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Senate Bill 282 – Oregon’s Newest COVID-19 Landlord/Tenant Changes

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Brad Kraus
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Senate Bill 282 Oregon’s Newest COVID-19 Landlord Tenant Changes

A new Oregon Senate bill 282 is going to impact landlord tenant issues if it passes so attorney Brad Kraus reviews some of its issues for landlords and property managers.

By Bradley S. Kraus,
Attorney at Law, Warren Allen, LLP

As the old saying goes, the more things change, the more they stay the same. As we continue into year two of COVID-19 related rules, restrictions, and issues, landlords and tenants are still struggling.

Unpaid mortgages, rent, and bills continue to accumulate. Assistance is still lagging, failing to reach those landlords and tenants who felt the most impact.  As of this writing, the Landlord Compensation Fund still has not commenced round two of its funding application process. Even still, the Oregon legislature is in the process of passing new legislation that  will affect landlord/tenant relations—this time in the form of Senate Bill 282.

While Oregon SB 282 has yet to pass, in its current form—and much in line with the statement above—SB 282 contains more of the same. It extends the grace period for the repayment of amounts that accrued during the applicable grace period of April 1, 2020 through June 30, 2021 until February 28, 2022. This means that unpaid amounts that accrued over the past year will not be actionable until next year.

Senate Bill 282 further restricts a prospective landlord’s ability to screen applicants for these unpaid amounts.

It states that when considering an applicant, landlords cannot consider an applicant’s unpaid rent, including rent reflected in judgments or referrals of debt to a collection agency that accrued on or after April 1, 2020 and before March 1, 2022. It also contains the vague and concerning language that landlords cannot consider eviction actions if they are based on “claims” that arose on or after April 1, 2020 and before March 1, 2022. The reason that this is concerning is because even evictions related to violent conduct are technically “claims” that would fall subject to this broad standard. To suggest that a landlord could not consider the fact that an applicant stabbed someone within the above timeframe would be absurd.

SB 282 also contains additional required disclosures that will require landlords to update their forms. More specifically, notices for non-payment of rent will need a disclosure related to the extended grace period and an additional disclosure related to a website containing information on tenant resources. Balance-due notices will also need an update due to the changing grace period. Should SB 282 pass in its current form, landlords should review their materials and procure updates where needed.

Finally, SB 282 also contains prohibitions on a landlord’s enforcement of rules related to unauthorized guests. SB 282 states that a landlord may not enforce a restriction by any means, including terminating the tenancy, if the restriction is based on “the maximum duration of a guest’s stay in the tenancy.” The bill does allow a landlord to screen the guest, if the guest resides in the premises more than 15 days in any 12-month period. The screening may not be based on credit reports or income. Finally, landlords can enter into temporary occupancy agreements with the guests, but that agreement cannot have an ending date earlier than February 28, 2022.

As the calendar turns every month, landlords and tenants continue to fall behind on rent, mortgages, and other payments they have not been able to make due to COVID-related shutdowns.

The Oregon Landlord Compensation Fund is/was intended to resolve those issues, but it remains shuttered due to numerous issues. Rather than address those issues head-on, the legislature hastily crafted—and will likely pass—this bill. SB 282 does not solve the issues brought on by COVID-19; it further kicks those cans down the road. As the saying goes, the more things change, the more they stay the same.

A new Oregon Senate bill is going to impact landlord tenant issues if it passes so attorney Brad Kraus reviews some of its issues for landlords and property managers.
Bradley Kraus, Portland attorney

Brad Kraus is a partner at Warren Allen LLP. His primary practice area is landlord/tenant law, but he also assists clients with various litigation matters, probate matters, real estate disputes, and family-law matters. A native of New Ulm, Minnesota, he continues to root for Minnesota sports teams in his free time. You can reach him via email [email protected] or 503-255-8795.

