The Unseen Costs Of The Extended Eviction Moratorium

rental market

The eviction moratorium in California was initially a smart thing to do because it kept thousands of people off the streets during the early days of the pandemic.

Sadly, with another extension of the eviction moratorium there are unseen costs that are rarely talked about in the media.

What are those unseen costs?

Even though the media talks about the plight of the tenant, the reality is that thousands of residential and commercial property owners across California haven’t been able to collect rent in months and now face severe financial strain.

Even though landlords and owners across California are typically thought to be able to hold out just fine during the eviction moratorium, many owners are facing financial ruin by not being able to collect rent from their tenants.

Financial Strain

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.”

Source – California Globe

What Comes Next?

The financial needs of landlords must be addressed since many landlords in this state are living check to check during the pandemic like their tenants are.

To avoid another financial crisis in California, and a loss of rental inventory statewide, the state can’t just “kick the can” any longer.

The eviction moratorium will have to come to an end eventually if California’s rental market is ever to get back on track.

Contact RPM Central Valley

For more information on what’s happening with the rental market in California, or to speak with us about our property management services, contact us today by calling (209) 572-2222 or click here.