Looming Eviction Crisis
Real Estate Agent · Jacksonville, FL · Member since 2015 · 252 posts · 132 votes
Looming Eviction Crisis
Most Popular Reply
Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votesThe crazy 30 million evictions numbers are being fed to news outlets by tenant unions and activists hoping to create fear especially in the minds of politicians and voters. I see some LL continuing to take the shaft unfortunately, and those with insufficient reserves will get hurt.
When you see those claims of "37.5% of households have not made their housing payment for August" take it with a grain of salt.
28 Replies
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes6y
President Trump signed an Executive Order extending Unemployment at $300 a week, protecting against evictions, and deferring student loan payments.
And on a side note, he also suspended the (Federal) payroll tax for wage earners (California and other payroll taxing states will still grab their share of your paycheck if you live in those states, but for workers that should mean extra spendable "Mean Green" to stimulate the economy). He also says he intends to permanently end it (if he wins the next election).
I'm not sure how many renters this will cover (some will have extra money, some will be protected from eviction), but as far as owner cash flow is concerned, some owners may be more affected by this than others.
It may end up depending on your tenant base. For instance Section-8 owners may not feel as much crunch as "working tenant Class-C" owners.
Or some cities (or sections of cities) may be harder hit than others.
This is such a huge national problem, I think we will just have to wait and see how it turns out.
Just my 2 cents.
- Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes6y
Originally posted by @Scott Mac:
President Trump signed an Executive Order extending Unemployment at $300 a week, protecting against evictions, and deferring student loan payments.
And on a side note, he also suspended the (Federal) payroll tax for wage earners (California and other payroll taxing states will still grab their share of your paycheck if you live in those states, but for workers that should mean extra spendable "Mean Green" to stimulate the economy). He also says he intends to permanently end it (if he wins the next election).
I'm not sure how many renters this will cover (some will have extra money, some will be protected from eviction), but as far as owner cash flow is concerned, some owners may be more affected by this than others.
It may end up depending on your tenant base. For instance Section-8 owners may not feel as much crunch as "working tenant Class-C" owners.
Or some cities (or sections of cities) may be harder hit than others.
This is such a huge national problem, I think we will just have to wait and see how it turns out.
Just my 2 cents.
The fund from which Trump is pulling that $300/week has enough money for 3-5 weeks, depending on your news source. Big help!
The federal tax payroll suspension is just that: a suspension. It's not a cut. Those taxes are still due at some point.
Just chiming in!
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes6y
Originally posted by @Jon Schwartz:
The fund from which Trump is pulling that $300/week has enough money for 3-5 weeks, depending on your news source. Big help!
The federal tax payroll suspension is just that: a suspension. It's not a cut. Those taxes are still due at some point.
Just chiming in!
He also says he intends to permanently forgive it and end the payroll tax completely (if he wins the next election). I guess we will have to just wait and see.
- Rental Property Investor · Member since 2020 · 172 posts · 110 votes6y
I don't think this is an honest question, no offense. It's speculation. I agree that it absolutely could happen, but until it does nobody is going to give a suitable answer. We don't know what role the government will play, like, will they set up a program for guaranteeing rent for people who have previously been evicted, or will laws pass that prohibit asking if a person has been evicted, etc. I'm not saying any of this will happen, I'm just saying you don't either. Way too much information missing currently to bother going down this road.
- Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes6y
There are already states and localities that don't allow the landlord check eviction records with some going as far as to try to seal them so there is no way to find out without a warrant. These are very landlord friendly places and not the places I'm looking to do business but I feel this may be more widespread. I have been thinking of this exact same question a lot lately though and wondering for those who get evicted are landlords going to be willing to house them or what will they do. I for one plan on holding my course and rejecting applicants with evictions on their record especially if it were actually enforced by the courts vs. just filing. While I know every landlord isn't as forgiving I think as a whole people are giving chances to set up plans and there was a moratorium on evictions. At the same time stimulus checks have gone out, enhanced unemployment benefits for those affected were making some people make more than they did when they worked and the CARES act gave unprecedented access to retirement accounts. Suspending payroll taxes will put more money in the pockets of workers however this is where funding for SS and Medicare come from and I think this funding should be treated as untouchable and not a political pawn used by both sides of the isle since the buck will be passed to future administrations when the funding runs out. If its not funded by taxes though the printers will fund it, there isn't a politician out there who wants to run on the platform we stole your SS money over the years and now you have nothing for your retirement, best of luck with that. There are plenty of companies near me deemed essential or have since opened up that are begging for workers since so many are happy on unemployment that I don't buy the fact you can't find a job. During all of this the tenant not only couldn't come up with rent but refused to make alternate arrangements to vacate on their own and drug the process out as long as possible to get the courts involved. This is costing the landlord money and actively acting against their own self interest by marking their profile with an eviction that I just can't look past. If it was filed and they left on their own they will have an easier time and it may not even come up in some background checks but if I find out that is a no for me as well. Good luck to them and I wish them the best as everyone needs a place to stay however it will not be with me. Sorry for the long post but this has been on my mind lately but I'm curious to see what others think.