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A Bright Outlook For Suburban Rental Housing

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By The Editors
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A Bright Outlook For Suburban Rental Housing

The tight housing supply and rising costs will delay many renters from transitioning to homeowners, providing a bright outlook for suburban rental housing, according to Marcus & Millichap  in their most recent research brief.

Suburban rental housing market signals transformation

“Home buying is being driven in large part by changing demographic trends that have been accelerated by the health crisis.

“The aging of the millennial generation into the homeownership phase of life and more households seeking larger spaces in lower-density areas as they work and attend school from home have driven housing demand in the suburbs.

“Home sales are also being fueled by historically low interest rates and a surge in savings during the pandemic that are helping more prospective homeowners afford the associated down payment and mortgage. Lower land costs farther from metro cores are keeping many developers focused in suburban and exurban locales,” Marcus & Millichap say in the report.

Housing shortage reiterates value of apartments

 During March, the supply of both new and existing home sales remained near a historic low, resulting in many potential homeowners being repeatedly outbid as prices continue to soar.

“The median cost of an existing home jumped 3.0 percent in March alone to $342,400, a new all-time high. Over the past 12 months, the price has surged 18.4 percent, which is the fastest pace of annual price growth since at least the 1960s.

“As a result, the monthly payment for a 30-year loan on a median-priced home, with a 10 percent down payment and including taxes and insurance, rose to $1,926. In contrast, the average effective rent on a Class A apartment is $1,787 per month, underscoring the value of rentals.

“The tight supply and rising cost will delay many renters from transitioning to homeowners, providing a bright outlook for suburban rentals,” the report says.

Single-family rentals gain traction

Strong demand for single-family home rentals since the Great Recession and a lack of available homes to purchase for rentals have some investors constructing single-family communities for the purpose of renting. In recent years, the number of build-for-rent homes (BFR) accounted for five to 10 percent of the new homes constructed; however, the numbers are growing, especially in the Sun Belt metros with lower land prices, including Atlanta, Phoenix and Houston. These assets could increase competition for larger suburban apartments.

Strong demand activates developers; cost continue to rise

“Housing completions surged 16.6 percent during March and single-family permitting jumped 4.7 percent.

“While permitting and construction activity are growing, rising production costs and a shortage of materials are delaying the groundbreaking on some homes.

“In the final week of April, the average cost of 1,000 board feet of lumber sat just under $1,300, up 232 percent since the onset of the pandemic. The rising costs have some developers focusing on higher-end residences, where these costs can more easily be absorbed into the sales price,” the report says.

Marcus & Millichap is a leading firm specializing in commercial real estate sales, financing, research and advisory services.

5 Trends Shaping the Future of Rental Housing After the Pandemic

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How the Pandemic Will Affect the Future of Apartments And What People Rent

Rent Prices Show Largest Jump in April Since 2017

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By The Editors
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Rent prices National Rent Index Shows Largest Jump in April Since 2017

Rent prices are continuing to rebound with the national index up by 1.9 percent month-over-month in April, “the biggest monthly jump in our national index since the start of our estimates in 2017, breaking a record set just last month,” said Rob Warnock, senior research associate with Apartment List.

Rent growth has now been outpacing prior-year averages for several months, “indicating that this year’s moving season is set to be a historically busy one,” Apartment List says in the report.

“For comparison, in the pre-pandemic years of 2018 and 2019, month-over-month rent growth in March was 0.8 percent and 0.7 percent, respectively. This month’s sharp increase breaks a record set just last month, when rents jumped by 1.4 percent. In each of the past four months, our national index has not only had positive growth, but has outpaced the average growth of prior years.

“After the rapid growth of recent months, year-over-year rent growth now stands at 2.3 percent, in line with the rates from prior years,” Apartment List says in the report.

Days of plummeting rent prices have come to an end

“The data continues to show significant regional variation, but the days of plummeting rents in pricey coastal markets have come to an end.

“The cities with the sharpest year-over-year rent declines are now experiencing positive rent growth again, and in some cases, prices are rapidly rebounding. At the other end of the spectrum, many of the mid-sized markets that have seen rents grow quickly through the pandemic are continuing to boom,” Warnock says in the report.

