In the 1993 movie that starred Bill Murray, Phil Conners experiences the same Groundhog Day events over and over until he gets his life right, and when that finally happens, the page on the calendar is turned. As we face yet another eviction moratorium, I’m starting to feel like Phil. Can we hope for the same outcome? Soon?
So far, our situation feels more like we are living one’s definition of insanity—doing the same thing over and over, but expecting a different result. The government keeps extending the eviction moratorium, and the level of outstanding rent owed to landlords continues to climb (it’s currently at around $73B). In this scenario, landlords continue to not get paid, even though the government has allocated Rental Assistance Funds to cover at least part of the outstanding rent balance. So, the moratorium gets extended further, landlords continue to be branded as heartless and greedy because of their own concern for revenue, and there is still no workable solution in sight.
So, what can we do to end the “Groundhog Day” cycle? Honestly, some things have to change. So, here are some ideas:
First, landlords are not the bad guys, but we are in trouble. Whether or not residents pay rent, operating expenses at our properties continue, as payroll for on-site employees, utility expenses, debt service, property taxes, property insurance, repairs and upkeep do not stop. For every dollar of rent, approximately 90 cents go to operating costs and debt service. Without rent collections, where does the money come to pay these costs? Landlords need help, and we seem to be the only industry not getting any.
But even still, as landlords, eviction is not our first or preferred option—it is, and should always be, the last resort—the least desirable solution of all. Depending on which state you are in, an eviction can take 30….90….120 days, or even longer, and to what end? Landlords still do not get their money, and on top of that, we have to get the apartment ready to lease again, costing even more. In almost every situation, landlords would much prefer to work with residents so that they can keep their home, and the landlord can get paid—even if through an agreement over time.
Second, since 12/27/2020, there has been approximately $47 Billion of Rental Assistance money that has been provided by Congress. Today, less than $4 Billion of that has actually been released for rent payments—after more than seven months! Why? Because the burden has been placed on residents to apply for assistance—and because it is a very complicated and onerous process, most residents can’t—or won’t—endure the process. So, they just wait until there is another extension, and Groundhog Day starts all over again.
So, what to do? The solution is actually pretty simple—let the landlords be in charge of the application process, with the assistance and verification of the resident. We have most of the information, and will certainly take the time. This puts all of the stakeholders into the process, with plenty of motivation to get it done. Sure, there are some greedy landlords—some bad actors—eager to game the system, but that does not represent most landlords. In the same vein, we know there are renters that are not paying their rent even if they have the means, but they certainly don’t represent all renters!
So, let’s do something different for the benefit of most—let’s break the Groundhog Day cycle. I know there are some states doing exactly what I suggested (it wasn’t really my idea), and other states should learn from their success. Many landlords are at the breaking point. We cannot continue to kick the can down the road, and let’s be honest, the housing and rental economies will face even greater hardships down the road if all our landlords pull up stakes, sell properties off, or stop renting.
Fortunately, there is a solution. Let’s make some noise with our representatives and work together for the best solution. Let’s turn the page on the calendar!