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Retail Store And U.S. Household Evictions Skyrocket Due To Missed Payments

As the economic fallout from the coronavirus pandemic continues, almost one-third of U.S. households, 32%, have not made their full housing payments for July yet, according to a survey by Apartment List, an online rental platform. Retail Store And U.S. Household Evictions Skyrocket Due To Missed Payments

About 19% of Americans made no housing payment at all during the first week of the month, and 13% paid only a portion of their rent or mortgage.

That’s the fourth month in a row that a “historically high” number of households were unable to pay their housing bill on time and in full, up from 30% in June and 31% in May. Renters, low-income and younger households were most likely to miss their payments, Apartment List found.

In April, May and June, the majority of missed housing payments were made by the end of month, Apartment List reports. Almost 90% of households had paid some or all of their rent or mortgage payment by the end of June. But with late fees tacked on, those households may be more likely to miss their next housing bill, perpetuating a vicious cycle.

“Delayed payments in one month are a strong predictor for missed payments in the next,” Apartment List says. While 83% of households who paid their May housing in full and on-time also did so in June, only 30% of households who were late in May did so in June.

Worries About Evictions Mount

States started to reopen their economies last month, but spikes in coronavirus cases led many to re-close sectors or pause reopening plans altogether.

“The economic fallout from the pandemic does not appear on track for the quick V-shaped recovery that many had originally hoped for,” reports Apartment List. Plus, the continued coronavirus recession has more Americans worried about evictions and foreclosures, Apartment List found.

Renters are especially vulnerable. About 36% of renters, who are more likely to work in industries devastated by the coronavirus, missed their July housing bill, compared to 30% of homeowners.

The federal eviction moratorium, which covers around one-fourth of renters in the U.S., put in place at the beginning of the pandemic has been extended to the end of August. But many people are still worried about an imminent wave of evictions across the country, as tenant protections vary greatly depending on the state and even city. Many — though not all — states and cities have instituted their own eviction bans; some have already expired, leaving tenants vulnerable at a time when coronavirus cases are increasing in many spots in the U.S.

Many households have already spent their one-time stimulus check, and the extra $600 per week in unemployment insurance — used by many to cover essentials like housing — runs out at the end of July. That means even more households could potentially miss their rent or mortgage payments in coming months.

Housing advocates are calling for a uniform, nationwide eviction moratorium that covers all renters, as well as other federal aid in the form of emergency rental relief. The House or Representatives has passed several measures, including the Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act and the Emergency Housing Protections and Relief Act of 2020, to address the housing crisis. Neither bill is expected to pass the Republican-controlled Senate.

Updated: 9-1-2020

Retail Eviction Proceedings Pick Up As Economy Restarts

Some tenants, particularly those from apparel, fitness and theater sectors, continue to struggle with rent payments even as coronavirus shutdowns lift.

Proceedings for the eviction of retail tenants are picking up across the country as courts reopen and states’ moratoriums on evictions are expiring or getting curtailed as the economy reopens.

In Miami, a luxury-shopping-center landlord began legal proceedings to evict Saks Fifth Avenue two weeks ago for nonpayment of rent amounting to $1.9 million as of early July.

In other parts of the country, smaller retail landlords also have filed lease termination and eviction notices to restaurants, bridal shops, entertainment operators and co-working tenants that haven’t paid rent and weren’t able to come to mutually agreeable modifications to their leases.

Before the pandemic, most of these disputes end up getting resolved before the sheriff throws them out, but lawyers said they are seeing higher volumes of disputes which could lead to more evictions.

“We hope and think that the outcome of the lawsuit is that Saks would come to its senses and pay its rent in full. If Saks still doesn’t do so, we’ll have a whole host of other options for the space,” said Matthew Whitman Lazenby, chief executive officer of Whitman Family Development, a private company that owns the ritzy Bal Harbour Shops in Miami.

