Pub. 5 2020 Issue 4

9 ISSUE 4 2020 How Many Residents Are at Risk? The Aspen/COVID-19 Eviction Defense Project study was based on a census bureau study of renters. It tallied the number of respondents who said they might have difficulty paying rent in the current or next month. Roughly a quarter of 12.6 million renter households in the survey said they had little or no confidence that they could pay the next month’s rent. The study noted that residents who didn’t pay rent are at risk of evictions. The Aspen survey didn’t take into account mitigating factors such as eviction moratoriums, the length of time that evic- tions take to go through the judicial system, the eagerness (or lack thereof) of property owners to file for evictions or the steps that industry organizations such as the Nation- al Multifamily Housing Council (NMHC) or National Apartment Association (NAA) have taken to help property owners avoid evictions. A patchwork of eviction moratoriums throughout the country covers potentially one in two renters. The Federal Housing Finance Authority has a moratorium on eviction through the end of the year on properties financed through Fannie Mae and Freddie Mac, the largest lenders in the multifamily in- dustry. The Federal CARES Act mandated a moratorium that expired in late July, and now landlords are required to give residents 30-day notice before filing evictions. Plus, many states and municipalities have implemented eviction bans. It’s not just moratoriums that are stopping eviction filings. Court systems throughout the country are operating well be- low normal capacity. In any event, many property owners are reluctant to go through the time and expense of an eviction proceeding. “Eviction is always a part of property manage- ment, but under normal circumstances, it is the last resort,” said Paula Cino, a vice president of construction, development and land-use policy for the NMHC. “The industry is used to working with residents.” Even when they get to court, less than half of eviction filings typically result in evictions, says Paula Munger, an assistant vice president of industry research and analysis at the NAA. Taken all together, there doesn’t seem to be a danger of an imminent spike in evictions. “I just don’t see where we’re going to have this huge wave,” Munger said. Sam Gilman, a co-founder of the COVID-19 Eviction Defense Project, agreed that moratoriums and court closings have put off many eviction filings, but said that the group’s analysis remains sound. “The conditions that lead to a spike in evictions have been building,” he said. Rent Collections Strong, But For How Long? Source: Eviction Lab at Princeton University Apartment rent collections have been better than expected, given that more than 20 million Americans have lost their jobs and more than 10% remain out of work. The NMHC started a rent tracker in March that measures the payments of 11.4 million professionally managed units nationwide. The tracker has consistently found rent payments to be roughly two percentage points lower than historical levels. The NMHC survey covers relatively high-quality apart- ments, which tend to have wealthier residents and profes- sional managers that have greater resources to communi- cate with residents and to help them access aid programs. Surveys of smaller and lower-quality properties not covered by the NMHC database show worse performance. Published studies have indicated a 7.5% to 9.0% increase in missed rent payments for residents at smaller apartment properties, Munger said. There is widespread agreement that the biggest factor keeping rent payments steady was the federal government’s enhanced unemployment program, which added $600 a week to state unemployment aid. That additional unemployment aid expired at the end of July, which means that the risk to rent The Aspen/COVID-19 Eviction Defense Project study was based on a census bureau study of renters. It tallied the number of respondents who said they might have difficulty paying rent in the current or next month. Continued on page 10