Worst time to Evict in US History?

Question

Those who have been in the industry for a few decades, or are familiar with US history- is this the worst time in U.S. history to have a non-paying tenant?

On a national scale, has HUD or the CDC ever taken such drastic action to limit residential evictions?

On a local scale- I know many major cities are going above and beyond the federal limits. Has there ever been a more dramatic effort by local authorities to prevent eviction?

Aside from the legislative efforts at the federal, state, and local level- eviction courts themselves are backlogged many months in major cities. On top of all of this, I know of a few cities that have tightened penalties for self-help evictions (turning off utilities, changing locks, etc).

Is it fair to say this is the worst time to evict a tenant in US history?

Also- one of the biggest uninsurable risks to a landlord is having a non-paying tenant. When risk increases, required return increases for a rational investor. What will increased eviction risk do to the market?

JD Martin · Answer

Not by a long shot. The worst time to evict would historically be at a time when there were no replacement tenants. The Great Depression might be a candidate.

To answer your other question, in marginal or difficult eviction communities, you will see either less rentals or more initial and ongoing cost borne by the tenant, or both simultaneously. Higher deposits, higher rents, more stringent credit & background checks, less leniency by landlords.

Kevin M. · Answer

@JD Martin I see your point and I think it's clear that (to this point) the Great Depression was significantly worse for owners from an economic standpoint, but I think the 'eviction' question is still relevant. Although it may be a worse time to try to rent a unit- how about getting rid of a non-paying tenant? Would it take 10 months for an owner in the 1930s to eject a non-paying tenant from his/her property? The point I'm making is actually regaining possession of rightfully owned property in response to tenant breach. I imagine investors would rather have an empty unit than a unit occupied by tenants forced to pay their utilities, fix appliances, deal with wear and tear.

I agree with your point. I also predict a shift of investor funds outside of cities into surrounding communities that may have faster eviction times.

JD Martin · Answer

At the end of the day (other than utilities, which may be a valid point) the property is not making any money whether it is occupied by non-paying tenants that can't be evicted or by no one in bad economic times. In fact, if the tenants aren't destroying the place, a good case could be made that the property is better served by having someone in it than having it abandoned, as empty houses don't fare well in the long term. As for appliances and repairs, the same courts that don't exist to enforce evictions probably also don't exist to enforce repairs and standards of living. In other words, most landlords will/would probably choose not to make repairs to appliances and other things that enhance the tenant's quality of living if they aren't receiving any funds.

I think eviction moratoriums are the wrong approach, for what it's worth. It really creates a death spiral for the property and the tenant/owner relationship. There are plenty of alternatives that don't have to be either/or.