'A Lot Of People On The Streets': The Eviction Crisis Has Begun
Eviction cases are moving forward all over the country, and though many states and municipalities have mandatory waiting periods, tenants with unpaid rent are already being locked out in others. A significant number of landlords had waited to even file for eviction until there was no moratorium to challenge it, accelerating new filings, multiple sources told Bisnow.
Landlord-tenant law varies from state to state, county to county and, in terms of enforcement, judge to judge. But the threat of eviction has gone from a problem looming over the horizon to an immediate danger. As many as 3.5 million households are behind on their rent, and according to an analysis of U.S. census data by Goldman Sachs, 750,000 are at immediate risk of being evicted before the year is out.
“I suspect we’ll see a lot of renters out on the streets,” said Michelle Dempsky, a staff attorney for Legal Aid of Southeastern Pennsylvania, adding that she has already seen an increase in the number of eviction cases she has been assigned in the three business days since the moratorium was lifted.
“Most of the reports I’m getting are from cases that were filed but weren’t heard, and now the hearings are going forward,” National Housing Law Project Director of Litigation Eric Dunn told Bisnow. “I do think we are a couple weeks out from when we would really start to see massive numbers of physical evictions.”
Even though the CDC clarified that landlords were allowed to file for eviction during the moratorium, many waited until it was lifted to file at all, which has also been the case during the brief windows between the three federal moratoriums over the past 18 months, National Multifamily Housing Council Vice President of Construction, Development and Land Use Policy Paula Cino told Bisnow. The trend is already repeating itself: Dunn said he has heard local reports of eviction filings spiking in many places around the country.
Larger landlords were more likely to wait until now, in part because it is more efficient to serve notices in bulk without worrying about having many cases tied up at once, Dempsky said. Corporate landlords and the third-party property managers that often represent them are also more likely to evict tenants for nonpayment of rent than opt for mediation or other alternatives, according to data from Princeton University’s Eviction Lab reported by Bloomberg.
Now that the apparatus for evictions has started back up, the urgency for jurisdictions to distribute Emergency Rental Assistance funds allocated by the federal government has reached a critical level. In many areas — but not all — judges will likely delay reaching a decision until a tenant’s application has been processed, Dunn and Dempsky said.
Only $5B of the $46B in rent relief funds authorized by Congress had been distributed at the time of the Treasury Department’s most recent update in mid-August. Even in areas like Philadelphia, which has been efficient in getting money to tenants, the number of new applicants per week is outpacing the number of applications that get processed, according to city data. As of the end of August, Philly was distributing an average of $7M per week and has already used up about 80% of the funds it was allocated.
The Treasury Department has made clear that by the end of September, jurisdictions that have been especially slow in distributing assistance will have funds reallocated to areas that have done a better job and demonstrate further need. But if Philadelphia doesn’t receive any extra funding, it will run out of money before September ends, said Philadelphia Housing Development Corp. Senior Vice President Gregory Heller, who oversees the city’s distribution program.
As much as the distribution of assistance has been backed up, the situation could easily worsen in the days and weeks to come.
“There could be a wave of new applications that slows down the process on the whole,” JustAnswer attorney Jessica Bober told Bisnow. “A common thing I heard from tenants throughout Covid is that a lot of them just assumed [the CDC moratorium] would be extended. I do believe that some tenants really were caught off-guard because especially with the delta variant, they got numb to the possibility that there would be an actual end."
In Philadelphia, a landlord must apply for emergency rental assistance and enter a 45-day eviction diversion program before filing for eviction under a court order that was extended on Aug. 31, the day it was set to expire, to Oct. 31. In the surrounding counties, it takes a minimum of 28 days before an eviction filing can turn into a lockout, Dempsky said.
In Hillsborough County, Florida, which includes the city of Tampa, it takes a minimum of 30 days, Bober said. In both areas, the gap between an eviction filing and a lockout is often longer.
“We’re actually waiting to hear back from our lawyer on where we are on the lockout list, because there are so many lawyers and landlords in the city that are trying to lock [tenants] out,” said DMH Investments founder Daniel Harvey, who owns multiple rental units in West Philadelphia. “So you just have to keep checking in to see where you are on that list.”
Those built-in delays will be critical in buying time for tenants to receive assistance, although judges in many areas are not obligated to stop an eviction after filing or judgment even if the tenant finds the money before a lockout occurs, Dunn said. In certain jurisdictions, tenants who are facing an eviction filing for nonpayment cannot file an appeal until they have the money to pay back what is owed, foreclosing on the possibility that assistance can keep them in their homes.
Leaving aside the economic effects of the pandemic, evictions likely would have accelerated in the coming weeks simply due to the backlog of hearings that were delayed for more than a year, NMHC’s Cino said. But tenants who are evicted for nonpayment of rent now are likely to have additional months of unpaid rent to make up for, considering that in pre-pandemic times, it would only take a couple of months of nonpayment for a landlord to take action, Dunn and Dempsky said. Philadelphia’s rental assistance payouts are averaging eight months’ worth of rent per tenant. Without federal rent relief, that debt will follow them out the door.
Large landlords, in particular, will send unpaid rent bills to collection agencies even after a tenant has been evicted as a matter of course, Dunn and Bober said. That results in garnishment of wages, impacts on credit scores and other side effects that make it more difficult for someone to find a landlord willing to rent to them. In effect, the evictions that will be carried out in the next few months are more likely to result in longer-term housing insecurity than they would have before the pandemic.
“[An eviction judgment] means tenants will get a monetary judgment against them, and if they can’t pay it, they have to file bankruptcy to get out from under it,” Bober said. “To have an eviction on your record affects your credit score, but so does bankruptcy. So now you’re really behind the eight ball. It’s going to be almost impossible to rent at the private level, and you’re basically going to be left with public housing. It’s scary what could happen in 2022 with public housing.”
Some areas are already taking measures to forestall the crisis they see coming. New York legislators just voted to extend the state's eviction moratorium, though, like any lower-level moratorium, the Supreme Court’s recent judgments make it likely to be challenged in court. The city of Boston has imposed a new moratorium, and states like California and Minnesota still have moratoriums in place, according to legal database Law Atlas.
Any protection against eviction, even a federal one, is still subject to the whims of local judges, like those in Texas who began ignoring the CDC moratorium as early as June. The closest thing to a sure way to keep tenants in their homes is by giving them the money to pay the rent they owe, advocates for both landlords and tenants agreed. Yet so far, efforts to do that have fallen short.
“I do wish that more of the national discourse were balanced around the dual problems of some places not being able to spend [rental assistance funds] and other places with the pending threat of running out of money,” Heller said. “Because both are real and legitimate.”