Saks Fifth Avenue has a ground lease with the outdoor mall and pays percentage rent, or a percentage of sales as rent. Compared to fixed rents, such lease structures already have built-in protections if sales fall.

“It’s perplexing,” said Mr. Lazenby. Bal Harbour Shops was closed from mid-March until the third week of May, and Saks Fifth Avenue recorded stronger sales in June this year compared with last year, he said.

“Unlike the majority of our landlord partners, Matthew Lazenby and the Whitman family have not acted in good faith.

Not only have they chosen not to adequately assume their fair share of the damages created by the global health crisis still gripping our nation, they have used the press and legal system to bully tenants,” said a Saks Fifth Avenue spokeswoman, adding that the company has been able to work with other landlords “to amicably and logically share the losses incurred during the pandemic.”

“For many years, Saks has been a significant part of the success of Bal Harbour Shops, and we expect to continue to be part of that success for a long time to come,” the spokeswoman added. The luxury-department-store operator, whose parent company Hudson’s Bay Co. went private in early March, had a hard time before Covid-19 competing with online upstarts and other rivals.

While overall retail rent collections have improved to 77% in July from around 54% in April, some tenants, particularly from the apparel, fitness and theater categories, have continued to struggle with payments, according to data from Datex Property Solutions, a real-estate data firm that tracks rent collection on thousands of properties across the country.

During the coronavirus-shutdown period that started mid-March and extended to as late as August in some cities, tenants have implored their landlords for deferrals and lower rents to stay in business.

States also imposed moratoriums on commercial-real-estate evictions, which offered temporary respite until they expire. New York Gov. Andrew Cuomo extended the state’s moratorium until Sept. 20 from a previously extended Aug. 20 deadline.

Landlords said they have modified tens of thousands of leases over the past few months, including deferrals or discounts in exchange for lease extensions or other concessions, such as the removal of clauses that prohibited certain types of tenants in the neighboring space, such as direct competitors or other uses of common-area space. But for some, negotiations reached a stalemate and landlords said they have no choice but to resort to litigation.

“It’s an unfortunate but necessary tool to enforce the lease,” said Derek Waltchack, partner at Shannon Waltchack, a real-estate landlord based in Birmingham, Ala., with more than 400 tenants across 64 properties. “We also have to balance the expense of securing new tenants versus working with our tenants and providing some rent deferrals.”

Mr. Waltchack said his firm has taken legal action against more tenants for missed rent payments, mostly bars and restaurants, compared with a year ago. He added that the majority of his tenants would subsequently pay the rent late rather than get evicted.

He said his firm lost 10 tenants, mostly bars and restaurants, due to the Covid-19 pandemic.

In Minneapolis, Eric Ruzicka, a partner at Dorsey & Whitney LLP, said his law firm has commenced around 30 eviction filings for commercial tenants, including restaurants, children’s play zones and bridal shops that were hurt by the drop in tuxedo rentals for proms.

He expects most cases to be resolved before trial and that many of his landlord clients still have a desire to work things out. So far, only one, a restaurant, has an eviction trial date set for late September.

“Landlords need to figure out which tenants are going to thrive and make the center better and which ones have been struggling already,” said Mr. Ruzicka. “If it was a good relationship before coronavirus, it’s a salvageable relationship.”

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Updated: 9-27-2020

More Homes Are Going Dark As Moratoriums On Utility Shut-Offs End

Utility companies say they can’t afford indefinite halts to shut-offs without raising prices for all customers.

Latoya Dandridge was laid off from her school cafeteria job in March during the coronavirus shutdown. Six months later, she is now anxiously waiting for the moment when her electricity will be shut off.

In North Carolina, where Ms. Dandridge lives, a moratorium on utility disconnections ended Sept. 1. Similar reprieves imposed during the pandemic are ending in more states, putting more people at risk of losing access to water, electricity and gas as they struggle to find work or are quarantined at home.

