Renter advocates celebrated when the Biden administration extended a Centers for Disease Control and Prevention moratorium on most evictions through Sept. 30, 2021. The extension provides relief for areas of the country where covid-19 cases are spreading fast but leaves small landlords trapped in a cycle of having to pay mortgages, taxes and maintenance on housing they’re renting out for free.
About a third of the U.S. population rents housing and about 6 million households are behind on their rent and potentially at risk of eviction, Brookings reported.
In addition to the federal moratorium, some states and local governments have imposed their own eviction bans.
Property owners know they are offering an essential service, but they are the only ones being asked to provide it free, according to Carol Kelly, a former office manager who owns six rental homes in Kansas City.
“What’s the difference between me and a grocery store or a restaurant?” Kelly asked in a Washington Post interview. “You would never go into a restaurant and say, ‘Please feed me for the next 12 months and I’ll give an IOU.’ But that is what people are saying to me.”
Generally, it’s a great time to be a real estate owner. Residential property values have skyrocketed and many corporate apartment chains catering to white-collar workers are raising rents and making huge profits. An index of publicly traded apartment chain stocks was up 43 percent on Friday. Meanwhile, some mom-and-pop landlords are giving up and deciding to sell, Washington Post reported.
The eviction moratorium has created widespread hardship for landlords — many of them, small-business people who depend on rental payments to cover mortgages, property taxes, utilities and maintenance. “They fill a vital role in the economy. Their reward has been to incur a burden that properly belongs to all of us,” Steve Chapman wrote for Creators Syndicate.
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Small landlords who are struggling should be able to find buyers for their properties, Redfin senior economist Sheharyar Bokhari said.
Wall Street investors are buying up rental properties and raising rents. In the second quarter, investors — rather than traditional home buyers — bought one in six homes sold in the second quarter, up from a typical one in 10. They paid a record $48.5 billion to acquire 67,943 homes, the highest quarterly figure on record, according to Redfin.
“Given that units in these structures are generally older and have relatively low rents, institutional investors may consider them prime candidates for purchase and upgrading. These changes in ownership have thus helped to keep rents on the climb,” researchers wrote.
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