Author: Tim Ballering

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COVID Coronavirus Eviction Moratorium Evictions Section 8 Security Deposit Support Animals Tenant Responsibilities Tenant Screening WI L/T law

Landlord Boot Camp 2020

Featuring: How To Navigate Eviction Moratoriums

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:

  • Attendees will receive a searchable PDF Boot Camp manual, making it easier to search and reference items in the future.
  • A recording will be available to attendees for 14 days after the event to re-watch portions that you want a deeper understanding of.
  • Attend the event from the comfort and safety of your home. 
  • As in prior Boot Camps, the live Q & A session is part of this event.
  • You will receive all of the same information normally presented in Landlord Boot Camp PLUS the latest information on navigating the CDC and CARES Act eviction moratoriums. 

For pricing and registration click here:  

https://aasew.org/event-4043452

www.aasew.org

Categories
COVID Coronavirus Eviction Moratorium Housing Stats

The impact of the COVID economic crisis on housing

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. 

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COVID Coronavirus Eviction Moratorium Eviction Prevention Recovery

Foreclosures and Evictions Could Derail a Recovery

An important piece from DSnews

In an opinion piece published on the Informed Comment website, John Buell, a former professor at the College of the Atlantic, observed that an after-effect of the COVID-19 pandemic’s economic trauma will weigh on the housing market as homeowners and renters struggle to keep up with housing costs.


“If foreclosures and evictions are standing in the way of recovery, it is also safe to say that the draconian cuts in budgets of state and local governments translate into wage reductions and/or unemployment for public sector workers and thus more pressures on the housing market,” Buell wrote. “If homeowners and government workers are not able to create sufficient demand to restore economic growth the federal government must step in. State governments are constitutionally prohibited from borrowing for daily expenses.”

Categories
Housing Stats Industry stats

Percent of rentals owned by independent owners

https://www.jchs.harvard.edu/blog/who-owns-rental-properties-and-is-it-changing

Institutional investors own a growing share of the nation’s 22.5 million rental properties and a majority of the 47.5 million units contained in those properties, according to the US Census Bureau’s recently released 2015 Rental Housing Finance Survey (RHFS). The changes are notable because virtually all of the household growth since the financial crisis has occurred in rental units, with more than half of the growth occurring in single-family rental units.

According to the RHFS, individual investors were the biggest group in the rental housing market in 2015, accounting for 74.4 percent, or 16.7 million rental properties, followed by limited liability partnerships (LLPs), limited partnerships (LPs), or limited liability companies (LLCs) (14.8 percent); trustees for estates (4.1 percent); and nonprofit organizations (1.6 percent) (Table 1). However, because the share of rental properties owned by individual investors tends to decrease with the property size, individual investors owned less than half (47.8 percent) of rental units, followed by LLPs, LPs, or LLCs (33.2 percent), trustees for estates (3.3 percent), real estate corporations (3.3 percent), and nonprofit organizations (3.2 percent).

A 2017 report puts 55% of rental units as owned by part time landlords
https://www.avail.co/education/articles/state-independent-landlords-2017

https://www.globest.com/2020/07/30/small-apartment-landlords-worry-about-payments-as-pandemic-continues/

Small “mom and pop” landlords, often defined as landlords who own or manager fewer than 20 units, reported lower rent collections in 2020, with 25 percent of them borrowing money to cover operating costs, according to a survey by The National Association of Hispanic Real Estate Professionals and UC Berkley’s Terner Center for Housing Innovation.

In the survey, about 58 percent owned or managed 1-4 units, and 25 percent owned or managed 5 to 19 units. The majority of respondents were in California, Texas and Illinois. About 67 percent of these landlords perceived their rental properties as a source of retirement income.

Categories
Credit crime Tenant Screening

This is, or should be a crime.

There has been a proliferation of online services that sell fake employment and housing documentation used by tenants to pass screening when they do not have a legal source of income. (Drug dealers and prostitutes do not get pay stubs for their efforts.)

Here is one such “service” is https://paystubsnow.com/pricing/ There are dozens of similar offerings on FaceBook, some for as low as $9.

One trick the fraudsters use is selecting employers that will not verify employment, such as Waste Management, which requires people doing background checks to use https://theworknumber.com, an Equifax service that charges $41-$48 per inquiry. At that point, many property owners simply accept the pay stub as real.

I encourage people who have been a victim of this to report this to the District Attorney

Categories
Collections Eviction Prevention

Evictions plummet as owners work with renters in an unprecedented manner

WI evictions are down statewide by 28% year to date through September 30th. In Milwaukee, that percentage is slightly higher, at just under 31% reduction.

A telling part is that August evictions were much lower than last year, despite the state’s moratorium being lifted.

