I think she can handle it.
Posted on 01/30/2021 4:45:32 AM PST by Kaslin
Editor's Note: This piece was authored by landlord and Young Voices contributor Jen Sidorova.
To much aplomb from the public and to the great chagrin of landlords everywhere, President-elect Joe Biden announced plans to extend the eviction moratorium to the end of September. The measure, of course, was meant to protect 40 million Americans facing homelessness as a result of the ongoing pandemic. But Biden’s move isn’t just sticking it to greedy, rich landlords with an eye putting poor people on the street in times of crisis. After all, the white-collar landlords will make it out of this alive. No, this moratorium is just leveling middle-class landlords like me.
Since I couldn’t afford a single-family house, I bought a multi-family house with tenants in Buffalo, NY last January. The idea was to live in the smallest unit and rent out three other units in order to pay the mortgage. Of course, my income has shrunk considerably as a result of the crisis and I can no longer cover the mortgage with rental income. Plenty of other landlords are in the same position as me—and it’s not clear what the solution for us is.
When I started this project, I didn’t intend to merely function as a landlord. I wanted to revive a Victorian house and provide the community with affordable, pleasant housing. I took pride in reviving a once-thriving neighborhood of West Buffalo. Many landlords in my area are doing the same thing.
Indeed, America’s rental market in this country mostly consists of mom-and-pop ventures like mine. Many invest their life saving, take a mortgage to buy their second house, or, like most of my friends who live on Long Island, rent out parts of their houses just to cover their property taxes. In fact, individual investors make up 77 percent of small-building units and 40 percent of the total rental market. About a third of individual landlords are from low-to-moderate- income households. Having to go unpaid for what, now, looks like 18 months will be devastating to those families.
U.S. renters owe an estimated $70 billion in back-rent. Biden’s budget proposes $30 billion in rental assistance, which is not even half of the money currently owed. So, it is unclear what the plan is for the rent debt accumulated during the pandemic.
Although the new eviction moratorium also prohibits lenders from foreclosing, a mortgage is just a part of a landlord’s expenses. Rental properties still need regular maintenance. Even small accidental repairs, such as water leaks or minor breaks that are a routine part of house maintenance, are now a burden for landlords who have essentially lost their income. Maintenance alone can be a burden. It is estimated that for landlords, who have four or fewer units, annual operating expenses per unit range from $4,600 to $5,400. That’s in addition to still needing to pay property taxes.
It is yet unclear how the rental assistance would be distributed. Assuming it will go to tenants, it may create an accountability issue. So far, one of the unintended consequences of the eviction moratorium was that it let tenants who haven’t suffered from income loss take advantage of the eviction moratorium with few-to-no repercussions. Tenant abuse of the eviction moratorium is becoming commonplace.
If the president moves to disburse the rental assurance through expanding Section 8 program, which he seemed to favor during the election, he still won't solve the problem. Section 8 ensures that qualified tenants don’t pay more than 30-40% of their income—leaving landlords with a fraction of what they are owed and no way out.
There are other issues beyond nonpayment that might prompt landlords to want their tenants out, such as destruction of property or noise. Last November, I had to pay my problematic Section 8 tenant, who already owed $1000 in back rent, $1100 in cash just so that they would move out at the end of their lease. Essentially, I had to buy my own property from people who didn’t own it.
Landlords like me aren’t coming from money. Indeed, many of us are lower-to-middle-class households that provide a service, just like grocery stores or gyms. No one is asking them to do it for free. Several others rent out properties in the communities that they live in or grew up in. For us, this isn’t just a business—we are sharing our homes with people. What’s more, we’re investing and preserving the communities by improving existing properties and investing back in our hometowns.
Instead of mandating landlord-tenant relationships, the new government should focus on how to get people back into the workplace and reopen businesses. Stripping landlords of property rights isn't the answer. After all, like far too many small businesses in the last year, many landlords are sure to have lost their homes at the end of the pandemic. The government has already bungled things for Americans for the past 10 months—what will it possibly do for us then?
I guess the government’s plan for landlords hinges on the question… “Are the Bidens landlords?”.
Both Deblasio and Governor Newsom have talked about buying up all the real-estate in their areas. I read that New York was planning to offer loans where if you don’t pay, they take the real estate. All while making it difficult or impossible to get traditional loans and also allowing your tenants to not pay.
New York is the largest landlord in the world. This is the source of much of their revenue. What I don’t think they understand is they have killed all the reasons one might locate business in New York. The other thing happening at the same time is increased bandwidth. Many tech workers no longer need to be located anywhere near where they work. It looks as though, if fifty years, the cities will be abandoned. All because of a power grab that has used the time we might have used to slowly move into the new bandwidth world where people don’t need to be co-located. Why, if you can do your job from a hobby farm in a tax free state would you locate in a dirty city where there are no restaurants and no public entertainment? You might say, well, those things will come back. Not if the clientele has moved away and the rents are impossibly high because garbage collectors earn more than physicists.
If the GVT can let renters not pay but expect taxes to be paid by the landlord then the landlord should legally be able to transfer tax debt to non-paying tenants letting the GVT figure out how to get the money.
Never going to happen.
Bargains to be had, if you have the cash. You’ll have to out bid Big Govt though
This will also be the end of privately owned rental housing. You will either own a house, or live on the street or in the projects. All is going to plan.
