Following Governor Newsom’s eviction moratorium extension executive order on Tuesday, thousands of landlords across California are now facing severe financial strain. With two months added on to the moratorium on top of several months of not being able to remove tenants, landlords across California hoping for relief are only finding more months of hardships.
Several landlords reached out to the California Globe about how the order could financially ruin them.
Renters not paying due to the moratorium in LA
“Me and my husband own a block of apartments in Los Angeles,” said Susan Chang, a Los Angeles landlord. “Out of the 12 units, currently 5 are not paying any rent. Our income has literally been halved.
This was supposed to be our retirement. We never got much in pensions or 401ks, but by chance we managed to buy an apartment complex with our savings. One of our friends is a handyman and another owns a gardening service, so all together we had a good system.
Then the coronavirus hit. Now we are unsure what to do. Normally we would evict. We feel for those tenants, especially those with kids, but this is business and not personal. They were negotiating a reduced rate with use until the moratorium was announced, then all five immediately stopped. They know the law. They also know they don’t have to pay until October.
In October it will be a huge fight over back rent, evictions, and other things I don’t want to think about now, but presently it’s rent and how they haven’t legally paid in months.
I know the government means well, but if I don’t get the usual rent amounts soon, we can’t make paying the mortgage. In August, part of our social security checks will actually have to go towards that.
I honestly can’t believe it came to this.”
A tense home renting situation in San Bernardino disrupted by the moratorium
A home renter, Noel Wilson of San Bernardino, also shared the realities of such a moratorium.
“I own one home in San Bernardino in which I rented 2 years ago to be able to go back to school to earn my masters,” shared Wilson. “January was the last rent payment I received and the tenant has made no contact as to why he can’t pay. I tried selling the house in late April. When I tried to gain access to the house after given 24 hours notice, the tenant had changed the locks and called the police on me. Can you believe that?!
Everyday I research, investigate, and connect with people who are in the exact situation. I have drained my savings account paying for the mortgage and have received a forbearance but will ultimately be responsible for paying borrowed money back. I’ve worked so hard for to live the California dream. Now my dream has turned into an unbelievable nightmare!
I’ve been dealing with this for 6 months. He was almost 30 days late paying rent for December. Paid January. In February I gave him extra time to pay but had to file a 3 day or quit at the end of February. I hired an eviction company and they said the tenant evaded service 3 times. The tenant said he was sorry and was seeking some sort of assistance from a government program and would pay by March. He also said he was looking for another place to live. He also has a cat and my house smells like cat pee.
Since the moratorium he has ignored all communication with me. I decided to put the house for sale to avoid foreclosure. I’ve put up 3 for sale signs and the tenant has torn them down. The neighbors rarely see him. He posted a sign to his from door saying no one is allowed due to [COVID-19] but replaced that sign with a note to the UPS and FedEx drivers saying ring the doorbell when dropping off a package.”
Unforeseen situations of Newsom’s executive order
Newsom’s order was primarily aimed at protecting renters, many of whom are facing severe hardships due to lost jobs, inadequate unemployment payments, or other financial issues stemming from unemployment. With many fearing a huge rise in homeless people if evictions should continue, eviction protection was put into place. John Oliver gave this argument, among many others, during his ‘Last Week Tonight’ program earlier this week.
“If we allowed eviction moratoriums to end at the end of July, California could have been facing a mass homelessness crisis, way bigger than now,” noted homeless counselor Jane McCutchen on Wednesday. “We’re already seeing many continue to move out anyway because, despite the moratorium, people without jobs can’t afford many other expenses. I’ve talked with many people who have become homeless this way.
Without eviction protection, that would mean at least 10,000 more in California.”
And tenants from the landlords the Globe talked to have been in those very same predicaments of being caught up in hard times.
“Three of them lost jobs in March, all waiters or cooks,” said Chang. “Then in April two others were let go. One worked at a WeWork office and the other was a salesman of sorts.
Some had let me know early on, but others I only found out when I knocked on doors and they told me that and that they were protected. One of them even slammed the door in my face.
Another actually broke their lease agreement by having their mother move in, but again, I can’t do anything due to the moratorium. ll I can do is ask.
And California law is very prickly about this. I can’t switch off power or water or gas legally. Others have tried that to force tenants out, only for the court to side with the tenants. Newsom had been my hope, that he would give landlords a break. But he just screwed all of us over.
Again, I know he wants to protect people from coronavirus, but if we aren’t protected either, what will they do when everyone is out on the street at once when the mortgage defaults?”
Noel’s situation painted a similar story.
While protections may extend to small businesses, and thus grant landlords who are operating under a small business either federal or state funds, many others simply renting by agreement and not by agreement with a company could be left out.
A landlord in Oakland who wished to remain anonymous shared her experience in attempting to get emergency funds as a small business.
“I don’t want to say where I went, but when I showed them my financials they asked who the checks were being made out to,” explained the Oakland landlord. “When I showed copies of checks showing them being made out to me and not a renting company, they said they couldn’t do anything.
It’s apparently that simple.”
Few assistance options for landlords and building owners
Experts agree that not only more assistance needs to be made available to landlords, but ignoring landlords needs could lead to a larger rental crisis in the future.
“If more landlords don’t get rent payments or government assistance out of this, they may wind up being unable to make mortgage payments and losing the property,” noted accountant William Hewitt, who looks after finances of several renting companies and landlords in LA County. “So not only will the landlords be out, all tenants are at risk of having to go out.
Now it becomes a question. Should landlords be allowed to evict to get new tenants so that a few very needy tenants are on the street, or should we protect tenants but risk landlords and possibly all tenants from losing it all? It’s a hell of a gamble with no easy answer.
But if there’s a tenant out there who said that the landlords should have been the ones preparing for a rainy day and not have the burden be on the tenants, they are very much wrong. Tenants have a contractual obligation to pay
Coronavirus has been the trump card here. The current recession, you know, evictions would most likely continue as usual, even in California. Look at the Great Recession ten years ago. But Governor Newsom and doctors are scared that a mass homeless issue would be not only humanely dangerous, but it could lead to even higher spikes of coronavirus.
It is for certain that a lot of Californians will be evicted come October if no more extensions of moratoriums are made. But who knows if some of these landlords can last this long.”
With tenants being protected, many landlords now face an uncertain summer, with little recourse.
“No one ever wants to feel sorry for a landlord,” added Susan. “They think we’re just in it for profit.
But we really do care and are willing to work with people during hardships.
This is what happens when they legally don’t have to even attempt in doing that. This is that reality.”