When is the last time you watched a movie and saw a landlord depicted as a caring, helpful person who not only provided a roof over someone’s head at a reasonable price but also made sure the rental house or apartment was properly maintained? Hard to find those characters in film or on TV. Instead, we often see depictions of landlords as greedy, petty cretins who stay up late at night plotting ways to evict tenants for spurious reasons. Ever seen a demonstration on behalf of landlords? Folks marching the streets demanding that landlords be given a fair shake and not be forced to bear the entire brunt of the housing impacts caused by the COVID pandemic? Nope.
The Brookings Institution recently published a study entitled, An eviction moratorium without rental assistance hurts smaller landlords, too. The entire study is worth reading on many levels, but I would like to highlight one particularly poignant quote:
The loss of rental income under the eviction moratorium represents a significant income shock for smaller landlords of modest means. Our analysis finds that 40 percent of residential property units are owned by individual investor landlords. Among those owning residential investment property, roughly a third are from low- to moderate-income households; property income constitutes up to 20 percent of their total household income. Without rental assistance, tenants and smaller landlords alike will continue to struggle to make ends meet….unstable rent payments are even more detrimental for individual investors—often referred to as “mom and pop” landlords—who carry greater financial vulnerabilities.
I’m not sure why this all too obvious reality has not been given more attention in the media. Is it just a sign of the times we live in? Perhaps. As a new round of COVID restrictions/lockdowns begins in New York State and in other places in the USA, landlord relief becomes an even more critical issue that our State and Federal governments must address.
If moratoriums on evictions continue beyond January 1, 2021, which they likely will, who bears the brunt of that economic pain? Landlords. It may be sound public policy to extend the eviction moratorium – I leave that to Albany, President-Elect Biden, and the incoming Congress. Here is what I know for sure – if the financial burden of unpaid rents falls solely on the backs of landlords, then you will see an exodus of small landlords from the market in 2021 and beyond. Wall Street will rush in to fill that void and buy up rental properties in giant real estate investment trusts, further corporatizing the rental market. When small landlords are forced out, much of the stock of affordable housing goes with them. Communities will be left with fewer economical rentals, and our bankruptcy courts will have to process billions in defaulted mortgage debt from former landlords.
How does destroying non-corporate landlords benefit New York State or our nation? Who decided that landlords were the ATM for the pandemic? By choosing not to provide rent relief and to effectively outlaw evictions, the government has, in effect, done just that.
I have worked with landlords every day for many years. While there are “bad apples” in any industry, the vast majority of landlords I know are hardworking, conscientious people who provide a fair product and service for a reasonable price. Demonizing landlords as a group has become all too common and is completely unjustified. At Sterling Property Solutions, our mission is to serve both landlords and tenants. The rental housing market works because good tenants seek out and find responsible landlords. Rents are paid, properties are maintained, and families have places to live and raise their children. If any part of that equation breaks down, for whatever reason, society suffers.
While I’m concerned about the future, I’m also optimistic. It appears (my fingers are crossed!) that not one or two but more than three COVID vaccines will be made available to the public within the next 90 days. Assuming the vaccines work and are widely distributed, all of us can return to a normal life. That bodes well for economic growth and a return to normalcy in the landlord-tenant relationship. But what do we do over the next six months before the vaccines inoculate the population? Do we continue to force landlords to bear the brunt of the rental housing impacts of the pandemic? If we do, that decision could have negative consequences that will haunt us all in 2021 and beyond.
At Sterling Property Solutions, our team can answer all of your property management questions and address any challenges. Together, let’s form a plan for you to take full advantage of the current conditions and put in place a robust, long term program for your success. Please give us a ring at 914-355-3277 or send us an email at firstname.lastname@example.org.