COVID-19 Tenant Protections Are Causing Hardship for Older Immigrant Property Owners

The COVID-19 pandemic has caused unprecedented effects across the U.S. rental, housing, and property market with many tenants failing to pay their rent on time, or at all. The Federal government stepped in to provide COVID-19 tenant protections against evictions and penalty fees. However, older immigrant property owners may have trouble making their monthly payments if rent checks dry up.

Tenant protections come in the wake of massive job losses, nationwide unemployment, and loss of income for many households across the country. With less rent income coming in, some property owners may face a hard time. Older immigrants and mom-and-pop landlords are especially vulnerable since mortgage payments, insurance, and property tax often account for well over half of their property income.

How COVID-19 Tenants Protections Affect Property Owners

Many landlords must pay building-wide utilities, including garbage and recycling collection, gas and electricity, or water and sewer fees for common areas. These essential services must remain functional at all times, even during the pandemic.

What’s more, many of the expenses that property owners incur are the wages of other workers. Keeping residential building apartments safe, clean, and functioning takes the efforts of housekeeping and maintenance staff. Larger buildings often employ on-site workers while smaller properties frequently outsource to local contractors like electricians and plumbers.

COVID-19 has been unfairly hard on immigrants and noncitizens. With the entry into the U.S. severely restricted, immigrants are facing the brunt from slow family immigration processes to people detained in immigration detention centers. Furthermore, Congress left millions of immigrants out of legislative relief, which left many to struggle to stay afloat during the pandemic.

Unfortunately, the federal government has less control and influence over mortgage lenders for market-rate apartment buildings that constitute the vast majority of the national rental housing. The situation has left many immigrant property owners at risk of foreclosures or tax lien penalties and interest after July 10, 2020.

Retaining Reliable Tenants

During a widespread economic crisis, property owners also have financial obligations to meet. Many have a strong financial incentive to retain their existing tenants rather than push them out because partial rent is better than nothing. Vacant units do not bring in rental income. It’s also challenging to find new, reliable tenants during an economic crunch and preparing apartments for new ones costs money.

COVID-19 Tenant Protections

The Federal government has taken action to offer tenant relief during the COVID-19 pandemic.

1. CDC’s Temporary Eviction Suspension

The CDC halted residential evictions for failure to pay rent. However, tenants had to meet the eligibility requirements to qualify. The order prevents homeowners from evicting tenants from September 4, 2020, to December 31, 2020.

Tenants must complete a declaration form to become eligible for the protection. However, they must continue to pay rent and follow other terms of their lease. Property owners can evict tenants for different reasons, such as the violation of the rules stipulated in their lease agreement. Unfortunately, the order does not cover foreclosures on home mortgages.

2. The CARES Act 2020

The Coronavirus Aid, Relief, and Economic Security Act also provides tenants in federally-backed or subsidized housing protections from eviction or late fees due to failure to pay rent. The CARES Act protected tenants from March 27 to July 24, 2020.

3. Property Owners with Federally-Backed Mortgages

The CARES Act further provides tenants additional protection if their landlords enjoy the right to temporary relief from mortgage payments (forbearance) because they have a federally-backed mortgage. The federal protection extends to property owners of multifamily properties with five or more units.

Hasting evictions sounds good on paper but risks exacerbating the COVID-19 pandemic’s economic impacts in unforeseen ways.