Where is the Eviction Tsunami?

After moratoriums expired, the massive wave of evictions predicted by tenant groups never came. So why are landlords’ hands still tied?

By DANIEL BERLIND, Snappt

There has been a burgeoning fear that as pandemic-era eviction moratoriums expired across the country, hordes of renters would suddenly be put out on the streets.

But the tsunami of evictions, long predicted by tenant groups and housing advocates who portray landlords as evil instead of the business-oriented providers of housing they are, never happened.

Just look at New York City, where a moratorium on evictions during the pandemic expired in January 2022. The city’s notoriously chaotic housing court is open and operating again. But instead of clogged hallways jammed with renters, owners and lawyers –a routine occurrence pre-pandemic – its passages and rooms today have a more muted, orderly tenor.

“It’s so dramatically lower than it was pre-pandemic,” Jean T. Schneider, the supervising judge for the New York City Housing Court, told The New York Times. “There is just not an explosion of filings.”

Indeed, while New York landlords filed 171,000 eviction cases in 2019, there were less than half of that number – around 75,000 – working their way through the system in mid 2022, six months after the local moratorium ended.

It’s not just New York City, either.

While there’s no uniform database that tracks all evictions nationally, Princeton University’s Eviction Lab, which tracks filings in 31 cities and six states that post updated data online, is the next best thing.

The site captures roughly a quarter of all renters nationally. But its analysts were likewise surprised when a groundswell of evictions never materialized.

“Given economic hardship resulting from the pandemic, we would have expected far more eviction cases to be filed in 2021 than in 2019,” the organization wrote in a blog post. “But the opposite happened.”

Indeed, while the group said in a typical pre-pandemic year, 865,000 eviction cases would be seen in the locales it tracks, last year saw just half that amount. “Using regression methods and historical data for the rest of the country, we estimate that nationwide, at least 1.36 million eviction cases were prevented in 2021,” the organization wrote.

Where did all the evil landlords go?

The reasons why evictions have not mushroomed are complex, and can be credited, at least in part, to the Center for Disease Control’s moratorium on evictions, which was struck down by the Supreme Court in August 2021.

But other locales have had longer, stricter moratoriums in place. In Oakland, California, for example, an eviction moratorium is indefinite until city council takes action to remove it. And in my hometown of Los Angeles, evictions are still off the table for owners until February of 2023, one of the longest running moratoriums in the country.

But by and large, as eviction moratoriums have expired for most of the country – there were no longer any statewide eviction bans in place as of July – renters have been spared.

The market dynamics that prevent evictions

Indeed, one of the main takeaways from a recent White House summit on eviction prevention was that the tsunami of evictions never happened, in part, due to the moratoria, but also because housing providers made a business-based decision to shoulder the burden of lost revenue while keeping their residents in their homes.

From that perspective, the primary stem that held off the eviction tsunami post moratoria was a predictable force: market dynamics. For landlords who look to their properties as an income-producing resource, evictions are a measure of last resort due to the high costs and lost time they generate.

Simply stated, evictions are bad business, and most owners just don’t want to go there. Instead, they work with residents on any other way to get whole on the rent first.

The reasons why are obvious.

According to a recent survey of 100 institutional property managers across the United States, the average eviction ends up costing property managers $7,500 in lost rent, legal fees and repair costs. It also takes time. In some jurisdictions, evictions may be carried out in a matter of weeks, but in others, the process can take as long as six months.

Or as Lisa Gomez, CEO of L&M Development Partners, which manages about 20,000 affording housing units, told the New York Times, “There is no upside in going to court.”

Marco Villegas, a landlord who owns nine buildings in the Bronx, said eviction was the least cost-effective way to generate income from his properties, and that he valued his renters as his greatest asset.

For him, court fees add up to $2,500, while turning over an apartment, making repairs and finding a new resident can run as high as $30,000. Instead, he prefers a communitybased approach where owners and renters work together to make the numbers work.

Some owners more aggressive

To be fair, not all owners have taken this approach during the pandemic. A recent Congressional report found four corporate property owners aggressively filed eviction papers, even while moratoriums were in place. However, those few bad apples still only represented 15,000 cases, a miniscule portion of the 2.7 million households that receive eviction notices in a normal year.

But while most landlords and property owners have shown market-driven moderation on evictions, even after moratoriums have expired, holdover legislation from the pandemic is still tying their hands as they try to work through the remaining renters in their portfolios who can’t, or won’t, pay their rent.

According to the National Apartment Association, a drafting error in the 2020 CARES Act means that owners of federally funded or assisted properties are still required to give renters an additional 30 days notice before filing an eviction in court, two years after the act expired. The result adds at least another month to an already drawn out and expensive process as owners struggle to recover from lost revenue during the pandemic.

While NAA has been lobbying to get this provision overturned and says it has found lawmakers sympathetic to owners’ challenges, by October 2022, it still hadn’t been able to find an actual legislative sponsor to fix this oversight. Apparently, Washington politicians did not want to be cast in the same lot as the “evil” landlords stoking the nonexistent eviction tsunami immediately before midterm elections.

The next potential eviction tsunami

The continued hurdles that owners have to clear, even post-pandemic, could result in some losing their properties in the months and years ahead.

As inflation has risen, increasing owners’ operating costs, and interest rates have gone up, yesterday’s operating numbers may not add up to a profitable building in today’s environment.

As Forbes points out, especially for owners with variable mortgages – a property that penciled out at a 3% mortgage rate may be underwater at 6%. That’s a troublesome thought, since 23% of Freddie Mac’s multifamily portfolio has variable rates, with 9% of Fannie Mae borrowers in the same boat. If rising rates lead to foreclosures, that could be the real trigger of an eviction tsunami, as many transactions require renters being out of a property before it changes hands.

With a post-pandemic wave of evictions averted, owners now have a new challenge to face – keeping their income-producing businesses viable in an increasingly tumultuous economic environment. Removing the remaining burdens they’ve responsibly shouldered over the last two and a half years to keep people housed during this crisis should be policymakers’ first order of business, if they want to prevent a real eviction tsunami ahead.

Daniel Berlind is the Chief Executive Officer and Founder of Snappt, a cuttingedge technology company that is eliminating financial fraud committed during the rental application process. Prior to founding Snapp, Daniel served as the President of Berlind Properties and oversaw the management of their properties from 2011 to 2017. Prior to Berlind Properties, Daniel was a professional baseball player for the Chicago Cubs and Minnesota Twins.