With some eviction moratoriums lifted and eviction filings predicted to flood courthouses, will this affect a tenant’s ability to find housing later?
- 25.8% of landlords surveyed by the American Apartment Owners Association (AAOA) responded “YES” when asked “With an increase in evictions due to COVID-19 there is a higher probability you will have applicants with evictions on their records. Will you be relaxing your tenant screening criteria to fill your vacancy faster?”
- Another AAOA survey showed nearly 80% of landlords are willing to defer rent for tenants who need it in hopes of avoiding eviction altogether.
Our surveys demonstrate eviction filings may be less common than predicted if tenants work with landlords, and even if an eviction is unavoidable, some landlords say they will be more lenient when approving tenants for housing. This offers hope to tenants who may have been unable to pay deferred rent due to unforeseen circumstances.
However, even if a landlord is willing to overlook an eviction record in light of the pandemic, many renters will not be accepted into a rental if they cannot afford the security deposit. According to the Federal Reserve’s 2019 Report on the Economic Well-Being of U.S. Households, 37% of Americans have less than $400 in emergency cash. The financial set back of an eviction could make it nearly impossible to afford one or two month’s security deposit.
As a result security deposit alternatives are trending nationwide as more states (California, New York, Virginia, Alabama, Connecticut, New Hampshire, and Pennsylvania) are close to passing bills that require landlords to consider a low-cost security deposit alternative instead of a traditional security deposit. Legislators believe a security deposit alternative will help eliminate barriers to affordable housing and help more applicants affected by the pandemic to qualify for rental housing.
AAOA notes landlords are already taking matters into their own hands as seen by a 15% increase in the use of LeaseGuarantee, a security deposit alternative that reimburses landlords for lost rent, since the start of the pandemic. The cost of LeaseGuarantee starts at only $199 per year, which is much lower than traditional security deposits.
LeaseGuarantee has another benefit – rental owners are more inclined to accept tenants even if they have a low credit score or eviction record if the tenant’s rent is backed by a security deposit alternative. Watch this video explaining how AAOA member and property manager, Stacy Kennedy, has been using LeaseGuarantee to accept more tenants to her rental units.