Expect the Most Evictions in History as Ban Expires

Mish

The federal ban on evictions expires in January. For millions that's when huge problems start.

Wave of Evictions Coming

Prepare for a Wave of Evictions in January as Federal Ban Expires.

Millions of U.S. renters face the prospect of eviction in January unless federal officials extend protections put in place during the Covid-19 pandemic.

That month is when the Centers for Disease Control and Prevention’s ban on evictions is set to expire. The moratorium protects tenants who have missed monthly rent payments from being thrown out of their homes if they declare financial hardship. The CDC ordered the halt on evictions under the Public Health Service Act, which allows the federal government to enact regulations that help stop the spread of infectious diseases.

Between 2.4 million and 5 million American households are at risk of eviction in January alone, and millions more will be vulnerable in the months after, according to estimates from the investment bank and financial-advisory firm Stout Risius Ross.

Landlords have already filed more than 150,000 eviction petitions during the pandemic in the 27 cities tracked by Princeton University’s Eviction Lab. Many of those tenants have lost their cases, and are now on the hook for all their back rent.

Most Evictions In History

I don’t see how it’s possible that we’re not going to see more evictions on Jan. 1 than we’ve ever seen in a month,’ said John Pollock, staff attorney at the Public Justice Center

Questions Abound

  • It's easy to sympathize with tenants but what about landlords who cannot pay mortgages?
  • Are we to postpone evictions forever while landlords lose their property? 

There has been no discussion in any of the recent Covid packages for further moratoriums nor aid to landlords who have not been paid for months.

So unless there is specific aid sufficient aid in the bill to allow tenants to catch up, millions of evictions are on the way.

Mish

Comments (60)
No. 1-19
Dodge Demon
Dodge Demon

The landlords have to pay their local property tax bill no matter if the tenants don’t pay rent. The government locusts and their pensions must be paid. Those rats haven’t missed a cent of pay all year.

Carl_R
Carl_R

Yes, we'll see evictions. We may also seem some impact on spending, as tenants slash spending to pay back rent.

Webej
Webej

There will be no choice than to have a temporary extension of the eviction moratorium pending temporary readjustments in the economy, engendering temporary dislocations in other parts of the economy, ad infinitum.

Felix_Mish
Felix_Mish

It would be interesting to see the ratio of renters to landlords-using-rent-to-cover-house-payment.

Too, renters must go somewhere. Which says either lower rent or a combo of empty houses and houses with more people together. Together, breathing on each other.

Johnson1
Johnson1

I am guessing the people have to live somewhere. Lets say Bill gets evicted from his apartment on Oak street while Jill gets evicted from her Apartment on Elm street. Bill will probably then be looking for an apartment and Jill's will be free so he will move into her apartment and visa versa.

People need to live somewhere so at the end of the day, will there actually be an increase in vacancies?

Winn
Winn

That's why Buffett sold the banking shares. He foreseen this problem.

AVThompsin
AVThompsin

I live in Florida, where the state is now a red zone!!! The virus is spreading rapidly. The government or local officials wouldn't even honor the ban. I was evicted from my apartment in November for back rent. The landlord don't care now homeless!

dbannist
dbannist

This is going to come across as heartless. It's not intended to be so.

I'm a landlord of 72 low income units. The average income here is around 15k annually. Many of my tenants lost their jobs in March, about a third of them. While that's a very high number, not even one of them lost income. The Pandemic Unemployment benefit guaranteed that every one of my tenants made significantly more than before. Additionally many of my tenants got a 2200 or more gift from the federal government from the checks that got sent out.

About 9 of those tenants stopped paying their rent, even though they had MORE income than before. I asked each of them each month since then when they were going to pay their rent. One of them told me she couldn't pay her rent because she "had to buy new furniture with the check". 6 of them bought brand new spanking cars.

There will be exactly ZERO sympathy from me when I can file eviction on Jan 1. Zero. They deserve to be evicted.

I do have one tenant who had her hours severely cut and has been in constant contact. She has apologized nearly every week for not being able to pay her rent. She received no help from unemployment. It's weird that in America you are better off unemployed than keeping your job but having hours cut.....there's something morally wrong with that. I will work with this tenant who deserves to keep her unit due to circumstances beyond her control.

The others? Nah, I'm not going to show mercy. They deserve it when they drive a nicer car than I do.

