FIG's Eviction Trends During COVID-19Sep 18, 2020
As of September 4, the CDC enacted an agency order halting all evictions until January 1, 2021. This eviction moratorium has a primary goal of reducing the spread of COVID-19.
"The Centers for Disease Control and Prevention (CDC), located within the Department of Health and Human Services (HHS) announces the issuance of an Order under Section 361 of the Public Health Service Act to temporarily halt residential evictions to prevent the further spread of COVID-19." [Read the Full Notice Here]
This response is in part due to a study that suggests 30-40 million people throughout the nation are at risk of being evicted in 2020 due to pandemic-induced financial concerns.
According to MarketWatch, the moratorium does not come with additional funding to help supplement renters and landlords. This brings concern that the start of the new year will cause its own set of problems as landlords and renters simply delay the inevitable.
"The moratorium doesn’t automatically protect renters — they must proactively fill out a form and send it to their landlord to receive protection under the CDC’s order. But the CDC’s moratorium was essentially a unilateral act.
White House officials stressed that some emergency funding at the Department of Housing and Urban Development and the Department of Treasury — including money allocated by the CARES Act — could be accessed by struggling renters and landlords alike. Congress, however, has not yet appropriated any funds for the explicit purpose of providing rental assistance..."
FIG's Eviction Trends in 2020
Many of you already know that the majority of FIG investments run through our partnership with MAXX Property Management. What many of you might not know is how COVID-19 has effected FIG multifamily in regards to eviction and rents. As the economy continues to wade through these difficult times, one might ask if their investment is at risk.
In talks with Corey Bohner, Director of MAXX PM, FIG's overall portfolio of approximately 2,000 doors is doing quite well. Since the start of the pandemic, we've seen about 10 to 15 tenants with either late monthly payments each month, or no payments up until the 7/27 eviction ban was lifted. At that point, MAXX PM has gone to work addressing these non-payments during the short window before the CDC guidelines came into effect.
Here's a rough look at the numbers:
- Tenants between 7/28 and 8/31 who left without going through full eviction process: 10
Notifications were posted and they left. Each of these tenants have been sent to our attorney for collections and we are working to get these funds back to the owners.
- Full evictions: 1
- Tenant-filed bankruptcies: 4
With our current portfolio, we have a <1% eviction/move-out rate due to COVID. Keep in mind though that the new CDC guidelines have essentially handcuffed us when it comes to any future evictions. 2020 is not over yet, and it's something we'll have to deal with going forward.
FIG and MAXX PM have put in a lot of work to keep things rolling and collecting for our investors. If anything, having less than 1% face eviction/move out is a testament to the strength of a properly managed new construction fourplex investment.
On another note, Utah has some new programs that allow MAXX PM to help tenants apply for rent relief if they need it down the road. The program can grant up to $2,000 per unit per request for rent... more info about that at cullimorelaw.com
If you have any further questions, contact your FIG agent directly.