The wave has already begun: Evictions surge as cities suspend moratoriums
by Akiko Fujita
Legal aid groups and housing advocates are bracing for a surge in evictions, as local governments begin lifting moratoriums that deferred rent payments for millions of tenants who lost jobs to the pandemic.
In Michigan, where the state is set to lift the eviction moratorium next Wednesday, Ruthie Paulson has seen a 76% spike in calls to her 211 call center, which provides social services to those most in need. Nationally, the call volume has jumped 200%.
â€œA lot of the tenants are living in fear, day to day, not knowing if theyâ€™re going to receive a stimulus check, not knowing if theyâ€™re going to receive an unemployment check,â€ Paulson said. â€œThey know that date is coming, when legally they know their landlord will be able to get a court order to officially evict them. They know theyâ€™re not going to be able to pay that money.â€
States that have already lifted the moratorium have seen a dramatic spike in eviction cases. In Memphis, Shelby County courts faced a backlog of 9,000 eviction cases when hearings resumed last month. In Milwaukee, eviction filings spiked 15% since the cityâ€™s moratorium was lifted, according to data from the Eviction lab. Columbus, Ohio, converted the cityâ€™s convention center into a socially-distanced housing court to prepare for the impending wave of evictions and homelessness.
â€œIn many ways, the wave has already begun. We need to work to stop it from becoming a tsunami and we’re running out of time,â€ said Diane Yentel, President of the National Low-Income Housing Coalition. â€œWe’re seeing now a really frankly horrifying confluence of increasing evictions in states where new coronavirus cases are surging.â€
20 million renters at risk of eviction
More than 20 million people, or one in five of the 110 million Americans who live in households that rent, are at risk of eviction by the end of September, according to the COVID-19 Eviction Defense Project. While economic stimulus payments and unemployment insurance have allowed tenants to remain in their homes throughout the pandemic, CEDP Co-Founder Zach Neumann says that is likely to change dramatically, with enhanced unemployment insurance set to expire at the end of the month.
Black and Latino families are at highest risk of eviction, according to Yentel.
Those seeking help arenâ€™t limited to low-income families, but young professionals now out of work.
â€œYou have a lot of folks who had strong incomes, in a lot of cases high five figure or low six figure
. They didn’t have a lot of savings, lost their jobs or were furloughed, and there was not any severance attached to that, but had rents that were in line with the salaries they were earning,â€ Neumann said. â€œThe client pool economically looks a lot different than it has in the past.â€
Eviction hearings conducted by Zoom
The threat of homelessness coincides with a troubling uptick in coronavirus cases across the South and West, leaving tenants especially vulnerable. In Tucson, where a surge in infections has filled hospitals to capacity, courts are processing over 52 eviction cases a day, 2 to 5 times the case load from the same period last year, according to Yentel. A disturbing spike in COVID-19 cases and hospitalizations prompted Texas Governor Greg Abbott to roll back the stateâ€™s reopening plans last month, but eviction hearings are moving forward on Zoom. Thatâ€™s complicated the legal fight for tenants, who donâ€™t have access to the technology.
Tenant rights vary from state to county to city, adding to the confusion. In some jurisdictions, failure to dial into a hearing by video call paves the way for landlords to move forward with an eviction.
â€œWith a Zoom hearing you never have the opportunity to access a lawyer, to speak to someone who can give you advice to explain how the process goes. So the odds of not having your full rights under the law or not having representation, go down even further,â€ said Neumann, who offers legal aid to tenants in Colorado. â€œEven before COVID it was an extreme problem â€” 98% of landlords in Colorado went to court with an attorney and 2% of tenants did. We expect to see that 2% go down to an even lower number, which obviously affects outcomes across the system.â€
Housing advocates say the pandemic has exacerbated an affordable housing crisis the country faced even before COVID-19. Yentel says 8 million households, or roughly 25 million people, were paying at least half of their income towards rent each month.
â€œWhen you have such limited income to begin with and you’re paying so much of it for your home, you’re always one financial emergency away from not being able to pay the rent and facing eviction, and in worst cases homelessness,â€ Yentel said.
