A Massive Wave of Evictions Will Probably Hit Washington Next Month

What are officials doing about it?

Comments

1

Pay the mortgage on rental properties would be nice gesture by politicians.

2

@1 The banks are the last people who should be made whole out of the tax payer's pocket.

This crisis is an excellent opportunity to zero out debt from stem to stern. Make every creditor write it all off - they can deduct the "losses" on their income tax.

3

I have a friend who owns several lucrative commercial properties in West Seattle and Burien. He’s been working with his tenants on reduced rents, payment plans, etc, because he and his business partner own the buildings outright (the 70’s were a great time to buy property in Seattle)

His business partner wanted to be more ruthless, but my friend rightfully pointed out that less money is better than no money, and if their tenants go out of business, it will likely be hard to replace them. So basically they’re just collecting enough to cover taxes.

4

"We know that half of Seattle-area renters already pay more than they can afford in rent" - don't live where you can't afford?

5

@4 haha - as close to a literal let them eat cake as you're ever going to see.

6

@4 What if there are no jobs where you can afford to live?

7

@4:

Also, their rent was probably somewhat more affordable just a few years ago, but with the huge influx of six-figures-out-of-the-gate earning tech bros flooding into the city in the interim, rents skyrocketed in just a very short period of time, while simultaneously wages for most people didn't even go up enough to cover basic COLA increases.

8

Not one word about how the county is supposed to get its money, via property tax payments. Houses are property and are taxed. People living in those houses and people who own those houses have to pay the county taxes.

Not one word about those dots being connected. WOW.

Ignorant people think everyone is an island. Functioning as independent people, having no connections with the broader community. That's why they're ignorant.

9

Nationalize banks!

10

@2, No rent to landlord, no mortgage payment to bank. Bank becomes landlord.

70% of rent goes to pay the loan payment on the loan to buy and/or do the last remodel on the building (replace that roof, install wifi, re-face those cabinets, change out all the outlets, and other amenities to keep up with tenant needs/wants). 25% goes to operating costs, bank required reserves, etc. If you are lucky, you get a 5% margin.

11

@3, Having no debt, lowers returns on investment by a lot. You aren't leveraging other people's money. For that reason, only small owners, without investors they are obligated to, do that. By the same token, it lowers risk. Without the tyranny of that loan payment and a lender that can foreclose, you need less rent to stay solvent (also lowering returns on investment).

Long-term, the future of all commercial real estate, particularly office, is in great doubt. 54% of all people working at this time, are doing so from home. King County is going to make that largely permanent, and so are many tech employers. The pandemic has taught them they don't need to make everyone shlup into the office, to produce services. Retail, already suffering year-over year declines in sales per square foot for the last decade, is on the ropes as consumers switch to delivery. Employment is becoming de-concentrated and so is retail. I don't think a lot of office space downtown every gets re-occupied post-pandemic. The retail catering to those workers on their lunch hours is gone.

12

@2 does not understand how tax deductions work

13

Absolutely @2. Zero everything the fuck out. You still pay for your staples and needs. But nobody gets anything. Landlords, banks, billionaires millionaires etc. It will decrease suffering and social unrest. Cos if that comes it is going to cost a whole lot more.

14

You can't simply extend the eviction moratorium endlessly. You can force it for a few months, but eventually you have rippling economic effects.

Economics is hard. If renters don't pay rent, what happens to the landlords? You can't just say fuck them (gratifying as that might sound). They have mortgages to pay and expenses to cover. They may be able to eat that for a month or three, but eventually if the landlords don't pay the mortgage because the tenants don't pay rent, then the banks start to foreclose. The property tax doesn't get paid, so the state is collecting less tax revenue, which compounds the problem they are having because they're already collecting far less revenue from sales tax. So that puts the state/county/city governments in an even deeper hole. The banks can absorb a few foreclosures in the short term as well. But eventually if foreclosures get too high, then you can trigger another mortgage banking crisis like we had in 2007/2008. It's all interconnected.

To solve this, you can't just have an endless eviction moratorium. You need rent forgiveness, because unemployed renters are never going to be able to climb out of that hole. You need to couple that with relief to landlords and banks, or you'll just trigger a banking collapse. Inslee is right. This will require federal help. The state can mandate an eviction moratorium, but the feds will need to step in with relief to landlords and mortgage banks. That's largely outside of state control, or the state's ability to fund.

15

@2 & 13,

Do you think it is realistic to assume we can completely dismantle and replace our existing economic structure by the end of the month? Seemed a bit ambitious to me, but presumably you have thought this through.