Ms. Dandridge, 36 years old, said her unemployment insurance payments, which she applied for in June, have yet to arrive. Her electric bill, unpaid for months, is now $600. A sister is helping her make car payments, but there is no more money left to borrow.

“It may be a week. It may be the end of the month,” said Ms. Dandridge, whose four children take classes on school-issued laptops in her apartment in Fayetteville. “I don’t know when they’re going to turn it off.”

Since the pandemic started, 36 states have issued moratoriums on utility shut-offs for people who couldn’t pay their bills. In other states, utility companies voluntarily stopped disconnecting customers who fell behind.

Between now and mid-October, an estimated 24 million households are set to lose protections as moratoriums end in nine states—they have already expired in 14 states—leaving 13 in place, according to an analysis of state moratoriums by Carbon Switch, an energy efficiency startup. Moratoriums are currently set to expire in Texas at the end of September, Virginia on Oct. 5, and Washington on Oct. 15.

Utility companies say they can’t afford to halt shut-offs indefinitely without raising prices for all their customers.

“Every utility in the country is facing the same situation,” said Chris Eck, a spokesman for FirstEnergy, which serves 6.1 million customers from Maryland to Ohio. “It’s rather unprecedented. We have to balance the needs of customers with what makes the most sense to keep the lights on.”

Duke Energy, which has 7.7 million customers from Florida to Ohio, plans to resume disconnection notices between September and December in different states. In late August, the number of people behind on payments was only about 4% higher companywide than last year, but many customers owe more than usual. For example, in Florida, customers with accounts overdue by 60 days or more owed nearly $15 million in June, compared with just over $1 million in June 2019.

However, Barbara Higgins, Duke’s chief customer officer, said the company expects to disconnect fewer people than it typically would, because the company is helping customers find outside financial assistance, waiving fees and offering new payment plans, among other changes.

“It’s in nobody’s interest to have a large number of customers default,” she said.

California, Illinois and Massachusetts all recently passed measures intended to protect utility customers, such as extending moratoriums, debt forgiveness and waiving reconnection and other fees.

But the debt burden is growing in many states. In Massachusetts, the amount of money owed by utility customers through July was $200 million more than through the same time last year, according to reports filed by utility companies. More than 10,000 customers were 90 days or more behind in payments.

“Arrearages are going through the roof,” said Charlie Harak, a Boston-based attorney with the National Consumer Law Center, which advocates for low-income residents.

Before the pandemic, one-third of the U.S. population faced difficulty paying utility bills, according to the group. The federal stimulus this spring provided $900 million for the Low Income Home Energy Assistance Program, known as LIHEAP.

Advocates for low-income residents say the funding won’t be enough to cover utility payments people owe. Losing utilities often causes people to live in dangerous conditions. During the pandemic, that could mean crowding more people into homes, low-income-housing advocates say.

For people who live in federally subsidized housing, nonpayment of utilities is frequently a lease violation that leads to eviction. Many states already bar providers from disconnecting service during the winter. Some advocacy groups are calling for states and companies to extend moratoriums through the winter.

Payment plans to avoid shut-offs often require customers to pay a portion of the past-due bill on top of a current bill, which advocates say isn’t practical for many people unemployed during the pandemic.

Yet some low-income advocates say extending moratoriums is a double-edged sword. If they last until spring, some customers could have a year’s worth of unpaid bills that it will be even harder to pay.

Nonprofits have stepped in to help customers. Denise Holmes, 58, of Jeannette, Pa., said Catholic Charities paid $108 in July to keep her gas connected. But she has a $165 sewage bill due Sept. 30 with the water authority in Westmoreland County. “I do not know what I’m going to do,” she said. “I’m scared, to put it bluntly.”

In North Carolina, just over 1 million out of 8 million electricity customers had accounts 30 days or more overdue as of the end of July, up 30% from last year, according to state data.