Sen. Elizabeth Warren (D-Mass.) has introduced legislation to extend the 120-day rent moratorium in the CARES Act to March 2021. Though the initial provision, set to expire on July 25, only covers federally assisted housing, or roughly 30% of renters nationwide, Warrenâ€™s proposal extends the proposal to include most tenants.
But with Congress on recess until July 20, any action may be too late for tenants living in cities where the moratorium has already been lifted.
â€œWeâ€™re running out of time,â€ Yentel said. â€œThe stakes couldn’t be higher right now, and every day of inaction is putting more low income people at risk of losing their homes.â€
By Becca Savransky, SeattlePI, Wednesday, May 6, 2020
Seattle City Council this week passed a bill offering more protections to prevent tenants unable to pay their rent from being evicted after the city and statewide eviction moratoriums are lifted.
The bill — passed in a 9-0 vote by the council — gives tenants a defense to use in eviction proceedings relating to not being able to pay rent for six months after Seattle’s moratorium on residential evictions is lifted. The moratorium is currently in effect through June 4. The bill is aimed at helping to keep the thousands of people impacted by the spread of the novel coronavirus safely housed.
“This legislation before us today can help people stay housed and that is the bottom line,” Council President M. Lorena GonzÃ¡lez said during a council meeting.
The bill expands on the city’s just cause eviction ordinance, creating an addition tool a tenant can use in eviction court proceedings. The eviction defense applies to tenants who have been financially impacted by the pandemic and have therefore been unable to pay their rent.
“What we are doing is we are enhancing existing landlord and tenant laws to benefit tenants who are going to need additional time to get their feet grounded and to be able to continue to dig out of this economic crisis,” GonzÃ¡lez said.
Under the bill, landlords can still take actions associated with evictions, but tenants can use this as a defense in court. Tenants will also still accrue debt and will be expected to pay the rent that is owed.
“Providing a defense to eviction for certain causes is necessary as an additional step to protect public health to support stable housing, decrease the likelihood that individuals and families will fall into homelessness, and decrease exposure while the COVID-19 emergency exists,” the legislation said.
Councilmember Andrew Lewis said rent relief continues to be a priority for the city, but there are hundreds of thousands of people across the state who are unemployed and need help during this crisis.
“As one of the two renters on the council, I think it’s critical that we extend protection to renters in this time to make sure that we can keep people inside, especially in a time of uncertainty, in addition to public health threats,” he said during a council meeting.
“We are in a period of immense and extreme uncertainty regarding how people are going to immediately make their rent and it puts a lot of Washingtonians in a position where, while they could ordinarily be able to pay their rent on time, it might take some folks a little bit more time to do it.”
During the council meeting, council members acknowledged this is just one piece of the relief people need due to the coronavirus outbreak. Rent assistance, along with more affordable housing, is still desperately needed in the city and across the county.
The novel coronavirus outbreak has led to thousands of people across the region losing their jobs. Without a steady income, workers have struggled to pay for rent and other basic expenses. More than half a million people across Washington have applied for unemployment benefits since the pandemic started.
In March, Seattle Mayor Jenny Durkan issued an emergency order to temporarily stop evictions in Seattle for residents, nonprofits and some small businesses. Gov. Jay Inslee shortly after issued a statewide moratorium on evictions for people who weren’t able to pay rent. In April, he extended the moratorium through June 4. But under the eviction moratorium, people will still accrue debt and are expected to pay the rent owed after the moratorium is lifted.
Several nonprofits have rental assistance programs in place to help people pay their rent and avoid eviction, but with a growing need, those programs have been overwhelmed.
United Way of King County last month launched an expanded rental assistance program with a $5 million investment to help people behind on their April rent. Within days, the program had thousands more applications than it had the funds to serve.
Last week, Inslee announced he was extending the state’s stay-at-home order through May 31 and would continue with a phased approach to reopening the economy. The state’s plan means many people will likely be out of work for some time longer, as industries gradually reopen at limited capacities over the next several months.
Inslee has also warned if the state sees another jump in cases and hospitalization, restrictions could be put back into place. The most recent data from the Washington State Department of Health shows more than 15,000 confirmed cases of the virus
Americaâ€™s housing market is showing the first signs of trouble because of the coronavirus pandemic.
