I was invited by TMJ4 to talk about the end of the WI eviction moratorium on Friday. I cannot find a link to the show, but here are my notes and a picture from when my granddaughter happened to catch the broadcast when she was watching tv. It must have been one of her homeschooling assignments. 😉
My notes for the interview. Unfortunately I was not able to make all my comments.
How are you working with tenants?
Most important is communication. Tenants need to talk to their landlords. The sooner the better.
Our company has posted a list of resources for tenants on our website at:
ApartmentsMIlwaukee.com/r/Â Â
Despite dire predictions by attorneys for Legal Action, we do not anticipate a large increase in overall evictions.
What may be surprising to some, rental owners do not like evictions. It is in both parties best interest for a resolution. Successful landlords need successful tenants. Every eviction is costly to landlords in terms of lost rent and often damages. Evictions are costly to tenants as it impacts their future housing and is disruptive to their lives.
If tenants have resources to pay rent, then there will be no eviction crises when the moratorium is lifted. Governor Evers just announced $25M Wisconsin Rental Assistance Program will go a long ways to providing those resources and preventing many evictions.
Most owners did not charge late fees for April, well before the prohibition against late fees was issued.
We are seeing greater than 85% of tenants have paid their rent in full for April and May and generally timely.
As would be expected, some tenant took advantage of the moratorium and did not pay rent when they had an ability to do so. Many people are in better financial position today than they were three months ago due to the enhanced federal unemployment and stimulus money.
Our company and many other landlords are working with Mediate Milwaukee to attempt to resolve some of these issues without filing for eviction.
Are you worried about how the rest of the year looks?
Absolutely. Landlords need to collect their rents in order to survive. If landlords do not survive, tenants and municipalities suffer.
The real fear is, unless something dramatically changes, that August and September will be far worse due to the expiration of the enhanced federal unemployment, the stimulus money being spent, and those employers who received the SBA Payroll Protection Program grants will no longer be required to keep those employees.
Any substantial disruption in rent collections will cause an impact on not only the property owners, but also on future rental housing costs.
Milwaukee and other communities have recently furloughed employees due to COVID’s impact on their budget. This comes well before we will see the impact of COVID on payment of property taxes, sewer and water and reductions in collections of other city fees.
We can look at 2008 and see how that impacted Milwaukee’s housing for years after. The City ended up foreclosing on hundreds of properties, with many having been vandalized to the point they were razed. Milwaukee continues to have a huge number of tax foreclosures today, even in what was one of the best economies in history. It will only get worse now due to COVID. This is not only a burden to the cities but also reduces future housing choices for tenants.
There are predictions that the COVID housing impact will be far worse than the Great Recession. The 2008 bubble was predictable and the build up to it was over a couple of years. Many people in the housing industry realized the prices of real estate at the time was unsustainable and those people were not harmed.
COVID brought the economy to a sudden and unpredictable stop. No one was prepared, and many businesses will not return.
What resources are available to landlords?
Not many.
Landlords with very specific mortgages may forgo payments, but interest may still occur.  Mortgages are only a fraction of the operating costs.  Nearly an equal amount is paid to the municipalities in taxes, sewer, water, and other fees.  Maintenance is a large portion of the owners’ expenditures as is insurance and other operating costs.
Here is an infograph from the National Apartment Association: