In March I wrote that I was against the shutdown of the Economy and businesses. The unemployment rate is 15%. This is from 4.4 % in March. The cure has proven to be far worse than the disease.Let me assure you that I hold all life sacred and the death of even one person is a tragedy. But the consequences of the shutdown will be a tragedy for years to come, not months. Many businesses will be gone forever. Major retail stores, which were already suffering will never come back. Cruise lines and airlines and hotels and Vegas will take at least a year if not longer to come back, if at all. Restaurants that survive will have to operate at much lower capacity which will make it almost impossible for them to meet their obligations of rent and all employees and other expenses. Many such restaurants will close their doors and forever shut down. Tenants who are now unemployed will rightfully not be able to pay rent. Hospitals are going bankrupt ! Big stores such as Macys and Bloomingdales and other big retailers will be gone. People will hold back from buying cars, homes and many other non essential products for a long while. Avoiding gatherings of 50 or more are going to be devastating for live sports events, concerts, movie theaters and shopping malls and conventions and gyms and theme parks and much much more ! Oil and gas are already destroyed worldwide !
If by some miracle the pandemic ends soon, because of a vaccine or because of having a short lifetime of its own or any other reason, it will be a blessing like never before. It will be a world wide life savior.
If not, here is what I recommend needs to be done to save the situation.
Residential tenants, who lost their jobs and are NOT receiving pay from the payroll protection plan, PPP, should be relieved of having to pay rent for at least three months.The rent should be deferred and paid later over some reasonable time period depending on the virus situation. Banks should defer mortgage payments for the same period of time for landlords, to be paid within a reasonable time or at the end of the loan term or an added three months to the term. The three months include April, May, June, 2020. Maybe this period should be “covered” by a government aid package.
Commercial tenants, retail and services such as restaurants and salons and all others who are CLOSED due to the virus should also be relieved of rent payment for three months to be deferred and paid later. This does not include those businesses who got rent payments from government aid. This applies to all tenants, industrial and office tenants who had to close.
Starting July first all businesses should be allowed to operate at FULL capacity with the necessary precautions and safe guards. ANYONE with symptoms should stay home until full recovery or no symptoms and the elderly and sick should rest and stay home until they are better or the virus has completely disappeared.
The most critical aid to restore the economy as fast as possible in the future is as follows: For those businesses that need to operate at “lower capacity” temporarily, starting May 15th, rents for tenants and mortgages for the landlords should be proportionately reduced. The banks would have to cooperate with the borrowers.
Property values will be drastically reduced, but hopefully only temporarily until the economy and businesses go back in full gear. Maybe in this “interim temporary period” the Federal and State governments can help the banks with some type of aid. They should also stop and forgive property taxes and other taxes for this period.
There is no other option.
If businesses cannot operate at full capacity and the landlords do not reduce rents the tenants, businesses, will just close and leave. If landlords do not collect full rents and the banks do not reduce or defer or forgive and cooperate with the landlord borrowers on the mortgages, the only other alternative is foreclosures which would be catastrophic for the banks and all parties involved. The same applies for residential properties. Everyone has to cooperate until this pandemic, this war is over.
With goodwill, hard work and full cooperation we shall overcome. Add to that the power of lots of prayers and trust in God !