Derrick Fourong, 46, of Elm City, N.C., said his electricity was shut off earlier this month after he was unable to pay $150. His carpentry business, which he runs out of a shop at his home, has suffered during the pandemic, he said.

For several days, Mr. Fourong wasn’t able to draw water from his well and used rainwater to flush his toilet. He borrowed $250 from a friend to get power turned back on. Now he owes his friend money, and his next bill is due in mid-October.

“I’m still in the hole,” he said.

Updated: 12-03-2020

Landlords Staring Into Retail Abyss Need More Than A Vaccine

U.K. retail landlords are facing a hard reality: the rapid approval of a vaccine has come too late for thousands of their stores.

The collapse of department store chain Debenhams Plc and Philip Green’s Arcadia Group this week caps an unremittingly brutal year for the owners of brick and mortar stores. The demise of these retailers alone threatens 16.6 million square feet (1.5 million square meters) of real estate, according to data compiled by Radius Data Exchange.

Nearly double that amount of retail space has already been permanently shut this year in the U.K. — the equivalent of almost 500 American football fields.

Debenhams and Arcadia “were not so long ago considered anchor tenants,” said Rob Virdee, an analyst at real estate research firm Green Street Advisors. “The resulting large voids inside shopping centers will reduce even further the little negotiating power landlords still clung on to.”

Crisis enveloped the U.K.’s high streets well before the pandemic, but the combination of both has proved a lethal cocktail for retailers and landlords alike.

Once the bedrock of institutional investors’ property portfolios, the reliable cashflow from malls and stores has become a dripfeed as lockdowns sped a structural shift to online shopping. More than 20,000 U.K. stores are forecast to close this year, predicts the Centre for Retail Research.

Women’s fashion retailer Bonmarche Ltd. also filed for administration Wednesday, putting more than 225 further stores at risk.

The spike in vacancies has pummeled some of the biggest landlords: Intu Properties Plc collapsed in June after years of struggling under the weight of its debt; Hammerson Plc, the U.K.’s largest specialist retail landlord, was forced into an emergency share sale; and global mall giant Unibail-Rodamco-Westfield is scrambling for a new rescue plan after activist investors defeated management’s proposals.

Most of the biggest listed owners are exposed to Arcadia and Debenhams. Hammerson rents 16 stores to the former and two to the latter, according to Green Street. British Land Co. and Land Securities Group Plc, which own malls as well as offices, each have 10 Arcadia stores and 3 leased to Debenhams. The collapses just add to the firms’ woes: their stocks have tumbled this year, with Hammerson faring worst after slumping more than 80%.

The share-price plunges that have plagued U.K.’s real-estate companies since the start of the pandemic have lured a slew of bargain hunters, with private equity funds snapping up stakes in companies including Great Portland Estates Plc and British Land.

U.S. investors, led by private equity firms sitting on vast piles of ready cash, will spend about $10 billion on U.K. real estate next year, according to a September report from broker Knight Frank.

So far, they’re steering clear of retail — despite the large discounts on offer. A large U.K. shopping center has yet to change hands this year, while Intu failed to find backers for a rescue bid. Still, the breakup of Intu and the sale of its assets including the Trafford Centre in Manchester will provide a litmus test for the depth of demand. The mall’s sale process has so far failed to lure bids above the level of the debt secured against the property, Bloomberg reported last month.

Publicly traded U.K. retail landlords covered by Green Street have seen total returns down 47% since February, the worst of any property type. A rare bright spot has been warehouses, where landlords have benefited from a boom in demand from retailers selling online, delivering gains of 5% even as the pandemic hammers the wider economy.

“The virus has accelerated everything,” said Andrew Jones, chief executive officer of landlord LondonMetric Property Plc, which used to invest mainly in retail but switched to warehouses several years ago. “We’ve seen several years worth of value destruction condensed into a few months.”

Updated: 12-13-2020

U.S. Poised For Wave Of Evictions In January As Federal Ban Expires

Between 2.4 million and 5 million American households are at risk in January alone.

