The City of Chicago kicked off a campaign that brings together landlords and lenders to help landlords provide leniency to Chicago’s renters. Touting the program as the “first of its kind in the nation,” Chicago Mayor Lori Lightfoot unveiled the Chicago Housing Solidarity Pledge in a press conference on Wednesday, April 29. The voluntary, non-binding pledge asks landlords to implement flexible repayment periods and waive late payment fees for rent that doesn’t get paid on the due date. It also calls for landlords to come up with written plans allowing tenants to pay their missed rent payments over time. The pledge doesn’t call for suspending or canceling rent payments. Perhaps most importantly, the Pledge calls upon the banks that have extended mortgages to landlords to provide leniency to the landlords – so that the landlords have the financial and contractual freedom to extend repayment terms to their tenants.
Chicago landlords may wish to provide leniency to their tenants, but most would require the support of their mortgage holders to do so. Some commercial mortgages do not allow landlords to amend leases or delay rent collection without the mortgage holder’s approval. Landlords might also fear that without projected revenues from renters, they will be unable to pay their mortgages – and would risk foreclosure on properties. The Chicago Housing Solidarity Pledge makes it easier for landlords to provide rent relief by providing some leniency to landlords to make their own mortgage payments to the banks.
Financial institutions and major lenders are joined together with landlords under the pledge, with various banks such as Wintrust, Fifth Third, BMO Harris, Bank of America and Northern Trust signing onto measures that will grant property owners more slack. Participating lenders will suspend foreclosure filings and won’t report late mortgage payments to credit reporting agencies as part of their commitment to the Chicago Housing Solidarity Pledge. Some of these banks had initiated these measures prior to the city’s Solidarity Pledge. “The city can’t regulate banks,” said Chicago’s Department of Housing Commissioner Marisa Novara, “but [Chicago] can establish public accountability.” That may be the most realistic assessment of the pledge in the eyes of many renters who are in need of financial assistance during the economic crisis brought on by the Coronavirus pandemic.
Landlords who want to provide leniency to tenants during the Coronavirus crisis can check the complete list of financial institutions that have signed on to the pledge. If a landlord's mortgage holder is on the list then they should have enough flexibility to extend payment due dates for renters at their properties.
So, what can renters do with this knowledge? Renters may have already exhausted assistance from housing grants, applied for unemployment benefits or put their stimulus check to use. Now, renters can also ask landlords whether they, and their mortgage holder, have signed onto the city’s solidarity pledge. Landlords who have done so are more likely to provide a lease amendment that delays rent collection in the short term. Given that Governor J.B. Pritzker’s latest round of executive orders prevents landlords from initiating the eviction process for the month of May 2020 in Illinois, the immediate threat of losing shelter is minimized (the Governor’s order does not suspend renters’ obligations to pay the rent).
Renter households are better represented in Chicago than the rest of Illinois and many other metro areas across the nation. More than fifty percent of households in Chicago are occupied by renters. But renters have been “hit ten times harder than homeowners” by the current economic crisis according to Lightfoot.
Here is the complete list of institutions signed onto the Chicago Housing Solidarity Pledge as of May 1, 2020:
- Bank of America
- BMO Harris Bank
- Byline Bank
- Fifth Third Bank
- First Eagle Bank
- First Midwest Bank
- Northern Trust Bank
- US Bank
- Wintrust Bank
- Second Federal Credit Union
- Seaway Credit Union
- Lawyers Committee for Better Housing (LCBH)
- Chicagoland Apartment Association (CAA)
- Neighborhood Building Owners Alliance (NBOA)
- Chicago Association of REALTORS (CAR)