In markets like San Francisco where rents had been falling fastest, prices have turned a corner and are now rebounding.

At the same time, booming markets like Boise continue to see prices climb. More broadly, as vaccine distribution continues to gain momentum, we may be starting to experience the release of pent-up demand from renters who had been delaying moves due to the pandemic. Whereas last year’s peak moving season was halted by the pandemic, this year’s seasonal spike appears to be making up for lost time.

Summary

“We are now seeing that the markets where rents had been falling sharply have turned a corner, and in some cases, prices in these cities have started to rebound rapidly. But although some may be moving back to superstar cities, affordable mid-sized markets are continuing to boom. As vaccine distribution continues to gain momentum, rental markets may be beginning to reflect the preferences of a post-COVID future,” Apartment List says in the report.

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How the Pandemic Will Affect the Future of Apartments And What People Rent

The Case Study of a 1031 DST Specialist

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By The Editors
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The Case Study of a 1031 DST Specialist

By Steve Haskell
Vice President at Kay Properties and Investments

There are various strategies when using DSTs (Delaware Statutory Trusts) in a 1031 exchange. Some investments are as easy as a simple exchange from one property into a single DST. Other times DST’s are used to invest leftover equity from an exchange so the investor is not taxed on leftover funds, called “boot”. Investors will routinely use DSTs as a backup ID in case their target replacement property doesn’t work out. And occasionally, Kay Properties will assist an exchanger to utilize all said strategies in one sophisticated effort to mitigate risk and defer as much tax as possible. Read on for the experience of a highly skilled 1031 DST specialist.

A real estate investor sold an investment property for approximately $2M.  Roughly 25% of his property was leveraged. Therefore, $1.5M was sitting in his qualified intermediary account. He then contacted Kay Properties to pursue a partial 1031 DST exchange. The exchanger wanted to purchase a property on his own, but something smaller and easier to manage than the property he recently sold. He wanted to put part of his exchange into a completely passive DST option that would require no management on his part. The DST part was relatively easy. However, he was having a hard time finding a replacement property to own outright, and the 45-day clock was ticking. Kay Properties created a multifaceted strategy that supported the investor from a variety of angles.

First, the exchanger used the debt built into the DST to replace his mortgage. The Kay Properties representative created a DST portfolio for the investor with a loan-to-value of approximately 50% to match the exact debt required to satisfy the 1031 exchange regulation. The debt was non-recourse, meaning the investor did not need to apply or sign for the loan, nor did it show up on his personal balance sheet. This freed him up to purchase a smaller property to own outright without taking out a mortgage, which increased his probability of closing.

Next, the exchanger used a DST as a backup ID in case the target property did not work out. The due diligence period on the replacement property extended past the 45-day period. If inspections exposed an issue that compromised the deal, the exchanger would be vulnerable to over hundreds of thousands of dollars in taxes. However, since the Kay Properties representative advised the client to use a DST as a backup ID, the exchangers risk of a failed exchange was significantly mitigated.

Finally, Kay Properties assisted the investor to ensure there was no leftover equity by using the DST to invest the leftover boot. After the exchanger and the seller agreed on a price, he realized there was approximately $50,300 of exchange funds left over. Kay Properties found a DST to invest that exact amount to finish up the exchange.

When one has the knowledge and the assistance of a skilled DST 1031 specialist, an investor can mitigate risk and protect themselves from a failed exchange in a variety of ways. Through the assistance and guidance of Kay Properties, the exchanger in this case split funds into both DSTs and his own property, replaced his debt with a non-recourse loan, protected his exchange with a backup ID, and took care of the leftover boot. These high level DST skills often are not available to investors who choose to work with unaware financial planners with little-to-no understanding of real estate, 1031 exchange strategies and DST investments. Fortunately, the client was working with Kay Properties. If you are interested in learning more on how to use a DST to mitigate risk and defer taxes in your 1031 exchange, contact Kay Properties by registering at www.kpi1031.com.