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes6y
Unemployment has been high for five months and rent collections have been fine in most markets. There are two trillion reasons for this...with more stimulus coming. Ignore all the noise...elevated unemployment benefits will continue soon, likely somewhere around $300-400 per week + the normal state level.
- 6yBjorn AhlbladPro MemberInvestor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
The crazy 30 million evictions numbers are being fed to news outlets by tenant unions and activists hoping to create fear especially in the minds of politicians and voters. I see some LL continuing to take the shaft unfortunately, and those with insufficient reserves will get hurt.
When you see those claims of "37.5% of households have not made their housing payment for August" take it with a grain of salt.
- Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes6y
Originally posted by @AJ NA:
@Scott Mac if he ends it completely, how will SSI and Medicare get funded? Just curious as I’m 38 and have already paid a couple hundred K into the system. Not sure if I’ll ever see a dime of that
May I suggest that you plan the next 20 to 30 years of your life so that you wouldn't even need $0.01 of social security or Medicare. You'll be happier with less stress in the end.
There are plenty of things which we paid into that were utterly wasted ( hell, that's most of what we pay in taxes ) so this additional 3-5% is nothing.
- Investor · St Petersburg, FL · Member since 2014 · 231 posts · 221 votes6y
Originally posted by @Adam Martin:
There are already states and localities that don't allow the landlord check eviction records with some going as far as to try to seal them so there is no way to find out without a warrant. These are very landlord friendly places and not the places I'm looking to do business but I feel this may be more widespread. I have been thinking of this exact same question a lot lately though and wondering for those who get evicted are landlords going to be willing to house them or what will they do. I for one plan on holding my course and rejecting applicants with evictions on their record especially if it were actually enforced by the courts vs. just filing. While I know every landlord isn't as forgiving I think as a whole people are giving chances to set up plans and there was a moratorium on evictions. At the same time stimulus checks have gone out, enhanced unemployment benefits for those affected were making some people make more than they did when they worked and the CARES act gave unprecedented access to retirement accounts. Suspending payroll taxes will put more money in the pockets of workers however this is where funding for SS and Medicare come from and I think this funding should be treated as untouchable and not a political pawn used by both sides of the isle since the buck will be passed to future administrations when the funding runs out. If its not funded by taxes though the printers will fund it, there isn't a politician out there who wants to run on the platform we stole your SS money over the years and now you have nothing for your retirement, best of luck with that. There are plenty of companies near me deemed essential or have since opened up that are begging for workers since so many are happy on unemployment that I don't buy the fact you can't find a job. During all of this the tenant not only couldn't come up with rent but refused to make alternate arrangements to vacate on their own and drug the process out as long as possible to get the courts involved. This is costing the landlord money and actively acting against their own self interest by marking their profile with an eviction that I just can't look past. If it was filed and they left on their own they will have an easier time and it may not even come up in some background checks but if I find out that is a no for me as well. Good luck to them and I wish them the best as everyone needs a place to stay however it will not be with me. Sorry for the long post but this has been on my mind lately but I'm curious to see what others think.
We could go totally nuts and tell people they're responsible for their own retirement. I know, totally crazy, right? Then we could get rid of payroll tax altogether, and people would have that much more to save for retirement.
Of course, I wouldn't cut it cold turkey. Phase it out over time. If you were born in 2000 or later, plan on getting nothing, but you'll be paying until everyone with an entitlement is dead. 90's kids, you get 33% of the expected entitlement, since you've paid in some, but you have time to change your plan. 80's kids, 66%. Born before 1980, you get a full entitlement, since you have less time to plan for a retirement without it. Maybe even offer a plan where you get tax incentives for declining your entitlement. I'm planning like I won't see a dime anyway, so I'd happily give it up for some tax perks today.
