A report from the Denverite in Colorado. “The median rent for an apartment dropped 1.4 percent to $1,454 between the first quarter of this year and the second, according to the University of Denver’s Daniels College of Business. The decrease was sharpest for newer apartments, which tend to be more expensive. Drew Hamrick, senior vice president for Apartment Association of Metro Denver, said he could think of only a few reasons for landlords to raise the rent in this climate. Some might have been holding off and have decided now is the time for a correction. Others may need to recoup the costs of recent improvements to their property.”
“‘Or, three, the landlord’s just plain wrong about how much they think their apartment’s worth,’ Hamrick said.”
From Carson Now in Nevada. “A report by the Nevada State Apartment Association: the second quarter of 2020, the average vacancy rate for local apartments was 8.9%. That’s up from 6.3% one year earlier. Reno’s current construction pipeline is massive by local standards, with 3,170 apartment units in the works. In fact, that’s more than the number of units being built in the much larger Las Vegas metro area. This will increase the Reno area apartment inventory by roughly 10%. The local apartment inventory has increased by roughly 17% since 2016.”
The Star Tribune in Minnesota. “The rental market in the Twin Cities remained relatively healthy during the first half of the year, but with thousands of apartments expected to hit the market this year and no plan to replace expanded jobless benefits, vacancies are expected to increase and rents soften by end of the year. During the first half of the year 3,117 rentals opened, and the market absorbed about 1,142 total units compared with 3,690 units during the same time last year.”
“As housing advocates fret about the prospect of a large wave of evictions, property managers in some areas are bracing for an increase in empty units. Some are offering rent concessions, or inducements to rent, including one or two free months’ rent with at least a yearlong lease in some buildings.”
From Market Place. “The New York real estate firm Douglas Elliman’s latest report on New York City rentals for July finds record vacancy rates in some parts of the city — and the most significant year-over-year decline in rent in nine years. Kat O’Brien rents an apartment in Manhattan, a new place that she found during the pandemic. She’s still getting bombarded with ads, mostly for luxury housing. ‘I’ve seen two months free, the most I saw was one on a 24-month lease, up to four months free,’ O’Brien said.”
“‘Landlords are having a much more difficult time filling apartments,’ said Jonathan Miller, who authored the report. In Manhattan, ‘that’s why vacancy is double what it was a year ago — more than double — and it’s the highest that we’ve tracked in 14 years,’ he said.”
The New York Daily News. “It’s a renter’s market all across Manhattan. The month of July brought a record high number of vacant rental apartments in Manhattan, with more than 13,000 residences available to rent, according to real estate experts Daniel Elliman and Miller Samuel. The 4.33% vacancy rate was more than double the figure from one year ago, when the number of vacancies was just below 6,000.”
“‘There was a record amount of listing inventory, a rise in landlord concessions and the vacancy rate jumped for the third consecutive month to a new record,’ read the report as COVID-10 continues to wreak havoc on Manhattan housing. The report, now in its 14th year, offered more bad news for landlords: A significant drop in newly-signed July leases compared to 2019, along with a fall-off of about $350 in rent from this July compared to last July.”
The Real Deal on New York. “‘Forty percent of Manhattanites left the city in March and April, and without clarity on topics like school reopenings, there has not been urgency to return,’ said Jonathan Miller, author of the report. As demand stayed low in July and the number of available units grew, the median rent fell to $3,167, down 7 percent from a year earlier — the largest dip in nearly nine years.”
The Real Deal on California. “Downtown Los Angeles is no stranger to protests, but an unexpected group will be hitting the streets on Saturday to raise their signs: Residential landlords. The event is being organized by Yong Ling Lee, who calls herself a ‘mom-and-pop landlord.’ Lee says she rents out 10 single-family houses in Hawthorne, Redondo and other corners of the county. The protest will focus on two concerns: The statewide eviction ban, and landlords’ mounting mortgage payments, in which they say the government has provided little relief.”
“‘The rental rights people that are saying, ‘housing is a human right,’ they are taking advantage of us,’ Lee said. ‘We work hard for little profit. And the government has not helped us a dime with our mortgages.’”