About Kay Properties and www.kpi1031.com

 Kay Properties is a national Delaware Statutory Trust (DST) investment

firm. The www.kpi1031.com platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market.  Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $21 Billion of DST 1031 investments.

This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing.  IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation.  There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed.

Securities offered through Growth Capital Services, member FINRA, SIPC, Office of Supervisory Jurisdiction located at 582 Market Street, Suite 300, San Francisco, CA 94104.

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HomeVestors Renovates Dilapidated Multifamily Project

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By The Editors
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A HomeVestors franchise has moved from ugly houses to an ugly apartment complex makeover in partnership with the city of San Bernardino

A HomeVestors franchise has moved from ugly houses to an ugly apartment complex makeover in partnership with the city of San Bernardino, according to a release.

The franchise completed a dramatic $2 million makeover on a 44-unit apartment complex that had been a blight on its local community. The property, which neighbors an elementary school, had been a public health hazard and was shut down by the city of San Bernardino when franchisees Berto Ramos and Manuel Ramirez took it on with their “We Buy Ugly Houses” mentality.

Built in the 1960s, the complex spent years in a state of disrepair as one of the area’s most troublesome residential properties.

The properties were so far beyond code that apartments were left with no running water, windows or electricity, and the city had forced the mostly absentee previous owner to surrender the property. Ramos and Ramirez purchased it and completely renovated it to not only meet code, but to also reach the highest level of quality in local rentals. In addition to a new water and sewer system and heating and cooling upgrades, each unit now has its own heating and air conditioning system, water source, and shutoff valve.

“This property had been a challenge for the city on a daily basis for years before we took control. Given the extensive problems the last owner let go unaddressed, the city was weary about who to entrust it with – they knew its state at the time was wrong, needed someone to fix it, and didn’t want to end up with a similarly delinquent landlord,” said Ramos.

“The truth is, it takes real estate investors like us to help change these community situations. Law enforcement, the city and the courts can’t bear the full burden. Someone like us needs to invest the attention and capital, treat the neighborhood with respect, and give them what they need, which in this case was 44 quality homes for local residents that were previously not available.”

The project was handled by the HomeVestors franchisees as they would with any of their other ugly-house makeovers. Every asset was redone – kitchens, bathrooms, and bedrooms. Public areas were made over, including the addition of new courtyards, play areas, and barbecues. The property, once viewed with trepidation by teachers at the school next door became a clean and safe haven for families. Reopened in March, the renamed Golden California Apartments are already 80 percent full and expected to be at occupancy this month, according to the release.

“People are hurting, rents are skyrocketing, and that makes it even more important that we repair a property like that so people can live there,” said Councilman Damon L. Alexander, whose seventh ward includes the Golden California project. “There’s no reason any San Bernardino resident should not have a good place to live, and there’s no reason why other residential properties in the city can’t be upgraded the same way.”

More than 80 percent of houses HomeVestors purchases are less than 1,400-square feet and were built before 1980, though some are multifamily homes like the San Bernardino project. Franchises generally rehab and sell their homes or hold them as investment properties.

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Property Managers, Take Note: Happy Pet Owners Mean Happy Long-Term Residents

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By The Editors
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Property Managers, Take Note: Happy Pet Owners Mean Happy Long-Term Residents

A guest post to help property managers understand pets and the connection with long-term happy rental residents.

By KC Theisen
Opening Doors

A few weeks ago, a graduate student at the University of Maryland interviewed me about the connection between pets and people. I often get to talk about the logistics of keeping pets and families together, as in the administrative aspects and guidelines for property managers. But since our chat, I’ve been thinking about our bond with animals and wanted to focus on one of the simplest facts about pets: They make us happy. Property managers, take note. When you have happy residents, you have long-term residents.

