MARKETS & TRENDS
Will Moratoriums Kill theMarket? HOW SHORT-TERM RENT MORATORIUMS COULD WREAK HAVOC ON THE RENTAL MARKET FOR YEARS TO COME
by Matthew I. Paletz, Esq.
eople braced for mass eviction of renters when the CDC’s mor-
The federal moratorium had questionable authority even at the height of the pandemic. I have seen this rent moratorium process as an unconstitutional taking of property without compensation. It should be up to the local courts to decide, on a case-by-case basis, if landlords and tenants are acting in good faith. Rel- evant state laws and judicial discre- tion should be used accordingly, as they have historically done. Contrary to what has been report- ed, CDC rent moratoriums have not erased people’s contractual obliga- tion to pay their rent. These arrears in rental payments are not only going to hit the renters’ credit rating and the ability to find housing later but it’s been hitting landlords hard. I’m not talking about big corporate con- glomerates. Almost half of all rental properties are four or fewer units and of those, nearly 80 percent are owned by “Mom and Pop” landlords. Don’t think Larry and Leona Helms - ley; think Larry and Leona Appleby. And they have mortgages to pay. While many social advocates and the media continue to focus on the immediate potential homelessness of renters, more attention needs to be focused on the rental market beyond 2021. We are entering into an era, not a season, of devastating renter double jeopardy Specifically,
atorium expired on July 31, 2021. 1 But as someone who has been one of the more outspoken advocates of a group of people without one (land - lords), I am more concerned about a country that needs to brace for a lack of long-term housing as a result. There is no national database regarding “potential” evictions. But I do know this; there has been a significant amount of rental assis - tance in many states being distribut- ed to and on behalf of renters, both during and prior to the COVID-19 pandemic. A small percentage of cases went to suit and resulted in the of tenants. The majority of ten- ants and landlords have worked out resolutions, or the renters found alternative housing independently. With so many variables, there is no legitimate way to come up with even broad eviction numbers before the moratorium is lifted. But an underreported fall-out from interminable government COVID rent moratoriums is the impact that more than a year of “bad” rental debt will have on landlords and tenants. The CDC, a government agency that is supposed to regulate health issues, should have never been in the posi- tion to take constitutional protections away from landlords.
landlords will be forced to raise rents to regain some of the financial foot - ing lost during the pandemic, pricing many renters out of the market. Another obvious repercussion of having tenants in arrears for over a year is that landlords will also have to tighten the process of financial pre-approvals, a bar many rent- ers cannot meet after a year of bad rental debt. As for the renters still renting their properties, the vetting system has already begun to deter-
78 | think realty magazine :: september 2021
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