Some people believe they don’t have to pay rent under the federal coronavirus relief program, the poorly communicated CARES Act. With eviction moratoriums announced by some state and local governments, the housing sector is about to be forced into layoffs and furloughs. This is exactly when we need property management services to keep us safe as we shelter in place.
We already had a housing crisis before COVID-19. A moratorium on evictions perversely makes it worse. If we bankrupt housing, lay off housing workers, and discourage the creation of more housing, we are making a drastic and avoidable mistake.
There are other solutions, including offering immediate rent support right now and massively investing in and incentivizing the creation of more housing as soon as possible.
Killing with kindness
Initially, it’s understandable why governors and mayors would prohibit landlords from evicting tenants, hiking rents, and taking other actions in the middle of the coronavirus pandemic. People need to remain at home, not spread the virus. Unemployment is rising fast. Putting out renters because they couldn’t pay at the beginning of the month hardly seems fair.
But the new measures are undermining landlords’ and property managers’ ability to provide homes where citizens shelter in place — sometimes heroically, if they must enter quarantined units to make essential repairs.
Even worse, the 90-day moratorium on evictions in New York, mandated extended time for rent payments in Austin, the ban on rent increases on hundreds of thousands apartments in Los Angeles, and other recent measures reflect the same mistaken political mindset that created the affordable housing crisis that serves as a backdrop to our current public health emergency.
Millions of people would be more financially resilient today if we had built more housing in past years. We can still harness the markets to expand supply and bring down prices to make housing more affordable. But anti-development activists have slowed construction in cities where demand is greatest. Shortages and homelessness have skyrocketed as a result.
The new rules aiming to protect tenants are similarly shortsighted. We are in a public health emergency that is also an economic crisis with housing at its heart. People are fearful of losing their lives, their jobs, their housing. Hamstringing landlords isn’t the sustainable way to allay their fears. We need to maintain our existing housing stock. That costs money.
Coming to grips with reality
Landlords aren’t evicting tenants who miss rent because of the coronavirus. Property managers are reaching out and communicating with residents, developing payment plans if necessary, and keeping everyone in the community informed about public health guidelines, as the National Apartment Association recommends.
A moratorium on evictions rids landlords of any leverage they had in securing past-due payments. If that were not true, then the moratorium would be unnecessary. Evictions, after all, can take months. Landlords cannot simply toss renters out of their homes. They have to convince judges to issue court orders. It can be a lengthy process that often results in tenants agreeing to leave the premises on a specific date in the future. These additional layers of so-called tenant protection are overkill designed to score political points.
Consider this analogy. Like landlords and property management firms, supermarkets have kept functioning as essential services while restaurants, clothing shops, and beauty salons have closed. Nobody, however, would dream of public officials ordering supermarkets to give out food for free. They are not charities. Everyone knows they must sell food so that they can buy more food, pay employees, and keep the lights on.
Skeptics might say they would want politicians to compel supermarkets to hand out free food in the event of an emergency. If people were on the verge of famine, though, we would all rightly point to our leaders and ask what went wrong. Why didn’t they pull out all the stops to increase supply before it was too late? Why hadn’t they used every tool at their disposal to avoid the worst of a crisis? What would we do once the supermarket shelves go empty?
The answers to those questions would likely reflect badly on the very leaders forcing a temporary fix for the problem they failed to prevent. The same is true for politicians intervening in the housing market today as the coronavirus ravages America. Almost overnight, the housing industry has rallied and trained and tackled challenges in this crisis that they’ve never had to handle before. We are investing in our teams to protect residents. We must be able to serve for however long this goes on.
Dru Armstrong is CEO of property technology company Grace Hill, which focuses on policy, training, and assessment software designed to develop, retain, and build talent.
