This is how government elongates and worsens economic downturns. Instead of letting this naturally correct by allowing landlords to continue to evict deadbeats and replace them with paying tenants, government tries to freeze everyone in place. We are back to full employment in Wisconsin. People need to pay their rent to move to a place they can afford. By trying to protect tenants, the government is going to put landlords out of business, force a wave of foreclosures, force a consolidation of property ownership, and depress property prices. Any potential bailout money for either landlords or tenants is just money taken from someone else and spreads the pain to people who aren’t directly involved.
There is no free lunch. We have to let our economy react or it will not recover.
That money, however, has yet to be disbursed. While people wait, tenants are falling further behind in rent payments, and some property managers haven’t seen a rent check in nearly a year.
“Our owners aren’t getting paid and that means we’re not getting paid,” said Joe Hoffman, who owns Porchlight Property Management. “In some cases, tenants are as much as six months behind.”
Hoffman oversees 650 different units and about 100 landlords in Milwaukee, Washington, Waukesha, and Ozaukee counties. He runs the business with his wife and four daughters. He’s also a small-scale landlord and adds most of the property owners he manages are just like him.
“These are small, mom-and-pop businesses,” he said. “We have retired farmers, school teachers, city workers, people who are retired and this is their retirement plan.”
Hoffman says his delinquency rate when it comes to rent payments has jumped to 15%, compared to just 3% before the pandemic. His revenue dropped as much as 30% in some instances last year, from quarter to quarter.
The CDC eviction moratorium has been extended twice since its inception this past September. There is also discussion of extending it into the fall of 2021. Pettit and Hoffman worry if this happens, and rental assistance lags, the problem will be too great to solve.
Eviction filings in Milwaukee County dropped significantly in 2020. Data from Wisconsin Circuit Court records shows last year, the county had 7,918 pending cases. In 2019, that number held at 12,164. In 2018, it was 12,244.
Pettit said this in part due to judges looking at every eviction case more closely due to the pandemic. This includes filings for behavioral issues and other problems not covered under the moratorium.
“Nobody wants to evict anyone right now,” he said. “So, they’re scrutinizing even those evictions more carefully to make sure it’s not being used as a pretext for failure to pay rent.”