The good news: President Biden's eviction moratorium is keeping families in rental homes and apartments and driving out bad landlords.
Some owners are taking advantage of a red-hot housing market to sell their units to deep-pocketed investors willing to wait out the moratorium or to families who plan to live in them. Buyers are increasingly out-of-town investors or equity funds, whom critics fear will renovate the properties and market them at much higher prices.
“A lot of landlords are disgusted. They are selling at losses. They are getting out period,” Reid said of the dozens of investors he talks with.
Even those sticking with the property business say the moratorium has forced them to change their operations.
Some are leaving apartments vacant for months at a time, either because they lack the money to renovate or fear being stuck with nonpaying tenants. Some aren’t buying any new properties as long as the moratorium is in place; others will only buy in wealthier neighborhoods.
Still others are bolstering their screening process and giving extra scrutiny to someone who was unemployed for long stretches during the pandemic or saddled their previous landlord with months of back rent.
“If somebody stiffed their previous landlord out of 12, 15 or 18 months rent, I don’t want to rent to them,” Reid said.
This could result in fewer places to live for low-income tenants facing eviction when the moratorium lifts.
“It makes it worse for everyone. It’s worse for tenants, in particular, because we are going to lose affordable housing,” said Stacey Johnson-Cosby, who with her husband owns 21 units in the Kansas City, Missouri, area.
“The investors are going to come. They are going buy the property, put money into it, renovate it and rent it at a higher amount.”
Rick Martin anguished over just that before selling two of his five buildings in the Dorchester neighborhood of Boston. Before that the 62-year-old left most of them vacant due to the moratorium, depriving him of thousands of dollars in rent.
“The minute they enacted the moratorium, that trigged my decision to sell the properties,” Martin said. “I did not want someone moving in whom I could never get rid of if they didn’t pay rent. That would make the financial situation worse.”
Martin said he was torn about the decision to sell to investors. One has turned a building into condos. Another has already doubled the rent on a three-family building.
“Honestly it’s a very difficult decision,” he said. “I want the small property owners to flourish and grow. But because of this moratorium, we are having everything cut out from beneath us.”