Landlords need help too
Just like renters, property owners suffer effects of pandemic
Renters aren’t the only ones living on the edge due to COVID-19.
Many landlords aren’t collecting rents and are struggling too. Some face losing properties to foreclosure.
Arizona’s growth draws many individual investors who buy a couple of houses or small apartment complexes to rent out. Many of these investors don’t have the resources to hold on if they aren’t receiving rent.
Many of those landlords are angry that available rental aid isn’t getting to them.
To top it off, rental rates are falling in metro Phoenix.
Gov. Ducey recently announced a $5 million state fund to help landlords avoid foreclosure. That announcement came with the extension of the eviction moratorium in Arizona.
The new funding wasn’t enough to offset many rental property owners’ angst.
“Governor Ducey’s decision ... to add another 90 days to his eviction moratorium is incredibly disappointing for property owners all over the state,” said Courtney Gilstrap LeVinus, CEO of the Arizona Multihous
ing Association.
“We’re not disappointed because we’re heartless or because we want to see anyone evicted during a pandemic,” she said. “Rather, property owners are disappointed because the state’s haphazard, woefully inefficient rental relief initiatives have done virtually nothing to help renters and property owners for going on 120 days now.”
Struggling landlords
Rent payments dropped to their lowest level in July since the COVID crisis began. National studies show payments made to landlords have fallen 25% since March.
And metro Phoenix was one of 19 big U.S. cities to post a rent drop during June, according to Yardi Matrix.
The Valley’s rent dip was less than 1%, but the apartment research firm is forecasting rents will fall 5% in the region during 2020.
Details of Arizona’s new fund to help landlords aren’t available yet, and some landlords think it will be too little, too late.
“If I don’t receive rent, I can’t pay my mortgages,” said William Vickrey, who has five Phoenix-area rental homes that fund his retirement. “The moratorium is just delaying the inevitable.”
He said at the end of the year, he will be owed six to eight months of rent from his tenants who won’t be able to pay.
“The state needs to step up and reimburse landlords directly,” said the Chandler resident.
Suing over the moratorium
One Valley property owner took Ducey to court over the eviction moratorium.
Phoenix landlord Ann Gregory sued the governor and a lower-court judge, claiming the moratorium unconstitutionally prevented her from evicting a family living in her Surprise rental home who owed nearly $4,000 in unpaid rent and fees.
The tenants said they had lost their jobs during the pandemic.
A Maricopa County Superior Court judge rejected the landlord’s challenge last week, saying the governor did not abuse his authority when he delayed eviction enforcement, and that he made the decision in the interest of public health.
Help needed fast
All of Arizona’s eviction prevention programs pay landlords directly for renters who qualify.
Until last week, a $5 million eviction prevention fund handled by the Arizona Department of Housing was the only major aid program for Phoenix-area renters.
Now, Maricopa County and the city of Phoenix are offering $50 million in renter aid. The new programs were designed to require less documentation and get money to landlords faster than the state fund.
Some small landlords have government-backed loans and can get forbearances under the CARES Act until the end of August, so they don’t lose properties to foreclosure.
But other property owners tapped savings and paid cash for homes or have loans not covered by the CARES Act.
All rental property owners have to pay taxes, maintenance fees and some utility bills, even if they aren’t receiving rent payments.
Gilstrap LeVinus of the Multihousing Association said of the tens of millions of dollars in rental relief available in Arizona, less than $2 million has been disbursed.
“There is simply no excuse for such ineffective bureaucracy in the midst of a statewide crisis,” she said. “We’ve worked with tens of thousands of renters to keep a roof over their heads.
“We’ve helped renters file relief applications. We’ve agreed to payment plans and we’ve refrained from evicting renters impacted by COVID-19. We will continue to work with those in need,” said Gilstrap LeVinus.