Just a Landlord

The Virginia State Supreme Court extended yesterday the judicial moratorium on eviction proceedings for another 28 days. 

While it is VA, the arguments apply universally.

https://www.baconsrebellion.com/wp/no-equal-justice-for-landlords/

Justice Kelsey finds the following faults with the majority’s approach:

• The judicial-emergency statute exists to help folks who can’t avail themselves of the courts, or to meet schedules or time deadlines. He concludes that “Exactly the opposite will be true under this ex parte order” (italics his). This order impedes a landlord’s access to the courts, even while the courts are capable of adjudicating their claims. The majority cited tenants who might suffer from health conditions that prevent them from coming to court. This dissent calls that an unwarranted generalization, one that landlords are powerless to contest on a factual basis in each case.

• The legislature passed in April a bill that provides relief to tenants facing evictions, giving them an of-right 60-day continuance. That provision lasts as long as the Governor’s declaration of emergency does, so as Justice Kelsey points out, it’s still in effect. By entering this order, the court has stepped into the legislative and executive arena. He concludes, “Whether this legislative response to the housing crisis is adequate or not, we have no authority under separation-of-powers principles to issue an ex parte judicial order expanding the statutory remedy.”

• Next, the dissent points out that this order singles out and targets one type of litigant: landlords. And it deprives those landlords of a remedy while doing nothing to prevent a tenant, even one who hasn’t paid rent since March, from suing the landlord for breach of some lease provision. Justice Kelsey argues that the order “rests on a wholly untested factual assumption,” namely, that tenants would have paid their rent but for the pandemic. What about those tenants who didn’t lose their streams of income? What about those who received alternative income streams, such as CARES Act payments? They get relief, too, and landlords have to sit on their hands and fume.

• The dissent next notes three “constitutional concerns” that the order ignores. First, no one has the power to suspend the execution of generally applicable laws. But this one does that, hampering landlords to the benefit of tenants, in a specific class of cases. It matters not to Justice Kelsey that the judiciary, rather than the executive, is doing the suspending. Next, he posits something that I’ve mused about: This deprivation of a remedy may be a taking of private property for a public purpose, triggering a landlord’s right under Art. I, section 11 for just compensation. And third, this order at least appears to impair the obligation of contracts.

NAR and other industry partners sent this to the President this afternoon – message “Rental Assistance and Eviction  Moratorium- Can’t do one without the other!

August 7, 2020 

The President
The White House
1600 Pennsylvania Ave, NW Washington, DC 20500 

Dear Mr. President: 

The undersigned national associations that represent for-profit and non-profit owners, developers, managers, housing cooperatives and housing agencies involved in providing affordable rental and cooperative housing to millions of American families urge you to take meaningful action now to protect the housing stability of millions of American families impacted by the COVID-19 pandemic. The relief provided by the CARES Act was successful in helping Americans meet their housing needs, and we strongly urge the Administration to support critically needed policies as you consider further action.

As you know, over 54 million Americans have filed initial claims for unemployment since the beginning of the pandemic, and many are struggling to pay everyday expenses – chief among them, rent. As the pandemic drags on, the country’s 109 million renters are expected to be disproportionately impacted because they are more likely to work in industries hardest hit by layoffs. In fact, the Census Bureau estimates that 46 percent of all renters are currently unemployed. Moreover, as the crisis continues and renters’ savings are depleted, these ongoing challenges will interfere with renters’ ability to pay their rent: Nearly 24 million people have little or no confidence in their ability to pay next month’s rent, according to the Census Bureau. 

If residents are unable to pay their rent, housing providers will also be unable to meet their mortgage obligations, fund their payrolls and pay their property taxes to state and local governments that have been hardest hit by the pandemic. That, in turn, is likely to catalyze a chain of events with potentially devastating financial and economic effects.

We urge you to consider two items of great importance to the housing sector:

• Financial Assistance/Emergency Rental Assistance – Renters impacted by the pandemic need federal rental assistance to continue meeting their financial obligations. Federal and state unemployment assistance benefits have helped many renters make their rent, but without that supplemental assistance or another financial lifeline, many will not be able to meet their financial obligations. An extension of now-expired federal unemployment benefits, in conjunction with direct rental assistance for those not able to access those funds, is necessary to protect the housing stability of millions of Americans.

A variety of rental assistance proposals have emerged, and our groups urge policymakers to ensure whichever delivery mechanism(s) is chosen, swiftly distributes funding at the property-level, while also protecting struggling renters at all income levels and geographic regions including urban, suburban and rural areas throughout the country.

• Eviction Moratorium – The CARES Act included a temporary eviction moratorium that responded to the immediate uncertainties and difficulties at the outset of this crisis. Today, we better understand the scope of the housing challenges we face and must establish long-term solutions to avert serious damage to America’s renters and housing providers. An extended eviction moratorium is not the answer to the financial distress that renters may experience and could in fact cause considerable injury to the housing sector as a whole. 

