Since covid began, most people have been free to skip rent payments for both residential and commercial properties but those days have come to an end so what’s going to be the fallout in 2022?
For commercial properties, some businesses are already warning that they may file for bankruptcy. From KCBY11,
A survey of nearly 1,200 restaurants and bars in all 50 states released Friday by the Independent Restaurant Coalition found 42% of businesses that did not receive RRF grants are in danger of filing for or have filed for bankruptcy. Nearly 30% have received or are expecting to receive eviction notices. Restaurants that received grants are about half as likely to be facing financial difficulties.
KCBY11
With a severe labor shortage, additional funds may not have helped many of these restaurants as deep pocket corporations like Amazon, Target, Costco and others are now paying $20+/hour for labor. With evictions looming, it is likely many of these restaurants will shutdown in 2022.
In Seattle, nearly 100,000 people are behind in rent and if nothing is done then it is likely 100,000 will be kicked out and perhaps left homeless.
In Virginia, $2.9 million has been set aside to help prevent evictions but that’s a small drop in an ocean of debt.
In Philadelphia, court rooms are packed with evictions.
When Landlord Tenant Court reopened for the first time in the new year, up to 100 people found themselves packed into a courtroom roughly the size of a7-Eleven…With the current backlog of cases, Gershenson said it’s unlikely Philadelphia’s court could process more than the 20,000 eviction proceedings typically filed each year, meaning that an eviction spike, if any, might play out over a long period of time.
The Philadelphia Inquirer
And in the fourth largest city in the country, Houston, the rental assistance money has been mostly depleted. The article
Houston and Harris County were some of the fastest distributors of rent relief funds in the nation, and now the area’s reservoir of aid is quickly drying up. As of January 6, only $4 million of the $283 million that Houston’s rental assistance program received remains.
Houston Chronicle
It should be clear that small businesses across America are taking multiple hits. Over due rent, labor shortages, inflation, supply chain issues, and the possibility of covid resurgence are just a few of the many factors that will make 2022 a very tough year for small operators. As such, the prudent thing to do is to invest in established companies that are paying hefty stable dividends to keep up with inflation.
Stay tuned to learn more and stay solvent…