This page describes what happens if the law being asked for is made, and how it can happen.
Q: “Is this saying that businesses could pause payments on mortgage or rent for the number of impacted months, then have the option of adding those months to the end of their term with no penalties?”
A: “Exactly. For example, if you have 3 years left on your lease or mortgage and you pause now, you owe nothing for each paused month: those paused months are “free” or “no rent”. Then you have 3 years left on your lease or mortgage starting on the date you unpause, and you pay each remaining month as usual.”
Q: “How can this law be done?”
Answer for Oregon: “For each month of the COVID-19 crisis, small businesses that lost more than 25% revenue have the option to pause (extend) their lease or mortgage.”
- Businesses will have the option to pause payments on mortgage or rent for the number of impacted months, then have those months added to the end of their term with no penalties.
- It’s most helpful if the lease pause applies for the entire length of the COVID-19 crisis in Oregon, starting when the mortgage pause (extension) started for landlords.
This solution was done for landlords* but not for commercial tenants. Providing this support to tenants will be a much shorter temporary extension than was already provided to landlords.
*The Oregon Legislature’s HB 4204 and the Governor’s Executive Order 20-37. Landlords got a pause (extension) with no mortgage owed during that time, while commercial tenants still owe 100% of all rent during that time. A mortgage is often 30 years, and a lease is often much shorter, 1 to 5 years.
Answer for Portland: If the Oregon solution above isn’t an option for Portland to implement, which it might be, then the simplest way is for the city or state to make a law that greatly extends the ‘no eviction, no penalties’ law for small businesses that’ve lost revenue. A rent payment extension with no evictions and no penalties was done for residential properties by Multnomah County, and April 1 for businesses by Oregon.
Extend the amount of time for no evictions from currently three months to the whole time that COVID-19 is a crisis, for each month the small business tenant chooses. And extend the rent and mortgage with no evictions or penalties currently due July 1 2020, to be due a thousand years later, or even better, never due.
The law could allow people on the other side of the contract the option to pause their side of the contract during the time payment is paused, or even the option to cancel.
This is legal in Portland now because it was already done on a smaller scale.
A more elegant way to do this is to pass a law that allows all small businesses that’ve lost more than 25% revenue the option to pause their lease or mortgage, the same way that building owners can currently pause their mortgage due to COVID-19. If there are, for example, 3 years left on the lease or mortgage now which the small business pauses, then when the business restarts the lease or mortgage, they have 3 years left, and they pay each month from when it’s unpaused, with no debt, penalties or interest.”
Q: “What happens to the building owners?”
A: “Under the CARES Act, landlords can file for unemployment insurance like many more small business owners already have.”
Q: “And what about rent that’s been below market-rate? Isn’t it unfair to landlords for them to make even less?”
A: “No. In Portland, most commercial landlords’ profits are 60% to 93% (7 to 11 months of every year is pure profit), including taxes, salaries, utilities, etc. All the money paid for a mortgage is earned back when the landlord sells the building: in Oregon that’s a 5% average gain every year for the past 45 years. Some buildings sell for 10x the price after 30 years. Some buildings raise rent by 33% in one year.”
The landlords almost always have much more money than the tenants. COVID-19 is currently increasing inequality faster than before. We are asking, with this law, for a pause: for the same options to be provided to tenants as to landlords.
We are asking for the government-ordered stay-at-home law and a pandemic to not *only* reduce tenants’ incomes while the law enforces collection of 100% rent to landlords.
Do we think there is more that can be done? Yes. This polls well and benefits almost all Oregonians, and it’s meaningful.”
Q: Is this helpful for tenants? Will you continue your business after COVID?
A: It’s a lot more helpful than not. At least it’s a lot easier to find a subtenant after COVID compared to now, and a lot better than filing for bankruptcy and/or losing a lot of money now.
Q: “I can’t make laws myself but this is important and I want to help. What can I do?“
A: “Thank you. Please: endorse.
Then, you can email or message some people you think are most likely to endorse when you ask them, who can also influence other people. Likely they’re small businsess owners, maybe managers, and politicians or organization leaders. You can copy and paste the homepage of this website into your email. Then at the top of the email, write why this matters to you. It’s a lot more effective if you first endorse.
It’s not worth it to try to persuade people. If they don’t say yes, you might want to ask what questions they have, and you could even forward those questions to: info@SmallTogether.org By not arguing, you’ll have more time to reach out to more people who might say yes.”
Q: “I don’t have a small business. Why does a pause (extension) of the lease or mortgage matter to me?”
A: “Don’t force more than ten thousand small business owners in Portland, and more in other cities, to each stress and negotiate how to go into debt to pay rent because of the government stay-at-home order and COVID-19. More and more small businesses are now choosing to close permanently. And their stress, their increasing rent debt (and how they can pay for that debt) and closures, affects communities they serve. Small businesses likely include your favorite restaurant, theater, shop, bar, business service, hairdresser, and on and on.”