“In fact, the federal government has provided mortgage relief, but only to landlords with mortgages guaranteed by Fannie Mae and Freddie Mac. Gov. Gavin Newsom announced a deal with some lending institutions in March for mortgage forbearance. But many landlords said they didn’t see the state’s intervention as an improvement over individual negotiations with mortgage providers.”
“Landlords are also concerned about rental income with the expiration of $600-a-week supplemental federal unemployment benefits. While property owners interviewed said they weathered the storm in August, landlords like Kevin Conway, who owns about 6,000 residential rental properties across the state, said he expects a drop in payments come September.”
From SCV News in California. “By a vote of 19-1 on Thursday, the Judicial Council repealed emergency orders suspending foreclosures and unlawful detainer actions in California’s courts, leaving lawmakers just a few weeks to enact legal protections to avert an impending flood of evictions for unpaid rent when the moratorium is officially lifted on Sept. 1. A study by the Terner Center for Housing Innovation at UC Berkeley notes that as of June, 1 million renter households in California have suffered a job loss because of the pandemic’s resulting economic downturn. A model developed by the Aspen Institute predicts that 3.6 million Californians will be at risk of eviction by the end of September, more than any other state in the country.”
“Another particularly sobering study by a team of UCLA researchers led by law professor emeritus Gary Blasi estimated that with no income, 365,000 renter households in Los Angeles County alone are in immediate danger of eviction. ‘No one can say when the tsunami of evictions will arrive,’ the researchers wrote. ‘We can say that it is coming.’”
“‘While larger owners may be able to last until 2024, for small owners who have less than 16 units there’s no way they’ll be able to make it until 2024,’ said Debra Carlton, the California Apartment Association’s executive vice president for state public affairs. ‘You lose half of your rent and you’re doomed, especially if you have a mortgage. We’re getting calls from people in their 70s and 80s. This is their retirement. They’re living on this money.’”
“Anti-poverty lawyer and USC Gould School of Law professor Clare Pastore agreed landlords face immense pressure. ‘I’m not unsympathetic to the plight of landlords,’ she said. ‘This is landlords’ income too. Lots of people like to think of big, bad, greedy landlords but there are many mom-and-pop landlords facing desperate times without income from tenants. This dwarfs the 2008 recession.’”
The Turlock Journal in California. “While we are squabbling whether it is safe for kids to return to classrooms a number of students may soon be evicted from their current remote classrooms. A ban on evictions during the pandemic is coming to an end on Sept. 1. The California Legislature has toyed with some fairly creative solutions since March but as usual they can’t come up with a workable plan.”
“It is clear that any attempt by Gov. Gavin Newsom to simply extend the moratorium for more months will be aggressively challenged in court. But whether it would be wise for Newsom to even attempt to do so is a point that even the governor likely sees as a horrible move. That’s because the impact essentially of free rent for five months is doing irreparable monetary damage to landlords, most of whom have one to 10 rentals, and driving them closer to the financial abyss as they have bills and mortgages to pay. Even bigger players that carry debt are getting the squeeze.”
“An example of a ‘little guy’ is Karen Clark who owns a triplex near the University of Southern California campus. She rents the other two units to families for $2,400 a month. That’s below market rates for the area but it is a choice she made as she preferred to rent to families that were more stable tenants than college students.”
“One of her tenants lost his job in March due to the pandemic. Even though she was fortunate enough to still be working at City National Bank, the loss of $10,000 in rent has forced her to dip into her savings to not just pay the mortgage but also the power bill and municipal services for the unit. A couple more months without rent and she’ll have the mortgage lender knocking on her door. She could lose everything including her home because the state forced her to have a tenant living rent free because he lost his job to COVID-19 orders put in place by the state.”
“As for stopping foreclosure against the landlord caught up in the state’s free rent answer to the economic chaos their COVID-19 orders have created, that doesn’t relieve them of the debt or the interest payments that keep accruing because they are being denied by the state the legal ability to evict a tenant — essentially a taking of property by the state — and replace them with someone who can pay the rent.”
“This all circles back to the wisdom of shutting down the economy. Rental housing is just one of many segments of the economy that are cratering due to stay at home orders.”
“The danger of tightening up lockdowns or even keeping some of the restrictions now in place on what businesses can and can’t reopen even with COVID-19 protocols is creating a massive economic destruction as well as growing homelessness and other mental and physical health related issues that will do far more lasting damage to Californians than the coronavirus.”