A protracted eviction moratorium is unsustainable and does nothing to address a renter’s underlying financial distress or risk of housing insecurity. In contrast, the creation of a robust rental assistance program, as outlined above, or other financial aid would provide real support for American families, while also helping preserve critical stability for property owners. An eviction moratorium without a federal funding commitment creates conditions for a systemic market failure where lost, and likely irrecoverable, rent payments jeopardize property owners’ ability to maintain critical property operations and ensure the ongoing financial viability of the property. These efforts put the stability of the entire rental housing sector in danger and further complicate our shared efforts to address long- standing housing affordability challenges across the nation.

As you continue your work to respond to the COVID-19 pandemic, it is clear that continued direct financial support and emergency rental assistance provide solutions for residents and housing providers alike and are necessary to help those with financial hardships, without undermining the stability of the housing market and the financial health of our communities. By taking meaningful action now, the Administration can keep roofs over families’ heads, save small businesses and pull the country back from an emerging housing crisis.

Sincerely, 

CCIM Institute
Council for Affordable and Rural Housing
Institute of Real Estate Management
Manufactured Housing Institute
National Affordable Housing Management Association National Apartment Association
National Association of Home Builders
National Association of Housing Cooperatives 

National Association of REALTORS
National Leased Housing Association
National Multifamily Housing Council
Mortgage Bankers Association 

cc: Treasury Secretary Steven Mnuchin White House Coronavirus Task Force

I encourage everyone to download and read the following published research paper

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3641859

“Our research shows that in order to keep rental housing affordable and sustainable for low-income families, lawmakers have to walk a fine line in determining what will benefit the tenant and what may ultimately be detrimental to them,” Shen said. “On the surface, strict landlord regulation sounds good for tenants, but our paper points out, the solution isn’t that simple. The research suggests that conventional thinking on the issue of more regulation may have the opposite effect on tenants.”

“Though advocating for tenant rights seems noble and the right thing to do, the resulting consequences could have a devastating impact on this vulnerable population,” Shen said.

“Our research indicates that if landlords aren’t allowed to evict, rent will likely increase to compensate for their losses. The housing supply would diminish, though the demand would still exist. These landlords may choose alternative investments if owning property is no longer feasible. A reduced housing supply would mean less competition, which would drive up the cost of rent for everyone.

Read the National Housing Coalition letter  to Congress and the Senate. It is a worthy read, even if you are disinclined to reach out to your elected officials, but you should call/write your Senator and Congressperson.

Who are my Senator and Congressperson, you ask?

Find my Congressperson
Find my Senator

No harm in asking your local elected officials to support these efforts as well. You can find your State Senator and Representative on the Wisconsin Legislature home page. The search box is on the right, just below the picture. Tell them you understand they do not directly control Federal legislation, but ask if they could please talk to their party about this.

Also no harm in presenting this to your local elected officials. They hold more political power than many believe. In Milwaukee those folks are:
Mayor Barrett
Common Council
County Supervisors

What are you waiting for… Go make some noise! 😉

Halting evictions during the coronavirus crisis isn’t as good as it sounds

Read the whole thing, but here are some tasty nuggets

To protect renters from losing their homes, a growing number of cities and states have put a temporary halt on evictions, meaning that landlords cannot evict tenants who fall behind on their rent. While this may buy renters more time, a moratorium on evictions could cause ripple effects that further hurt local economies. But there is a more effective way to help renters by giving them cash that replaces lost income, while also supporting small businesses and local governments.

RENT HAS IMPORTANT MULTIPLIER EFFECTS IN THE LOCAL ECONOMY

Rent checks don’t just line the pockets of fat cat landlords—they also contribute to essential government services and other workers’ wages. If many households are simultaneously unable to pay rent, the economic impacts will be felt throughout the local economy.

…

The first entity that gets paid by a monthly rent check isn’t the landlord—it’s the local government. Property taxes have a higher priority even than mortgages; if a landlord falls behind on both property taxes and mortgage payments, the local government’s claim supersedes the lender’s.

Landlords are also responsible for paying building-wide utilities, including water and sewer fees, garbage and recycling collection, or gas and electricity for common areas. These are essential services that must remain functional even during the pandemic.

Additionally, many of the expenses incurred by landlords are actually the wages of other workers. Keeping an apartment building functioning, safe, and clean requires the efforts of maintenance and housekeeping staff. Larger buildings typically employ on-site workers, but even small properties have ongoing needs which they may outsource to local contractors, like plumbers or electricians. As rent payments dwindle, small landlords will defer some maintenance needs—which means poorer quality housing for all tenants in the building and loss of employment for maintenance workers.