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There is a path to minimize evictions once moratoriums end — while still supporting landlords — in a post-pandemic country
The path to forecasting evictions is rocky, and more than 3 million renters say they are at risk of eviction. The actual number of evictions this summer, which could be as low as 130,000 households, depends on the speed of relief distribution, pace of economic recovery, and decision-making by landlords.
More than 8.3 million U.S. renters reported that they were behind on rent in the Census Bureau’s latest Household Pulse Survey, with 16.8% believing they were ‘very likely’ to be evicted in the next two months before the moratorium was extended this morning.The federal eviction moratorium that has kept many renters in their homes during the pandemic is now set to expire June 30.
More than 3 million renters in Seattle said they were at risk of losing their homes with the federal eviction moratorium set to expire on Wednesday, but a new Zillow analysis shows the number of households ultimately evicted could be as low as 130,000, depending on government action, the pace of economic recovery, and how landlords respond.
That range highlights the need for federal intervention — both continuing the moratorium, which happened this morning, and additional assistance that will help not only struggling renters but also their landlords, such as the $45 billion in rental assistance in the recently passed federal stimulus bill.
“Job disruptions and economic hardships brought by the pandemic have hit renters particularly hard, and the number at risk for eviction is staggering. Although the path forward is uncertain, there are still ways for policymakers to keep the vast majority of renters in their homes,” said Chris Glynn, senior managing economist at Zillow. “We know two things for certain: the eviction moratorium is succeeding at keeping renters in their homes, and millions of renters believed that they will be evicted in coming months if the cliff came this week. How many actually are evicted depends on the economic recovery and individual landlord decisions.”
Forecasting the number of likely evictions
According to Zillow’s analysis of the Census Bureau’s Household Pulse Survey, some 3.4 million Americans said they are at risk of eviction with the moratorium set to expire on Wednesday. With that extended three more months, as few as 130,000 renter households ultimately could be evicted, depending on the economic recovery, and individual landlord decision-making.
More than 8.3 million U.S. renters reported being behind on rent payments as of March 15, with 16.8% (1.41 million) of those respondents indicating they were ‘very likely’ to be evicted in the next two months. While these numbers are sobering, it is expected that a small fraction of those fearing eviction will actually lose their homes — not all landlords will choose to evict, and also, not all eviction filings result in actual eviction judgments in courts.
However, with no historical precedent for this potential crisis, predicting how small the fraction might be once the moratorium expires is extremely difficult, especially with remaining uncertainty around federal policies and how landlords are able to respond.
Landlords are facing difficult choices
Every tenant-landlord relationship is unique, but evictions based strictly on owed rent aren’t always in the landlord’s best interest. The process of evicting a tenant is time-consuming, and in the end, landlords might find themselves struggling for several months to fill vacant units, which will ultimately cost them even more.
“Landlords are willing to work with tenants, and when the moratoria ends, we would much rather find a solution than evict,” says Kellie Tollifson, owner and vice president of operations of T-Square Real Estate Services. “It’s all about maintaining a relationship and open communication to figure out the best path for your unique situation. Landlords can direct tenants where to find assistance or work out payment plans that support both parties. Keeping people housed is the right thing to do, and it’s also good for business, so landlords are highly motivated to work with renters to get through the pandemic together.”
One mutually beneficial solution is offering a repayment plan and amortizing the back rent into ongoing rent payments, with landlords effectively serving as private creditors as they recover back rent over time. In this scenario, the benefit to the renter is avoiding an eviction, and the landlord is made financially whole. However, that might not be feasible for landlords who need a steady cash flow to make mortgage payments and remain afloat.
Last year, many young adults left their rentals to move back home, and one-third of rental listings were offering concessions this past fall as landlords tried to entice renters with benefits such as free parking or one-month free rent. And now with millions of U.S. renters at risk of eviction this summer coupled with increased rent growth across the U.S., finding new tenants without a record of evictions and with liquid funds to make security deposits may prove extremely challenging.
An eviction crisis could be avoided with the right federal support
While today’s extension protects renters from eviction, the policy should be coupled with relief for landlords and rental assistance programs to support both and avoid an eviction crisis on the horizon.
The recent federal stimulus bill was an invaluable lifeline in delivering direct economic relief, providing $45 billion in rental assistance to put money in the pockets of the most vulnerable renters, as well as landlords who have struggled to meet mortgage and utility obligations due to missed rent payments. However, the government has struggled to distribute that money fast enough to meet the needs of renters and landlords, as the March 31 moratorium deadline loomed.
“The ongoing challenge for policymakers is to keep renters in their homes without overburdening landlords,” according to Glynn. “Further extending the eviction moratorium achieves one goal but also prolongs the financial stress on individual landlords. Eventually the federal moratorium will end, back rents will come due, and landlords will be able to evict. Avoiding an eviction crisis will require that landlords, tenants, financial institutions, and policymakers work together to find constructive and creative ways to keep renters in their homes and make landlords financially whole. The alternative is millions of evictions, and the social and economic costs of that are unimaginable.”
The extended moratorium is a temporary bandage that has potentially damaging repercussions in the future, if not paired with other relief programs. Robust economic recovery and expedited distribution of fiscal support to renters and landlords is needed to prevent a potential eviction crisis and keep landlords and renters in their homes.
The post With Eviction Cliff Extended, Here’s How Millions Can Keep Their Homes appeared first on Atlanta Daily World.