Separate from any eviction moratorium that was applicable to lessors under the CARES Act, evictions of persons from properties securing FHA-insured Single Family mortgages, excluding actions to evict occupants of legally vacant or abandoned properties, are also suspended through March 31, 2021.
https://www.hud.gov/sites/dfiles/OCHCO/documents/2021-03hsgml.pdf
Note this covers all tenants in HUD insured single family properties
“I don’t think a landlord should be expected to shoulder the burden of taking care of a property for several months or a year,” when a tenant stops paying rent, said Dawn Anastasi, a landlord who owns 18 properties on the northwest side of Milwaukee. “It’s not the tenant’s fault, but it’s not the landlord’s fault either.”
Even with the rent assistance, landlords will be left holding the bag for much of the unpaid rent, predicted Tim Ballering, treasurer of the Apartment Association of Southeastern Wisconsin.
“The unpaid rent will never be paid, let’s be honest about that,” Ballering said, noting that even when a tenant is evicted the landlord seldom collects the past due rent.
As a result, Ballering, who is also a landlord, predicted a spike in the number of local landlords who sell their properties to large absentee rental companies.
“Is that a good thing or a bad thing?” Ballering asked. “That depends on your views. Do you think that the small American farmer being driven out by large corporate farmers is a good thing?”
Heiner Giese, attorney for the association, said the $25 billion in rent assistance will be helpful though he agreed it would likely only last a couple of months.
Giese noted that the federal bill will allow landlords to file for rent assistance, unlike other rent assistance programs that require the tenant to apply
Giese, who is also a landlord, said he has seen cases where tenants signed the required CDC declaration that protected them from eviction but then did not apply for any rent assistance.
“They would just say he’s going to evict me anyway, so screw it,” Giese said.
I am hearing from more and more owners who are not paying their mortgages, utilities, and even fire insurance because they can’t, due to uncollected rent. Maintenance was the first casualty.
If you are facing similar problems and would be willing to share with your elected officials and or the media, please email me. Tim[at]ApartmentsMilwaukee.com
https://www.cnn.com/2020/12/17/success/landlords-struggling-rent-eviction/index.html
If landlords are struggling, tenants will also be affected as home maintenance slides.
“I’m seeing landlords who can’t pay for trash removal,” Gray said. “We’re getting ‘no heat’ calls. They aren’t paying real estate taxes. They aren’t paying their mortgage.”
For the typical landlord in trouble, which he said is someone who bought their property in the last five years and is leveraged to the hilt, there are no reserves. “Despite tenant protection laws, these landlords don’t have the cash reserves, nor the equity in their building to get loans,” he said. “With the moratoriums, they’re taking hit after hit.”
Some landlords, he said, are being paid less and seeing the wear and tear on their property increase as grown children or friends double up after losing their own housing. Routine maintenance that was supposed to take place this year has in some cases been delayed or canceled because landlords just don’t have the money, said Gray.
“They can legislate the need to do timely repairs,” he said. “But for many landlords, there is no money.”
We are trying to get a handle on what percentage of uncollected rent is not reflected in eviction judgments. Any data you share will be aggregated and will not identify you when we share our findings.
This information should be only for your Milwaukee County rentals.
You can email me directly
There is an average of about a million dollars a month in Milwaukee County eviction judgments. Our initial survey shows this represents somewhere between a quarter and a tenth of the total unpaid rent, which in turn means your tenants who are paying as they should are paying an extra $49 to $123 per month to cover those tenants that do not pay.
Five years after the eviction has concluded only 2.5% of eviction judgments are paid.
Tim Ballering
Tim@ApartmentsMilwaukee.com
A member wrote on the free Apartment Association listserv wrote:
I have a single family in Milwaukee county that the tenants are late almost every month. Usually I work with them but they haven’t been answering my calls. Can I give a 5 day notice to pay or vacate?
I’m not really sure what’s legal with the eviction moratorium.
CARES ACT: If the property has a federally backed mortgage or you are receiving Section 8, you are probably prohibited from serving a notice until at least 1/1/21. You would need to serve a 30 day notice for any money due in 2020.