By Jacob Passy, Market Watch
March started out as a strong month for the U.S. housing market â€” but by the second half of the month, the first indications that the coronavirus pandemic would weigh on home-selling activity began to emerge, according to a new report from Realtor.com.
In the weeks ending March 21 and March 28, the number of newly-listed properties fell by 13.1% and 34% respectively when compared with the same period a year ago, Realtor.com found. This is an indication that home sellers may be holding off on listing their properties right now.
The pace of home-price growth also slowed notably in the latter half of the month, according to the report. Home list prices were only up 3.3% year-over-year for the week ending March 21, and 2.5% for the following week. This represented the slowest pace of listing price growth since Realtor.com started tracking this data in 2013.
â€œOur inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,â€ Realtor.com chief economist Danielle Hale wrote in the report.
â€œThe U.S. housing market had a good start to the year. Despite still-limited homes for sale, buyers were buying and builders were building,â€ she wrote. â€œThe pandemic and virus-fighting measures appear to be disrupting that initial momentum as both buyers and sellers adopt a more cautious posture.â€
Real-estate firms have taken steps to brace for the impact of the coronavirus pandemic. So-called iBuyers including Zillow US:ZG and Redfin US:RDFN that purchase homes from sellers and then sell them for a profit had wound down their home-buying operations in anticipation of an economic downturn. Real-estate brokers, incuding Redfin and Re/Max US:RMAX , had also shifted toward virtual home tours as open houses became verboten in the wake of social-distancing recommendations.
And other recent reports have shown additional signs of a slowdown in the housing market. LendingTree US:TREE released an analysis of Google US:GOOG search data analyzing the popularity of the search term â€œhomes for saleâ€ across the countryâ€™s 50 largest metro areas. Searches for â€œhomes for saleâ€ have fallen across all 50 cities in the study from their peak levels in 2020 thus far.
LendingTree estimated that these Google searches could drop some 63% compared with last year if the impact of the COVID-19 outbreak remains substantial for the next two months. A drop in web searches could presage a decline in home sales.
Another sign that home sales will slump this spring: Mortgage applications. The volume of mortgage applications for loans used to purchase homes was down 24% compared with a year ago for the week ending March 27, according to data from the Mortgage Bankers Association. Thatâ€™s in spite of mortgage rates being near historic lows. Comparatively, the volume of refinance applications was 168% higher than a year ago.
Before the coronavirus pandemic flared up, the U.S. housing market was on relatively solid footing. While the number of homes for sale remained low â€” constraining sales activity to an extent â€” demand among buyers was still quite high. Low mortgage rates had fueled an early start to the spring home-buying season, with homes selling four days faster in March when compared with 2019 levels, Realtor.com found.
The jump in jobless claims has stoked concerns of a repeat of the Great Recession and the foreclosure crisis that preceded it. But housing economists argue that this is unlikely to be the case.
â€œWhile housing led the recession in 2008-2009, this time it may be poised to bring us out of it,â€ Mark Fleming, chief economist for title insurance company First American Financial Corporation US:FAF , wrote in a report this week.
Unlike in the 2000s, the housing market in the U.S. is not overbuilt, Fleming argued, making it less likely that a large swath of vacant properties will crater the home values for homeowners. Rising home values and stricter lending standards have also meant that homeowners are sitting on historically high amounts of home equity.
â€œThe housing market will not go unscathed, as consumer confidence and a strong labor market are essential in the decision to purchase a home,â€ Fleming wrote. â€œYet, this time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.â€
I spoke in the Small And Solo Firm Practice Class at the University of Washington School of Law recently. The discussion was largely about my career path. I hope that more mentorship opportunities within the legal profession arise for younger attorneys.
The rent is just too darn high in these U.S. cities
By Adriana Belmonte,Yahoo Money
The cost of rent in the U.S., particularly in certain metro areas, is too darn high.
Nearly half of U.S. rental households are spending more than the recommended 30% of their income on rent, according to a report from Apartment List. (The national rate went from 49.5% in 2017 to 49.7% in 2018.)
