families of their own in order to focus more on education, career success, and life experiences before they settle down. The result is that many of the milestones that typically prompt people to settle down are being delayed. It has been said that they are “the generation that doesn’t own, but rents; holds down jobs, not careers; and pays off student loans, not mortgages.”[iv]
[i] Friedman, Z. (2019, June 06). 50% Of Millennials Are Moving Back Home With Their Parents After College. Forbes. Retrieved from https://www.forbes.com/sites/zackfriedman/2019/06/06/millennials-move-back-home-college/
[ii] Friedman, Z.
[iii] Greenberg Traurig, LLP. (2017, August 27). Millennials Need Estate Plans Too. The National Law Review. Retrieved from https://www.natlawreview.com/article/millennials-need-estate-plans-too/
[iv] Kearns, M. (2020, March 20). How the Coronavirus Pandemic Could Come to Define the Millennial Generation. National Review. Retrieved from https://www.nationalreview.com/2020/03/how-the-coronavirus-pandemic-could-come-to-define-the-millennial-generation/
Millennials During the COVID-19 Pandemic
Most millennials right now are looking for shelter and safety, there isn’t much of a guarantee for that when renting a property. On top of this, the uncertainty, expense, and chaos of the pandemic can make renting unappealing to those who weren’t already doing so before the pandemic began. There are also a number of benefits that come from living at home that are especially important during these difficult times, including less responsibility, better mental health support, and the presence of loved ones during an unprecedented time.[i]
All of this means that property managers should expect less business and reliability from both current and potential millennial renters, as along with the social and economic difficulties brought by COVID-19, millennials were already struggling under their own financial constraints. There is a risk then that some millennial tenants who have not already opted to move back home “will refuse, or be unable, to pay rent and other obligations under their leases.”[ii]
[i] Laneri, R.
[ii] Tierney, J. E., IV, &; Van Someren, M. (2020, April 20). Strategies for Landlords in Dealing with Tenants in Light of COVID-19. The National Law Review. Retrieved from https://www.natlawreview.com/article/strategies-landlords-dealing-tenants-light-covid-19/
Addressing The Challenges
Even during the best of times, a property manager’s financial situation is often inseparable from that of their tenants. As such, property managers should aim to be empathetic and understanding towards millennials renters and their unique situation, negotiating with them to ensure that both parties’ needs are being met.
In our next blog, we’ll discuss how property managers can work with their millennial renters in order to prevent financial or legal problems before they happen.