[1] https://dfpi.ca.gov/2021/03/15/covid19/
[2] https://home.treasury.gov/policy-issues/coronavirus/assistan...
For the most part, we saw landlords REFUSING these subsidies and refusing to help tenants get them - https://newrepublic.com/article/163840/erap-cash-tenants-not...
The reality for her company, and many landlords, is that it was extremely easy for a deadbeat tenant to stop paying rent. They simply printed out the form, filled it out (it was essentially a 1 page form), and they could immediately stop paying rent and not be subject to eviction. No verification was needed. City workers who were definitely still employed according to public records were doing this on 3 of her properties when they did an audit.
Conversely, the programs that would reimburse landlords required far more rigorous documentation, AND ACTION FROM THE TENANT. That last part was the killer. The deadbeats simply had no interest or motivation to fill out paperwork that allowed the landlord to get reimbursed.
I know that this is anecdotal, but my sister is also an elected representative of an industry group that represents property management companies. Her group did extensive surveys and analytics, and concluded that in the state of Virginia, the problem was widespread, and her company's experience was actually a bit better than most of the other member companies.
She would call me to vent quite a bit. She was furious at how "thoughtless" the original implementation of the moratorium was under the Trump administration. She thought for sure that Biden would come in, see it as a Trump artifact, and revise it in a careful way. This didn't happen, and he instead extended it twice. It was extremely detrimental to their business, but more importantly, to any and all new tenants, as well as existing tenants. New tenants had to pay far higher rents. Her company had to cover the losses from the deadbeats, and additionally, had to "price in" the risk of a new tenant suddenly filing the moratorium form and ceasing to pay rent.
It never ceases to amaze me how bureaucracies will double down on policies while ignoring the unintended consequences they produce.
The deadbeat tenants don't really escape their liabilities though. They've gone for so many months not paying and not pursuing aid. So when they're evicted, eventually, they owe so many months back rent to the landlord. I'm sure some will escape through bankruptcy, expatriation, new aid, etc, and that the annoyance (if not the cost) of pursuing the rest will be substantial. But anyone that actually realized a financial gain at the landlords expense through is going to face liens, garnishment, and seizures until they're square. If there really are tons of these people, it would seem like a good time to be in the collections business.
Individually, no. As a class, yes. Property rental seems a lot like a Subway franchise in this respect. If one property owner becomes insolvent, the property will be sold to another person who is not. The tenant might be evicted by the new owner but, on average, probably not.
Edit: pardon my obscure Subway reference. Subway franchises are notorious for going out of business with incredible frequency. You'd never notice because an insolvent franchisee's best option is to sell the operating business to another, solvent franchisee. Subway arranges the sales. Then Subway sells more franchises with statements to the effect of "80% of locations have been operating for over 20 years" (not their actual words).
Elevating group identity over individuals is the root of some of the most evil activities in human history.
It should be noted that individual human beings who moved to a new home and chose to rent their old home got burned by this moratorium as well. Often getting put in a situation where they were forced to foot the full bill of two mortgages, with no end in sight. There was a well-reported case of a terminally ill cancer patient who lost all of her income when a tenant in her split-level home stopped paying rent by abusing the moratorium.
Your Subway example was hilarious, BTW. I've seen that happen so many times lol.
Moreover, while many tenants have continued to pay their rent - MANY have gradually started realizing that I am unable to evict them, and have completely stopped paying rent. Moreover, they have started collaborating under the assumption that there is more protection if they do it together.
Like other landlords, I have lost a tremendous amount of money in this pandemic. My 12 unit complex represents my retirement, so this hit me very personally.
It's incredibly unfair that the most honest tenants continue to pay. The ones not paying are not paying because they know they can get away with it - not because they cannot pay - they are all still working.
Financial advice always says, don't put your eggs into one basket. If a single multi unit apartment represented your retirement, that seems to have just been bad investment?
Anyway, rental assistance programs are available out there. Just need to put the work in and apply and wait.
I can see why people get so frustrated with landlords. It’s the same kind of frustration when Wall Street asks for government intervention after making a series of bad trades
Even worse, a long term eviction moratorium is incentivizes landlords to filter out poorer tenants with income and credit requirements, making housing more expensive for them.
