In one of his first acts as President, Joe Biden extended, through March, the Centers for Disease Control moratorium that offers modest protection against eviction for about half of America’s renters. While this is better than nothing, it really only kicks the impending eviction crisis down the road.
The real solutions will require dealing with the growing concentrated ownership of rental housing by corporate landlords and the amassed overdue rents accumulated by more than 10 million Americans and their families. These debts averaged more than $5,000 per renter as of December and continue to grow each month.
Against this backdrop, a new report, which I co-authored, found that your tax dollars are being used to subsidize corporate landlords even as they continue to file evictions in the face of the growing pandemic.
The report, published by Jobs With Justice and Private Equity Stakeholder Project, found that 197 corporate landlords received more than $320 million in federal Covid aid, even as they filed more than 5,300 evictions against tenants who could not pay their rent, many of whom lost their jobs or who could not work because of Covid-19 illnesses. If these funds had been instead devoted to help renters rather than landlords, nearly 25,000 families could have had their rents paid from April through December.
This Covid aid is the latest in a string of federal, state, and local handouts to corporate landlords. The Obama administration supported government policies providing federally backed financing for private equity firms, scooping up tens of thousands of distressed properties following the 2008 housing crisis. These policies are at the center of the dramatic rise of corporate control of rental housing.
Corporate entities owned about 20 percent of the nation’s rental housing stock before the 2008 recession. Today private equity funds, real estate investment trusts (REITS), and other corporate landlords control nearly half of U.S. rental housing.
Our nation’s tax rules also significantly privilege real estate investors over other industries. This is one of the reasons former President Trump was able to pay little or no taxes in many years. While there are many tax rules that harm tenants and incentivize gentrification one particularly nefarious one allows real estate investors to defer capital gains taxes on properties whose value has increased if they exchange these properties with other corporate concerns.
This has resulted in an active asset swapping market between corporate landlords, subjecting tenants to ever-changing managements, policies, and on-the-ground customer contact staff. Tenants cease to be people with individual stories and needs and instead become profit lines on a spreadsheet.
We saw this clearly with one firm in our study, Canadian-based Ventron Management. Ventron led the firms we studied with 1,017 eviction filings while collecting $3.5 million in forgivable Paycheck Protection Loans. Closer study revealed that Ventron’s policy was to automatically file evictions against any tenant more than 10 days late in paying their monthly rent.
This eviction happy behavior is not unusual among corporate landlords. A study from the Federal Reserve Bank of Atlanta found that corporate landlords are more likely to file evictions than small Mom-n-Pop landlords.
President Biden faces many urgent challenges. The looming eviction crisis, which the Aspen Institute estimates could affect 30-40 million U.S. renters, is high on that list. Extending eviction moratoriums is a reasonable first step, but more needs to be done.
Biden should support efforts in Congress to cancel rents that have accumulated as a result of Covid illnesses or job loss. Any funds that Congress provides to landlords to cancel rent should prioritize small landlords and require landlords to comply with fair rental policies.
We also need long-term solutions that ensure everyone has a safe and affordable home.
This will require addressing the dangerous concentration of rental housing stock in corporate hands, a trend that is deepening inequality and putting renters at greater risk.
Scott Klinger, co-author of Taxpayer Subsidized Evictions, is a Senior Equitable Development Specialist with Jobs With Justice Education Fund.