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Both landlords and tenants are suffering during the pandemic. If the various eviction moratoriums expire as of December 31, 2020 as scheduled, $70 billion in unpaid back rent and utilities will come due, according to estimates by Moody’s Analytics Chief Economist Mark Zandi. While the estimates of the number of potential tenants affected vary, the number of tenants who could face eviction is in the millions. The Aspen Institute’s research says that up to 40 million people could be threatened with eviction over the coming months.
According to Stout, an investment bank and global advisory firm, an estimated 11 to 13 million renter households are at risk of eviction. It predicts there could be as many as 6.4 million potential eviction filings by January 1, 2021 if the CDC moratorium is lifted.
While the focus has been on tenants, Stacey Johnson-Cosby, president of the Kansas City Regional Housing Alliance, says more than 40% of the landlords surveyed in her coalition said that they expected to have to sell their units in the coming months due to rental income losses.
A Rental Housing Finance Survey shows that just over 40 percent of residential units are owned by individual investors. Without rental income, a significant number of noncorporate, “mom and pop” landlords, who may be coping with their own unemployment or additional expenses related to the COVID-19 pandemic, are struggling to pay their mortgages, utilities bills, property taxes, maintenance costs, and other property-related expenses. The National Rental Home Council said the eviction ban leaves many landlords with two grim options – go deeper into debt or sell. The sale of these “mom and pop” rentals is likely to result in higher rental prices.
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Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.
