The title of this article has probably confused some readers that rent, but to any Chicago landlords who might be reading it will seem redundant. This weekend is going to be an absolute disaster for a huge chunk of the renting industry. Let me stick a flashlight under my chin and tell you what’s going down over this Labor Day weekend.
The golden rule of Chicago property management is to minimize your October 1 vacancies. At any other time of year landlords can be a little more relaxed about letting apartments sit empty for a month in order to clean and flip them, but September and October have no margins of error. If an apartment has to sit empty for the month of September, that’s another vacancy that must be filled for October 1. If a vacancy has not been filled by October 1, the chances are very high that it will sit empty until at least March 1.
Most of the renters with a lease ending August 31 will ask if they can wait until the long weekend to move. However, all of the folks moving in from out of town with leases that start on the 1st will want to move in on Friday the 1st. Some will blame landlords for greedily trying to fill apartments without leaving enough time to turn them over. This is partially true. However, the market is slower in the three months prior to September 1. If every renter decided to only apply for vacant apartments, landlords would need to keep some units vacant all summer in order to have enough inventory on hand for September 1. Other industries can simply make more products to compensate for seasonal peaks in demand. Landlords do not have this luxury. Real estate – especially high density commercial real estate – cannot be magically created overnight.
A lot of renters have no idea how much time and effort is needed to turn over an apartment. Based on personal experience I can tell you that even a perfectly clean and undamaged apartment takes a couple of hours to inspect and polish up for new occupants. Most apartments are not left in perfectly clean and undamaged condition. A paint and patch job can take anywhere from 4 hours to 2 days. Cleaning up messes left behind by previous occupants can take anywhere from an hour to a week. Restoring major damage can take several weeks. I shouldn’t even have to mention what the chances are of a landlord finding a skilled work crew including union electricians and plumbers for a reasonable rate on Labor Day weekend.
All of this is compounded this particular Labor Day weekend by a skilled labor shortage. As Houston recovers from Hurricane Harvey, many workers have headed south to help out and cash in on some FEMA dollars. As it is the skilled labor workforce is at its lowest, with plumbers and electricians reporting insufficient new blood to replace retiring pros and the entire industry suffering disproportionately from the current national focus on immigration.
Chaos in the Alleys
The last moments in an old apartment and the first moments in a new one are the most important for developing a positive relationship between tenant and landlord. If a renter has to move into an apartment that isn’t ready, that sets a nasty tone for the rest of the lease. If a landlord refuses to allow renters to delay their move-out, those renters will probably turn around and slam the landlord on Yelp for not being responsive to tenants’ needs. But all of this piles on top of the grueling task of actually moving, and moving this weekend is going to be particularly nasty.
We will have a lot of renters who have been forced out of their apartments a couple of days before they wanted to leave. These midweek moves will mean that they had to take time off from work at month end, causing a ripple effect through most Chicago businesses.
We will have a whole passel of new renters, many with parents, many moving into their first apartments, crowding their moving trucks into the alleys of Chicago. We will have dumpsters overflowing with discarded furniture and trash, and delayed trash collection throughout the next week. We will have landlords paying double overtime so their labor crews can turn over apartments on a holiday weekend. Those crews will consist of the unlucky workers who drew the short straw, most likely the newest and least skilled laborers in their respective companies. But wait, it isn’t over yet!
Delayed Cash Flow
The first of the month is also when rent is due! Who tends to rent? People on fixed incomes. People on social security, unemployment, people paid by check on Friday or on the first of the month. People who must cash those checks at a bank in order to turn them into rent money. At a bank which will be closed for the long weekend on Monday. Or sent through the postal system, which will likewise be closed on Monday.
So a whole lot of rent payments will arrive in landlords’ hands on Tuesday the 5th, meaning late fees for some, 5 day eviction notices for others, and a generally massive headache for any property management office that still does manual payment processing. So not only will landlords have to pay overtime to turnover crews, they will have to do so at a time when their monthly cash flow is at its absolute lowest.
Imminent Cost Increases
In many horror movies the hero will kill a tanky evil minion only to be pounced by the big boss a few minutes later. Landlords are facing just such a scenario as soon as this weekend is over.
In case the warm summer months have lulled you into a sense of security, let’s not forget that it will soon be getting quite chilly here in Chicago. Landlords can’t forget it as the first day of the mandatory heating season begins on September 15, just two weeks away. So not only must they be focusing on turning over a huge number of apartments very quickly with delayed cash flow, but owners of vintage buildings must be taking steps to ensure that steam boilers and radiators are in tip top condition. This tends to be one of the more expensive recurring maintenance costs in vintage buildings, but failure to get it done can be fatal.
So what can a renter do to minimize the horror of Friday the 1st of September? We have some recommendations.
- In the future, if you plan to move on September 1, choose a vacant apartment.
- If you are moving this weekend expect to have to stay in a hotel or couchsurf for a few days.
- Do not expect landlords to do a walkthrough with you on move in or move out. Document everything yourself and keep those photos and checklists on hand for the six weeks following your move.
- At some point between now and 2023, switch your move date to something other than May 1 or September 1.
- If your landlord accepts online rent payments, use that option this month.
- Be on special alert for abnormal behavior at your building. Thieves will certainly be taking advantage of the chaos to help themselves to unprotected items. Also be on the lookout for “fly dumping,” which is the illegal use of private trash bins to dispose of construction debris.
- If you’re into dumpster diving, this is your weekend. You can take your pick of awesome loot from the alleys, but you might want to hose it down before bringing it inside. You’ll also want to bear in mind that your progress through alleys may be blocked by moving vans.
- Do not discard any large furniture this weekend if you aren’t in the process of moving.
- If you park in an alley, move your car to the street until the weekend passes.
- Be exceedingly kind and gracious to any workers who you see around the building this weekend.
- If something minor breaks in your apartment this weekend, hold off on reporting it and don’t be surprised if repairs take a little longer than normal.
- Expect to hear construction noise and smell paint fumes during every minute of permitted time. In Chicago that’s 8am to 10pm every day.
- Live gently and try to avoid breaking anything major in your apartment this weekend. Every member of the maintenance staff must be focused on turnovers for the next few days. There will not be many hands to spare to help existing tenants.
- Be kind to your landlords and their staff this weekend. This is likely to be the worst weekend they’ve seen in years. The first rarely falls on such a bad day and a bad month. It won’t happen again until 2023.
It’s rare for us to come out and say that you need to go gently with your landlords. We’re normally big on accountability. But we know from experience with other Friday the 1sts that this weekend is going to be a horror show for the Chicago rental industry. If ever there was a time to bring a nice batch of brownies over to your property management office, this is the weekend to do it.
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