Where Have All the Evictions Gone?

Andy Newell

In spite of the pandemic and reports that tens of millions of renters would be displaced, the eviction rate is down 60 percent from 2019. The federal government has provided stimulus checks, enhanced unemployment benefits and emergency money to states for renter assistance programs. Meanwhile, the unemployment rate has dropped to 6.3 percent, which is typical, if not low, for any recession. In addition to government aid, charitable organizations provide assistance for rent and practically every other basic human need. Add to that the apartment owners who, when given the chance, would prefer to work with residents than to evict them.

Eviction moratoriums are unnecessary and unconstitutional, and worse, interfere with the contract and property rights of owners. Speculation that tens of millions of renters would be evicted is utter nonsense–the industry could not survive if residents were evicted at that rate. Instead, owners are working with residents to ensure that eviction is only used as a last resort. There should be very few people who cannot find the help and resources necessary to get through this pandemic. The eviction moratorium merely lends the illusion that these folks are being helped, while thousands of dollars in past-due rent accumulates that will devastate them financially. Renters should be encouraged to find and take advantage of resources available to them. If the federal government does not believe sufficient aid is available, then they should provide additional assistance. The eviction moratorium will ultimately cause more harm to those that it purports to help.

The real evictions story

Evictions by state. Based upon actual eviction statistics for 12 states for 2019 and 2020. Source: Data from state, county and municipal courts and the Utah Apartment Association

Within weeks of the start of the pandemic, the media began to bombard the public with reports of how tens of millions of renters would be evicted, homeless and helpless—while being at greater risk of contracting COVID-19. And here we are, 10-plus months into the pandemic, and evictions are currently at 40 percent of historic norms. Yet stories of massive waves of evictions still persist. At first a tsunami of evictions was expected in June 2020, then it was moved to July, then to September, then definitely by December. The wave of evictions never arrived, but the stories continued that unprecedented levels of evictions were still coming, and tens of millions would be cast into the streets.

The eviction moratorium that ended on July 24 protected roughly one-third of all renters, yet during that period, eviction filings were a fraction of what they had been in previous years (about 23 percent of 2019 levels). On Sept. 1, the Centers for Disease Control and Prevention declared an eviction moratorium, preventing evictions on renters who met specific criteria. Although the CDC moratorium only protected some renters, evictions still remain quite low. Levels are a fraction of historical levels, not because of the moratoriums, but rather, because landlords understand the situation. They are actively working with residents on payment plans, identifying resources for rental assistance, or allowing residents out of their leases completely so that those renters can find more affordable housing to avoid the overwhelming debt that would result if they just stayed and relied on the moratorium to temporarily protect them.

Source: Data from state, county and municipal courts and the Utah Apartment Association

In reality evictions are terrible for owners. They are expensive, time consuming  and result in an empty unit that must be cleaned, repaired and re-leased. To paint a picture of heartless landlords eagerly pursuing evictions is complete and utter nonsense. As a matter of fact, evicting tens of millions of renters would absolutely devastate the multifamily real estate industry. What are landlords going to do with all of those empty units? To whom are they going to rent them? It is not within the scope of any reality that evictions would skyrocket to projected levels. What business owner would ever want to ditch a previously paying customer?

In general, evictions are often completely misunderstood. The word “eviction” paints a frightening picture of a family being cast out onto the streets—with nothing. The reality is that a small fraction of evictions result in physical removal of a renter. An eviction is a legal process by which owners enforce their right to possession of the rental property through the courts. Usually, a landlord starts an eviction process when a resident does not pay monthly rent on time. Since the owner does not know if the resident is ever planning to pay, the landlord is compelled to begin the eviction process to protect their rights. In most cases, the resident pays the past-due rent, and the process is stopped. The next most common outcome is that the resident, recognizing that they can no longer afford their current apartment, voluntarily moves out. In the majority of cases where a court issues a judgment and grants possession of the property back to the owner, the renter still usually moves out on their own accord before the eviction can be enforced. Only in rare cases where a resident refuses to leave after a judgment is issued by the court does a local sheriff get involved to physically remove the resident.

Source: Monarch Investment and Management Group Evictions Statistics

The data reveals that for nearly 54 percent of instances when eviction paperwork was filed, the resident was able to pay and stay. In approximately 23 percent of the cases, the resident voluntarily left, and only about 11 percent of the time did a filing result in physical eviction. Only about 12 percent of the residents relied on the CDC declaration to avoid eviction.

Evictions are not always for nonpayment of rent. To ensure that residents can enjoy the safe and peaceful use of their unit, every community has rules. If a resident is a drug-dealer, a violent threat to others, has a dangerous animal or perhaps just disturbs the peace on a regular basis without regard for neighbors, the property owner has a fiduciary responsibility to other residents to evict the rule-breaker. Moreover, the owner has a contractual obligation to all of the residents to enforce the rules and evict non-abiders. With this in mind, the eviction moratorium blatantly interferes with owners’ ability to meet contractual obligations to ensure that all residents can feel safe and secure and enjoy the quiet use of their homes.

It is difficult to understand the reasons for such dire predictions of massive evictions. The federal government has provided stimulus checks, enhanced unemployment and emergency funds to states. And residents can also turn to countless charities, owners who are working with residents, and, hopefully, to friends and family.

Curiously, when the media interviews those who have been evicted, journalists rarely ask about why the resident couldn’t find a way to meet their commitments through all of these available resources. In cases where the resident has lost a job, no one asks why the enhanced unemployment benefits are inadequate to pay bills. The media rarely asks if the resident has applied for financial assistance from the government or from local charities. Nor do they ask how the stimulus money was used. The media basically portrays those in need as helpless victims—and ignore all the programs and resources available to assist those who are suffering from the economic impacts of COVID-19.

In summary, the moratorium on evictions is completely unnecessary: Evictions are at all-time lows. Moratoriums prevent owners from evicting bad actors who threaten the safety of responsible residents. Significant sources of aid are readily available so that individuals can get current on their rents. The moratorium does not prevent individuals from accumulating massive debts that will haunt them well past the pandemic. And the moratorium removes the incentive for individuals to find affordable, alternative living arrangements.

Andy Newell directs the accounting and reporting of all assets within the Monarch Investment and Management Group portfolio. Before joining Monarch, Newell spent 11 years as CFO for two Denver-area real estate development companies. He has a Bachelor of Arts in Economics from The Colorado College and an MBA and a Master of Public Accounting from the University of Washington. He also holds an active CPA license in Colorado.