And according to Apartment List, â€œin 19 of the nationâ€™s 25 largest metros, a household earning the median renter income would be cost-burdened by the median rent. Of the 100 largest metros, the median renter would be burdened in 64 metros.â€
Among the biggest metros in the U.S., Miami has the highest cost burden rate at 62.7% â€” this means that 62.7% of its renters are spending more than the recommended 30% on rent. Not far behind is New Orleans at 60.1% The two largest metros in the U.S. by population, New York and Los Angeles, are at 52.2% and 56.9% respectively. Given their size, NYC and LA house the highest number of cost-burdened individuals.
â€œCertainly, the worst offenders â€” places like Los Angeles, Boston, San Diego, Miami â€” these are places where itâ€™s not always easy to build as many houses as youâ€™d like, but also their economies have been very strong, so the increases in rental [costs] become an unfortunate byproduct of that,â€ Igor Popov, chief economist at Apartment List, told Yahoo Finance.
By state, Florida has the highest cost burden rate at 56.5%. Other high cost-burdened states include New York, New Jersey, California, Colorado, Louisiana, and Connecticut â€” notably places along the coasts.
â€œWeâ€™re seeing that especially coastal cities â€” where adding new housing is difficult but economies are booming â€” those are the places where affordability issues are stacking up the most,â€ Popov said. â€œWith that said, it is a national problem so even cities that arenâ€™t necessarily in the housing affordability debate every day still have a lot of renters who are struggling.â€
Because of high rents in many of these cities, residents often turn to surrounding areas to reside for more financially feasible places to live. This is the case of Riverside, Calif., a city near Los Angeles, where the median rent accounts for approximately 36% of a personâ€™s income.
â€œRiverside is actually seeing a lot of people who are migrating from the LA metro in search of more affordable options, but that demand is, in turn, driving up the price there as well,â€ Popov said.
â€˜I guess we went in the wrong directionâ€™
Supply and demand wasnâ€™t the only factor that affected the increase in rent-burdened households last year. Rental increases also outpaced wage growth in 2018, the first time since 2011.
â€œThereâ€™s a lot of factors for why that might be but on a very macro level, I think this economic expansion has been one that hasnâ€™t [benefited] low-income households very well,â€ Popov said. â€œThat shift was a bit surprising especially given that â€¦ weâ€™ve seen a lot of high-income renters flooding in the rental market. In some ways, theyâ€™ve been padding the stats, so to speak, because theyâ€™ve come in and theyâ€™ve typically been able to afford their rentals, so theyâ€™ve made it look like things are getting better but this year, I guess we went in the wrong direction.â€
From 2017 to 2018, there were nearly 300,000 more cost-burdened rental households throughout the U.S., which Popov described as â€œa big change in the number of people that have gone from being able to afford their housing to technically living in a place that theyâ€™re unable to afford.â€
â€œYou risk them moving away and that could both affect the economy and the economic diversity of a city when the renters move away, and you risk not being able to attract talent to grow the economy, and you risk not having basically that next generation being able to come and move to the city to keep it vibrant,â€ Popov said. â€œI think of this on a city-by-city basis and on that level, there are a lot of markets where maybe the flag isnâ€™t being raised for the first time â€” maybe itâ€™s been raised for a while.â€
July 30, 2019 at 6:00 am
By Gene Balk
Seattle Times Columnist
Seattle rents are on the rise again, after a brief respite. And that shouldnâ€™t come as much of a surprise, because thatâ€™s what rents do around here â€” they go up, and they go up fast.
At the start of the decade, Seattle ranked just outside the Top 10 among big U.S. cities for the cost of rent and utilities. Now, weâ€™re fourth. In fact, Seattle has become the nationâ€™s most expensive big city for renters outside of California.
According to survey data from the U.S. Census Bureau, the median rent and utilities paid in the city of Seattle hit $1,555 in 2017, across all sizes and types of rental units. Among the 50 most populous U.S. cities, the only three where renters pay more are San Jose, San Francisco and San Diego.
The median rent is the midway point â€” half of all renters pay more, and half pay less.
The last time I wrote about this date, which was in 2014,, it was to report that Seattle had broken onto the list of Top 10 most expensive big cities for renters for the first time. That seemed like a big deal at the time, but it turns out, that was only the beginning of our ascent up the rankings.
