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Upper Valley landlords, tenants look to May 1 with trepidation

Valley News Business Writer
Published: 4/24/2020 9:50:19 PM
Modified: 4/26/2020 1:09:46 PM

LEBANON — Rent is due next Friday.

Normally, the first day of each month is little more than an annoying reminder on the calendar that the landlord expects a check.

Not anymore. May 1 will be a day that millions of unemployed people around the country — and thousands in the Upper Valley — will be worrying about whether they can afford to pay for their housing after losing their jobs to the coronavirus shutdown.

Housing costs in northern New England take a big chunk out of a person’s paycheck: In New Hampshire, nearly half of all households pay more than 30% of their income for rent while Vermont is the 16th most expensive state in the country for renters.

At the same time, a record number of Twin State residents are out of work. The numbers are increasing weekly, but so far about 125,000 residents, representing 18.5% of the workforce, have filed for unemployment in New Hampshire, and 71,000 have filed in Vermont, representing 20.7% of the workforce.

And the true numbers of non-working people are even higher, as thousands of self-employed residents are either ineligible or severely hampered in their ability to seek aid.

Property managers are beginning see what is to come as tenants who are out of work stretch their unemployment checks and federal stimulus money to make ends meet.

River Valley Property Management recently sent a letter to the renters of the approximately 300 apartments it manages in the Windsor and Springfield, Vt., area. The letter informed tenants that, in light of economic hardship many are experiencing, landlords have agreed to a variety of relief measures, including suspension of interest and penalties for late payment. And if a need can be demonstrated, “We can work with you on a case by case basis to consider other options,” the letter says.

Mike Cammock, owner of River Valley Property Management, said he received 50 replies from tenants, and of those, 26 have needed to delay rental payments this month. He expects those numbers to increase dramatically in the weeks ahead.

“We’re expecting the real rental payment drop-off will happen in May and June. The shutdown didn’t initiate until late March and most of our tenants had already covered April rents from their March paychecks,” said Cammock, who also noted that, like himself, many of his tenants are “working-class and middle-class people.”

Financially struggling renters needn’t immediately panic about an unrelenting landlord threatening eviction, however. Both New Hampshire and Vermont, as part of their governors’ stay-at-home directives, have put evictions on hold until the emergency orders are lifted.

The New Hampshire Housing Finance Authority, which administers a federally funded housing assistance program, has seen an “uptick in inquiries” about its voucher program, according to Grace Lessner, public information manager, although the department did not have specific numbers — and the waitlist is at least seven years long.

“Anecdotally, we have heard from property owners who we work with that about 15% to 30% of their tenants have indicated they were not able to pay all or part of their rent at the beginning of April,” Lessner said via email.

The nonprofit Twin Pines Housing Trust oversees a portfolio of 500 rental housing units, 60% of which are in New Hampshire and 40% in Vermont.

Renters in approximately half the units receive rental assistance of some kind, according to executive director Andrew Winter, while most others are in below-market rate units.

“We’ve reached out to all of our tenants and while I don’t have exact numbers we know (job) cutbacks have been significant, whether it’s someone working in retail and is now unemployed or someone who is working and has gone from 30 hours a week down to 10,” Winter said.

“When a tenant has trouble with rent we first try to see about rental assistance,” Winter noted.

If they are still having difficulties with rent, Twin Pines may “enter into a payment plan,” he said.

Winter noted that “the numbers weren’t so bad in April, but we expect them to be worse in May and June depending on how fast people receive unemployment and their federal payment.”

Dartmouth College, the largest landlord in Hanover, is working with residential graduate school tenants “on an individual basis to adjust lease terms or forgive monthly rent relevant to their circumstances,” according to Dartmouth spokeswoman Diana Lawrence.

The college also owns many of the commercial buildings in downtown Hanover, leased for shop space to small retailers, for whom it has “agreed to forgive their April and May base rents so they could focus on maintaining their businesses,” Lawrence said in an email.

That amounts to $100,000 per month in waived rent to commercial tenants, she said, as the college is “committed to supporting our tenants through these challenging times and helping to maintain the viability of downtown Hanover.”

Depending on how long the shutdown for non-essential businesses remains in effect, Dartmouth “will consider future rent abatement if circumstances require it,” Lawrence said.

With all but nonessential businesses closed, commercial property owners are taking a big hit as their tenants struggle to pay rent. Inevitably, some are making adjustments.

Jim Rubens, owner of the Hanover Park building on Lebanon Street, said he has “given up three-quarters of the revenue for April” from the downtown Hanover building, whose tenants include Han Fusion and Base Camp restaurants and a showroom for furniture maker Pompanoosuc Mills.

“We have abatements and deferrals on a case-by-case basis relative to each tenant’s circumstances. We want all our tenants to make it through this,” Rubens said. “But it’s painful. We’re taking it on the chin like everyone else.”

But what really worries Hanover business people is not so much the now written-off second quarter but what happens in the summer and fall.

Downtown Hanover was just beginning to see a recovery in retail with several new businesses opening recently to fill long-vacant storefronts when the virus abruptly closed them.

“It’s going to be a very bleak and hairy summer,” predicted Jay Campion, who owns two landmark downtown buildings on South Main Street in which he leases spaces to “a couple dozen” commercial tenants. With the college suspending in-person classes for both the spring and summer terms and the influx of tourists expected to dwindle, “I’m just hoping my tenants can hang on,” he said.

“I’m not concerned where we are now. I’m concerned about where we are now and when the kids come back in September,” Campion said. “Presumably.”

John Lippman can be reached at jlippman@ vnews.com.

Clarification

Dartmouth College has agreed to forgive base rents worth about $100,000 a month from small business tenants in its downtown Hanover commercial buildings for the months of April and May. An earlier version of this story was unclear on the monthly impact.




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