Maybe my great, great grandchildren won't be burdened with such a program.
- 6yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Originally posted by @Colin Reid:
Originally posted by @Adam Martin:
There are already states and localities that don't allow the landlord check eviction records with some going as far as to try to seal them so there is no way to find out without a warrant. These are very landlord friendly places and not the places I'm looking to do business but I feel this may be more widespread. I have been thinking of this exact same question a lot lately though and wondering for those who get evicted are landlords going to be willing to house them or what will they do. I for one plan on holding my course and rejecting applicants with evictions on their record especially if it were actually enforced by the courts vs. just filing. While I know every landlord isn't as forgiving I think as a whole people are giving chances to set up plans and there was a moratorium on evictions. At the same time stimulus checks have gone out, enhanced unemployment benefits for those affected were making some people make more than they did when they worked and the CARES act gave unprecedented access to retirement accounts. Suspending payroll taxes will put more money in the pockets of workers however this is where funding for SS and Medicare come from and I think this funding should be treated as untouchable and not a political pawn used by both sides of the isle since the buck will be passed to future administrations when the funding runs out. If its not funded by taxes though the printers will fund it, there isn't a politician out there who wants to run on the platform we stole your SS money over the years and now you have nothing for your retirement, best of luck with that. There are plenty of companies near me deemed essential or have since opened up that are begging for workers since so many are happy on unemployment that I don't buy the fact you can't find a job. During all of this the tenant not only couldn't come up with rent but refused to make alternate arrangements to vacate on their own and drug the process out as long as possible to get the courts involved. This is costing the landlord money and actively acting against their own self interest by marking their profile with an eviction that I just can't look past. If it was filed and they left on their own they will have an easier time and it may not even come up in some background checks but if I find out that is a no for me as well. Good luck to them and I wish them the best as everyone needs a place to stay however it will not be with me. Sorry for the long post but this has been on my mind lately but I'm curious to see what others think.
We could go totally nuts and tell people they're responsible for their own retirement. I know, totally crazy, right? Then we could get rid of payroll tax altogether, and people would have that much more to save for retirement.
Of course, I wouldn't cut it cold turkey. Phase it out over time. If you were born in 2000 or later, plan on getting nothing, but you'll be paying until everyone with an entitlement is dead. 90's kids, you get 33% of the expected entitlement, since you've paid in some, but you have time to change your plan. 80's kids, 66%. Born before 1980, you get a full entitlement, since you have less time to plan for a retirement without it. Maybe even offer a plan where you get tax incentives for declining your entitlement. I'm planning like I won't see a dime anyway, so I'd happily give it up for some tax perks today.
Maybe my great, great grandchildren won't be burdened with such a program.
Even if they got rid of payroll taxes, lots of people wouldn't save that money, they'd spend it.
- Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes6y
In theory cutting taxes to allow people to save more would make sense. You pay 7.5% payroll tax and your company does the same and I would prefer to have the extra 15% in my 401k. The issue is that we need to save people from themselves because most people would not save and then you would have a large percentage of the population with no retirement who would either have to work until the day they died or until they could no longer physically work and be supported by welfare. Yes this would be their fault and they could have prevented it however a large percentage of the population can't look past today. Outside of real estate I am a financial advisor who specializes in 401k retirement plans and occasionally crosses over into IRA's when it makes sense and I see people working against their own self interest every day. I have people in their 50's who just casually call in to cash out what little retirement they have to buy a new car or pay off cc debt saying they have plenty of time to save, you do not and you most likely won't. I am fiscally conservative with government policy generally and feel the gov. should stay out and let markets dictate how and where people spend their money but based on my experiences this is one of the topics I do a 180 on. I am actually for the taxes going up 50-100% from where they are now and increasing benefits proportionally. SS is not designed to live off of it is there to provide you with your basic needs and if any of you talk to people who failed to plan you know there is a struggle. The economy as a whole would be better off if seniors were better supported through SS as that would be more money pumped into the economy and a lot of them are on gov. benefits anyway this way they at least paid for them throughout their working career.
This thread is taking a lot of turns but I like it.
- Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes6y
The executive order moratorium was only for government entities (~12M rentals), so there will still be tens of millions of units that aren't covered by this. When the senate pops back into work in a few weeks, they'll most likely extend the unemployment benefits.