Since then, weâ€™ve knocked off a bunch of high-price cities, climbing past Los Angeles, Washington, D.C., and even New York. Then, last year, we leapfrogged Boston to hit fourth place behind those three absurdly expensive Golden State locales. Can you imagine how high rents would be here if it didnâ€™t drizzle for nine straight months a year?
And Seattle actually ranks ahead of San Diego as the third most-expensive city for renters if you only look at the costs for one-bedroom units, with a median of $1,455.
There are a lot of ways to measure rental costs, and the census data is very different from those reports that just look at market-rate apartments. The census data is based on surveys, and it presents a current snapshot of renters across the spectrum â€” from tenants in luxury units to those in older-stock housing, who are paying significantly less than market rate. It includes people in affordable and subsidized housing, and even people who get a break in their rent in exchange for doing work around the building.
In some cities, it also includes people living in rent-controlled and rent-stabilized apartments â€” not in Seattle, of course, since we donâ€™t have any of those. But New York, for example, has more than 1 million such units, and San Francisco also has a substantial number. Thatâ€™s part of the reason the census data for those two cityâ€™s median rents is lower than you might think.
Bringing rent control to Seattle is one of the signature issues for City Councilmember Kshama Sawant.
The census data represents whatâ€™s called â€œgross rent.â€ That means that the cost of utilities, if they are not covered by the landlord, are included in the dollar amount. This allows for a better comparison of the rental costs between units where the tenants have to pay the utilities separately and those where the utilities are folded into the rent.
In Seattle, at the start of the decade, the median rent and utilities was just $990. The increase of $565 by 2017 ranks second among the 50 largest cities, only behind San Jose, where the costs went up by $738.
Seattle also ranks second if you look at the increase in rents as a percent change â€” our 57% jump in rental costs since 2010 ranks just behind Denverâ€™s 59%.
Rent and utilities have gone up in every big city, which isnâ€™t surprising. But there are places itâ€™s been much gentler for renters than in Seattle. In both Detroit and New Orleans, the increases have been less than 10% since the start of the decade. Virginia Beach, Memphis and Milwaukee are only a bit above 10%.
Many Seattle tenants have certainly been slapped with severe rent hikes, which has contributed to the cityâ€™s fast-rising median. But thereâ€™s another factor thatâ€™s probably more significant: Weâ€™ve had an unprecedented apartment construction boom thatâ€™s added thousands of high-priced new luxury units to our housing stock. Seattle has a higher precentage of new-construction apartments than any other big U.S. city.
Of course, rents wouldnâ€™t be going up so fast in Seattle if incomes werenâ€™t leading the way. The new class of renters in Seattle are higher income, and they can afford to pay more.
The Census Bureau also produces data that compares median rents and utilities with income, and it illustrates how the two have kept pace with each other. In 2017, the median rent in Seattle ate up 29% of household income. Thatâ€™s basically unchanged from where it was in 2010.
And while rents are a lot lower in Miami or Detroit, for example, so are incomes. The median rent in those cities is nearly 40% of household income.
But thatâ€™s small consolation if youâ€™re among the folks who donâ€™t work in tech or some other high-paying industry, and youâ€™re trying to make ends meet in Seattle. Census data shows that in nearly one out of five rental units in the city, at least half of the household income goes just to paying the rent and utilities.
Speaking At YGB Conference U.W. Law School
I was a panelist at the YGB Conference at U.W. Law School on Saturday, February 23rd. I was afforded the opportunity to speak with a group of high school students regarding my educational journey and career path and to have lunch with them. Their curiosity and intelligence made me very hopeful about the future.
Once again I was afforded the opportunity to speak in the Small and Solo Practice Class at the University of Washington School of Law, my alma mater.Â Interactivity and questions are on the upswing and this is welcome, because it means that students are increasingly engaged. The dynamic nature of the legal profession and the need for adaptability are frequent topics of discussion.
U.S. mortgage applications fell last week as home borrowing costs rose to their highest levels in more than seven years. The Market Composite index, which measures the volume of mortgage loan applications, fell 1.7% on a seasonally adjusted basis for the week ending October 5, according to a release from the Mortgage Bankers Association. Lower demand for mortgage refinances hampered mortgage lending, with refinance volume down 3% last week.