Look at the health statistics that spring from pet ownership. Pet owners report experiencing less depression and loneliness, and being more active, reducing heart disease. Spending time with a pet lowers blood pressure and heart rate, and having a companion animal to care for is the reason many seniors get out of bed in the morning despite aches and pains.

Pets make us more social. It’s clear from looking out a window that dog people are out and about, frequently stopping to chat with others about their furry family members. Visits to a pet-supply store, the veterinarian, and the park provide opportunities to meet new people. In rentals, the shared spaces become public meeting houses for dog owners, even while social distancing.

Cat owners are more social, too. They also go to pet-supply stores, grocers, and vet clinics, interact with other cat people. Creating a network of in-house cat sitters provides cat owners an amenity that makes them feel included in the building’s pet community. Especially for people with physical limitations or mobility issues, cats are a pathway to getting up and about indoors and to receiving affection. Hearing a purring cat makes it almost impossible for a human to cry.

How is your bottom line affected by physically healthy and socially adjusted residents? Happy people stay put. Happy people like living in a place where they feel welcomed and where they find comfort in being, especially when we are spending so much time at home these days. Happy people also invest in their happiness, and if they like living in your property, will tolerate moderate fees or rent increases to hold on to their happy place.

If you manage a property wracked by COVID-19 fatigue, how can you help alleviate your residents’ isolation and sense of loneliness while keeping the CDC guidelines in place? Welcome pets. Four-legged friends are a key reason people choose a rental, and better pet policies bring potential residents in droves.

Opening Doors has strategies to share so you can control which pets are welcome, and set standards of great care that translate to happier community residents, pet-owning or not. Make your property their happy place.

 About the author:

KC Theisen is the animal-management and pet-policy advisor for Opening Doors. She creates policies and programs for properties that enhance revenue potential while controlling potential conflicts and problems. KC has more than 25 years of experience working with animals and people. She obtained her undergraduate degree in Zoology from the University of Wisconsin. She was the Humane Society of the United States’ director of pet-care issues for many years. KC received her master’s degree in professional writing in 2007 and uses these skills to draft user-friendly policies and explanations for Opening Doors clients, bringing legal jargon into clear, concise rules and practices.

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Does 90-Day No-Cause Notice Apply If Tenant Is OK With Moving?

By
Brad Kraus
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Does 90-Day No-Cause Notice Apply If Tenant Is OK With Moving?

Ask attorney Brad is a feature with attorney Bradley S. Kraus and this week the question is about the 90-day no-cause notice and a tenant who is ok with moving.  If you have a question for Brad, please feel out the form below.

Ask Attorney Brad:

My tenant has been in my rental for a couple of years. It’s a mobile home and I’d like to move it to another property that is within a mile. The tenant is aware that the home may move and he is OK with relocating to the same house, once it’s moved. How might the 90-day notice figure into this arrangement? With our verbal agreement and the house simply going to another lot, it’s a unique situation. -Gary

Hello, Gary:

Quite a unique situation indeed!

The good thing about your particular situation is that (a) you don’t seem to want to get rid of your tenant, and (b) he’s okay moving to the new location.

Because of that, it may be as easy as working something out with the tenant in the form of a hotel stay or compensation for couch surfing while the mobile home is being moved. The particulars of this situation may not be fully apparent in your question, so if I’m missing something, let me know.

A 90-day no-cause notice for a qualifying landlord exemption (assuming that’s what you meant) is really only necessary if you want to remove the tenant. That doesn’t seem to be the case here.

So, a simple conversation with your tenant (and a well-crafted document reflecting the parties’ arrangement) will likely go a long way.

As adversarial as the landlord/tenant relationship has become recently, sometimes we forget that’s still an option.

–Brad

Ask Attorney Brad: Does 90-Day No-Cause Notice Apply If Tenant Is OK With Moving?
Bradley Kraus, Portland attorney

Brad Kraus is a partner at Warren Allen LLP. His primary practice area is landlord/tenant law, but he also assists clients with various litigation matters, probate matters, real estate disputes, and family-law matters. A native of New Ulm, Minnesota, he continues to root for Minnesota sports teams in his free time.  You can reach him via email [email protected] or 503-255-8795.