What happened to the “takings” clause? Is Joe sending landlord’s checks?
Or maybe the question is...How many houses and apartments do our new Chinese masters want?????
I think she can handle it.
It’s nothing more than an unConstitutional “takings”. If we still had a justice system and judges who weren’t corrupt, this would be an easy 5th Amendment slap down.
I was in the landlord business back in the day and now I am so glad I got out. Communists consider landlords to be the scum of the earth, and they will continue to turn the screws. I am also not paying off my mortgage. I might just refinance and get as much cash as I can out.
Welcome to Amerika. There are no property rights. There are no constitutional/civil rights. But are Americans pissed off about it enough to do something about it?
When I started this project, I didn’t intend to merely function as a landlord. I wanted to revive a Victorian house and provide the community with affordable, pleasant housing. I took pride in reviving a once-thriving neighborhood of West Buffalo.
This summarizes a horror movie. It's all there.
1 get a multi-fam because you need extra income to pay for it
2 in Buffalo
3 landlording secondary to good intentions to restore a worthy piece of architecture plus serve and enhance the community
4 it's not working -- income isn't even covering the mortgage, because...
Except it's not because covid, it's because tenants. They don't care about architecture or community or you. If there's a way to keep the rent money they will keep the rent money.
When I started investing in real estate -- as soon as it was legal, age 18 -- I took the advice of my wiser-elders and avoided tenants like plague carriers. I met other investors, and landlords among them all had horror stories with the same basic elements.
Adjust your course now. Accept that tenants will destroy you if you give them enough rope. Accept, too, that this moratorium may actually save you because it beats some even more tragic outcomes that would eventually befall you.
You're not bankrupt yet, and that too is nothing compared to what could happen if you don't remedy the situation promptly.
There are ways to get the tenants out. Among the legal ways, some are expensive but cheaper than letting them stay.
I can't go into them here. I hope you'll explore the possibilities.
When they're gone...it's Buffalo, it'll get on without you, but if you intend to stay there, don't ever depend on a tenant to keep you afloat. Consider flipping property instead. Tenants in cities like Buffalo are especially brutal. Presume that means "all tenants."
I get regular income from people living in properties I own, but you will never find the words "rent" or "lease" or "tenant" in my contracts, except to explicitly affirm that they are not renting or leasing and they are not tenants.
It's in capitals like the terms about radon.
Good luck and think of your plight as an opportunity better late than later.
Democrats rent; Republicans own. Investments that involve getting Democrats to hold up their end of the deal is never for the faint of heart.
I have one tenant that has not paid rent since last May. Moratorium extended till the end of March.
Not a communist by any stretch of the imagination but I think landlords- both corporate landlords owning vast numbers of complexes in the US AND individual landlords are the scum of the Earth.
Was renting a nice property pre-COVID and the 85-year old woman forced me out of where I was living due to COVID-19 concerns and that I violated my lease by starting to Work From Home (absolutely forbidden per her lease rules, so she thought - the lease only forbade home-based businesses ). She did that to all 6 of her properties. Lost all my worldly goods as forced to get rid of maybe 25K worth of furniture in less than a week. The city government and police were of no help, including on eviction day (there was a moratorium in place already)
On the corporate side, I owe an excess of $12000 in rent and late fees - April to August. Moved out at the end of my lease to move in to the above place. Corporate landlord demanded a notarized and certificated letter saying I wasn’t renewing. Due to COVID, and the office being closed, no move out inspection and they didn’t collect my keys until August. Come to find out they demanded the keys and notice to be mailed to their Dallas Office (I’m in Denver). BTW, I was in the Philippines since July.
Can never rent in the US again. Wages garnished and I’m in the eviction database. FICO score also went from 760 to 528.
So yeah, eff all landlords.
[Democrats rent; Republicans own. Investments that involve getting Democrats to hold up their end of the deal is never for the faint of heart. ]
Living rent free was always a crazy solution. In the case of the big landlords, the cities will wind up with trashed properties when landlords walk away from their mortgages and buldings will no longer be maintained. What city has a budget to fix the acres of wrecked housing that will result?
[I have one tenant that has not paid rent since last May. Moratorium extended till the end of March.]
The government needs to stay out of this. They only make things worse.
One thing property owners can do to keep tenants from abusing the moratorium is rent to people with good credit. Eventually the moratorium ends and back rent, late fee and court costs will come due.
My tenants credit is going to suck if they do that to me.
Of course things can change and government will just say tenants don’t owe the money but if tenant has good credit they are afraid to mess it up. I manage 108 apartments and 4 town houses. I am 98%occupied and 100% rent collected.
If you drive through our lot during the day you would think no one is working. Every one there is working from home.
Screen your tenants. If they have crappy credit they are probably going to abuse the system. If they have excellent credit they will do everything they can to hang onto it.
It seems the class A and C properties are being hit hardest. Good B properties are doing pretty good.
They do have to pull the covid card to avoid evictions. There are still other reasons we can evict for.
It is hard to get a court date though because some courthouses have been closed or open limited hours.
We knew the moratorium was coming and were all told to evict anyone we could that might abuse the system. I didn’t need to get rid of any tenants, other complexes did evivt in advance for cause. You can also evict for non payment if it isn’t covid related.
I’m not trying to make light of the moratorium. I fought against it but landlords/property managers don’t do their selves any favors by not applying strick credit/background rules.
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