By Amanda Fung
A number of key reports on housing data released in recent days are on a downward trend. Both existing and new home sales in the U.S. were down in June, and their previous monthâ€™s results were revised lowered. The lackluster sales data caused homebuilder confidence to plummet to its lowest level in 10 months Wednesday.
â€œThe housing market has been losing momentum for several months,â€ said Stifel Chief Economist Lindsey Piegza, referring to a slump in housing starts, building permits, and sales during the second quarter. â€œHousing is a solid gauge of the overall health of the economy; weakness in housing raises a large red flag regarding the sustainability of domestic growth heading into the second half of the year.â€
The U.S. Commerce Department said the sale of new U.S. single-family homes in June fell 5.3% to a seasonally adjusted rate of 631,000 â€” an eight-month low â€” and the previous monthâ€™s results were revised lower. While new home sales only account for 10% of the market, the latest existing home sales results werenâ€™t any better.
Existing home sales fell for the third straight month in June. Existing home sales slipped 0.6% to a seasonally adjusted annual rate of 5.38 million units last month, down 2.2% from June 2017, according to the National Association of Realtors (NAR). Mayâ€™s sales pace was revised down to 5.41 million units from 5.43 million units.
â€œExisting home sales help drive other sectors of the economy including consumer confidence and spending, as well as construction and lending activity,â€ Piegza said.
â€œChronically low inventory is choking sales,â€ said Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal firm, adding that higher-cost housing markets such as New York City and San Francisco are seeing a slowdown in sales more so because of homebuyersâ€™ uncertainty over the Trump administrationâ€™s federal tax reform.
Inventory levels have fallen for three consecutive years and for eight of the past 10 years, according to Lawrence Yun, NARâ€™s chief economist. At the current sales pace, it would take 4.3 months to exhaust the total inventory of homes for sale; six months is considered a balanced market.
â€œThrow in rising mortgage ratesâ€¦ that isnâ€™t helpful in terms of sales activity,â€ Miller said. While the rate increases are currently nominal for Americans living paycheck to paycheck, itâ€™s enough to sway a personâ€™s decision to make that home purchase. On Thursday, the average rate on a 30-year, fixed-rate mortgage rose to 4.54% from 4.52%, a week earlier, according to mortgage buyer Freddie Mac, adding that long-term loan rates have been running at their highest levels in seven years.
â€œAffordability pressures are increasingly a concern in many markets, as the combination of continuous price gains and higher mortgage rates appear to be giving more prospective buyers a pause,â€ saidÂ Freddie Mac Chief Economist Sam Khater in a press statement.
The slow sales activity is particularly perplexing because spring tends to be the busiest time of year since itâ€™s known as buying season. Moreover, the economy has been humming along: The U.S. economy grew by an annualized rate of 4.1% in the second quarter â€” the fastest growth since the third quarter of 2014.Â
The housing affordability crisis
The problem is wage growth. When you adjust for inflation, wages havenâ€™t risen in a decade, experts note. As the lack of inventory drives home prices up, affordability becomes an issue. Wages arenâ€™t keeping pace and consumers are priced out of markets by 6%-8% â€” depending on which home price index you look at, in terms of home values and wages, according to Piegza.
Median home prices in the U.S. have increased annually for 76 straight months (a little over 6.3 years), according to the NAR. In June, the median price of an existing homeÂ was $276,900, up 5.2% from the same time last year.
But experts expect prices to follow other housing data. â€œHome prices are the kaboose of the train,â€ Miller said. â€œYouâ€™llâ€™ see prices soften this year.â€
We may already be seeing signs of prices leveling off. Standard & Poorâ€™s said that its S&P CoreLogic Case-Shiller national home price index posted a 6.4% annual gain in April, down from 6.5% from a month earlier. May results will be released July 31. Meanwhile, the FHFA House Price Index rose 0.2% in May, one-tenth of a percentage point less than expected, according to Bloomberg.
â€œWhile weâ€™re not seeing the rug pulled out of the housing market, there are clear signs and a reason for caution,â€Â Piegza said.