We’ve heard several stories throughout the pandemic from at-risk tenants being protected by the CDC’s eviction moratorium. Now that evictions are again on hold across the U.S., this time through October 3, landlords are becoming more vocal than ever and advocates across the country are speaking out about their struggles, wondering if the most recent extension is really the answer to a looming crisis.
Debi Stobie remembers months of remodeling and work she proudly invested in her 24-unit apartment building before the pandemic.
“We’ve renovated a lot of these units. We’ve painted the interiors,” she said.
It’s one of three properties she and her husband own in the Denver Metro area.
Now, 18 months later, a once-rewarding stream of income has turned into lingering uncertainty.
“Why do we as landlords have to bear the risk, the burden of not knowing month to month?” Stobie asked.
These are the questions she and other landlords, especially smaller owners across the country, are now grappling with as the CDC’s eviction moratorium continues.
“No one wants to evict anyone, ever,” she expressed.
Stobie says keeping her residents at the forefront of her mind has been her goal from the start
“When their paychecks were suddenly cut or non-existent, our first thought was not to evict them,” she said. “We talked to them, ‘OK, when do you think you’ll go back to work? What can you pay?”
The new eviction moratorium is intended to target parts of the country where COVID-19 cases are rapidly spreading and mass evictions would worsen the spread.
In order to be protected under the moratorium, tenants must complete a declaration by the CDC, submitting a signed copy to their landlords. Before signing, they must meet at least one of these qualifications on the document.
“Allowing people to pay weekly, daily, sometimes the months overlap,” said Stobie.
Each overlap adds up, becoming a financial burden.
Now, between mortgage payments, taxes, and day-to-day operations, Stobie says she’s barely able to break even on her monthly bills.
She’s currently charging a below market value rent of $1,100 a month per apartment in the Denver area.
With the new eviction moratorium extension, she says the risks of ownership are starting to outweigh the benefits.
“It affects operations of the property. It affects payroll. It affects our employment and upkeep of the property,” said Stephanie Graves, a property owner in Houston, Texas.
While Stobie isn’t in a financial hole just yet, Graves has a different story.
“I have a property that has 14 units and there’s three residents that haven’t paid,” said Graves. “Each have a balance of over $10,000.”
Graves says she’s now digging in her own savings to cover more than $30,000 in back rent payments, while apartment amenities suffer.
“We can’t just go out and buy a $4,500 AC unit,” she said. “We have to find somebody that will extend us credit so we can replace that for the resident.”
Less money coming in means prioritizing funds and shutting down non-necessities like swimming pools on the property. Her smaller apartment units are taking the hardest hit.
“The impact has been tremendous. The amount of rental debt that’s outstanding has not stopped,” said Greg Brown, senior vice president for Government Affairs with the National Apartment Association (NAA).
According to the Urban Institute, at the end of 2020, there was about $57 billion in unpaid rental debt, and numbers continue to grow.
Brown says even though $47 billion in rental assistance was provided by Congress, there’s still a lot that federal support doesn’t cover.
“That weighs heavily on our members who have been trying to continue to operate their properties, serve their residents and keep people in their homes while not having all of the rent that they need to do that,” Brown said.
To help its members get back on their feet, the NAA is now battling the federal government in court.
With a $26 billion lawsuit for damages and losses, its members have faced since the start of the pandemic. A legal process Brown says could take years.
“We’ve just come to the conclusion that because there is this extraordinary gap between what is available in rental assistance and what is outstanding, that the chances that owners would be made whole and residents would be made whole at the end of this, is going to be very difficult,” he said.
Brown’s message for landlords is to hang on and to keep communicating with tenants, but he fears a grim future for these owners if this isn’t lifted soon.
“What you don’t want to see at the end of that is them having to sell their properties because they no longer can afford them,” said Brown.
As the pandemic has already created historic budget stress when eviction moratoriums finally do lift, it could lead to local governments and agencies spending more to prevent homelessness.
Graves fears rents will go up in the future and affect affordable housing long-term. She says this is already impacting the tenants who have been paying their rent on time.
“There’s also residents that are paying their rent on a regular basis and are being punished and don’t get the amenities they need because there’s other ones that don’t,” said Graves.
Stobie is not too sure where her future as an owner stands.
“I don’t think we have the stamina to keep in the game. You know, I think we would seriously consider selling the building,” said Graves.