This drop in evictions occurred even while reported collections are down by 12-16%. In talking to property owners, I’ve been told by many they have pulled back on maintenance, some suffering the impact to the point they have forgone insurance, utility and mortgage payments.

The impact on the other side will be higher housing costs for all as owners fail, or try to make up for losses in the future.

Categories
COVID Coronavirus Eviction Prevention

$171 Million “a drop in the bucket”

The Massachusetts Governor puts $171 Million into emergency housing funding. Advocates call it “a drop in the bucket”

The story is in Boston Magazine

Categories
COVID Coronavirus Eviction Moratorium

What does the CDC new guidance mean for housing?

Although the CDC guidance issued last Friday provides a mechanism for owners to challenge declarations that appear fraudulent, it should have little overall impact. If a large portion of the tenant population has no ability to pay rent or simply decides not to pay, housing will fail.

The Census Pulse shows nationwide 17.9% of tenants did not pay their August rent. (The reporting trails by about three weeks. Sept should be out next week) https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html Scroll down to the housing tables.

Wisconsin is doing better at 11.9%. I attribute our slightly better fortune to our tenant advocates, our Governor, and those who support landlords working far more collaboratively than other areas. Some metros are hovering around 20% of tenants who are behind, Los Angeles nearly 19%, NYC ~23%.

When you take into account that in good times typical owners receive 7-9% of the gross rent for their effort and investment, and today collections are off by 18%, it is easy to see we are on a collision course with massive housing failures.

A scarey side note: Nationwide 10.8% of homeowners did not make last month’s mortgage payment. This will open the door to another corporate housing buy out. https://theintercept.com/2018/01/20/you-think-your-landlord-is-bad-try-renting-from-wall-street/

It is estimated that unpaid rent by 12/31/2020 will be $34 Billion. This deficit will devastate both renters and housing for many years to come. In turn the harm to housing will continue to haunt tenants through reduced housing choices and increased future rents as owners try to stabilize.

Whether moratoriums exist, the true need is for rent assistance. This need has existed well before COVID. If renters are able to pay their rent, they avoid eviction and insurmountable debt, while enabling owners to pay their obligations as well. So far our federal government is failing at providing that assistance.

Categories
COVID Coronavirus Eviction Moratorium Housing policies

Landlords are Not the Devil

A well thought out comment on the post moratorium housing crisis

https://www.citywatchla.com/index.php/cw/los-angeles/20564-landlords-are-not-the-devil

The government’s destruction of small landlords in 2020 will be calamitous for tenants in 2021 and beyond. There will likely be an outbreak of foreclosures and sell-offs by those who are unable to endure the eviction-moratorium storm. When the small landlords disappear, so does much of the affordable housing. Corporate investors, real estate conglomerates, and Wall Street vultures will swoop down for the kill, snapping up properties, remodeling them, and raising rents. In the end, communities will be left with fewer economical rentals, and the chasm between the rich and poor will be a little wider. 

Categories
Eviction Prevention

Eviction Diversion Programs (EDP)

Michigan’s EDP
https://www.michigan.gov/mshda/0,4641,7-141-5555-533463–,00.html

An interesting program, but I’m not sure how well it is received by housing providers as they must forgive 10% of the back rent. If anyone has a contact with apartment associations there we should ask, otherwise I’ll cold email them.

A “must read” the diversion pilot final report:
https://nationalcenterforstatecourts.app.box.com/s/n7w8zu89tbayfjr0qz6h7mn6nrg0x6qh/file/679673021905

The National Center for State Courts has a bunch of info on EDPs. The link below is a starting point.

Generally speaking, an eviction diversion program offers tenants with legal assistance largely supplied by Legal Aid services and financial assistance provided by local governments and nonprofit organizations. Some programs also include financial literacy education for tenants. Programs require the voluntary participation of both landlords and tenants. The focus of these programs is to help tenants and landlords avoid evictions where possible.

https://www.ncsc.org/information-and-resources/info-and-res-page-card-navigation/trending-topics/trending-topics-landing-pg/eviction-diversion-programs

The one common flaw in many of the existing EDP programs is they require an eviction to be filed. There are advantages to both renter and housing provider if diversion occurs prior to filing. Perhaps they feel requiring a filing would reduce fraud, or maybe it is because they were initiated in the courts and therefore are from the courts’ perspective. But requiring an eviction to be filed also reduces benefit. (costs, conflict, court resources)

Looking at pages 7-9 of the diversion pilot final report linked above, the heading should not be “You have been sued by your landlord.” but “Are you behind on your rent?”

Ultimately though the goal needs to be portable housing vouchers, i.e. FodShare for Housing, as the need has existing long before COVID.