Boston Landlords Leery Of State Coronavirus Eviction, Mortgage Moratorium

To protect individuals and small businesses affected by the coronavirus pandemic, Massachusetts is poised to enact a moratorium on most eviction and foreclosure proceedings, which property owners say will give tenants a free ride at their expense.

The bill, H.4647, was passed by the Massachusetts House of Representatives and state Senate in the last two days.

Both houses also agreed to legislative language drafted by a conference committee. Before it reaches the desk of Gov. Charlie Baker, however, it needs to pass a vote of final enactment from both houses.

The Republican has indicated that he supports a halt to evictions and foreclosures, although he hasn't commented on this specific proposal. A spokesperson for Baker couldn't immediately be reached for comment.

Small property owners could be hit especially hard by the moratorium, which would last 120 days after the legislation's effective date, or 45 days after the declared pandemic emergency ends, whichever is sooner. Baker also has the power to extend the moratorium. 

"The bottom line is, if you are an owner on the commercial or residential side, you likely won't be getting rent until sometime in the third quarter or fourth quarter of 2020," said Gregory Vasil, the CEO of the Greater Boston Real Estate Board. "If you end up in legal proceedings against a tenant, you very likely aren't going to be getting rent until sometime in 2021. It further damages the economy." 

Landlords fear tenants will take advantage of the moratorium's protections and quit paying rent even if the pandemic hasn't hurt them.

"This whole approach, in my opinion, is completely wrong," said Ray Smalley, who owns three apartment properties in Holyoke, in an interview. "If the tenants can't pay the rent, the landlords can't pay the mortgage. The bank can't pay its investors. Do we want the whole financial system to collapse?"

Though Smalley said he can weather the moratorium's financial impact, other landlords aren't so optimistic. Nearly 20% of respondents to a recent MassLandlords member survey said they can't pay their bills. Another 15% said they expect to exit the housing business.  

Small landlords in other markets such as New York City have expressed similar concerns about eviction moratoriums. About 22.7 million of the country's 45.8 million total rental units are owned by so-called mom-and-pop operators, according to data from the 2015 Rental Housing Finance Survey, the latest version of the survey from the Census Bureau. 

Data from the National Multifamily Housing Council shows that 84% of U.S. apartment households made full or partial payment by April 12. During that same time, a year earlier, 90% of renters had made payments. May rental collections are expected to be worse.

Preliminary results of the MassLandlords survey found that 85% of respondents expect some May rent to go unpaid. Nearly 90% of members collected all of their March payments.

"These people have drained down their savings to pay April rent," MassLandlords Executive Director Douglas Quattrochi said. "May might be half of rents going unpaid." 

The Massachusetts Law Reform Institute estimates that more than 500 eviction cases have been filed since the pandemic began, WBUR reports. Without a halt in the process, more cases would need to be prosecuted after the state of emergency expires, according to the nonprofit.

Landlords counter that there will be a rash of evictions anyway once the pandemic ends because people will still have to pay deferred rent, which was due during the moratorium. But they are mindful that many tenants have lost their jobs because of the pandemic and are eager to help them out, Vasil said. 

"In times of crisis, some of the worst legislation gets made," he said. "We definitely shouldn't be putting people on the street, absolutely not. The landlords should be working with their tenants to come up with something that works so that people don't have to choose between paying rent and buying food."

CORRECTION, APRIL 16, 5:55 P.M. ET: The story has been corrected to show that the eviction moratorium bill hasn't yet reached the desk of Gov. Charlie Baker.