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.
“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.
“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.
Piecemeal Solution
“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.”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.”
Lawsuits Filed
Eviction moratoriums have been met with considerable resistance from property owners’ associations.According to Garvey, members also raised funds in June to sue the governor of Illinois over the moratorium.
Eviction Moratoriums
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.
Landlords’ Plight
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.“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.”