Renters, landlords feeling effects of COVID-19

Rachel Zivojnovity said the COVID-19 pandemic has impacted her family in many different ways.

The 29-year-old Hazel Park resident rents a home with her five young children and husband, Brad, who was temporarily laid off in late March hours after Gov. Gretchen Whitmer issued her stay at home order, which closed the in-person operations for all nonessential businesses.

With Brad off work and Rachel not being able to work because of a stroke she suffered two years ago, it as been difficult, at times, for the family to pay their rent and other bills. Unemployment benefits were slow to trickle in and the federal stimulus money had yet to arrive.

“COVID-19 has affected our family in many ways including bills, kids, and jobs,” she said. “With schools shutting down and having to try my best to home school four children and chase after a toddler, it’s hard. At the beginning of COVID, we were unable to pay rent like most. It was an unexpected layoff. We were scared because even if you couldn’t be evicted (for non-pay

ment of rent under Whitmer’s executive order) we don’t like being behind on our bills.”

When the pandemic first hit Michigan in mid-March, the family’s landlord had sent them a notice offering payment assistance, including payment plans, if dealing with job loss or other hardships.

Zivojnovity, an active mother involved on the local PTA board and as a Brownie troop leader, said she used the stimulus checks to pay March and April’s rent and have used unemployment benefits to purchase the necessities and pay other bills. Brad returned to his job working as a truck driver for Roush.

“Having a roof over our heads is top priority!,” she said. “We are currently all caught up on rent, but we now know that our landlord will work with us if our economy does shut back down.”

She joins the thousands of renters in Oakland County, and across the state, who have found it difficult to make ends meet during the pandemic, which has caused millions of Michiganders to lose their jobs.

Renters already faced a dire situation before the pandemic hit, said Alexander Hermann, a researcher at the Harvard Joint Center for Housing Studies, which reported in January that vacancy rates for rentals had hit the lowest level in decades, pushing up rent far faster than income. At last count, one in four renters spent more than half their income on housing.

The pandemic has hit renters particularly hard financially with renters tending to have lower incomes and more economically vulnerable than their homeowner counterparts.

In May, U.S. Census data shows about 19% of renters were late or deferred their rent payments. In June, about 31% of renters surveyed said they had little to no confidence they will be able to pay July’s rent.

Last week, about 22% of all Michigan housholds, a 5% increase from the prior week, reported missing last month’s rent/mortgage payment or having little confidence they will be able to pay next month’s rent or mortgage on time. This number stood at 26.7% for all households in metro Detroit, an increase of nearly 6% over the prior week.

The National Multifamily Housing Council’s Rent Payment Tracker found 77.4 percent of apartment households made a full or partial rent payment by July 6 in its survey of 11.4 million units of professionally managed apartment units across the country. This is a 2.3-percentage point decrease from the share who paid rent through July 6, 2019 and compares to 80.8 percent that had paid by June 6, 2020.

In Oakland County, there are 535,380 housing units, of which 352,687 are owneroccupied and 146,932 are renter-occupied. Around 36,000 of these housing units are vacant, according to the Oakland County Community and Home Improvement Division.

Help for landlords

In late-March, Whitmer issued an executive order suspending evictions for non-payment of rent, which was recently extended through July 15. The order also established the $50 million Eviction Diversion Program, which outlines a process for renters to get rental assistance or establish a manageable payment plan. The rental assistance will be made available in the form of lump sum payments to landlords in exchange for allowing tenants 12 months to pay their outstanding balances, and forgiving late fees and up to 10% of the amount due.

Matthew Paletz, a Troybased attorney who represents landlords across the state, said landlords, as small business owners, have also been hit hard by the pandemic and the resulting executive order allowing tenants to remain in their homes, despite not having paying rent. Many depend on those monthly rent payments to pay off mortgages and other bills.

While renters statewide have received temporary relief from eviction for non-payment of rent, the rent is still due to the landlord. Tenants are being encouraged to communicate with their landlords to arrange payment plans, with some willing to negotiate discounted or deferred payments to avoid eviction.

“Any funds available to landlords is positive, especially when it’s tied in with the governor finally allowing the judicial branch to handle landlord-tenant cases after July 15,” he said. “The administration of these funds is no doubt going to be slow, and mandating that tenants be allowed 12 months to pay the balances, as well as a 10% discount, is unfortunately going to deter many landlords from opting in.”

In 2018, the state’s 191,512 eviction filings were the fewest since 2011, according to the Michigan Eviction Project. Southfield, Pontiac, and Oak Park ranked fourth, fifth, and eighth statewide from 2014-2018 with average annual eviction filing rates per 100 rental households of 32.8, 31.2, and 26.8 respectively. Oakland County ranked seventh statewide at 19% eviction filings per 100 rental households.

Tenants whose back rent is not completely covered by the program will be enrolled in payment plans facilitated by Supreme Court Administrative Order 2020-17, which also defines how district courts statewide will resume processing landlord and tenant cases once the state’s suspension on eviction filings expires July 16. The order requires courts to set a specific time for each hearing in order to safeguard public health.

Paltez said for small family-owned landlords who operate on thin margins, this relief from the state may be too little, too late. He added that judges will not simply be throwing people “out on the streets” once the eviction ban expires and the courts begin processing any potential eviction filings. “They were already in dire straits back in the spring,” he said. “To now have to wait even longer, if they opt-in to eviction diversion program, is simply not practical. Being precluded from their legal remedies for what could amount to four months or more may be too long of a time without significant revenue for them to stay current with their underlying mortgages, utilities, payroll, and property taxes, not to mention the cost of maintenance and upkeep of the property.”

The State Court Administrative Office estimates that more than 75,000 cases could potentially be filed in district courts statewide once the pause in case filing ends next week. The COVID-19 Eviction Defense Project, a coalition of economic researchers and legal experts, estimates that 19 million to 23 million Americans are at risk for eviction by the end of September.

Bridget McCormack, Michigan Chief Supreme Court Justice, said while the pandemic was not the disruption we wanted, it may be the disruption we needed to transform the landlord/tenant docket into a resource that serves the community.

“By funding a statewide eviction diversion program, we have the opportunity to build on the success of local court programs that have kept people in their homes and supported stronger neighborhoods. Judges across Michigan are ready to take advantage of this win-win plan that helps families to stop worrying about losing their housing and helps landlords get paid so they can stay in business.”

Resources are available for landlords and renters on the Michigan State Housing Development Authority website at https://www.michigan.gov/mshda.

Renter protections and resources

A number of other cities and states have put some assistance programs in place, as well as moratoriums on evictions amid the pandemic.

The National Low Income Housing Coalition has a list of state and local rent assistance programs on its website. United Way’s 211.org website also has links to local charitable assistance for housing, food and other essentials.

The Eviction Lab maintains a list of local and regional actions to pause evictions of renters. It’s policy scorecard provides useful detail on actions in your state.

In addition to protections at the state level, there are also some renter protection’s for renters at the federal level.

Congress put a temporary nationwide eviction moratorium in place for renters who live in a federally subsidized building or one with a federally backed mortgage through July 25. Landlords cannot charge fees or penalties for nonpayment during this time as well. Tenants can search the Fannie Mae website or the Freddie Mac site to find out if their building has a federally backed mortgage.

The Consumer Financial Protection Bureau has helpful information on its website as well.