If the government bans cigarettes, should the government then reimburse every shareholder in Philip Morris?
>However, they are the ones who are forced to pay for provide a service that the government desires, housing, at their own expense
Someone had to brunt the cost of the pandemic. It would have been bad public policy if the government had let people go homeless.
Regardless, my point isn't that the government acted piously here, it's that real estate is a capital asset class and should be treated as such. If you get in the game of capital speculation you shouldn't get to go crying to the government when things don't go your way. I have the same amount of sympathy for people who all-in on urban real estate and the people who go all in near to expiration SPY calls. The government's primary concern shouldn't be protecting people's capital investments.
No, but that's because Phillip Morris isn't actively offering anything to the government. A landlord that isn't allowed to evict is. If the government forces them for provide cigarettes to soldiers during a war, they have to pay them to do so.
> Someone had to brunt the cost of the pandemic.
That's what taxes are for. Even money printing is better. It doesn't make sense for them to target landlords who serve low-income tenants in particular. That would be like forcing grocery stores to offer free food to poor locals. In the short term, it may help some people, but in the long term, grocery stores in poor neighborhoods would simply shut down and everyone would be worse off. That's why we have food stamps instead.
> If you get in the game of capital speculation you shouldn't get to go crying to the government when things don't go your way.
I agree that land speculation is particularly useless and the government should try to get rid of it, but that's not happening. Property speculation is higher than ever.
You are also entitled to sue your tenants in arrears for every penny of unpaid rent plus the costs of collecting. Even with a judgement you may not be able to collect if they have become destitute, that’s the nature of the business you are in.
I sincerely hope you get a chance to retire, society would be a lot better if everyone is able to. Hopefully we don’t all need a 12 unit building to do so!
I know you WANT to believe this program didn't screw over landlords, and that most of the people utilizing the program were honest, good human beings. That's simply not the case when you talk to any landlord.
Feel free to ask the person you are replying to what their experience has been. I have yet to meet a landlord that doesn't have a hugely negative view of the entire suite of pandemic programs.
See another comment I made discussing my sister's experience.
The childish, dorm-roomy attitude of landlords being "big faceless corporations" is wholly inaccurate and distorted. The same group also has this view that most people using this program were honest, good citizens experiencing true hardship. This is absolutely not the case according to every audit my sister's company did, as well as the research the industry organization she was elected to did.
It's a bunch of dirtbags capitalizing on a poorly constructed policy.
They allow politicians to pretend they've resolved a problem, while managing other aspects of a crisis. Later, when the moratorium expires, hopefully the media is concerned with other things and the plight of the evicted will go unheeded.
It's also a middle-of-the-road measure between doing nothing (bad publicity) and declaring a rent holiday / subsidizing rent from taxes / expropriating rented-out apartments or other such measures (politically difficult, angers donors and politicians' social milieu).
So, it prevents that. And it's an important thing to prevent.
Not quite. Only 0%.
It's going to be less and more delayed than rent payments, but that's expected during a crisis.
Renting isn't, and shouldn't be risk free.
That goes both ways, as a renter you risk getting kicked out, while as the landlord you risk not getting paid. Landlords typically evict and get someone who will pay but they were unable to. While there were programs for landlords, it was hard to get money out of them for various reasons.
Did I imply it doesn't? Evictions are no longer banned at a national scale. So, uh, yeah? We already know it goes both ways. In this special circumstance, the government essentially came in and said "We're not going to allow you to do that type of business for a bit for the sake of society."
Landlords by definition exist because the state allows them to exist. If the state wasn't there, landlords would probably be at the mercy of the 90% - and things would get ugly. So, to keep enjoying those protections that the government is giving, you need to follow circumstantial business changes. Such as a pandemic.
I mean, medicine is socialized (*) so that living will be "risk-free" health-wise, so why not housing?
(*) - Yes, I know that doesn't hold in the US...
Some states had programs that would provide some money to renters to help them with that, but it wasn't enough for a lot of people.
But my less affluent neighbors also didn't receive anything in direct support of rent payments, despite their jobs disappearing.