Landlords in peril, tenants in distress: Expiring eviction bans foreshadow national reckoning

Seven states plus DC will lose eviction protections before federal ban sunsets July 31

Seven states will lift their eviction bans next month, and the cases to follow will offer a glimpse of the onslaught to come. (iStock)
Seven states will lift their eviction bans next month, and the cases to follow will offer a glimpse of the onslaught to come. (iStock)

In Connecticut, real estate attorney Ori Spiegel hadn’t heard much from landlords as the end of his state’s eviction ban approached. He expects that to change, starting today.

“There are many who I’ve asked to call me back on June 30,” Spiegel said. “The governor has often waited until the last minute to extend the moratorium, so I don’t really have information for them until that point.”

Barring any 11th-hour interventions, Connecticut, Kentucky, North Carolina and Oregon are set to drop their state eviction protections at midnight. Four more states plus the District of Columbia are slated to do the same in July.

The expiring bans will leave the overwhelming majority of U.S. tenants who’ve fallen behind on rent with only the federal moratorium imposed by the Centers for Disease Control, which offers less protection and gives landlords more ways to circumnavigate.

Coming Onslaught

In states without protections, eviction cases filed this month will offer a glimpse of what’s to come when the federal moratorium sunsets July 31. Tenant advocates and landlord attorneys expect an onslaught of cases for arrears — each in the tens of thousands of dollars — that could carry astronomical costs for communities left with the job of housing the newly homeless.

Landlords in the 15 states that maintained their own bans before June 30 have largely had their hands tied when it comes to filing eviction cases. In Connecticut, the state moratorium affords a few exceptions, such as for tenants who owe back rent from before the pandemic. But Spiegel has advised landlords not to take anything to court until the state ban lifts.

That’s because the CDC moratorium offers a workaround for landlords.

The federal ban only protects tenants if they fill out a hardship declaration. In Connecticut, a judge may determine a tenant’s form isn’t credible, paving the way for eviction.

The CDC’s moratorium also includes five exemptions, the last of which has allowed eviction cases to proceed. If a tenant violated a lease for a reason other than non-payment, the landlord can bring them to court. Attorneys in states with expiring bans expect more of these cases in the next month.

States with weaker protections like North Carolina, or those without a state ban, like Florida, have already seen tenants evicted for reasons other than non-payment.

Expired lease, borrowed time

James Surane, a North Carolina attorney, said he’s taken on a steady stream of cases in which the tenant had owed money, and had an expired lease, allowing the landlord to move forward with a case. And Florida attorney David Winker said the recent mass eviction of 200 tenants from a Miami building owned by apartment giant Aimco and spinoff Air was also a non-monetary action.

And for cases that are brought over arrears, the CDC’s ban doesn’t stop a filing in its tracks or a court from issuing a judgment. It just prevents tenants from being kicked out of their homes.

Portland, Oregon, tenant attorney Troy Pickard expects that in situations where a judge has ruled against a tenant in an eviction case, the parties won’t need to go to court once the federal ban expires. The judge will be able to issue a notice that makes the eviction effective.

“The sheriff will be able to go to that home and rip the people out of the house,” Pickard said.

In most states, even those like New York and California that have extended eviction proceedings through the summer and beyond, the end of the federal ban will also bring an influx of filings.

About 11 million renters — about 1 in every 33 Americans — are estimated to be behind on their payments, according to estimates by the Center on Budget and Policy Priorities. In cases that have already been brought, the arrears owed are record-breaking.

“I’ve been doing this for about 30 years; probably did a half a million evictions and I’ve never seen ledgers like these,” Surane said. “They are now topping $20,000 in arrears”

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There’s no comprehensive data on U.S. eviction filings. The Eviction Lab at Princeton University, which tracks five states and 29 cities, has found nearly 385,000 evictions filed since the start of the pandemic. Still, anecdotes from attorneys point to a much bigger backlog of cases.

For the landlords doing the filing, an eviction is often an act of desperation — a last resort to regain financial control after as many as 15 months of non-payment.

Of the 10 million to 11 million small landlords HUD estimates are in the U.S., one-third are at risk of bankruptcy or foreclosure because of unpaid rents, the Washington Post reported.

In California, where the governor just extended rental protections until Sept. 30 — one of the longest state bans nationally — landlord advocates fear that smaller landlords owning four to eight units could be facing foreclosure.

`Financial Peril’

“It’s hard enough for landlords to miss a couple of months of rent payments, but to have this go on for over a year, it has put property owners in financial peril,” said Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, which represents landlords.

Biden’s decision last week to extend the federal moratorium until July 31 probably won’t raise the risks for landlords by much. But the extension will add to the growing ire of property owners, particularly landlords who kept up with mortgage and bill payments by going into debt or tapping into retirement accounts because their tenants couldn’t or wouldn’t pay the rent.

Winker said one of his clients, a model and single mother who emigrated from Russia, was incredulous at the extended ban.

“She didn’t know it was coming,” he said. “And when she heard about it, she said this is like socialism, but it’s not the government that pays for it, it’s the landowner.”

Older people — just over one-third of landlords owning two- to four-unit buildings — are also suffering. Many are retired and unlikely to have another source of income apart from rent, according to The Urban Institute.

A subset of owners is itching to sell. Some are scarred from the stress of the last year and want to get out entirely. Others are hoping to take advantage of the hot market, but can’t unload property while their tenant is in possession. Connecticut attorney Mark Sank said he gets calls daily from owners looking to sell and tells each to wait until the state moratorium lifts.

In states where tenant occupancy isn’t an issue, landlords have sold to institutional investors who will then have to take tenants who owe back rent to court.

To describe what may happen when the federal ban finally lifts, tenant advocates have relied on a grab bag of flood metaphors — a wave, a deluge, a tsunami — to predict the number of evictions that will ensue.

For landlord attorneys, the rental housing market itself is sick, an economic manifestation of Covid-19, and evictions are just triage. And waiting only makes it worse.

Winker compared it to preventative medicine. Take your 10-cent-per day blood pressure medication because if you don’t, you’ll face much worse consequences.

“I will end up in the hospital in the emergency room in full cardiac arrest and that is the least efficient way for me to receive my health care,” Winker said. “I often talk about courts being that way.”

With states struggling to dole out assistance payments, many arrears cases won’t be remedied until they hit housing court — the last and most expensive course.

The Cost of Eviction Calculator developed by the University of Arizona estimates that the 11 million renters at risk for eviction could cost the U.S. as much as $101 billion to care for through shelter, health care and foster care.

“Eventually there has to be a reckoning of some kind. The question is how does this thing ultimately end?” Pickard said. “Hopefully it won’t end in a mass of evictions, because if it does that’s just going to be one more huge cost to society that might have been avoided through some kind of intervention.”