The Eviction Moratorium’s End May Not Lead to a Jump in Homelessness

Many landlords, frustrated with the extension to the CDC pandemic eviction moratorium, are likely counting the days to its end on July 31.

So are many others, whether in CRE or public policy, but with greater concern. A sudden surge of evictions would “have a devastating and large negative impact on communities,” Eric Maribojoc, executive director of the Center for Real Estate Entrepreneurship at George Mason University’s School of Business, tells GlobeSt.com. 

“The latest US Census Pulse Survey at the end of June shows that 7.4 million renters, about 15% of total renter households, are behind in their rental payments,” Maribojoc says. “About half of these renters report not being employed and the loss of employment income as the primary reason for non-payment of rent.”

The most recent data from the Census suggests 35.8% of adults (plus or minus 2.9%) in households behind on rent or mortgage report that “eviction or foreclosure in the next two months is either very likely or somewhat likely.”

And who wants their industry to play the mustachioed villain demanding the rent from a young distraught woman in a silent picture?

But some that study real estate and practice law in the field have played the Mountie who comes to the rescue, in this case saying, “Wait a minute, things may not be as bad as they seem.” 

“A lot of people have been getting [unemployment payments],” John Loper, associate professor of real estate for the USC Sol Price School of Public Policy, tells GlobeSt.com. “The large number of people we’ve worried about not paying rent have been receiving government funding. I think there’s going to be very few evictions more than normal. The majority of people are getting enough money to pay rent,” whether from government aid or having jobs.

In other words, there’s a chance that the government data, self-reported by presumably worried people, may not be accurate.

Steve Williams, a partner in the Pennsylvania law firm of Cohen Seglias Pallas Greenhall & Furman, says that eviction cases have proceeded in most parts of his state. “The only thing the CDC order has prevented is the actual disposition of the tenants.” So, it’s not as though all evictions have stopped to create an even larger backlog.

“Most of the larger landlords, at least the ones I’ve been speaking to, have not had a significant problem with tenants not paying rent,” Williams says. “Landlords have generally reached out and tried to work with the tenants.”

Michele Harrington, COO of Southern California independent brokerage First Team Real Estate, has a similar experience. “I don’t think there’s going to be a flood of affected rental properties or a mass exodus of tenants because landlords are figuring out payment and working it out so that they don’t have to evict their tenants,” she tells GlobeSt.com.

There also has been federal and state financial help for renters who needed it. But it’s been slow in deployment. The amount of money distributed in June under the Emergency Rental Assistance program—more than $1.5 billion—was more than all previous assistance from “all three previous reporting periods combined.” Unless money gets to the people who need it, it doesn’t matter how large the overall program is, namely the $25 billion rental assistance program the Treasury announced in January 2021.