16

If you "zero everything out" your checking and savings acct is zeroed too. Where do you think the money for the loan comes from?

17

My theory is that the big reason Trump is throwing even more endless tantrums than normal is that he was hoping for a massive wave of evictions and foreclosures, so that he could have Donny and Eric buy up tons of foreclosed property at bargain-basement rates, flip them-while stiffing the contractors and their crews, as always- and make a huge killing reselling the properties at a huge markup.

He never really cared about getting re-elected at all-he just wants to lift the country's wallet and give us all the finger-including the "supporters" he never cared about in the slightest and did nothing for- one MORE time on the way out the door.

Trump thought he was owed a massive, unearned windfall for not taking Covid-19 seriously.

19

@10:

My landlord, who retired more than a decade ago after a long and successful career in the restaurant industry, has owned this property for more than 30 years - he's already PAID OFF his mortgage, and he hasn't done a major remodel to our apartment since my wife moved in some 13 years ago. Sure, he replaces large appliances (water heater, refrigerator, washer) when they break down, but that comes to at-most a few hundred dollars per year; any minor repairs or upgrades come out of OUR pocket. So, except for what our rent covers in terms of water/sewer, light yard maintenance and property taxes (which, because he's a senior citizen are reduced by 40% over the normal rate) nearly everything we give him is pure profit - more like 70%, given it's a triplex and he receives around $4,000 per month for the three units. Based on that and his current assessment (easy for renters to look up -https://payment.kingcounty.gov/Home/Index?app=PropertyTaxes - if you know the county parcel number, which itself is pretty easy to locate: https://www.kingcounty.gov/services/gis/Maps/parcel-viewer.aspx), it takes less than three months for his tenants to pay his entire annual tax assessment.

Given the age and general condition of most dwellings in our area I wouldn't be surprised if a significant percentage of rental landlords fall into that category; and that's not even factoring in the newer properties and those that have gone on-the-market since the 2008 recession that now belong to huge management companies owning tens, if not hundreds of thousands of units nation-wide.

If you're a landlord, your mileage may vary, but it's not a safe assumption that every landlord is being squeezed by this pandemic; most are probably doing just fine, even while literally almost everyone else isn't.

21

@19:

That doesn't mean you're owed a free ride.

25

@20: I can't help but noticing you're still using the "it's no worse than the flu" line. If you'd kept up with the briefings from Lying Dipshit Command, you'd know that they have moved on from "it's just the flu" to "the economy is more important than other people's lives" and "besides, it'll probably go away eventually." Please try to keep up.

26

No pay no stay.

27

Love all the armchair economists in here assuming 200,000 vacancies are going to be filled overnight, at current rents, when all these tenants are evicted.

28

Lot of really biased terminology in this article.

Not renewing a lease is not a "loophole" in the just-cause eviction ordinance. A lease is for a set period of time. Unless you negotiated it and it is spelled out in the lease document, you have no right to remain after it expires "just because." I would have thought that anyone who writes for the Stranger (and presumably either rents or has recently done so) would understand this. The constituent in this article is not being evicted. His contract to rent his house is up. If he had contracted to do a job for a year, without a right to renew, I don't think that anyone here would see him as being "fired" if he was not given a new contract.

And I NEVER thought I'd be (even partially) agreeing with @18, but here it is. There is no reason to evict a paying tenant who has not been a problem. Going through the process is unlikely to be worth it even if you do get a somewhat higher rent in the end.

Rental assistance is hardly "lining landlord's pockets." The one who was unable to meet their obligations and who's being paid the benefit by society is the tenant (and rightly so; as a problem affecting all of society, that is where the burden logically lies).

Finally, I find it curious that assistance to renters is just too much money for the state to come up with, but somehow it's assumed that it would be OK for landlords to eat it.

29

@27 BINGO. Evictions will not be taking place, but the Drama of it all, now that's nice.

All the Queens love Drama.

30

@28 The difference is that unlike the state, the landlord can sell a property that's losing money.

If enough of them do that, prices for rental properties go down, and thus the rent yielding the same margin goes down, which in turn increases aggregate renters' ability to pay, until the new equilibrium is established.

Market solutions to market problems, right?

31

@30 Can you elaborate on who might be purchasing up all the rental properties that are loosing money? I suspect that could be a potential weakness in your plan.

33

@31 If we're doing conventional economic analysis here and proposing a market solution, then the "problem" you raise is what is normally referred to as "the pricing mechanism."