Regardless, have any of y'all seen an eviction go through its general course of process yet?? I don't think courts at local levels have started to process them, and even if they have they're starting all the way from the March filings on a first come basis. By the time they get to the potential evictions in Q3 of this year, we'll probably be in 2021 already. Curious to see if anyone has had any progress with evictions.Going back to the original question, I used to automatically reject an application for having an eviction. Now I will have to take a much harder look at things. If they still don't have a job (assuming that's why they couldn't pay), then it's a no brainer. If they had a $1200/mo rental, lost their job & got evicted, and found another job at a reduced salary, but the rent is only $800/mo, then it's something to definitely consider. It'll be a case by case basis. But realistically, I still don't see people getting slapped with an eviction this year in most ordinances.
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes6y
Originally posted by @AJ NA:
@Scott Mac if he ends it completely, how will SSI and Medicare get funded? Just curious as I’m 38 and have already paid a couple hundred K into the system. Not sure if I’ll ever see a dime of that
I'm not a W2 guy, don't know, but I think he's just talking about canceling the Federal 1040 type tax for employees.
I doubt they would cut that, because it would be a hardship on so many people.
It would be like shutting down welfare. Probably a non-issue to worry about.
- Member since 2019 · 111 posts · 130 votes6y
@David Wurzel
I think the courts will be backed up for years. So evictions and foreclosures will be even slower and more painful than ever.
I was just subpoenaed as a witness for a commercial landlord/tenant dispute. Case has been repeatedly delayed. I expect that to happen again: Especially if people start pugging courts with class action suits for loss of income or property due to Covid fraud or riots.
As landlords, we need to do even more due diligence on prospective tenants. Honestly, I'm more concerned about the possibility of runaway inflation and the government slapping on rent controls or enacting and enforcing antidiscrimination laws.
- Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes6y
@David Wurzel, that's a snarky question, so here's a snarky response: Look to your politicians, not the mom & pop landlords.
There have always been an assortment of economic problems affecting our country--it's a cyclical occurrence, like the seasons. Boom/bust. But that does not excuse the blatant power grab of a landlord's right to due process foisted on us by elitist politicians.
Want to take away our constitutional rights? Fine--declare a national state of martial law. Then at least we all know where we stand.
The jury is still out as to the appropriateness of the government's response, but IMHO, to quarantine an entire population of young, old, middle age, healthy and sickly and effectively shut down our economy has been and continues to be a mistake of judgment.
But, what is done is done, and we must buckle up and ride it out. It will get a lot messier before it gets cleaned up. And oh boy, will it make for great sound-bites for both sides of the aisle.
Those of us that feel badly for tenants that are directly affected by the pandemic, as well as those tenants that are simply taking advantage and gaming the system based on Gubnitorial decrees of halting any eviction suits may aways work out a payment plan with the tenant, or write a nice large check to the Treasury Department to help bail out the affected people.
- Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes6y
A public health crisis should be solved with a public response.
Banning evictions just passes the cost to landlords who if pushed too far will be unable to pay lenders, utilities, taxes; etc.
The only viable solution is to either pay landlords a reasonable amount for their lost rent or just let people get put out on the streets.
- Member since 2016 · 79 posts · 134 votes6y
Originally posted by @Scott Mac:
Originally posted by @Jon Schwartz:
The fund from which Trump is pulling that $300/week has enough money for 3-5 weeks, depending on your news source. Big help!
The federal tax payroll suspension is just that: a suspension. It's not a cut. Those taxes are still due at some point.
Just chiming in!
He also says he intends to permanently forgive it and end the payroll tax completely (if he wins the next election). I guess we will have to just wait and see
Don't mean to kill your enthusiasm, but if Social Security loss its main source of revenue (payroll tax), we are in much bigger doodle than a bunch of renters can't pay their rent. The idea of payroll tax cut or permanently get rid of payroll tax has nothing to do with giving the little men a bit of boost in their ability to pay bills - but has everything to do with some people's dream of getting rid of social security for good.
No political judgement here, all I caution is that be aware of what you are wish for. Boomers generations are incredibly ill equipped in dealing with their retirement needs. A good portion of them depend on social security payment as their sole retirement income. By destroying social security or making it a 401k like program will cause a lot of unintended consequences.
