40% Can’t Pay Their Tel Aviv Rent as Unemployment Grows Amid Coronavirus, Survey Shows

Gili Melnitcki
Gili Melnitcki
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A woman rides a bicycle with her children past a banner hanging at the entrance of Shuk HaCarmel (Caramel) market in the Israeli coastal city of Tel Aviv on March 24, 2020.
A woman rides a bicycle with her children past a banner hanging at the entrance of Shuk HaCarmel (Caramel) market in the Israeli coastal city of Tel Aviv on March 24, 2020.Credit: JACK GUEZ/AFP
Gili Melnitcki
Gili Melnitcki

Nearly four out of 10 tenants in Tel Aviv won’t be able to make their next rent payment, and another three out of 10 say they won’t be able to pay within a few months, a new survey shows.

The coronavirus crisis has hit Israel’s labor market hard, with unemployment now hitting 20%, up from an all-time historic low of 3.4% in February.

Haaretz Weekly Ep. 71

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Some 2 million Israelis rent their homes. In Tel Aviv, the percentage is unusually high and includes 46% of all residents.

The survey of 6,500 respondents was conducted by Doron, an artificial intelligence bot designed by a startup that specializes in matching renters with Internet listings.

Its respondents include people who used its services or considered using them in the past. Many are between the ages of 24-37, many of whom have been put on unpaid leave and are only now starting to apply for unemployment pay. Many other are self-employed.

The survey found that on top of the 38% who said they couldn’t pay this month’s rent, another 29% said their finances were borderline, meaning they could pay the coming month’s rent but won’t be able to pay in the following few months.

Only 33% of respondents said the coronavirus outbreak hasn’t impacted their ability to pay rent.

The survey also found that many landlords are in an equally tough financial situation, and are unable ­— or unwilling — to compromise.

Some 41% of renters who said they’d have trouble paying said they’d already spoken to their landlords or intended to speak to them about delaying payment.

Of those who spoke to their landlords, some 52% - more than half - said their landlords had demanded full payment.

Another 25% said their landlords had asked to speak again in the future; some of the landlords explained that they themselves were waiting to hear back from banks or other financial institutions about their financial commitments.

Another 23% of landlords agreed to be flexible, including delaying payment or discounting rent for the next few months.

One respondent said his landlord had agreed to cut monthly rent by 2,000 shekels, and said they’d work out back payments when the crisis ended.

One landlord explained that she’s a single mother with two children, and that she’s been forced to shutter her business.

The Tel Aviv apartment she rents out, which she inherited, is now her only source of income.

She herself is looking to move to a less expensive apartment, she said. Renters’ distress can’t fall entirely on landlords, many of whom are paying mortgages or living in rentals themselves, she said, and urged the government to get involved.

Many landlords complained that they reached out to their banks last week in a bid to postpone mortgage payments, but that the banks have been particularly slow to respond. The banks have been cutting back on staffing, like most businesses.

The crisis has not yet affected the home sales market, aside from freezing it for the time being, but is expected to cause a short-term drop in prices followed later by a resumption of price increases.

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