The seller simply reduces the price until it reaches the point some buyer is willing to pay. That's what the "market" in "market solution" means.

There are people out there who still have jobs, who still have surplus income. To some of them at least, buying rental property is not attractive at current prices, but would be at some lower price.

More realistically, as others have mentioned there are large and growing rental property concerns out there buying the dips in the real estate market, but for our simple model it's clearer to talk about this as if it's just ordinary high-income individuals who invest in rental properties, and leave out the added confusion of large highly capitalized corporate buyers.

34

How are people with no money supposed to pay rent?
How are people with no money supposed to pay mortgages?

What do landlords and banks believe is going to happen when hundreds of thousands of people are pushed out into the streets - jobless and now homeless during a pandemic?
Are people going to rush to rent that apartment or buy that house?

The level of delusion, denial, and destruction happening in this country is astronomical.
When will people wake up? Trump and his minions do not care how many die or how massive the economic destruction is. He and the GOP have decided to let the country burn to the ground.

In a country where a handful of people have more wealth than the rest of the country and most of the world, you would think we would be leading the world with how to handle this pandemic. But no. We've opted for the slow motion zombie apocalypse.

It's not bad enough that over 40 million people have lost their jobs.
It's not bad enough that 126,00+ and counting people are dead.
It's not bad enough that the long term health effects of the virus are not even fully known - but are appearing to be worse than ever imagined (neurological problems, lung, heart, and kidney damage, blood clots, strokes, and ???) and that huge swaths of the idiots in this country believe this is a hoax.

NOW the people have decided to make this horror show infinitely more horrific by shoving hundreds of thousands of people, if not millions, out on the to the streets with nowhere to go. How exactly will this be good for anyone?

If people are forced into a position where they are hungry, homeless, jobless (and also sick), what exactly do those in positions of power think is going to happen?

Trump won't be the only one hiding in a bunker.

35

@30 - Nothing "market" at all about your little "solution." It's pure government interference with the market.

How about the government comes in and says you and everyone else in whatever your industry is have to take a pay cut such that none of you can afford to pay your mortgages or your rent? Bingo, home prices/rents drop and aggregate renters' ability to pay goes up. Too bad for you and your colleagues, but I guess that's fine?

36

@33 - I believe that this scenario is exactly what the City Council seems to have in mind. The real problem there is that, along with the prices of rental property, the prices of single family houses will crash too, as a lot of them are rentals. This in turn will wipe out much of the wealth of the middle class (many homeowning people have little or no significant assets except their house). And I would bet that a good number of those people are the salt-of-the-earth, non-landlords who the Council feels are deserving of a break.

37

@35 I haven't mentioned the government once. It has no effect.

The approach I've described works perfectly well without the moratorium-- allow landlords evict the 200,000 tenants who can't pay, creating 200,000 vacancies, and exactly the same situation arises, with exactly the same potential solution-- for those who can stomach the hard realities of the market, at any rate.

38

@36 I don't understand. You're saying the economic impact of the crisis shouldn't be shared by ordinary citizens? Where is it supposed to fall, then?

40

@38 - I am speaking more broadly of what the Council was trying to to even before the crisis. Their war on landlords is not new. They are not trying to drive housing values down as a response to the crisis, but because they think they are too high.

In terms of the fallout from the crisis, then yes, it should be and must be shared by all of society. That means all of us, not just landlords or homeowners. It's fully appropriate to have rent assistance come from government budgets, just as the added unemployment benefits did.

@37 - I may have misunderstood you as arguing that the government should excuse tenants from paying their rents, thereby triggering the sell-off of money losing properties. As the Stranger is fond of saying, we regret this error. Having said that, I don't see landlords evicting any large number of people unless they see new tenants lining up for the apartments. Not sure that there would be a whole lot of long-term vacancies, at least here in Seattle.

43

There is a very simple solution:

The landlords simply tally up all the "unpaid rent". Send an invoice to the city, less 10% for processing and collection.

The city writes a nice big check to the landlord for the rent, less 10%! .

Since the city is implying, in effect:

a) This is helping the citizens at large, then as "citizensof the city" we should be willing to pay for our poor underlings who have no money to pay rent or even part of their rents. With only $1,000/week from unemployment benefits, however could they pay even a small part of their rent. I mean its just unthinkable.

b) As the city implies or suggests in their actions, the rents will be easy to collect...so whats the big deal. The city shouldn't mind collecting the rents and working with the tenants on a payment plan.

