Where Will the Eviction Wave Hit? Follow the Big Landlords

With evictions expected to resume in the wake of a U.S. Supreme Court order, new data points to the kinds of tenants that may face the greatest risk of housing loss.

Evictions that have been delayed in many parts of the U.S. are likely to proceed, now that the U.S. Supreme Court struck down the federal eviction moratorium on Aug. 26.

The court told the Biden administration, for the second time this summer, that only Congress can authorize a federal ban on evictions. Yet efforts by members of Congress to prevent evictions have also come to naught. Rental assistance has been slow to arrive: Despite a pressure campaign from the White House to get $46.5 billion in emergency rental assistance to tenants, state and local leaders had spent only about $5 billion by the end of July.

Now some 2 million renter households owe more than $15 billion in rent, according to the Federal Reserve Bank of Philadelphia, with other estimates putting the need even higher.

Perhaps the biggest winner amid all these setbacks for tenants? The biggest landlords.

Over the course of the pandemic, owners of large apartment complexes have filed the lion’s share of evictions against tenants. Across a dozen cities and counties where data are accessible, evictions at just a small number of apartment buildings contributed between one-fifth and one-half of all pandemic eviction filings, according to new data from Princeton University’s Eviction Lab.

The analysis points to the potential shape and location for a wave of evictions unleashed by the Supreme Court’s decision.

In Phoenix (Maricopa County), filings from just 100 addresses accounted for 21% of all eviction filings since March 15, 2020, according to new data from Princeton University’s Eviction Lab. For Greenville, South Carolina, evictions at the top 100 buildings with the most filings made up 47% of all pandemic evictions. Some of these evictions that have been pending for months could now proceed any day.

These figures can’t account for overall eviction activity by corporate landlords, since the identity of building owners are often shielded by LLCs. A single corporation might own several buildings under different shell companies. These large landlords routinely use eviction threats as a way to collect rents rather than remove tenants. So as a reflection of overall eviction activity by large landlords, figures on the properties with the most eviction filings are conservative, according to Peter Hepburn, assistant professor of sociology at Rutgers University-Newark and research fellow at Eviction Lab.

“If you looked at the top 100 companies that are filing eviction cases in Memphis, that’s going to account for a much larger share of all filings in the city than just the top 100 buildings,” Hepburn says.

Pockets of Evictions

Data on evictions reveal patterns of compounding despair in places that have struggled against vicious cycles. The new Eviction Lab data points to the role of corporations and large property owners in perpetuating these cycles.

In Houston, for example, buildings within the Villa Serena Communities portfolio dominate the list of addresses with the most eviction filings. These buildings are concentrated in Greenspoint, a suburb nicknamed “Gunspoint” for its historically high crime rates and one that developers are trying to rebrand as North Houston.

Biscayne at Cityview, a modest Villa Serena complex with 560 units in the Greenspoint area, ranks third for eviction filings for any address in Harris and Galveston Counties, with 136 eviction filings since the start of the pandemic. Other Villa Serena properties follow close behind, including (and not limited to) Breckenridge at Cityview (#7), Serena Woods (#11), Crescent at Cityview (#17), Rockridge Springs (#31), Rockridge Bend (#48), Rockridge Station (#67) and Amherst at Cityview (#84).

Records from the Small Business Administration show that the company that owns these buildings — VSC Management LLC — received $2.7 million through the Paycheck Protection Program.

Steve Moore, cofounder and managing partner of VSC Management LLC, manages the more than 6,000 units in Villa Serena apartments around Greenspoint. A 2017 report by the local CBS affiliate praised Moore for his efforts to collaborate with law enforcement to reduce crime at his properties. Moore himself lives at Biscayne at Cityview, where, according to Eviction Lab data, Moore’s company filed to evict 18 of his neighbors over the last 8 weeks. (Moore did not return requests for comment.)

Eviction data highlight the concentration of court filings for homes in poorer neighborhoods. In St. Louis, eviction filings at just 20 addresses — many of them apartment buildings in the working-class suburb of Florissant — accounted for 14% of all pandemic evictions. Similar patterns follow for Cincinnati, Indianapolis, Phoenix and other metros. The Brooklyn at 9669, the number-one apartment complex for pandemic eviction filings in Dallas County, has filed evictions against about a fifth of the residents of the complex, some 225 people, since March 2020. Even before the pandemic, a lawsuit against the property owners by the city of Dallas alleged that it was creating a nuisance by tolerating criminal activity.

Another study at Princeton finds that large landlords in Boston filed evictions at two to three times the rate of small landlords, and often for less money owed, too. Often, landlords are filing these evictions in automated processes, or even as a strategy for accessing federal rent relief that has been hard to come by.

“We know that under normal circumstances, larger landlords tend to evict more aggressively than smaller landlords,” Hepburn says. “Often larger landlords are the ones who are more likely to have very set policies and rigid, algorithmic tracking of rent collection. The determination about whether to file that eviction case isn’t made so much by the individual who is managing the property as it is by corporate headquarters, who says as soon as someone falls behind on rent, the appropriate next step is to file for eviction.”

A Soft Landing for Big Landlords?

Landlords of all size levels struggled during the pandemic, at least compared to their pre-pandemic norms. Property owners who saw rent payments slip missed utility or tax payments, sought mortgage forbearance and even sold off properties. (Nearly one-third said they delayed repairs and maintenance, a six-fold increase from 2019.) But the pain is relative: While mid-sized landlords (owners of 6–19 units) and larger landlords (20+ units) were much more likely to report non-payment during the pandemic than small landlords (1–5 units), most larger landlords were not deep in the red. According to a survey of property owners in 10 cities by the Joint Center for Housing Studies at Harvard University, 10% of small landlords and 8% of mid-sized landlords said that they were still owed half or more of their rent by the end of 2020, compared with just 3% of large landlords.

And the owners of market-rate properties — those that don’t have subsidized or affordable housing — have barely suffered at all: The National Multifamily Housing Council has reported that rent collection levels at professionally managed buildings have hovered around 95% from 2019 through August 2021, never falling below 93% and rising as high as 97%. The Harvard survey finds that more landlords granted rent extensions or forgave back rent than perhaps ever before, but if that has been a factor at all for the market-rate sector, it’s been a small one.

Industry leaders looking at these figures insist that there is no wave of evictions on the horizon, despite the dire warnings of a tsunami once the final federal levee breaks. Indeed, the survey shows that the share of landlords across 10 cities who filed an eviction against at least one tenant was the same for 2020 as it was in 2019 (15%). Of course, there’s been a moratorium in place for most of this time, however inconsistently it’s been applied.

Source: bloomberg.com