CDC Moratorium: Judge Conley, who is in charge of evictions in Milwaukee County, has recently ruled that the moratorium does not prohibit serving a notice or filing an eviction even if you received the CDC Declaration.
If your property is not covered CARES or CDC you can serve notices and file evictions.
But … Have you considered attempting meditation?
We tried pre filing mediation before the WI moratorium ended. In our experience it delivered results similar to what you would get in a stipulated dismissal, but with far less confrontation and the added benefit of the mediator helping the tenant apply for assistance. We had a number of cases that would have resulted in displacement, but were positively resolve because of mediation.
In fact this has worked so well that we implemented a policy that we attempt mediation for all non payment situation prior to filing. Our company policy of pre filing mediation will remain in effect even after the COVID crises ends, because it works.
Mediate Milwaukee 414-939-8800 or emailing apply@mediatemilwaukee.com.
There are those who see rental housing as a zero-sum game — the only answer to the COVID rental economic crises is to have the property owners absorb all the lost rent.
What we learned from looking at the September 2015 and May 2019 Milwaukee County eviction data that less than 2.4% of eviction judgments are paid even after five years, with less than seven tenths of a percent paid within six months.
So when you read of $50-120B in rent debt due before the economy returns, that means someone is expecting $47.5B to $117B will be borne by housing.
The right answer is for renter advocates and housing advocates to work in unison to get the funding necessary to prevent evictions and stabilize rental housing .
If the rent is paid, people will not need to worry about eviction, nor will they have to worry that rental housing will fail, also leaving them homeless and facing higher rents in the future. And let’s not forget the cost of housing foreclosures on municipal budgets.
If you want to share this or any other housing concerns with your elected officials, go to democracy.io and enter your address. The site allows you to write to both your US Senators and your Congressperson at the same time without searching for their emails or finding who represents you.
We should be asking for housing assistance to prevent the failure of both renters and housing.
If you do write – I’d appreciate if you send me a copy to Tim@ApartmentsMilwaukee.com
74.4 % of rental properties owned by individual investors. Source: https://www.census.gov/newsroom/press-releases/2017/rental-housing.html and in an easier to read format in this report from Harvard: https://www.jchs.harvard.edu/blog/who-owns-rental-properties-and-is-it-changing
55% of rental units as owned by part-time landlords: https://www.avail.co/education/articles/state-independent-landlords-2017
Rent debt will be $25-34B by January 1st. https://www.ncsha.org/resource/current-and-expected-rental-shortfall-and-potential-eviction-filings/
roughly 10 – 14 million renter households — home to 23 – 34 million renters — were behind on their rent by a total of roughly $12 – $17 billion as of September 14, 2020.
These renters will owe $25 – $34 billion by January 2021,
(from a chart just below the P1 fold)
More State-Specific info at: https://assets.aspeninstitute.org/content/uploads/2020/08/chart3_fsp.png
Local economic multiplier of rent payments from a report by Brookings Inst.
RENT HAS IMPORTANT MULTIPLIER EFFECTS IN THE LOCAL ECONOMYRent 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.
Cities and counties rely on property taxes from all their constituents—individual homeowners as well as owners of apartments, offices, and other nonresidential properties—to cover the cost of providing public services. Although local governments could defer property tax payments during the current crisis, the pandemic is already stressing local government budgets. Cities are front-line providers of health care and emergency services, and also need money right now to feed children whose public schools are shut down and care for older adults and vulnerable populations.
https://www.brookings.edu/blog/the-avenue/2020/03/25/halting-evictions-during-the-coronavirus-crisis-isnt-as-good-as-it-sounds/
Census reports that the average rental unit generates $1,198 per unit per year in wages.
https://www.census.gov/data-tools/demo/rhfs/#/?s_byGroup1=12&s_tableName=TABLE4&s_type=2
Mean Payroll Costs for Employees Per Housing Unit 1,198
We can fix evictions for what it costs to allow the problem to continue
https://assets.aspeninstitute.org/content/uploads/2020/08/Evictions-Data-Update-August.pdf
Providing shelter and services to a family experiencing homelessness can cost local governments $10,000,[1] which is more than the $9,120 average annual cost of one housing voucher to the federal government[2]
[1] Evans, William, James Sullivan, and Melanie Wallskog. “The Impact of Homelessness Prevention on Homelessness.” Science, 333:6300 694–6999, 2016. https://science.sciencemag.org/ content/353/6300/694.full.