Ask Attorney Brad

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Ask Attorney Brad: Why Can’t A Landlord Give a 30-Day Notice to Vacate?

5 Trends Shaping the Future of Rental Housing After the Pandemic

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By The Editors
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5 Trends Shaping the Future of Rental Housing After the Pandemic

There are five trends witnessed during the pandemic that will be shaping the future of rental housing and apartments for years to come, according to National Apartment Association (NAA) President and CEI Bob Pinnegar.

“The world continues to change as vaccines roll out. During the past year, businesses have adapted, consumers have altered purchasing habits and industries are adjusting to a new normal. The rental housing industry is no different, and apartments will continue evolving in response to the pandemic,” Pinnegar said in a release.

Here is what Pinnegar said about the five trends he sees, in a recent Washington Post column.

No. 1: A new outlook on amenities

“There has been a shift in the amenity world—shareable areas to individual spaces.

“Shared spaces such as fitness centers and pools are still important, but communities have shifted their focus to in-home amenities like larger kitchens, balconies, in-unit washer and dryers and high-speed Wi-Fi.”

No. 2: Virtual tours and decision making

“For obvious reasons, there’s now a larger number of prospective residents virtually searching for new homes.”

While it was previously only part of the process of selecting a new community, virtual touring has been a catalyst to “invest in new technology, high-quality videos and specialized training to give prospects a more complete picture of the community.”

No. 3: Changing relationship between property managers and residents

“Communication between community managers and residents is vital, and could impact resident retention and even new apartment searches.”

Interactions between the two parties has “significantly increased” compared to pre-pandemic relationships.

No. 4: New perspective on location

“Remote work has caused residents to re-think where and how they live.”

One of the biggest rental housing trends is that residents who don’t need to be close to the office can now search for other options—a two-bedroom in the suburbs vs. a one-bedroom in the city—to accommodate the work-from-home lifestyle.

No. 5: A new generation with new values

“The younger generations—millennials and Generation Z—favor renting, which leads to higher demand for apartments, more competition and new development.

“One of the greatest hallmarks of the apartment industry is its propensity for choice, flexibility and adaptability,” Pinnegar says. “This means that the current demand for apartments is only going to increase, creating steeper competition, prompting innovations and spurring new development.”

Future of rental housing is choice

Pinnegar writes in his column that, “One of the greatest hallmarks of the apartment industry is its propensity for choice, flexibility and adaptability. As we witness a seismic shift in our society and economy, the apartment industry is racing to identify and respond to its residents’ changing lifestyles.

“For residents, it’s a critical time to communicate your needs to your property manager or leasing agent. In this way, housing providers and residents can come together to shape and influence the apartment market of the future,” Pinnegar says.

4 Categories of Apartment Rent Forecasts for 2021

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How the Pandemic Will Affect the Future of Apartments And What People Rent

Tenants Can Hold Debt Collectors Accountable for Illegal Evictions

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By The Editors
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Tenants Can Hold Debt Collectors Accountable for Illegal Evictions

Tenants can hold debt collectors accountable for illegal evictions if the debt collectors seeking back rent payments fail to advise the tenants of the CDC eviction moratorium under a new rule, according to a release from the Consumer Financial Protection Bureau (CFPB).

The CFPB’s rule requires debt collectors to provide written notice to tenants of their rights under the eviction moratorium and prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium.

“The CDC has established the eviction moratorium to protect the public health and reduce the spread of the virus. Debt collectors who evict tenants who may have rights under the moratorium without providing notice of the moratorium or who misrepresent tenants’ rights under the moratorium can be prosecuted by federal agencies and state attorneys general for violations of the Fair Debt Collection Practices Act (FDCPA) and are also subject to private lawsuits by tenants,” the CFPB said in the release.

