We study residential lease payments during the COVID-19 pandemic. A survey of Israeli renters shows that nearly one in eight did not pay full rent during the first lockdown in March-April 2020. These households held back two-Thirds of their contractually due rent on average. Financially fragile households with large income cuts withheld a greater share. Both formal and relational aspects of the landlord-Tenant relationship affected payments: Tenants paid more of their rent if their leases included formal provisions against non-payment, and less if they had strong relationships with their landlords. We use bargaining and relational contract theories to explain our findings.
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© 2022 The Author(s). Published by Oxford University Press on behalf of Royal Economic Society.