Finding Home: During A Pandemic, Past-Due Rent And Evictions Loom
Normally about one in five renters in this country don’t pay their rent in a given month, according to the National Multifamily Housing Council. In April, it was almost one in three. It’s a dramatic shift nationally in who’s missing what for many is the biggest expense they have.
In Charlotte, the numbers were a bit better: Only one in four renters didn’t pay, compared to the usual one-in-six. The obvious cause, here and elsewhere, is the coronavirus pandemic. It’s led to stay-at-home orders in every state. Entire industry sectors have closed, deemed “nonessential." And with those closures come job layoffs. On April 9, North Carolina hit an unhappy milestone: More than half a million people had filed for unemployment since the beginning of the pandemic in mid-March.
Right now, residents in North Carolina have one thing in their favor: They can’t get evicted because courts aren’t processing evictions. Chief Justice Cheri Beasley suspended most of the state’s court business in March and then extended that order until June 1. Landlords can’t file for eviction until then. Many sheriffs in the state, including Mecklenburg's Garry McFadden, have said they won’t enforce the evictions that were filed in March before the courts closed.
Renters who live in properties with federally backed mortgages may have a bit more time. That’s due to a provision in the CARES Act, the recently signed federal stimulus bill. The act says property owners who have these types of mortgages can’t file for evictions because of unpaid rent until late July. Tenants have 30 days once an eviction is filed, meaning these evictions wouldn’t happen until late August.
But there are other options to evict tenants in the meantime.
In a recent email obtained by WFAE, law firm Loebsack & Brownlee PLLC advised its clients to consider other reasons to file evictions if they have federally backed mortgages. The firm said it deals with some of Charlotte’s biggest rental property companies.
Here's what the email says, in part: “You may want to consider now to be an ideal time to do some ‘housekeeping’ with your tenant list by filing cases for all the non-rent lease violations you’ve always just put up with, and thereby cleaning out some of the bottom-of-the-barrel tenants you don't really want on your rent rolls when the Moratorium ends, anyway!"
The email lists violations such as unauthorized pets, noise complaints or letting renter’s insurance lapse. It was written by attorney Chris Loebsack. He said many people in the rental property industry have questions about which mortgages are affected by the new stimulus bill, and he wanted to clarify the situation for clients.
Juan Hernandez is an immigration lawyer in Charlotte who often works with renters.
"So, what I’m afraid that’s going to happen is a lot of property managers are going to come up with some other reason to evict, and there’s going to be a large volume of these other than nonpayment cases that get brought up," Hernandez said.
Hernandez expects to see eviction cases like these starting on June 1 when courts reopen, not in August when that rule in the stimulus bill allows landlords to evict for nonpayment. And for landlords who have private mortgages with banks, those limitations don’t apply. They can file evictions starting June 1, too.
Liana Humphrey of Crisis Assistance Ministry says the court’s suspension of eviction filings helped "but we know that that is just short-term."
"In the meantime, those rent balances are going to pile up," Humphrey said. "And so, while immediately they’re not at risk of eviction, we’re planning for a huge surge in need once the courts reopen."
Crisis Assistance Ministry is now closed. Humphrey expects when they reopen, the organization will have to provide three times the financial assistance it did before the pandemic. It will provide payments to meet the needs of families who face overdue rent and utility bills.
The organization says that the expected need is 50% more than during the height of the 2008 recession.
In the meantime, Humphrey said people who’ve lost their income are having to make tough choices.
"So, right now they’re focused on being able to meet their immediate needs, around providing food and medicine for their family," Humphrey said. "And they’re really hoping that once the unemployment and or stimulus check comes in, then they’re going to hopefully put together a plan and start paying some bills."
That’s the case for Julia Burgess.
She lives in an apartment complex in Steele Creek. She’s on disability but had been working part-time at a restaurant to make extra money. She lost that job in late February. She was going to start a new one in March, but she couldn’t because she was at high risk for the coronavirus due to her disability.
Now, Burgess and her husband are down to just his income. She says the choice was clear at the start of April.
"So, I could have paid all of my rent on time, with no extra income, and I’m not receiving any extra assistance, but yet I wouldn’t have had any food, I wouldn’t have had a means to get to and from work, for transportation," Burgess said. "So, I had to use funds from my rent to go towards the things that would allow me to survive."
Burgess said her landlord doesn’t allow partial rent payments, so she’s trying to get enough money saved to pay her rent by April 17. It’s about $1,400 after she incurred a $65 late fee. Even if she does pay her rent this month, she doesn’t know how she’s going to pay May’s rent.
"Once I get through April, everything is a day to day because we don’t know which way anything is going," Burgess said. "Even if I’m able to go right back to work, I’m looking at my income taking a substantial hit for a bit of time."
Landlords also have financial challenges because of the pandemic, says Kim Graham of the Greater Charlotte Apartment Association.
The group represents smaller property owners as well as large apartment complexes. Graham is advising landlords to talk with their renters and work with them on payment options. She said smaller property owners are particularly at risk during the pandemic.
"For smaller owners, they often will have mortgages, and their profit margin is very thin — very, very thin, even thinner than multifamily," Graham said. "And so they’re concerned that they will default on their mortgages and be foreclosed on, just like a regular apartment community."
She mentioned a $5 million fund created by the rental company Camden, which has properties in Charlotte. Camden’s renters could apply for up to $2,000 in relief if they were laid off. That fund opened for applications on April 6 and was exhausted within 16 minutes.
Graham says renters and property owners will need a government stimulus like that to survive: money that’s available to all renters who can prove hardship because of the pandemic. That way renters can get the money they need to pay rent.
"You know, May is 17 days away," Graham said Tuesday. "And so, as a community, we have to work collectively across sectors to figure out how we provide the necessary financial supports so we don’t lose whole industries and so that we come back stronger than we were before COVID-19."
This week, Charlotte City Council approved one measure that provides some help: $3.5 million in federal housing grants to help up to 700 Charlotte families with their rent, mortgage or utility payments.
In the meantime, the property owners Kim Graham works with and renters like Julia Burgess have begun a long process of figuring out how rent, evictions and maintaining a home during a global pandemic will work.
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