Posted September 7, 202010:01 am
The Trump administration’s order that could help millions avoid eviction might put many landlords in a bad financial situation.
The order announced last week by the Centers for Disease Control and Prevention forbids evictions through Dec. 31 for many tenants who are unable to pay rent.
One problem with the order is that the administration did not attach any money to offset the landlords’ lost income if a tenant does not pay their rent, local advocates say. Instead, renters are still on this hook for any back rent when the order expires in December, leaving landlords to chase money from people who might still not have the means to pay their rent, plus all the rent accrued over the months while the order was in effect.
Ralph McGreevy, executive vice president of the Northern Ohio Apartment Association, called the order “an aggressive reach into a business’ cash flow.” He said it would hurt smaller landlords who own a few properties, possibly leading to foreclosures on houses or buildings.
“It doesn’t offer the landlord anything except (saying that) you cannot evict these people,” McGreevy said. “Most of them can’t afford to have tenants who aren’t paying the rent.”
The order lets tenants avoid eviction for nonpayment by presenting a declaration to their landlords if they meet specific criteria, which are broad and focus on people who have lost wages or their jobs due to the coronavirus pandemic.
The order intends to stave off a wave of evictions that many feared would come as federal stimulus benefits expire. It is similar in reach to many moratoriums enacted by local and state governments at the beginning of the pandemic that since lapsed. It came as President Donald Trump is engaged in a fierce re-election campaign against former Vice President Joe Biden.
Even tenants’ advocates expressed mixed feelings about the order. They said it was good that many renters who cannot pay rent will not get evicted for the next few months. However, the order says the amount of unpaid rent continues to accrue, which advocates fear could lead to significant money judgments when the moratorium expires.
Landlords and their representatives are unequivocally bothered by the order, though, as it could mean that landlords lose money and cannot to do anything about it.
Middleburg Heights attorney Edward Kasputis, who frequently represents landlords in court, noted that landlords can still seek eviction of tenants for reasons other than not paying rent. However, he acknowledged that nonpayment is the most prevalent reason landlords seek to evict renters.
Kasputis noted that landlords have their own mortgages and bills to pay.
“I feel bad for landlords in this time of uncertainty,” he said. “They’re experiencing a huge wealth transfer.”
In discussing the order, McGreevy also said rental assistance would have been helpful. Such assistance, which was not included as part of the CDC’s order, is obtained by tenants but also benefits landlords. Nonprofits administering an $18.1 million rental assistance program send checks for approved applications directly to the landlords in Cuyahoga County.
The county and city of Cleveland still have money available for rental assistance, which the federal government sent as part of a stimulus bill, a spokeswoman for the nonprofit CHN Housing Partners noted.
A spokeswoman for the Legal Aid Society of Cleveland, which frequently represents tenants facing eviction, also noted that landlords’ financial well-being is crucial for people to maintain housing.
“Rent assistance is needed to ensure rent payments continue to be paid to landlords. Without rent assistance to help fund this order, many tenants will face an insurmountable rent burden when the moratorium lifts,” the spokeswoman said. “Also, there will be a profound impact on many landlords’ ability to continue their business.”