Metro Detroit landlords struggle with extension of eviction moratorium
For those unable to pay rent, the evictions will again be suspended – this time until October 3rd.
Barbaza said she doesn’t think anyone has been evicted in the meantime. Ted Phillips, the executive director of the United Community Housing Coalition, said up to 600 Detroit households would have been at immediate risk if the outage had been permanent. Eviction suits were filed in a further 9,000 households, but they were still pending.
“There is potential for a lot more cases,” he said.
Phillips said those who are evicted lose everything when their belongings are unceremoniously tossed in a dumpster – children’s files, medicines, family Bibles. The continued moratorium will give more people the chance to get stable housing and keep people away from accommodation and other precarious living situations.
“It was a real fight,” he said. “People will run where they can.”
More than 18,000 applicants have been approved for more than $ 117 million in rental relief, but there are thousands of pending applications and more than $ 400 million to be distributed, said Anna Vicari, a Michigan State spokeswoman Housing Development Authority.
It’s important to keep people inside their homes to contain the spread of the coronavirus, said Margaret Dewar, professor emeritus of urban planning at the Taubman College of Architecture and Urban Planning at the University of Michigan. Otherwise, people will move to shelters or double up with friends or family, and community diffusion will increase.
“It’s not good at all,” she said. “What we need is time to get the money out.”
Groups like Phillips have knocked on doors and made calls to let tenants know that money is available. Still, the moratorium combined with the slow pace of distribution has been frustrating for landlords and others who cannot move to fill their properties with people who can pay.
Derrell Grant, the owner of D. Grant Holdings and JPA Holdings, said he still had repairs to be done on his properties, even though he did not receive any income from some of them. Grant owns 68 single-family homes, most of them in northwest Detroit, and said tax and insurance costs continued to arise even though up to 25 residents were unable to keep up with rent. Since then, he has had tenancy easements.
Justin Lindenmuth, the broker / owner of Lindenmuth Realty, said the moratorium hit him “really hard”. Lindenmuth, who is based in Texas, owns about 100 homes in the Detroit area. He said collections had dropped to about 10 percent of what he expected in the first few months of the pandemic. His lender changed his loan, postponed some routine maintenance and feared he would have to use up his cash and start selling real estate if he does not get government support. Lindenmuth said he had about half a million dollars in additional rent.
“It feels like the landlords are taking the brunt of it, and it doesn’t really seem fair,” he said. “This will be the death knell for many landlords.”
Also the main burden? Real estate managers like Berkeley Champlin, whose Doyenne manages Detroit rentals for investors – many of them foreign owners.
Champlin said that if the tenants fail to pay rent, some of these owners will blame them directly. It’s hard to explain that if a tenant doesn’t pay and don’t apply for relief, she has no recourse, she said.
For some owners, it has thousands of dollars in maintenance and repair costs. Champlin said she could only hope that the CERA money would be available and it would be reimbursed.
As a director of the management companies Suite Properties and Reserve Management Co., Eric Wizenberg said he did not pay his management fee unless the rent came. This was not the case for 60 percent of the approximately 700 units he managed in Detroit. The delinquency is about seven digits, Wizenberg said, and he has relied on paycheck protection program loans to keep his staff on board.
Kevin Callahan, a real estate attorney at Callahan Law PC, said many of his clients are frustrated and defeated while they wait for funds to be released.
“We’re getting to a point where people are going under,” he said. “Mom and Pops suffer the most.”
Organizations like the Wayne Metropolitan Community Action Agency are working to get funding. Maintaining the eviction moratorium will allow more time to distribute money and make landlords whole, said Louis Piszker, CEO. When mass evictions begin, both tenants and landlords suffer.
“The resources are here,” he said. “We always work with a sense of urgency.”
Wayne Metro has distributed more than $ 31 million, an average of $ 8,043 per household. Landlords have largely cooperated with the program, Piszker said, knowing that this is the most likely way for them to be paid back.
Both sides, Callahan said, want the same thing.
“My customers want people to have stable homes,” he said. “We want to keep people in their homes; we want to make people pay.”