“With COVID-19 killing hundreds of Americans every day, kicking families out into the street during this pandemic may literally be a death sentence,” said CFPB Acting Director Dave Uejio. “No one should be evicted from their home without understanding their rights, and we will hold accountable those debt collectors who move forward with illegal evictions. We encourage debt collectors to work with tenants and landlords to find solutions that work for everyone.”

Some states and localities have adopted their own eviction moratoriums. Debt collectors may also be required to provide notice of these moratoriums. The CFPB’s rule does not preempt more protective state laws.

Nearly nine million households are behind on their rental payments.

“Tens of thousands of renters are being evicted every week, often without being told of their rights under the CDC moratorium. As the CDC has found, tenants who are evicted may end up homeless or in crowded or shared living settings, increasing their vulnerability to COVID-19 and the risk of the disease spreading throughout communities. Such evictions can have long-term health, financial, and social consequences for families and children,” the CFPB said in the statement.

The rule goes into effect May 3 and does not apply directly to landlords, but does apply to third-party debt collectors, including attorneys hired to represent landlords in eviction actions. It also forbids debt collectors from misrepresenting to renters that they’re not covered by the national moratorium, which was extended last month to remain in place through June.

The CFPB said it believes some tenants may not know about the CDC’s eviction moratorium or how to take advantage of it. And there are reports that tenants who do try to use the moratorium to halt an eviction may be “falsely informed” that they’re not eligible, the agency said.

“Numerous public reports and bureau outreach with consumer advocates, legal aid organizations, and other stakeholders also suggest that parties to the eviction process may be engaged in other conduct in violation of federal, state, or local eviction moratoria,” the CFPB said.

Will You Be Ready When the Eviction Moratorium Ends?

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Steep Multifamily Occupancy Declines An Urban Phenomenon

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By The Editors
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Steep Multifamily Occupancy Declines An Urban Phenomenon

Multifamily performance has rebounded quickly from the pandemic slowdown, with the exception of occupancy declines in properties in urban gateway metro submarkets, Yardi Matrix says in a recent report.

“According to a study of 78,000 properties in Yardi Matrix’s database, large occupancy declines in the last year have been concentrated in a handful of cities that may take years to recover,” the report says.

However, the multifamily industry overall “is surviving COVID-19 without too much disruption,” the report says. “Nationally, rent and occupancy levels fell only slightly in 2020 before turning positive again in the first quarter of 2021, while acquisition yields barely budged.” However, problems in the struggling urban submarkets show “problems that must be addressed in the wake of the pandemic.”

Some key points in the report:

  • Roughly one out of every 14 multifamily properties in the United States has seen occupancy declines and rates drop by five percent or more over the last 12 months.
  • However, the loss is concentrated in urban assets in gateway metros, which limits the potential for distress.
  • The study shows a large split in market performance and recovery period. Some markets are back to pre-pandemic performance levels already, while it could take five years or more for rents to recover in the most affected urban submarkets.

“While the data demonstrates the troubles some segments of the market face, the industry can take solace in the finding that the poor performance in demand and occupancy is limited.

“The results show that the amount of distress anticipated by some is likely to remain limited, and whatever does occur will almost certainly be concentrated in high-cost gateway centers that will have a much bigger hill to climb to get back to pre-pandemic revenue levels when normality returns,” Yardi Matrix says in the report.

Summary

“We forecast that it will take at least five years to return to first-quarter 2020 occupancy levels in gateway cities such as New York, San Francisco (and San Jose), Los Angeles and Chicago, and in secondary metros such as Orlando, Miami and the Twin Cities,” the report says.

“The upshot is that the pandemic has created a list of challenges and changes that the industry will wrestle with for some time. Our review of property-level performance indicates that potential distress might not be as widespread as first imagined, and that it might be an urban phenomenon.”

—Paul Fiorilla, Director of Research, and
Justin Dean, Senior Analyst

About Yardi Matrix:

Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149.

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