'We Have Zero Leverage': Eviction Ban Leaves Landlords Few Options
The eviction moratorium in Illinois is slated to end July 24. But for some landlords, it can't come fast enough.
The federal moratorium has offered critical protections to millions of renters facing financial hardship during the pandemic. According the the U.S. Census Bureau, more than 6,000,000 households are behind on their rent. The ban on evictions has kept tenants from being kicked out of their homes because they can't pay the bills.
But those protections don't extend to property owners, and many landlords say they've been left out in the cold. Janis and Andrew Hollins own 21 rental units on the west side of Bloomington. Janis Hollins said while most of their tenants have made good faith efforts to pay what they can towards rent; others have refused.
Hollins said that because of the moratorium, she has “zero leverage” in encouraging tenants to pay their rent.
She said she has found herself in a similar situation with water bills. As with evictions, water shut-offs have been placed on hold to protect people economically hurt by COVID.
Bills keep accruing. Hollins said one of her tenants wracked up $5,000 in unpaid charges. And in Bloomington, delinquent water bills are the landlord’s responsibility, not the tenant’s.
With no way to evict a tenant for nonpayment, and no way to shut off the water, Hollins has been left with no choice but to watch the unpaid balance grow.
Hollins said she turned to her own creditors, like her mortgage lender, hoping for some of the same grace being shown to tenants. She said the bank agreed to let her make interest-only payments on her loans. And though that helped, Hollins said the bank should’ve done more.
“I thought we could have a shared responsibility. This is a global pandemic that we're in,” she said.
Hollins said if landlords are unable to collect rent, other institutions — like banks — also should be expected to shoulder some degree of loss.
The Hollinses aren’t alone in finding themselves strapped for cash as a result of the eviction moratorium.
Eitan Weltman, a Bloomington attorney who represents property owners, said the moratorium has created a drastic reduction in cash flow for many landlords. That not only leaves them unable to keep up with mortgages and taxes, Weltman said, it impacts a landlord's ability to maintain a property.
“Some of my clients have had ordinance violations cases filed against them because they have failed to comply with the upkeep necessary by ordinance,” he said.
To fight those ordinance violations, Weltman said landlords have to spend more money — costs that put them even further behind. Weltman said when people think of landlords, they may envision powerful property management companies. Those companies have done fine throughout the pandemic, he said. It’s the “mom and pop” businesses that Weltman said he worries about — small, individual investors who often use rental income for their retirement; people perhaps like Janis and Andrew Hollins.
The couple got into the rental business after the real estate crash of 2008. They lost their jobs and their house in the crash, and were briefly homeless. They now rent to people who may be similarly down on their luck, those with criminal histories, or people who are struggling with addiction. Janis Hollins said the last thing she wants to do is evict any of her tenants. But the moratorium has pushed her so close to going out of business, and she said she can no longer afford to be patient.
“Even credit cards have a grace period. And I feel like everybody's grace is up,” Hollins said. “And I’m gonna hold people to the letter of the law with these leases as soon as I can.”
Hollins said she worries the moratorium will have an unintended long term consequence — making the rental market less accessible to low-income tenants. Once tenants are evicted for non-payment, Hollins said she thinks they might struggle to find alternative housing, as landlords burned by the moratorium create stricter leases and charge higher fees.
Adrian Barr, an attorney with Prairie State Legal Services in Bloomington, said the rental market already is tightening because of the moratorium. So it’s in a tenant’s best interest to take steps toward repairing the relationship with a landlord, Barr said.
Barr said even if a tenant has fallen far behind on rent and utilities, it’s important to come to the table — especially given the unprecedented amount of rental assistance that’s available.
Hollins said she and her husband have assisted many of their tenants in applying for assistance — a process that can be labor-intensive and confusing. But despite their offers of help, Hollins said some tenants still refuse. She said it’s difficult not to think that some people are simply taking advantage of the moratorium.
Barr said some tenants may be hesitant to seek rental assistance because they don't trust the government or social service agencies. Others, he said, are poorly equipped to navigate the system.
“Honestly, there are folks in our community that have dealt with mental illness, or they're just overwhelmed by life and they're just not facing the situation for their own reasons,” Barr said.
It’s precisely the people dealing with those kinds of issues that Hollins said she worries about: vulnerable tenants who, if they can't find a way to get current on rent and utilities, will be forced out of their homes into a shrinking housing market. She said the moratorium has been so difficult for small landlords, some are getting out of the rental business altogether.
And as mom and pop landlords look to unload rental units, properties could become increasingly consolidated by management companies — corporate entities that, unlike individual investors, still have enough cash flow to operate.
Hollins said she worries that could translate into fewer landlords like her — people who are willing to take a chance on renters down on their luck.