And I doubt that 7.65% bump for an individual who is having a hard time paying his/her rent will somehow save them. On the other hand, the direct beneficiaries of this policy are the large companies with huge payrolls cause to them a 15% cash savings can be huge for their bottom line. Again, no judgement, just the facts. I doubt that many of our biggerpockets readers care about company payrolls since hardly any of them are either evicting big companies from commercial real estate, or they expect to make a deal by buying a large company...
What's your take?
- Member since 2016 · 79 posts · 134 votes6y
Originally posted by @Andrey Y.:
Originally posted by @AJ NA:
@Scott Mac if he ends it completely, how will SSI and Medicare get funded? Just curious as I’m 38 and have already paid a couple hundred K into the system. Not sure if I’ll ever see a dime of that
May I suggest that you plan the next 20 to 30 years of your life so that you wouldn't even need $0.01 of social security or Medicare. You'll be happier with less stress in the end.
There are plenty of things which we paid into that were utterly wasted ( hell, that's most of what we pay in taxes ) so this additional 3-5% is nothing.
Dude, Social Security and Medicare is the law of the land. Even if their trust funds run out, the law still stipulate certain amount to be paid out to qualified seniors of the society. Most western advanced society have something similar to this to ensure some level of social safety net for retired folks. You really should look into the history of 1930s and 40s before the onslaught of World War II to understand why programs like this literally saved America from becoming Nazi Germany or Soviet Union.
In the end of the day, let's be real. Idiology is for idiots. We look at what we have, don't change too much of it, tweak it for the better, and move on. I wouldn't count on Social Security to be my main source of income after retirement, but I wouldn't count it off either. It's part of your whole life planning.
- Investor · La Jolla, CA · Member since 2016 · 66 posts · 169 votes6y
Originally posted by @AJ NA:
@Scott Mac if he ends it completely, how will SSI and Medicare get funded? Just curious as I’m 38 and have already paid a couple hundred K into the system. Not sure if I’ll ever see a dime of that
You're not going to see a dime of it either way.
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes6y
Originally posted by @Billy Zhao:
Originally posted by @Scott Mac:
Originally posted by @Jon Schwartz:
The fund from which Trump is pulling that $300/week has enough money for 3-5 weeks, depending on your news source. Big help!
The federal tax payroll suspension is just that: a suspension. It's not a cut. Those taxes are still due at some point.
Just chiming in!
He also says he intends to permanently forgive it and end the payroll tax completely (if he wins the next election). I guess we will have to just wait and see
Don't mean to kill your enthusiasm, but if Social Security loss its main source of revenue (payroll tax), we are in much bigger doodle than a bunch of renters can't pay their rent. The idea of payroll tax cut or permanently get rid of payroll tax has nothing to do with giving the little men a bit of boost in their ability to pay bills - but has everything to do with some people's dream of getting rid of social security for good.
No political judgement here, all I caution is that be aware of what you are wish for. Boomers generations are incredibly ill equipped in dealing with their retirement needs. A good portion of them depend on social security payment as their sole retirement income. By destroying social security or making it a 401k like program will cause a lot of unintended consequences.
And I doubt that 7.65% bump for an individual who is having a hard time paying his/her rent will somehow save them. On the other hand, the direct beneficiaries of this policy are the large companies with huge payrolls cause to them a 15% cash savings can be huge for their bottom line. Again, no judgement, just the facts. I doubt that many of our biggerpockets readers care about company payrolls since hardly any of them are either evicting big companies from commercial real estate, or they expect to make a deal by buying a large company...
What's your take?
I doubt Social Security as dispersed to the individual will be removed from the Federal Benefits for workers.
- Investor · Fall River, MA · Member since 2014 · 399 posts · 300 votes6y
@David Wurzel our attorneys are lined up and ready to serve eviction notices the day it becomes legal again.
We have hired a number of attorneys to ensure that one of them will be good at cutting through the red tape and get us to the finish line.
In the meantime we are holding off on deferred maintenance and only taking care of emergencies while keeping in line with the governments request for social distancing by allowing tenants to use credit cards to pay rent online.
Lots of big deals will be hitting the market soon!
Cheers to your success!
- Los Angeles · Member since 2018 · 464 posts · 471 votes6y
eh, what I've said has been said before, and they won't let me delete this post ...
Join the conversationCreate a free account to reply, vote on answers and follow this thread.