Millions of U.S. renters face the prospect of eviction in January unless federal officials extend protections put in place during the Covid-19 pandemic.

That month is when the Centers for Disease Control and Prevention’s ban on evictions is set to expire. The moratorium protects tenants who have missed monthly rent payments from being thrown out of their homes if they declare financial hardship.

The CDC ordered the halt on evictions under the Public Health Service Act, which allows the federal government to enact regulations that help stop the spread of infectious diseases.

Between 2.4 million and 5 million American households are at risk of eviction in January alone, and millions more will be vulnerable in the months after, according to estimates from the investment bank and financial-advisory firm Stout Risius Ross.

While several states and cities have their own eviction bans with varying rules and expiration dates, the CDC order is the only one that covers the entire country.

Housing-industry executives said they expect the CDC eviction ban to be extended. Many landlords said they believe they are more likely to recover some rent by working with tenants than by evicting them.

While many states have enacted eviction moratoriums, the CDC order is the only protection for renters in some cities. Attorneys and judges said they expect courts to be overwhelmed once moratoriums end, creating a monthslong backlog of cases.

Yet in many cities and towns, the legal process is under way. While the CDC order helps keep renters in their homes, it doesn’t prevent landlords from beginning the eviction process in court.

Since the CDC eviction moratorium went into effect in September, building owners in places like Plano, Texas, and Milwaukee, have taken tenants to court through videoconferencing.

Landlords have already filed more than 150,000 eviction petitions during the pandemic in the 27 cities tracked by Princeton University’s Eviction Lab. Many of those tenants have lost their cases, and are now on the hook for all their back rent.

Some failed to qualify for the moratorium because they didn’t sign a declaration of their inability to pay, or because their landlord challenged their claim to financial hardship. Some renters have then had to leave their homes despite the ban being in place.

Evicted renters are still liable for months of unpaid rent. Moody’s Analytics said it estimates U.S. tenants owing as much as $70 billion in back rent by year-end.

John Pollock, staff attorney at the Public Justice Center, a legal advocacy nonprofit, said that if the moratorium isn’t renewed, January is expected to be the worst month for evictions in American history. “I don’t see how it’s possible that we’re not going to see more evictions on Jan. 1 than we’ve ever seen in a month,” he said.

Evictions stress cities where the pandemic already has weakened social-safety nets, housing advocates say. Studies show they also worsen the health crisis. New research led by an epidemiologist at the University of California, Los Angeles, found that the expiration of local eviction moratoria was associated with more than 10,000 excess deaths from Covid-19, potentially due to increased disease transmission from dislocation or homelessness.

The dollar amounts of unpaid rent in eviction cases astonish even some veteran judges. Justice of the Peace Michael Missildine of Collin County, Texas, said he was issuing judgments against tenants owing more than $10,000 in rent payments. In the past, a typical ruling would be a fraction of that sum.

“It’s not normal,” Judge Missildine said during a video hearing. “They’re getting large very quickly, and it’s very scary to see,” he added, referring to rent-debt figures.

Some landlords say they have offered installment plans or taken other steps to accommodate struggling tenants, but now have gone months without collecting rent. They are blocked from taking control of their property by what they consider overly restrictive local and federal laws.

Korvall Li in Seattle said he hasn’t seen a rent check since January from a townhouse tenant who makes a six-figure salary. That is a deficit of about $30,000. Mr. Li said he has continued his mortgage payments and is suing the state and city over eviction protections that exceed the federal moratorium.

“I already decided that I’m not going to be a landlord in the future,” Mr. Li said. “It’s really turned me off the whole real-estate thing.”

Those behind on their rent during the pandemic are disportionately minorities, according to recent survey data from the Census Bureau. Nearly a third of Black renters and 18% of Hispanic renters said they were behind on rent last month. About 12% of white renters said they weren’t caught up on their rent payments.

