Mom-and-pop landlords across the United States are coming under increasing pressure as a patchwork of regulations and eviction moratoriums passed by the federal government, states, counties, and municipalities amid the pandemic have strongly curtailed their ability to enforce their property rights.
In addition, The Epoch Times has received reports that a small number of tenants are abusing the reprieve by choosing to withhold payment of their rent—and, in some cases, without claiming CCP (Chinese Communist Party) virus-related hardship.
Some landlords’ associations have resorted to legal action (pdf) to challenge the moratoriums, as many are currently unable to evict tenants breaking the terms of their lease agreement, such as those causing a nuisance to their neighbors—unless those tenants pose a danger to public health.
“Here in Illinois, landlords have been under a lot of pressure,” Jane Garvey of the Chicago Creative Investors Association told The Epoch Times in an email. “Roughly half of the residential rental properties are owned by small ‘Mom and Pop’ owners who count on the income from them to pay their own bills. This is their retirement investment and income. If their investment is lost due to inability to pay their bills, they will be in dire straits.
“With the moratorium in place, property owners have no ability to enforce anything in their leases,” Garvey says. “If tenants are causing a nightmare for other residents, or neighbors, there is nothing the owner can do about it. If they are tearing up the place, same thing.”
According to a letter (pdf) from Chicago’s Neighborhood Building Owners Alliance to Illinois Gov. Jay Pritzker, “Many small and medium-sized housing providers are struggling to make ends meet because of rental income lost due to their inability to remove tenants who have not been paying rent for months.”
“Without the ability to pursue an unlawful detainer, unless to protect public health and safety, some residents are creating nuisances and disturbing neighbors, and there is very little owners and managers can do,” Kendra Bork, president of the Southern California Rental Housing Association, told The Epoch Times in an email.
“Some tenants who are not impacted by COVID-19 are also choosing not to pay rent because of the regulation. This certainly doesn’t help property owners, but it also ignores the fact that tenants will have to pay past due rent at some point,” she said.
“The biggest issue is the layers of regulation,” Bork says. “Owners and managers in many cases are having to comply with a patchwork of eviction moratoriums from different jurisdictions, as well as court limitations statewide that essentially prohibit any kind of eviction.”
Landlords in California, for example, have had to navigate a web of state, county, and municipal regulations on the issues of property rights, evictions, and rent collection since CCP virus-related lockdowns were introduced.
California Gov. Gavin Newsom issued an executive order in March suspending state laws that restricted local governments’ ability to limit evictions. The order allowed local governments to suspend evictions when rents remained unpaid due to, for example, substantial decreases in household or business income, or substantial medical expenses. The executive order was subsequently extended, and is due to expire on Sept. 30.
In addition, the city of Los Angeles, Los Angeles County, and the city and county of San Francisco adopted their own emergency and executive orders and proclamations. In Los Angeles, landlords of residential properties can’t evict tenants who are unable to pay rent due to loss of income during the CCP virus crisis. Mayor Eric Garcetti’s emergency order is due to expire 12 months after his emergency declaration is terminated.
The Los Angeles city order defines and prohibits no-fault eviction, as well as evictions based on “the presence of unauthorized occupants, pets, or nuisance related to COVID-19.
“The ordinance confirms that tenants are still obliged to pay the rent they owe, though they are allowed up to 12 months after the local emergency period expires to pay their arrears. Under the terms of the eviction ban, “Owners are also prohibited from charging interest or late fees on the rent owed during the emergency period.”
As early as April 8, California’s Alameda County extended its moratorium (pdf) on evictions to “protect tenants from all eviction notices served or unlawful detainer complaints filed … through at least December 31, 2020.”
After being sued by retiree landlords Peggy Christensen and Peter Martin, however, California’s Judicial Council reversed its April 6 emergency order last week, announcing that the moratorium would officially end at midnight on Sept. 1.
Eviction moratoriums have been met with considerable resistance from property owners’ associations.
The Apartment Association of Greater Los Angeles (AAGLA) filed a lawsuit against the City of Los Angeles on June 11 on behalf of its members and the city’s housing providers. The AAGLA said in a statement that the city’s prohibition of evictions “singles out landlords and property owners throughout the City to absorb the residents’ claimed economic losses attendant to the crisis.”
According to Garvey, members also raised funds in June to sue the governor of Illinois over the moratorium.
The legal complaint (pdf) filed by Christensen and Martin against the California Judicial Council claimed that the Council’s emergency rule ER1 violated the fundamental rights of property owners by suspending, indefinitely, their right to initiate actions against unlawful detainers. Both landlords had been rendered unable to evict non-paying tenants that were disturbing other tenants. Neither tenant had claimed any coronavirus-related hardship, according to the complaint.
“The rule creates the perverse incentive for all tenants, whether they face financial hardship or not, to refuse to pay their rent during the crisis,” according to the petition.
Many states view the prevention of evictions as a key measure to prevent the spread of the CCP virus.
“Today, with the United States focused on containing the COVID-19 pandemic, the broader and longstanding issue of income and housing insecurity has quickly become paramount to the health of an entire nation,” according to the Eviction Lab database team at Princeton University.
Eviction Lab describes eviction and foreclosure moratoriums as a stopgap measure for state and local governments.
“To prevent the deleterious health consequences of eviction and an escalating economic crisis, states are beginning to pursue strategies to ensure safe, decent, and stable housing during and after the pandemic,” the team said.
A wide range of measures have been enacted at various levels of government to protect tenants from eviction, though the measures vary widely across the United States. The Eviction Lab team has developed a COVID-19 Housing Policy Scorecard to compare tenant protection measures that assign scores to states according to the extent that they have acted to protect tenants during the CCP virus crisis.
Jurisdictions that scored highly in their efforts to protect tenants from eviction include Connecticut, Massachusetts, the District of Columbia, Washington state, and Oregon. At the other end of the scale, a total of eight states were awarded zero points for their apparent reluctance to increase tenant-protection measures, among them Texas, Tennessee, and South Dakota.
Bork says many landlords in Southern California have been fortunate thus far with tenants paying rent, or have been able to reach a forbearance agreement with their lenders.
However, she says that much of the mortgage forbearance provided to date has been for single-family homeowners or federally backed mortgages, while those with traditional loans for multi-family properties aren’t always experiencing lender forbearance.
“Moreover,” Bork says, “there is a significant chunk of independent property owners who do not have mortgages, but rely on rents as their primary or sole source of income, and still have to pay for insurance, ongoing maintenance, taxes, and wages for employees, if they’ve been fortunate enough to retain them.”
According to Garvey, the belief that property owners all have deep pockets is a myth.
She says that rental income goes to pay a wide range of expenses that include property taxes, insurance, maintenance and repairs, property management, mortgages, utilities, trash, and cleaning, as well as the replacement of appliances, roofs, etc.
“In good times, approximately 9 cents of each dollar in rent is available as income to the owner of a well-operated property,” Garvey says.
However, she says the vast majority of her members’ residents were either paying in full “or had a brief hiccup and were on a payment plan catching up.”