“Eviction tech” is gaining traction in multifamily

Evictions are never fun or easy, but in the multifamily sector, they are necessary. Landlords always prefer tenants who pay their rent, repeated delinquency creates headaches for both parties. New technology is smoothing over the inherent roughness of an eviction, making a heated process more transparent, consistent, and easier to understand. Streamlining evictions with tech isn’t about booting tenants as quickly as possible, it prevents headaches for all involved.

Repeated delinquency leading to eviction is a messy process. For decades many multifamily landlords have turned to eviction services to help usher the processes along. Even when things go well, eviction is still a lengthy legal process often best left to outsourcing. Eviction laws in each state vary, but typically eviction begins by serving a tenant a Pay or Quit notice, giving them time to comply or vacate, filing an eviction complaint that starts a case, summoning the tenant before an eviction judge, and enforcing the ruling through removal, often with law enforcement. Landlords may then be required to repair the unit and clean out the tenants’ belongings. Between legal fees, court filing costs, sheriff fees, repair bills, and lost rent, eviction can end up costing the landlord between $4,000 and $7,000. Eviction losses average $3,500 per unit, according to TransUnion. Winning eviction proceedings against a tenant may still leave landlords unable to collect. The success rate of debt collection after eviction generally isn’t good.

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“Right now, because of the laws, eviction is not something that benefits anybody,” Craig P. Gambardella, a partner with Kucker Marino Winiarsky & Bittens, a firm that focuses on real estate law in New York, told Bloomberg. “It used to be, pursuant to the old law, that if you got an eviction from a tenant or a vacancy from a tenant in a rent-stabilized apartment, you were able to increase the rent 20 percent off the bat.”

Eviction friction

Landlords have a financial interest in speeding up the eviction process, but landlords stuck in a bad situation don’t have to pay some tough guy to push the boundaries of intimidation and harassment. Multifamily delinquency management platforms create a disciplined process that lowers the cost of eviction and enhances the overall experience for residents and on-site employees. Cutting out confrontational conversations between a landlord who won’t listen and a tenant that doesn’t understand lowers the heat of the entire process so each party can focus on the best form of recourse. Tenants want to pay rent, landlords don’t want to evict. Technology helps both parties see how their goals are aligned, offering each tools to navigate the process better.

Eviction proceedings are relatively rare, making the process a challenge for on-site staff who may not be used to handling such things in their day-to-day tasks. Residents and even some property staff are not always sure what to expect, skewing relations as each party digs in. Delinquency isn’t easy for most on-site staff to track, often understanding a property’s exposure to delinquency requires an attorney. Because each jurisdiction has different eviction proceedings, the process is difficult to navigate and hard to explain to tenants. The entire process is clouded in steeped emotions from a tenant who may lose their home.

Multifamily delinquency management platforms like ClickNotices automate the emotionally charged process by providing property owners and agents with a shared dashboard to prepare, deliver and track late rent notices, easily generating the necessary legal documents to begin proceedings should delinquency continue. ClickNotices says the dashboard helps facilitate more communication between landlords and tenants by easily laying out the process and state of proceedings. Often that transparency creates opportunities to settle delinquency before eviction proceedings even have to begin. The goal of the software isn’t to speed along evictions, that’s always the worst-case scenario. Instead, multifamily delinquency management platforms look to bring a greater understanding and accommodation to the process that benefits both parties.

Since the onset of the COVID-19 pandemic eviction has been a polarizing subject. Moratoriums and changing laws meant to protect tenants whose livelihoods were upended are only increasing the cost and emotional toll of eviction. Harris County, home to Houston, Texas, may be the eviction capital of the United States. Only New York City, with more than two times the population size, evicts more tenants. Evictions cost Harris County $241.4 million per year split across an average of 35,335 evictions, according to researchers at the Kinder Institute for Urban Research. That’s roughly $6,800 per eviction. Worse yet, those numbers may be an understatement, accounting only for the direct displacements following eviction. Many tenants never make it that far, especially in Harris County, where undocumented or non-English speaking tenants are wary of the American legal system. Evictions create a social cost that is much more difficult to track, forcing families into shelters. People experiencing homelessness are far more likely to be hospitalized, abused, and preyed upon, all requiring public funds to address the need for more emergency medical services and law enforcement. If a child is involved, costs skyrocket. There is an important human cost as well, children without a stable home are more likely to skip class and commit juvenile crimes.

The steep financial and societal cost of evictions means preventing evictions has a high rate of return. A study of evictions in Baltimore found that for every $1 spent towards tenant legal protection in eviction cases, there are $3 in cost savings. A similar program in Massachusetts showed that $2,000 towards eviction prevention saved more than $16,000 in court and processing costs alone. Public policy advocating for low-cost eviction solutions like legal protections, cost subsidies, and moratoriums are only part of the solution. At the end of the day, no one can stay in an apartment forever, especially if they’re delinquent. That doesn’t mean they should be forced to experience homelessness. Advocating for streamlined evictions and more robust housing assistance for our most vulnerable are not mutually exclusive goals.

While eviction proceedings are often necessary, critics say automating the process is accelerating legal action, creating a pipeline from delinquency to court rulings that works faster than ever. That’s why multifamily delinquency management platforms like ClickNotices and eWrit Filings are rebranding themselves as tenant engagement platforms, sending notifications that prevent delinquency from piling up. Some property management software is building out delinquency management solutions, like RentMangers’ Possession Partner service. The platforms make the case easier to dismiss too if the residents pay down the debt. They don’t favor one solution over the other and they don’t move faster than the law allows, they just streamline whichever solution the delinquent tenant is forced to choose. Only 3 percent of American tenants have an attorney, while 81 percent of landlords do, according to the National Coalition for the Civil Right to Counsel. That creates an imbalance in an eviction proceeding. Other platforms like JustFix and Esusu empower the tenant with financial tools and legal advocates that can generate hardship declarations and build credit through rental payments. Eviction technology aimed at helping tenants is as important as technology assisting landlords.

“Things like supportive services, self-help resources, mediation, and legal representation provide a more robust and well-rounded intervention to the intersectional crisis that eviction presents,” Deanna Pantín Parrish, Clinical Instructor and Lecturer on Law at Harvard Law School, told Princeton’s Eviction Lab.

Even messy problems no one ever hopes to deal with still need efficient solutions. Making evictions more difficult is a band-aid to America’s housing crisis, not a solution, as landlords are forced to eat higher and higher costs, eventually pushing them onto residents. The wave of evictions expected from the end of the federal eviction moratorium has not happened thanks to increasing funding for housing support, but there are still roughly 8 million Americans behind on rent. While eviction may be justified, when it leads to homelessness, society pays. Technology is key to creating a more equitable and efficient eviction process that keeps tenants in their homes, court costs from piling up, and affordable units on the market. [Propmodo]