Julie Watts, a Dallas wholesale worker who has been out of a job since the spring, has missed her $1,003 rent bill many times but kept her apartment because of the eviction ban. She is due to enter the hospital this month for an ailing kidney.

“I’m afraid to leave my apartment because I don’t want to come home from the hospital and find out my stuff is in the parking lot,” she said. “And for right now, my housing is more important to me than my health.”

Some tenants also struggle with videoconferencing applications, attorneys say. Missing a court hearing often means an automatic victory for the landlord. In St. Louis, a legal-aid intern said he had observed several hearings where judges granted landlords evictions because they believed the tenants had failed to log into the videoconference.

In fact, they had been placed on silent mode, according to his sworn affidavit in October. Those judgments were overturned, the affidavit said.

“The courts still do not have adequate policies and procedures to accommodate these very real barriers,” said Lee Camp, a housing attorney in St. Louis.

Updated: 12-15-2020

More U.S. Homeowners Seek To Delay Mortgage Payments

A growing percentage of U.S. homeowners are looking to delay making mortgage payments, the latest sign that the economic recovery is hitting a snag.

In the first week of December, the proportion of mortgage borrowers that started seeking forbearance relief rose to its highest level since August, according to the Mortgage Bankers Association. And call volume at the companies that collect payments rose to the highest level since April, a sign of growing distress among homeowners, the trade group said Monday.

With long-term unemployment rates rising and Covid-19 cases surging, “it is not surprising to see more homeowners seeking relief,” Mike Fratantoni, chief economist at the MBA, said in a statement.

The percentage of homeowners that have started seeking forbearance is still relatively low, but the rising proportion comes even as the economy has shown signs of recovery, underscoring how uneven the turnaround is. U.S. household net worth reached a fresh record of $123.5 trillion in the third quarter, while almost 4 million workers have been unemployed for more than 27 weeks.

Homeowners are delaying payments under a U.S. forbearance program that started in March and allows mortgage borrowers to take a break for as long as a year without penalty. The total percentage of loans that are in forbearance edged lower to 5.48% in the week ended Dec. 6, from 5.54% the week before.

Yet the number of borrowers looking to enter forbearance rose to 0.12% of all the loans mortgage servicers collect payments for, the most since August, the MBA said.

As the pandemic drags on, time is running out for some borrowers. Consumers whose loans are in forbearance have to resume making payments next year, in some cases as soon as the end of March. When that happens, many homeowners will face a difficult choice: either pay their mortgage, convince their lender to somehow ease the terms of their loan, or default.

The prospect of borrowers defaulting en masse may spur lawmakers to agree to more relief for homeowners, said Don Brown, senior managing director at the mortgage analytics firm RiskSpan Inc. in Stamford, Connecticut.

“Nobody has an interest in the chaos that would come from mass foreclosures,” Brown said.

The mortgage borrowers under the most stress are those who are usually the poorest, and took advantage of government programs allowing them to put minimal money down on their homes.

Those loans are usually bundled into securities known as Ginnie Mae mortgage bonds, and according to the MBA, about 7.68% of the loans in this pool are in forbearance. That’s lower than last week, yet it’s still more than double the percentage for conventional borrowers.

And while the percentage of Ginnie Mae borrowers in forbearance may continue to decline into 2021, borrowers who remain in the program will likely be from households under greater economic stress, according to analysts at Nomura Holdings Inc.
Delinquencies Climb

Even with the forbearance program, delinquencies have been rising, in part because some borrowers may not know they’re eligible for relief. At the end of the third quarter, about 7.7% of loans were delinquent, according to the MBA, about twice the percentage at the end of 2019. Delinquencies are still below their financial crisis peak of around 10%.

As the program comes to an end, buyers of mortgage bonds that include loans from those homeowners could take slight hits. If the loan has to be modified, or the borrower defaults, the servicer has to buy it back from the investor at par. That can weigh on bond investors’ returns, particularly when so many mortgage bonds trade above face value.

