Recently the Boston Herald published an article about a pending eviction ban and the effect it could have on society. It was an article that caught our attention and one that we thought deserved a little time in the spotlight.
Eviction Ban: What Effect Could it Have on Society?
The first hurdle has been cleared in passing a bill that would stop evictions and freeze rent for one year after Massachusetts governor, Charlie Baker lifts the Coronavirus lockdown. While many homeowners in trouble anticipate relief resulting from this bill, others are not so convinced that it’s a “good thing”, particularly landlords.
Landlords who are earning money from the rent they charge aren’t just worried about their profits, though, they’re worried about their assets. Without being able to evict tenants who don’t pay rent and without being able to increase rent to accommodate changes in the cost of living (or compensate for money being lost due to non-paying tenants), Landlords insist that if passed, this bill will lead to foreclosures galore and a significant downslide in the quality of neighborhoods.
Landlords are screaming at the top of their lungs in opposition to the ban/freeze bill because they know full well that if it passes, they will suffer. What few people in support of the bill realize, however, is that they are likely to suffer too. Houses that are foreclosed on, abandoned, are going to become slums, bringing down the aesthetics and the value of neighborhoods.
Greg Vasil, CEO, and president of the Greater Boston Real Estate Board explains that the bill simply won’t solve anything, it will just postpone the problem while causing another problem – housing falling into disrepair. He explains that renters who are already behind on their rent are going to continue falling behind and this bill only expands the amount of money owed making sure that renters will never be able to pay back what they owe. It also makes sure that landlords experience hardship for an extended period, a hardship that can (and very likely will) lead to abandoned houses and homes in disrepair. The result? Landlords now have a missing chunk of income that they depend on to provide for their own families. Now those landlords are left in a position where they can’t afford their own expenses and this furthers economic problems all around.
The Eviction Protection Bill
The bill that would ban evictions for a period and freeze rent is being called the “Eviction Protection Bill”. On October 1st, the Eviction Protection Bill passed through the Joint Committee on Housing with a vote of 14-3. The next step is to get the bill passed through the House Ways and Means Committee. Proponents of the bill tout the necessity of it as a means of keeping renters in their homes.
Under the new bill, small landlords (property owners who have fewer than 15 rental units) will be permitted to push the pause button on their mortgage for the select time period and have missed payments tacked on to the end of the loan. While this deferment may sound like a great opportunity for those in trouble at the moment, what is going to happen when those missed payments come due? Where are renters going to find 12 months of missed payments?
What does Vasil propose instead of the Eviction Protection Bill? He believes that it would be better to let the current eviction ban “run out” on October 17th and a solution found between himself and the judges of the state’s housing court. Ideally, he suggests, the Federal Center for Disease Control and Prevention order which still blocks evictions, but until the end of the year. This federal ban requires that tenants sign an affidavit swearing that they are unable to pay their rent due to COVID-19 related problems. He claims that the added layer of protection built into the federal ban will keep questionable people from gaming the system.
In response to Vasil, Cambridge Rep. Mike Connolly argues that the Eviction Protection Bill isn’t just being proposed to help renters, it’s also going to help landlords. He points out that one provision built into the bill allows for landlords to “draw on security deposits held in escrow to offset the cost of repairs”. A second feature allows for landlords to “write off any back rent owed as a tax credit and requires those landlords to forgive tenants that rent.”
The question that comes to light here, though, is can landlords survive on tax credits and security deposits? It seems unlikely.
Are You Facing Eviction or Do You Have Questions About Eviction?
If you are in or around St Pete, Florida, and are in need of legal advice or representation in regard to eviction and foreclosure, Weidner Law can help! Set up a consultation today by calling our office at 727-954-8752.