Facing ongoing rent collection challenges, apartment building owners should expect significant changes in 2023 when it comes to eviction processing and housing stability. In fact, multifamily operators risk seeing many pandemic-era tenant protection policies become the rule on federal, state and local levels.
Efforts to enact lasting reforms have accelerated as vital emergency rental assistance funding tapers off. Roughly 180 jurisdictions in 36 states have developed enhanced eviction diversion programs. Three states and 75 cities have adopted right to counsel laws for residents facing eviction or have expanded access to legal services. Meanwhile, the mid-term elections produced new rent control measures in dozens of cities nationwide.
Massachusetts is one of 23 states considering rent stabilization moves, including home rule legislation for the city of Boston, as the commonwealth grapples with widening income gaps, nation-leading median rents and, most importantly, inadequate affordable and middle-income housing inventory.
With so much in play, WinnCompanies’ experience with eviction diversion reforms may be a helpful blueprint for multifamily owners in balancing the need to keep vulnerable residents housed with the necessity to generate revenue to maintain overall financial viability despite skyrocketing operational, maintenance and capital expenses.
Millions in Losses Avoided
Since March 2020, our Housing Stability Program has helped more than 8,000 Massachusetts households avoid eviction for non-payment of rent. In addition, we have helped more than 6,700 Massachusetts renters access more than $16 million in emergency rental assistance. Across our national portfolio, the program has mitigated tens of millions in losses when accounting for reductions in bad debt, legal fees, collections, vacancies and unit turns.
Following our participation in Boston’s Eviction Task Force in December 2019, we embarked on a mission to design and implement a new operational and cultural approach to housing stability with the goal of reducing evictions in our owned and managed portfolio by 50 percent in 2025.
We wanted to make eviction the last resort, not our first reaction, while preserving the rental income stream fundamental to both functional communities and our organization. We reoriented our approach to focus on upstream interventions to avoid financial hardship evictions for struggling tenants – no small task for a company that operates in more than 600 communities, across all income categories, in 15 states and the District of Columbia.
Under our program, property managers must exhaust every effort to work with delinquent households before a notice to quit triggers the eviction process. We help participating households coordinate support for benefit and unemployment applications; recertify incomes to account for changing finances; create achievable rent payment plans; mediate disputes; focus our attorneys on preserving tenancies; and leverage state and local rental assistance.
Big Lessons for All Landlords
The program does not waive household lease responsibilities, including the obligation to pay rent, nor does it ignore lease violations from criminal behavior, violence or other activities that endanger the health and safety of the community and physical plant. It simply provides a viable path forward for residents who demonstrate a good faith effort to meet their obligations.
To date, WinnCompanies has not evicted a single household that has fully participated in our program. Incredibly and unfortunately, hundreds have chosen not to work with us to resolve their debts despite repeated efforts. For them, evictions cases have gone forward, although they can still choose to work with us while their case is pending.
For an owner/operator of our size, designing and implementing this program required significant effort. That’s why we believe the lessons we learned may be even more valuable to those with far smaller portfolios.
First, stay updated on the rental assistance programs available to you. Many multifamily property owners don’t know the owner pathways through which they can apply directly for aid. Understanding and navigating these programs is well worth the effort.
Second, create a housing stability plan for your portfolio that borrows from our toolbox and others. Boston now requires multifamily developers to maintain one. The state legislature and individual cities and towns are considering similar mandates. Work with your teams to develop a strategy based on your situation.
Third, make your voice heard. True housing stability only works effectively when owners and operators are involved in shaping housing policy. Advocate for your interests with lawmakers, regulators and tenant groups on issues of eviction, rent control, the right to counsel and rental assistance. Only if we all engage can an effective and balanced approach be realized.
Developers, Governments Can Collaborate
Massachusetts apartment owners are fortunate that our state has one of the nation’s best-funded, best-designed emergency rental assistance efforts. That was made possible because, at the pandemic’s onset, the commonwealth brought all the parties together to understand the big picture and brainstorm equitable strategies. Challenges remain, but efforts to improve the process continue to this day.
Our hope is that the same commitment to constructive collaboration occurs this year among governments, multifamily owners and tenant advocates as we confront the double-barreled challenge of continuing rental delinquencies and record-high labor and maintenance costs.
Partnership across the rental ecosystem will help avoid draconian approaches that stifle new development and tax revenues. Instead, let’s embrace comprehensive, collaborative policies that not only reduce evictions and homelessness but also preserve much of the rental income owners need to maintain the quality housing that communities deserve.
Gilbert Winn is the CEO of developer and property manager WinnCompanies. Trevor Samios is senior vice president of the company’s Connected Communities division.