The COVID-19 pandemic wasn’t exactly devastating for landlords, according to a new report by JPMorgan Chase.
Though many landlords lost rental revenues—especially at the onset of the pandemic—they were able to cut expenses by more, yielding higher balances.
Rent payments dropped off by about 20 percent in April and May of 2020, but landlords were able to slash their expenses by 25 percent by deferring mortgage payments and cutting maintenance costs. (“Tenants living in these properties were the ones experiencing the immediate reduction in standards of living due to deferred maintenance, not landlords,” the report says.)
“Both revenues and expenses mostly recovered in the summer of 2020 and through the present,” according to the analysis. “Since expenses fell more than rental revenues, and rental revenues recovered more than expenses did in June, overall balances were higher during the pandemic.”
Lindsey Siegel, attorney with Atlanta Legal Aid Society, which has been helping tenants avoid eviction amid the pandemic, told Atlanta Civic Circle, “This report does not surprise me at all.”
One thing it doesn’t seem to mention, though, “is that rents have skyrocketed since the pandemic began,” she added. “Not only that, but landlords have found many ways to collect extra fees from tenants.”
All too often, landlords—particularly corporate landlords—use an “a la carte model,” Siegel said. “It’s not unusual to see: rent, water, sewer, trash, utility service fee, amenity fee, insurance fee, pest fee, and more.”
These monthly fees can add up to hundreds of dollars and are often imposed to get money out of tenants who might be behind on rent and whose leases they have no intention of renewing.
Chelsea Juras, spokesperson with the Atlanta Apartment Association (AAA), which represents landlords and property managers across the metro area, did not comment on the JPMorgan Chase report, nor did she respond to Siegel’s remarks. She did, however, say that suggesting landlords have had it easy during the pandemic is an oversimplification.
Juras also provided some context to Atlanta’s rising rent prices.
“Our members have experienced significant increases to the cost to provide housing in the city, including astronomical increases to the cost of property insurance due to growing premises liability claims and the threat thereof across Georgia, as well as continued property tax re-assessments resulting in sometimes 200 to 300 percent growth over the past couple of years,” she said.
Many landlords, Juras added, are seeking out federal emergency rental assistance (ERA) funds to help offset those rising costs and account for when tenants fall behind on rent payments. She said AAA “remains hopeful that those dollars will get out to the residents and properties soon to pay down extensive debt and preserve housing stability.”
Many local and state-run ERA programs pay landlords and utility companies directly, instead of giving the money to tenants, “and landlords cannot apply for assistance without the tenant as a cosigner,” the JPMorgan Chase report says. That, among other bureaucratic reasons, is why many governments have been sluggish to distribute ERA money.
“For the landlords who have experienced shortfalls in rental income, accelerating the pace of rental relief will be critical for both making landlords whole and staving off eviction for their tenants,” the report says.
But, as Atlanta Legal Aid attorneys have pointed out to Atlanta Civic Circle in the past, some landlords have refused to accept ERA money on behalf of tenants so they can more easily remove them from properties to make way for higher-paying renters.
According to the report, “Direct cash assistance, such as rental assistance, has significant benefits relative to interventions such as eviction moratoriums,” which the landlord lobby—including AAA and the National Apartment Association—has opposed.
In short, while no one has been immune to the economic side effects of the coronavirus, landlords don’t seem to have it as rough as their tenants.