Another Reason for High Rents

The high costs of rents have multiple sources, some dating back to the pandemic. Not long into the ill-advised reactionary period, Matthew Haines, like many landlords across the country, learned he was barred from evicting tenants who didn’t pay their rent. The denial of his right to do so was due to a federal eviction moratorium that lasted nearly a year, costing him and his investors over $1 million.

Like any normal human being, loss of income often times means going into debt, which creates a need to make up for such loss of income. The easiest way for a landlord to do so is to increase rents at a higher rate than previously necessary.

Haines is among more than 1,500 property owners who filed a federal lawsuit arguing the moratorium enacted by the Centers for Disease Control and Prevention violated the Fifth Amendment by unlawfully denying them compensation. It was among the pandemic’s most divisive policies, and never should have taken place. Having been a previous business owner myself, I argued that shutting down the economy and denying anyone the right to income was unconstitutional – albeit tenants or landlords, pandemic or no pandemic.

Fortunately, the CDC moratorium ended after a Supreme Court shared my viewpoint. Sadly, it took nearly a year, and sadly, the end to the federal moratorium didn’t mean the end to state moratoriums. Moratoriums were also imposed in 43 states and scores of cities, because states and cities have broader regulatory powers than federal agencies like the CDC.

Landlords say the bans devastated their businesses. Unable to collect rent, many were forced to take on debt, lay off staff, delay repairs and, in some cases, sell their property. Many rental owners, especially smaller ones who are generally less adversarial, got out of the rental business altogether.

Tenant advocates, on the other hand, counter that eviction bans were a lifesaver. They credit them with keeping millions of tenants housed during the pandemic and slowing the spread of the coronavirus. They also claim landlords were already paid in the form of tens of billions of dollars in rental assistance. They are only half right. The backlog of cases, and red tape, still cost owners $57 billion as a result of more than 10 million renters becoming delinquent in just the first four months.

The article goes on to mention several landlords' experiences, as well as several renters that were “saved” by not getting evicted. What the article fails to mention is the unconstitutional act of shutting down the economy. Such a shutdown had little basis in actual science - which at the time I said it didn’t, and... which is slowly being admitted in the years since then.

As a hindsight result, landlords are far more cautious as to whom they rent to. “Most property owners and managers realize that it’s more important to keep that unit vacant than to put a bad resident in. That’s probably what the eviction moratorium reinforced,” said one rental property owner. That also means higher rents for units they do rent out.

Source used: Associated Press