SEATTLE, March 29, 2021 /PRNewswire/ -- More than
three million renters say they are at risk of losing their homes
with the federal eviction moratorium set to expire this week, but a
new Zillow analysis shows the number of households evicted could be
as low as 130,000, depending on government action, the pace of
economic recovery, and how landlords respond.
That range highlights the need for federal intervention -- both
a continuing moratorium and additional assistance that will help
not only struggling renters but also their landlords, such as the
$45 billion in rental assistance in the recently passed
federal stimulus bill.
"Job disruptions and economic hardships brought by the pandemic
have hit renters particularly hard, and the number at risk for
eviction is staggering. Although the path forward is
uncertain, there are still ways for policymakers to keep the vast
majority of renters in their homes," said Chris Glynn, senior managing economist at
Zillow. "We know two things for certain: the current eviction
moratorium is succeeding at keeping renters in their homes, and
millions of renters believe that they will be evicted in coming
months. How many actually are evicted depends on the economic
recovery and individual landlord decisions."
Forecasting the number of likely evictions
According
to Zillow's analysis of the Census Bureau's Household Pulse Survey,
some 3.4 million Americans say they are at risk of eviction this
spring. As few as 130,000 to as many as 660,000 renter households
ultimately could be evicted, depending on the federal moratorium,
which is currently set to expire March
31, the economic recovery, and individual landlord
decision-making.
More than 8.3 million U.S. renters reported being behind on rent
payments as of March 15, with 16.8%
(1.41 million) of those respondents indicating they were 'very
likely' to be evicted in the next two months1. While
these numbers are sobering, it is expected that a small fraction of
those fearing eviction will actually lose their homes -- not all
landlords will choose to evict, and also, not all eviction filings
result in actual eviction judgments in courts.
However, with no historical precedent for this potential crisis,
predicting how small the fraction might be once the
moratorium expires is extremely difficult, especially with
remaining uncertainty around federal policies and how landlords are
able to respond.
Landlords are facing difficult choices
Every
tenant-landlord relationship is unique, but evictions based
strictly on owed rent aren't always in the landlord's best
interest. The process of evicting a tenant is time-consuming, and
in the end, landlords might find themselves struggling for several
months to fill vacant units, which will ultimately cost them even
more.
"Landlords are willing to work with tenants, and when the
moratoria end we would much rather find a solution than evict,"
says Kellie Tollifson, owner and
vice president of operations of T-Square Real Estate Services.
"It's all about maintaining a relationship and open communication
to figure out the best path for your unique situation. Landlords
can direct tenants where to find assistance or work out payment
plans that support both parties. Keeping people housed is the right
thing to do, and it's also good for business, so landlords are
highly motivated to work with renters to get through the pandemic
together."
One mutually beneficial solution is offering a repayment plan
and amortizing the back rent into ongoing rent payments, with
landlords effectively serving as private creditors as they recover
back rent over time. In this scenario, the benefit to the renter is
avoiding an eviction, and the landlord is made financially whole.
However, that might not be feasible for landlords who need a steady
cash flow to make mortgage payments and remain afloat.
Last year, many young adults left their rentals to move back
home, and one-third of rental listings were offering concessions
this past fall as landlords tried to entice renters with benefits
such as free parking or one-month free rent. And now with millions
of U.S. renters at risk of eviction coupled with increased rent
growth across the U.S., finding new tenants without a record of
evictions and with liquid funds to make security deposits may prove
extremely challenging.
An eviction crisis could be avoided with the right federal
support
The Centers for Disease Control and Prevention (CDC)
recently sent a proposal to the Office of Management and Budget,
leaving many wondering if federal officials are looking to extend
the moratorium set to expire on March
31. And while an extension would protect renters from
eviction, the policy should be coupled with relief for landlords
and rental assistance programs to support both and avoid an
eviction crisis.
The recent federal stimulus bill was an invaluable lifeline in
delivering direct economic relief, providing $45 billion in rental assistance to put money in
the pockets of the most vulnerable renters, as well as landlords
who have struggled to meet mortgage and utility obligations due to
missed rent payments. However, the government has struggled to
distribute that money fast enough to meet the needs of renters and
landlords, as the March 31 moratorium
deadline looms.
"The ongoing challenge for policymakers is to keep renters in
their homes without overburdening landlords," according to Glynn.
"Further extending the eviction moratorium would achieve one goal
but would also prolong the financial stress on individual
landlords. Eventually the federal moratorium will end, back
rents will come due, and landlords will be able to evict.
Avoiding an eviction crisis will require that landlords, tenants,
financial institutions, and policymakers work together to find
constructive and creative ways to keep renters in their homes and
make landlords financially whole. The alternative is millions
of evictions, and the social and economic costs of that are
unimaginable."
An extended moratorium is a temporary bandage that has
potentially damaging repercussions in the future, if not paired
with other relief programs. Robust economic recovery and expedited
distribution of fiscal support to renters and landlords is needed
to prevent a potential eviction crisis, if the moratorium is
extended, and keep landlords and renters in their homes.
About Zillow Group:
Zillow Group, Inc. (NASDAQ: Z and
ZG) is reimagining real estate to make it easier to unlock life's
next chapter.
As the most-visited real estate website in the United States, Zillow® and its affiliates
offer customers an on-demand experience for selling, buying,
renting or financing with transparency and nearly seamless
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dozens of markets across the country, allowing sellers control over
their timeline. Zillow Home Loans™, our affiliate lender, provides
our customers with an easy option to get pre-approved and secure
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Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).
1 Zillow's estimate is based on the Census
Bureau's latest Household Pulse Survey (HPS). The analysis assigns
eviction probability distributions to verbal survey responses like
'very likely', 'somewhat likely', 'not very likely', and 'not at
all likely'. HPS is the best current source of insight into
the magnitude of a potential eviction crisis.
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SOURCE Zillow