A state-run program designed to provide emergency rental assistance to residents negatively impacted by economic fallout from COVID-19 was so inundated with applicants it had to shut down after just two days, suggesting the massive crisis that housing advocates have been predicting could be coming soon—and with good reason.
A statewide ban on evictions expired June 15 and federal unemployment benefits are set to expire at the end of this month.
But property managers aren’t handing out mass eviction notices, at least not yet, according to Laura White, executive vice president for multifamily at NAI/Latter & Blum, who manages some 8,700 multifamily units across the Gulf Coast.
White says most property owners are trying to work with tenants, the vast majority of whom have continued paying rent throughout the pandemic.
She’s not sure what will happen once enhanced unemployment benefits run out, however, and predicts the problem will be considerably worse in New Orleans, where thousands of laid-off hotel and restaurant employees won’t be going back to work any time soon.
“Our properties in New Orleans are definitely worse than those in Baton Rouge and Lafayette,” she says. “So many hotels and restaurants in New Orleans’ CBD have been devastated. But it’s hard to say for sure what’s going to happen because the federal government might come through with a big pot of money.”
White predicts there will be some evictions once backlogged courts are able to get around to hearing them because some tenants have refused to pay rent, even though they are taking advantage of government relief programs.
She estimates that number is less than 10% of the total number she works with but says it’s problematic for property owners, who have continued paying their mortgages even though they aren’t collecting all their rent.
“Unfortunately, we’ll be forced to evict some tenants,” she says. “But we cannot predict how many yet because we don’t know how many are sitting on back rent and how many genuinely cannot afford to pay.”
Others who follow the multifamily sector in Baton Rouge say despite gloomy predictions, multifamily is one of the least impacted sectors of all real estate at the moment, likely because of the enhanced unemployment benefits.
“We just haven’t heard the horrible stories from multifamily yet,” says appraiser Wesley Moore of Cook, Moore, Davenport and Associates. “Shopping centers are bad, restaurants and hotels are terrible. But what we’re hearing from multifamily has not been bad yet.”
Not only is the situation not dire for some landlords, it’s surprisingly good at the moment. Dave Treppendahl, who renovated the Ardendale Oaks multifamily complex in 2017, says he’s doing better now than at any point in the three years since he’s owned the property.
Treppendahl, whose complex is 95% occupied, says all his tenants are current on their rent and the handful who were delinquent at the beginning of the pandemic have since paid their back rent and are current.
Treppendahl suspects his complex is something of an anomaly, but he is also optimistic Congress will provide some sort of boost of housing assistance in a fourth relief package, currently being discussed in Washington.
“We are not coming out of this any time soon,” he says. “But I am convinced the feds do not want landlords evicting people and sending them out into the streets.”