The eviction moratorium issue is at the forefront of landlords’ minds. Whenever there are any significant developments on this issue, I’ll always let you know what’s up in this blog.
New York State’s eviction moratorium is in place until at least May1 2021. So, regardless of any national developments, New York landlords will be legally barred from evicting non-paying tenants (with very limited exceptions) until that date.
Nationally, the CDC-imposed eviction moratorium is set to expire on March 31st. In my view, the Biden Administration will very likely extend this moratorium for a few more months. However, nothing is done until it’s done, so watch your news feeds for updates this week.
The core issues underlying the moratorium remain the same. Renters got behind in 2020 when lockdown layoffs interrupted income. As the economy improved, unpaid rents from 2020 remained on landlords’ books. Plus, a small percentage of renters simply “gamed the system,” hoping to stay in their residences for as long as possible rent-free.
A staggering six million families are behind on their rent, and three million are behind on their mortgage. Millions of non-corporate landlords are also struggling, many receiving temporary mortgage forbearance from their lenders.
All of that said, there is hope on the horizon that we can get through this crisis and restore the balance that’s required for the rental market to thrive.
Over $46 billion in aid to cover back rent and utility payments for tenants is now in place. Congress also provided over $10 billion in mortgage payment relief. Over the coming months, these funds, which must, by law, be primarily distributed through State governments, will reach those in need. The logistical challenge is that states must create the infrastructure to allocate those funds, which takes time.
There is no doubt that millions of people were devastated starting a year ago by the COVID crisis economic shutdown. Through no fault of their own, millions of families had no way to pay for rent and basic necessities. There is also no doubt that landlords, until very recently when Congress acted, were asked to pay the total cost of the rental housing side of this government-created crisis.
I see some brighter signs on the media landscape. We are starting to see more news pieces like this one from CNN. Attention is now being focused right where it needs to be, squarely on the backs of our lawmakers. Tenants and landlords were caught in the middle of a public health emergency that our government chose to address by locking down much of the nation, to a greater or lesser degree, for months.
Consensus has developed around implementing a common-sense solution to this crisis – the government needs to make landlords whole for unpaid rent during the COVID crisis and, at the same time, reset the rental markets to allow for a return to normal market conditions.
Another aspect of this crisis is that Federal courts in Ohio and Texas have struck down the CDC eviction moratorium as unconstitutional. For better or worse, it is unlikely that any sweeping national ruling will emerge from these cases (there are more pending) for months or even a year (or more).
The best solution to this crisis is likely not a Supreme Court ruling on the moratorium’s constitutionality. We need our lawmakers to act. Why?
If we allow the eviction moratorium to continue for too much longer, we will devastate non-corporate landlords, increase housing costs and reduce supply. If we were to simply allow evictions to resume instantly, not only would millions of people potentially be at risk for homelessness, the economic disruption caused could throw the USA into an economic tailspin just when we are recovering from the COVID created slowdown.
Am I too optimistic in believing that wiser heads will prevail? It appears (my fingers are crossed) that the Biden Administration will extend the eviction moratorium for a while longer. Money has been allocated by Congress to deal with the back rents and unpaid mortgages.
We need to return to normal market functioning – tenants pay their rent, landlords get a reasonable rate of return on their investment, and problems are dealt with through fair, legal proceedings. That’s the optimum solution for renters, real estate investors, and the nation.
At Sterling Property Solutions, we have a team in place that can answer all your questions and address any challenges. Please give me a ring at 914-355-3277 or send me an email at Linda@Sterlingpsi.com. 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.