“The eviction moratorium kills small landlords,” says one
The one-month extension of the Centers for Disease Control and Prevention’s moratorium on eviction was welcome news for tenants, but another nail in the coffin for some struggling landlords.
Groups representing landlords have worked hard to end the moratorium and are now warning that even another month will put some of these landlords out of business.
“Every month that goes by increases the risk of losing more and more rental homes, which ultimately threatens the availability of safe, sustainable, and affordable housing for all Americans,” wrote Bob Pinnegar, CEO of the National Apartment Association, in a press release. “Flawed eviction moratoriums leave tenants with insurmountable debt and housing providers hold onto their pockets as our nation’s affordability crisis turns into an affordable housing disaster.”
The majority of landlords in the country are individual investors. According to the US census, they own approximately 23 million units in 17 million homes. According to the census, more than 6 million tenant households are in arrears with their rents. Landlords have almost no recourse.
Howard Simon owns a small building in Massachusetts with three rental units. He hasn’t received the rent for either of them since last October and has spent about $ 7,000 so far.
“I have mortgages, I have expenses for repairs on this particular building, I lose a third of the rent for that alone,” said Simon. “And you know the other tenants who live in the other two units, they do their best and do their best.”
Simon has contacted the defaulting tenants but said they will not respond or ask for any assistance available to them. While about $ 34 billion in federal aid for rent repayments and utilities has been distributed to the states, getting that money to landlords has been a tedious process because the tenant must be involved.
“In my particular case, the tenant doesn’t even cooperate in filling out the application. I’m just a small landlord and not a large company like many other large rental companies, so while the financing is very helpful, if the tenant doesn’t cooperate, everything falls apart,” said Simon.
Before the extension of the eviction ban, there would have been around 473,000 eviction actions in July and August according to Zillow’s calculations based on Census estimates. That is around 100,000 fewer than forecast in March last year. The improvement is due to the fact that federal aid is reaching some tenants, as well as a general improvement in the economy and employment. The numbers are likely to continue to decline with an extra month of air to breathe.
Still, landlords say they are angry at the way federal aid, $ 46 billion from two different aid packages, was both allocated and distributed.
“If the rent-subsidy bureaucracy is a monster, then the local governments that created it, Dr. Frankenstein, ”said Dean Hunter, CEO of the Small Multifamily Owners Association and a landlord himself. “They have asked states and cities to build entirely new infrastructure to get the money out of it, rather than using existing community-based organizations and safety nets.”
Hunter claims that small landlords are treated like big companies but should have been included in the small business aid package, the Paycheck Protection Program, instead.
“This is the most excessive and overly widespread expropriation of private property of my life,” said Hunter. “The eviction moratorium kills small landlords, not the pandemic.
After the moratorium was extended, the Biden government outlined measures it would take to continue helping both tenants and landlords. It said the US Treasury Department would clarify “How Scholars can achieve economies of scale by soliciting bulk information from utility companies and multi-unit landlords to expedite household eligibility determination and approved amounts for service in a single payment.” to bundle “. from several authorized tenants. ”
This and other efforts by state and local governments should help some, but if landlords don’t get the relief they need, it will have an impact on the broader housing market.
“What there will be in a tsunami is a loss of naturally occurring affordable housing because small landlords will sell their properties,” Hunter said.