A federal eviction moratorium still applies to Massachusetts residential real estate, but now that the different state moratorium is over, what do we know about the impact of such a policy? At first glance, it looks to have been unnecessary or even harmful.
When the realization of COVID first hit Massachusetts, the courts reacted promptly and correctly with Standing Order 2-20, issued March 13. “Any default judgment entered between March 1, 2020, and April 21, 2020, shall be vacated, upon motion.” This was the beginning of a procedural eviction moratorium, the first of a set of six COVID updates to standing orders.
Not to be outdone, the legislature (at the urging of anti-ownership zealots) were debating HD.4935, which would have put some of us in jail for six months if we issued a notice to quit. This was the spirit in which a legislative eviction moratorium was enacted over and above the court’s procedural moratorium. (The jail time provision was dropped, blessedly. Some would have gone to jail unaware that “the law passed last night made this morning’s notice criminal.”)
The unfunded state eviction moratorium ran from April 20 to Oct. 17, inclusive. During that time, almost all access to the courts ceased. Exceptions were granted for serious ongoing threats to health and safety – for instance, one brought to my attention involved a renter who shot a neighbor through a window.
What Happened to Renters
It was immediately apparent that the eviction moratorium had overreached from the point of view of renter legal services. Although the renter advocacy community themselves had pushed hard for a moratorium, lacking all access to court meant suddenly that legal services cases ran cold, new applications for rental subsidies ceased, and mediation was shut off. Those of us who most needed help could no longer be found. This, combined with our pointing out that we entered the pandemic with a housing crisis to begin with, led to strident warnings of a “tsunami of evictions” the day the moratorium lapsed.
At time of this writing, the dreaded tsunami was still over the horizon, if coming at all. Whereas a normal pre-COVID week would have seen 700 filings, the first three weeks after the moratorium saw a combined 173 filings. The rate of new filings has doubled each week, but this variability is entirely within the range of normal variability.
Filings will surely increase over the next four weeks. Massachusetts law requires 14 days’ non-public notice before an eviction may be filed. This means notices served to renters on Oct. 19 will not be visible until their entry date, Nov. 9 at the earliest. Also, the CARES Act contained a provision that did not expire along with the rest of it: Across the country, all covered properties now must issue a 30-day notice for nonpayment. Their entry date will be Nov. 23.
Is it possible that November’s back half will see tens of thousands of filings? Certainly. Is it likely? No, for several reasons.
What Happened to Landlords
The CDC eviction moratorium has tough penalties for landlords, surprisingly so considering they have come from an administration run by a landlord of sorts. If a landlord “causes” (whatever that means) any covered renter to leave, and that renter then subsequently contracts COVID and dies (however long after the fact, however related to the departure), the landlord will lose their property and go to jail. Specifically, the sentence can be up to $500,000 and 1 year. This is a strong deterrent to taking any action. No one should be serving a notice before Dec. 31 without talking to an attorney.
The state has set aside $171 million (small compared to the amount earmarked for economic recovery, $774 million) for rental subsidies, which now are flowing to renters who can get past the application process. Only to the extent it prompted the state to come up with this funding can the moratorium be declared to have been necessary. After all, the courts shut themselves down.
One final observation we can make is the impact on small property owners, the so-called “mom and pop” part-time landlords. We were forced to pay our taxes, insurance, utilities, mortgages, and repair costs for eight months without full income and in many cases without any income. An internal MassLandlords survey indicates approximately 5 percent of renters abused the moratorium by unlawfully withholding payment or otherwise violating the rental agreement. Our members have sold out of the business in August at twice the rate seen in February, even accounting for seasonal variations like a summer market.
The state eviction moratorium has accomplished three things. First, small-A affordable housing providers have sold out of the business at twice normal rates. Second, we kicked the can down the road for renters impacted by COVID, who are now awaiting either the arrival of subsidy or a summons. Third, we allocated a pot of money to rental subsidies, which we ought to have done anyway.
Would that Question 2 had passed, and officials could have been made to think a little harder about our shared, legitimate problems.
Doug Quattrochi is executive director of MassLandlords Inc.