KidHorn
KidHorn

Looks like black people had a big jump in unpaid rent while at the same time Asians saw a big drop. Any explanation?

BDR45
BDR45

I'm of two minds on this dilemma. Here in Tallahassee a law was passed to give landlords money to pay their mortgages. I spoke against this. We are really subverting capitalism, by subsidizing everyone, no matter how "deserving". As a landlord myself, I purchase a building knowing full well that the twists and turns of life do not always work in my favor. Do I expect to be compensated because a pandemic has been declared and 30% of my tenants can't pay rent? No, I am not a crybaby. I know there are a lot of risks in life. I accept the risks. I feel bad for tenants many of whom are living paycheck to paycheck. Most will not be able to pay back rent. They are suffering also. In capitalism, if a landlord cannot pay his mortgage, the lender forecloses. Am I an old fuddy duddy thinking it shouldn't apply to me?

LawrenceBird
LawrenceBird

No sympathy for landlords or any other holder of real estate investments. You took on the risks of non-payment when you bought the properties. Also no sympathy for renters/leasees who get sufficient goverment assistance and yet do not pay their bills.

CaliforniaStan
CaliforniaStan

It's good to keep in mind that the background rate of evictions runs just less than a million per year. So if "landlords" who have been unable to file for six months suddenly file 200,000 cases, that could well be lower than what happens every year.

Eddie_T
Eddie_T

I don’t have any defaults.....I had a couple of move-outs....one I was sweating because they were not great tenants and I wanted them out. They could have used the moratorium to squat for a while....but thankfully they didn’t. I was able to rent the house during COVID, after making repairs.

A second house is being made ready. It’s under management, and the management company is dragging their feet with repairs now.....probably because demand is low this time of year........but I think it will rent within a month or two.

I have a handful of other single family houses, and they are on time, with good tenants in place.

I’m lucky because the shift to Austin is keeping rental demand high. When I told my friend in SF that rents were still going up here, and that I expected property values to keep climbing too (several months back now) he couldn’t believe it. But it’s true.

Interest rates are very favorable for landlords to buy more properties...but prices are too high. It would be nice to see demand fall a little in new home sales....but I don’t look for it here.

I’d like to add at least one more property in the next year or so. I expect to pay a premium for anything decent. I’ll either buy something in a couple of neighborhoods I like (where I already have some exposure)...or I’ll buy a new house in a subdivision that’s still being built out.....to avoid having to put money into maintenance. That would mean getting way out on the edge of town somewhere. Maybe out near Tesla.

Real estate is in a bubble, but macro trends make some areas winners and others losers. I’m not too worried about having to do evictions, thankfully.

I have fifty boat storage units out here at the lake. Very old and small. I was doing repairs out there over the weekend.....Rebuilding barn doors, which isn’t much fun when it’s windy. I have a few vacancies, but I never market...I should make more effort

I need to come up with a new vision for that property......it is paid for now and flows cash, but if I had larger units I could do much better with it.

The lake community here is starting to be rapidly upscaled....cottages like mine are being torn down now and replaced by million dollar (at the low end) vacation and retirement homes.

AnotherJoe
AnotherJoe

"while landlords lose their property?"

Hard to answer that. Aren't landlords (Blackrock) getting a free ride with interest close to 0 and full access to money? Isn't the Federal reserve policy benefiting debtors (mortgage holders) more than renters? Isn't the central bank bailing out landlords to the detriment of the others? Why not bail out renters?

KendleC.Corndog
KendleC.Corndog

Why are the tenants and landlords the ones to lose, why not the banks? After all "we're all in this together."

mannor52408
mannor52408

vote to evict the politicians from office. They are getting paid for doing nothing. Newsome hasn't done anything productive for California other than keep the business closed.

1Roseburgman
1Roseburgman

But how necessary are the shut-downs and the overall economic slow-down? What is the total mortality number in America in 2020 and how does that number compare with the past 5 years in America? Just how accurate is the Covid-19 virus test? How many "with" the virus are dying? How many of those who have died had serious pre-existing conditions? What are the age stats on those who have died? Why are these simple questions not easily answered? Our economy is failing. Honestly, isn't the "cure" worse than the disease? How was this ever allowed? Remember, MILLIONS were going to die. But WHO's dying? If this is the worse pandemic in human history then where is the expected huge bump in national mortality???


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