Despite a federal order that protects tenants from being evicted until the end of June, corporate landlords around the U.S. have gone to court to eject thousands of people from their homes. Now government regulators are scrutinizing these property owners’ eviction practices, putting many of the nation’s largest landlords on notice.
The Federal Trade Commission and Consumer Financial Protection Bureau earlier this month sent letters reminding major landlords, which together manage more than 2 million rental units, of the U.S. Centers for Disease Control and Prevention’s limits on evictions. More specifically, the FTC said in March that it is monitoring “major multistate landlords, eviction management services and private equity firms.”
The CFPB, which protects consumers from financial abuse, has also tightened a rule to bolster the federal eviction ban. The rule, which took effect May 3, requires third-party debt collectors — a category that includes lawyers acting on behalf of property owners — to inform tenants of the CDC’s restrictions on evictions. The CFPB took that step after determining that third-party debt collectors were responsible for “almost all” the eviction filings in some parts of the U.S., officials said.
“Conservatively, there are probably thousands of families who are being evicted every week without knowledge of their rights under the CDC moratorium,” Diane Thompson, senior adviser to the CFPB’s acting director, told reporters in a recent conference call.
A landlord simply pursuing an eviction case in court doesn’t violate the federal order, which only applies to physically removing a renter from their home, and many courts around the country have allowed cases to proceed. Still, some property owners’ tactics of filing eviction cases en masse worries housing advocates.
“It’s quite common for some of the large landlords to essentially use the same attorney and have that attorney file 30, 50, 70, almost ‘robo-file’ eviction filings,” Jim Baker, executive director of the Private Equity Stakeholder Project, told CBS MoneyWatch.
ESP, a nonprofit advocacy group, published research last month showing that large and private-equity backed landlords have been filing tens of thousands of evictions since the CDC’s order was passed. More than 63,000 eviction cases have been filed since the agency’s moratorium took effect last September, while more than 31,000 have been filed just this year, according the group.
In some jurisdictions, corporate landlords have been responsible for “the vast majority” of eviction filings, Baker said. For example, in Georgia’s DeKalb and Clayton counties, outside Atlanta, more than 80% of eviction filings came from large corporations as of the end of last year, according to PESP.
Corporate landlords also accounted for more than two-thirds of eviction cases in both Harris County, Texas, which includes Houston, and Maricopa County, Arizona, which includes Phoenix. In Florida’s Hillsborough County, which includes Tampa, more than half of eviction cases were from corporate filers, according to data collected by the group.
The top eviction filers this year are Progress Residential and Front Yard Residential, two single-family rental companies owned by private equity firm Pretium Partners, according to PESP. They own a combined 55,000 homes, making Pretium the nation’s second-largest owner of single-family rentals.
Since September, entities owned by Pretium have filed nearly 1,300 eviction actions in court, more than any other corporate landlord tracked by PESP. Pretium’s holdings are concentrated in the South and West, including Arizona, Florida, Georgia, Mississippi, Nevada, North and South Carolina, and Tennessee. It also has a presence in Indiana, Minnesota and New Jersey.
A spokesperson for Pretium told CBS MoneyWatch its entities comply with the CDC’s eviction rules.
“The Private Equity Stakeholder Project’s narrative is misleading,” the spokesperson said in a statement. “Front Yard and Progress comply with the CDC eviction moratorium and have not evicted any individual who is covered by a valid CDC declaration. We work with our residents and seek to avoid eviction, but if a resident declines to pay rent and will not constructively engage to find a resolution, we reserve the right to proceed in accordance with applicable law.”
Pretium is far from alone in its activities, PESP’s Baker said. “While of the single-family rental landlords, Pretium has been among the most aggressive in filing eviction filings, they’re not the only one,” he said.
Landlords backed by S2 Capital, Ventron Management and Western Wealth Capital have all filed more than 1,000 eviction cases since September, according to data shared by PESP. Invitation Homes, which is the nation’s largest single-family home landlord with 80,000 properties, has filed roughly 795 eviction cases since September.
“Large landlords are a machine”
The CFPB’s rule addresses a long-standing criticism of the CDC’s eviction moratorium — that renters, in order to take advantage of the ban, must first know that it exists and assert their rights under the order.
“Many people have gotten evicted just because they didn’t understand they needed to sign a form and hand it to their landlords,” said Shamus Roller, executive director of the National Housing Law Project, an advocacy group.
“In many cases, these large landlords are a machine. They have a simple process — if you don’t pay the rent, we evict you. Sometimes people get caught up in that,” he added.
While Roller said the CFPB’s rule would likely prevent some evictions by making renters aware of their rights, he noted that federal regulators could be more aggressive in enforcing the CDC order.
Even thought the order includes stiff criminal and financial penalties for illegal evictions, “I have no knowledge of the [Justice Department] enforcing provisions of the order,” Roller said. “There’s lots that they could be doing on this.”