Free "Temporarily", It's Hard to Start Paying for It Again

(Image from Fullerton Observer)

Government interference in the marketplace--no matter how justified due to an emergency (World War II, natural disasters, COVID-19)--always produces winners and losers. The policy creates a noisy constituency who clamor for its continuation after the crisis passes.

Case in point: a "temporary" measure like the eviction moratorium has been very difficult to reverse. From January:

As we predicted when it was first enacted almost one year ago, the moratorium against evictions for non-payment of rent has been impossible to terminate. It was supposed to end in June, then September, then December, and now under a deal that's sure to be rubber-stamped by the legislature it's been extended to June, 2021.

Over much wailing and gnashing of teeth the national eviction ban was not renewed by Congress after it expired on July 31st.

As we have remarked, few cared about the small landlords who were not granted any of the debt relief that homeowners were, while state governments still insisted on receiving property taxes after cutting off the rents that landlords use to pay them.

Too often ignored are the costs on the other side of the evictions ledger. Renters are facing hardships, but so are landlords. There are about 48 million rental housing units in the U.S., according to a 2018 federal survey. For 42% of them, day-to-day management of the property was performed by either the owner or an unpaid agent. Another 25% had a paid manager who was still “directly employed” by the owner.

There are millions of mom-and-pop landlords who own a house here, a duplex there, a small apartment building two streets down. Some of them are going on a year, or more, without rental income, yet they’re responsible for paying the taxes and the upkeep. A few nightmare stories are trickling out, say, of a woman living in a house with a basement apartment, occupied by abusive tenants who apparently saw the moratorium as impunity.

A group of New York landlords is asking the Supreme Court to take a look at that state’s eviction moratorium. One of the petitioners is a retiree who rents out a co-op as a supplement to her Social Security income. Without $24,720 in unpaid rent, she “has been forced to ask friends for donations to help make ends meet.” Another is a “single mom who was living with her fiancé, broke up with him, and is now effectively homeless.” She would like to move into a rental property that she owns, but it “remains occupied by non-paying holdover tenants.”

In progressive California the eviction moratorium has been extended through September, but many tenants can forestall eviction through March, 2022. [bold added]

It continues the pause on evictions for nonpayment of rent due to a financial hardship related to the pandemic, such as lost income or increase medical expenses. Tenants who pay at least 25% of what they owe by Sept. 30 cannot be evicted over that back rent, which is converted into civil debt.

Starting in October, tenants will owe their full rent again. But for six additional months, through March 2022, they cannot be evicted if they qualify for the state rental aid program.

That program is available to lower-income tenants who earn 80% or less of the median income in their county — up to $114,480 for a family of four in San Francisco — and were financially affected by COVID-19.

Nice condo: it won't be rented till July October

Some unfortunate landlords will not have collected most of the rent due for two full years.

Despite this sad record of government effectively taking property from one group and giving it to another, my landlord friend will be putting her rental unit, deliberately left vacant for a year, back on the market.

She has more faith and optimism than I do.