At the beginning of September, the CDC issued a new moratorium on residential evictions through the end of the year, though they provided some exceptions to the rule. Individual states and cities have similarly created moratoriums on evictions in addition to the federal mandate. That list includes Illinois, where Governor Pritzker extended the current moratorium for another thirty days on Sunday. But some landlords, particularly the smallest ones with the least rental property, are now pushing back. They’re telling the governor that some tenants who were already delinquent before the pandemic hit have been taking advantage of the situation to live rent-free and these deadbeats are putting them in danger of bankruptcy. (CBS Chicago)
Some mom-and-pop landlords want Gov. JB Pritzker to let them evict tenants who were set to be tossed out before the start of the coronavirus pandemic.
On Sunday, the governor extended the eviction moratorium for another 30 days without offering any relief to the landlords.
CBS 2’s Jeremy Ross spoke to property owners who said it is allowing deadbeat tenants to live rent-free.
Linda Villareal’s Jefferson Park property provides rental income. But Jefferson said the tenants haven’t paid rent since the fall of last year.
In addition to previously delinquent tenants who are getting a free ride, we’ve also seen reports out of New York and other cities where tenants who were up to date on their rent before the pandemic simply stopped paying once the moratorium was announced, even if they were clearly still employed. Some apparently figured that it was worth getting evicted in 2021 if they could basically get most of a year’s worth of rent-free living in the meantime.
I’ve been writing about the looming eviction crisis since early in the summer, noting that it’s hitting both tenants and landlords in a dangerous fashion. The problem has already materialized in a number of places, such as Boston. Some of the “mom and pop” landlords there who only own one or two rental properties are losing their retirement savings because tenants haven’t paid their rent for many months but the bills keep piling up.
As we’ve seen with so many of the emergency measures that were rushed through at the start of the pandemic, the way the eviction mandates were pushed through was clearly shortsighted. In hindsight, it seems obvious that there should have been some exceptions put in place for landlords. Renters who were up to date on payments and then lost their jobs when the pandemic hit clearly needed some relief, though how they will square things away when the moratorium ends remains unknown. But anyone who was already delinquent before the moratoriums began or who stopped paying even though they saw no impact on their income should have remained eligible for eviction.
This is similar to the way that federally enhanced unemployment benefits were handled in a rushed and flawed fashion. We clearly needed to put a cap on those benefits at roughly 90% of the worker’s previous wages. Instead, we gave a lot of people a raise of as much as 50% to stay home rather than returning to work. Are we really surprised that many people wound up doing just that?
This epidemic of shortfalls for landlords is more widespread than some might imagine. The huge real estate firms that control large tracts of rental properties may be able to suck up some losses and ride this out. But of the roughly 43 million rental units in the United States today, approximately half of them are owned by small businesses or individual owners. There are plenty of tenants facing serious financial trouble to be sure, but so are these landlords. And if they are driven out of the market, all of the rental properties will be owned by the “too big to fail” companies.