[2] U.S. Department of Housing and Urban Development. “Snapshot of Housing Choice Vouchers, 2016,” June 2018, https://www.huduser.gov/portal/elist/2018-june_08.html.
Impact of the 2008 housing crises on Milwaukee
The following is from a letter we wrote to Milwaukee’s mayor. It outlines some of the economic factors of rental housing and the harm that will come if there is a mass failure. In 2008 smart money could see prices rising over a two and a half year period at a rate not sustainable by wages. In 2020 the economy was screaming, then two weeks later it stopped. The suddenness of the event is a recipe for disaster.
If action is not taken to avert this, the aftermath of 2008 will look like a walk in the park on a sunny day.
A December 2019 Milwaukee Dept of City Development report stated “The economic impact of the Great Recession and mortgage foreclosure crisis has had a significant, detrimental, and ongoing effect on City households.” DCD 12/2019.[ii] Foreclosure filings in Milwaukee County were three times higher in 2009 than last year.[iii] From 2008 through 2010,16,000 Milwaukee properties were in some stage of foreclosure by lenders and the city.[iv] In those two years, the tax base lost almost $2 billion in value, with a resulting $16.7 million loss of tax revenue. The resulting demolitions had a large impact on the City’s budget due to the cost of razing along with the impact on the property tax and municipal services collections.[v] The neighborhoods where those properties were located suffered long-term damage. We continue to feel that impact even today, and we certainly hope to avoid a similar outcome in the future.[ii]Section 2: Housing Needs and Demand Housing Affordability Report Department of City Development | December 2019 https://storymaps.arcgis.com/stories/eb043b089173407aa469eba948dd9601
[iii] State’s Foreclosure Rates Have Plummeted » Urban Milwaukeehttps://urbanmilwaukee.com/2019/07/11/states-foreclosure-rates-have-plummeted/
[iv] www.sewrpc.org/SEWRPCFiles/HousingPlan/Files/foreclosure-in-milw-progress-and-challenges.pdf
[v] Tom Barrett wants to spend $2.4 million on home demolition, rehabarchive.jsonline.com/news/milwaukee/barrett-wants-to-spend-24-million-on-home-demolition-rehab-b9933176z1-211401301.html/
We are excited to announce Attorney Tristan Pettit’s Landlord Boot Camp will be held on November 14th, 2020.
Due to recent changes impacting the CDC National Eviction Moratorium, we delayed the event to include the most timely information on navigating the current Moratoriums.
The Saturday, November 14th event will be held as a live-streamed webinar from 8:30 AM -5:00 PM with live Q & A from 5-6 PM.
Enjoy these advantages of the new virtual format:
For pricing and registration click here:
Since June I’ve been saying that the COVID economic crisis is going to make 2008 look like a pleasant walk through a park on a sunny day. Sadly more and more indicators are pointing to that being the case.
In 2005-2008 smart folks could see that housing prices were unsustainable and either sold, like many of my buddies did, or at least stopped buying.
In 2020 the US and world economies were flying high. Then in a matter of a couple of weeks, everything came to a sketching stop. This was unpredictable and no one was prepared. This was compounded by the dysfunction of our federal government.
Even without eviction moratoriums, rental housing providers will fail. With the government pushing this entirely onto the back of the property owners I see a future of much higher rents and municipalities struggling to survive right alongside the property owners.
Forbes has a great article outlining the precarious conditions facing the housing market.
Mortgage delinquency rates are at a 20-year high worse than the 2008 high if that tells you anything (and it should), and there are predictions that at least two million mortgages will soon go into default. And that is just the tip of the iceberg, as an estimated six million folks missed their mortgage or rent payment in September. The economic news isn’t too hot either, as the so-called “third wave” of coronavirus cases that is beginning to his the U.S. is already proving to be the worst yet.