Servicers are likely to buy back about $93 billion of mortgages this year, up from $41 billion in 2019, Kirill Krylov, a senior portfolio strategist at Robert W. Baird & Co., said last week. Fannie Mae, Freddie Mac, and Ginnie Mae ultimately reimburse these companies for any money they had to forward to bondholders. But with these kinds of figures, it’s possible the government will step in again, according to Krylov.

“There is a chance the forbearance deadline could be extended — it’s the logical thing to do,” Krylov said.

Updated: 1-27-2021

Landlord And Tenant Groups Join Forces To Stave Off Evictions

Usually adversaries, both push for more government assistance as pandemic housing fix.

A collapse in apartment rent collection during the pandemic is forging one of New York’s most unlikely political alliances.

The Real Estate Board of New York, the property industry’s main lobbying group, has joined with New York’s Legal Aid Society, a nonprofit association that advocates on behalf of tenant rights.

While these two groups are usually antagonists—and they are currently on opposite sides in a federal lawsuit over rent control—the pandemic has created common ground. Too many New York tenants can’t pay rent right now, which is making it harder for landlords to pay back their loans and causing tenant debt to pile up.

Both sides want to address the issue with more government action, mostly in the form of streamlined rental assistance.

“It’s nothing like a crisis to bring odd bedfellows together,” said Judith Goldiner, attorney-in-charge in the Legal Aid Society’s civil law reform unit. “I guess REBNY thinks they can’t evict themselves out of this crisis. And I would think that would be right.”

Asking rents for one-bedroom apartments Manhattan have fallen almost 20% over the past year, according to listings website Zumper, after a number of renters fled the city for cheaper accommodations or more space while working from home during Covid-19.

Many of those who stayed have fallen behind on their rent payments. A recent survey estimated that New York tenants may now be more than $2 billion in debt to their landlords.

The joint industry and tenant lobbying effort includes other housing groups and goes by the name of “Project Parachute.” It was first organized by Enterprise Community Partners, Inc, an affordable housing nonprofit. It has been pressing its case with elected officials, such as state Sen. Brian Kavanagh, the chair of the state Senate’s housing committee.

“Some lawmakers have been surprised to see us working together,” said Basha Gerhards, REBNY’s vice president of policy and planning. “Even though we know we won’t agree on everything, we can still work together to develop thoughtful policy reforms that help address the needs of vulnerable New Yorkers.”

The lobbying effort has been focused on changing the rules for existing rental assistance programs. New York’s Family Homelessness Eviction Prevention Supplement program, or FHEPS, requires tenants to first be brought into eviction court before they can qualify for relief. But the state’s eviction moratorium has made that impractical, limiting how much rental assistance can be distributed, the group argues.

The joint effort also advocates for raising the monthly rent ceiling to qualify for rental assistance and for expanding eligibility to more groups of people not included under current rules.

Meanwhile, New York has yet to lay out its plan for how $1.3 billion in new federal pandemic housing assistance will be spent this year. Mr. Kavanagh said he expects the state Legislature to play a significant role in deciding how the money is ultimately spent.

Neither REBNY nor the Legal Aid Society expects a permanent detente. Both submitted briefs in a continuing federal lawsuit that attempts to overturn rent control laws nationwide. REBNY favors the overturn and the Legal Aid Society opposes it.

In its latest brief from just last week, REBNY called tenant rent control protections a “grave governmental overreach in impairing constitutionally protected property rights.”

A repeal of the rent control laws would potentially subject roughly one million households in New York City to larger annual rent increases, once the economy recovers.

“I don’t expect this to be like, all of a sudden, we’re going to be besties,” said Legal Aid’s Ms. Goldiner.

Updated: 3-14-2021

Federal Courts Keep Chipping Away At The CDC Eviction Moratorium

An Ohio judge has blocked the federal eviction ban, allowing landlords to resume filings against tenants in the Cleveland area — and perhaps nationwide.

In a March 10 decision, a federal court in Cleveland blocked the national eviction moratorium, making it the second court to challenge the emergency measure implemented under President Donald Trump and extended by the Biden administration. The order clears the way for courts and landlords to resume evictions against tenants across much of Ohio.

But the landlord groups who brought the suit believe that the decision could have a broader national application, setting the stage for an earlier-than-anticipated resumption of eviction activity before the ban expires on March 31.

The judge ruled that the Centers for Disease Control and Prevention, which introduced its ban on evictions in September, lacks the authority to enact such a policy. While the court stopped short of issuing an injunction against the CDC ban, its decision goes further than the Texas court that made a similar call late in February.

The CDC and other public health experts have argued that a moratorium on evictions is necessary to prevent the spread of Covid-19. U.S. District Judge Philip Calabrese, who was nominated by Trump and sworn in on Dec. 5, said that it was the court’s duty to weigh a more limited statutory question alone.

“That narrower issue depends on interpretation of the particular statutes at issue — a more lawyerly and arcane task about which reasonable people may ultimately disagree,” Calabrese wrote in his decision.

How far the Ohio court’s decision reaches in enabling landlords to once again legally throw out their tenants for nonpayment may be an even thornier question for the courts.

According to Steve Simpson, senior attorney for the Pacific Legal Foundation and the plaintiff’s attorney in this case, at its absolute narrowest the decision would only lift the eviction ban in the Northern District of Ohio, which includes Akron, Cleveland, Toledo and Youngstown.

But he believes that the decision should also allow landlords located in other states and associated with the plaintiffs — among them Monarch Investment and Management Group, which manages more than 64,000 properties across 21 states — to consummate their eviction filings.

“This is a debate in legal circles, what’s the scope of a judge declaring a statute or rule contrary to law, whether it applies to the parties before the case, the district or the whole country,” Simpson says. “Our interpretation is that it should apply to the whole country.”

In his decision, Calabrese invalidated (or set aside) the CDC eviction moratorium under a provision of the federal Administrative Procedure Act known as section 706. The full scope of remedies under section 706 is a point of contention that has surfaced in recent years in high-profile decisions such as Trump v. Hawaii, the Muslim travel ban case.

The U.S. Department of Justice has already announced that it will appeal the Texas decision that invalidated the eviction moratorium. The DOJ statement argues that the February decision in Terkel v. CDC applies only to the plaintiffs at hand. A spokesperson for the CDC said that the agency is aware of the Ohio decision and working with the DOJ to review it and determine its next steps.

Courts across the country are still processing evictions due to loopholes in the CDC order; only in a few states, and for limited periods of time, have court filings fallen to zero. Eviction filings in Ohio have mostly fallen from historical levels, but they are on the rise.

Unless the Biden administration intervenes, courts could begin legally processing evictions in Ohio — and possibly elsewhere — immediately. Ohio renters face some of the highest risk of eviction in the U.S.

The potentially sweeping decision on evictions comes just as President Joe Biden signed the American Rescue Plan, which will deliver billions of dollars of relief to landlords in the form of emergency rental aid. But it will take some time to get those dollars flowing, which led tenant advocates to sound the alarm over evictions on Thursday.

“Now that Congress has appropriated $46 billion to address rent arrears, these lawsuits to overturn the moratorium are frivolous,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition, in an email. “These landlords will be made whole, but it will take time to get the money into their hands.

Their eagerness to overturn the moratorium, despite unprecedented resources to pay rent arrears, only underscores the need to be sure the moratorium is extended at least until resources are expended. For some of these landlords, it appears it was never really about the money.”

Landlords, industry groups and civil liberties associations have worked to overturn state and federal eviction orders since Congress issued the original federal eviction moratorium as part of the CARES Act. The Pacific Legal Foundation is appealing a separate decision in a Louisiana case that affirmed the eviction moratorium.

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