Everybody is happy, happy, happy!

44

@38/40 since interest rates are really low right now and there aren't a lot of sellers, places are flying off the market. A townhouse nearly identical to mine sold in 2 days for $60K more than I bought my place a year ago (granted the new place didn't need a lot of work). I doubt there will be as many evictions as the Stranger predicts, but there will be some for landlords that can't take 50-75% rent payments and need to sell. I don't think that will be enough to tank the housing market.

@19 your landlord is probably using your rent payments to cover their retirement expenses since they probably can't work.

45

I live 2 hours out from my job. I am paid well. But because I am trying to be responsible pet owner, and my previous landlord wanted to sell the house I was renting after my spouse died, I had to find something quick. That allowed pets. I had only 4 weeks. I now pay over half my income. I'm really lucky, as I still have my job, my pets, and a roof over my head. No money left for anything but bills. But I think of others who are going to suffer. Families already on the margin of poverty. The uncertainty must be incredibly stressful. What's going to happen to them? The children going into an overburdened foster care system? I'm just imagining the despair and how hard it will be to overcome this. .

46

It's the story of The Ant and the Grasshopper all over again. Lots of folks out there who confused 'wanna-haves' with 'gotta-haves', and have nothing laid on for the inevitable lean times.

TOP TIP: If you don't have six month's pay socked away in savings, then trust me, you have no business buying weed, nursing a 3x a day Starbucks habit and clubbing. Priorities, bitches.

47

@ 46.... right on....just add for the benefit of @45...having a pet which requires 50% of your income to provide housing.

48

@4 i love how you read "half of all seattle renters can't afford rent" and think well gee, half of seattle should just move.

do you have any idea the economic repercussions THAT would have? i promise the city would take decades, if ever, to recover, and that half of the population is the people who are making your food, cleaning your streets and buildings, and providing the services you take for granted.

if we, the poor, are forced to leave or be homeless, this city will die. the privileged will quickly realize that without our slave-labor there's no reason to be here either.

50

@48 You win the "comrade dramatico" award.

If what you said could really happened this city would rid itself of what today is fashionable to call the disaffected, the disenfranchised, the differently motivated...what we used to call lazy people.

How refreshing it would be to see this cadre of loafer exit out city and fresh, vibrant new people who want to get ahead come in and prosper.

If only it could be so.

54

If the eviction moratorium is extended all summer, many landlords will be unable to pay October property taxes owing to six months without income, while other landlords will withhold property tax payments because they have been denied 5th Amendment due process by the state.

There's only so long that an emergency order can be in effect before it starts to generate ripple effects. If I was a landlord who had been told that I could no longer evict for nonpayment, and it was mid-October, I would rightfully assume that the state had no interest in reversing itself before the spring of 2021 at the earliest. I would refuse to pay my property taxes, state why, and if the county put a lien on my property they'd end up in federal court.

55

@19: Where on earth did you get the idea that Seniors get a 40% break on property taxes? From what I can see, the only way a senior gets any kind of break is if they're dirt-poor to start with (household income < $58k). It's also limited to your primary residence.

Also, your whole 'you have no right to make that much money and not remodel my apartment' attitude is rubbish, helps answer @49's question why you're still renting an apartment after 13 years.

Your landlord invested, scrimped, saved, and took risks. You rent bc you probably like the lack of commitment and it allows you to have a nicer place than you can otherwise afford if you were buying.

Once again, it's all about the ants and the grasshoppers, and you're the latter. Maybe next go-around you'll understand 'You've got to risk it to get the biscuit'.

56

Rental assistance programs sound great but they have unintended consequences. They drive prices up and leave some people in worse shape.

57

I love how we all pretend like "Someones got to pay the mortgage" Like it isn't a common business practice to just not pay your bills. During good times your landlord isn't paying the mortgage so why are we worried now?

59

@21:

Why not? Who decided that humans MUST live under a Capitalist economic system where landholders are considered the "top of the food chain"? It's a completely arbitrary, made-up system that can be changed just as it was created. The only reason it HASN'T is because the relatively small number of humans on this planet who derive enormous benefit from the status-quo have convinced most of those who DON'T benefit that, if they just toe the line, keep their nose to the grindstone, lift themselves up by those bootstraps, or whatever other vacuous platitude you care to mention, MIGHT someday join that select group.

Of course, in this particular country property ownership is practically considered a birthright; never mind the fact that literally every single square foot of land currently held in private ownership was stolen from the original inhabitants - who never developed such a "highly civilized" concept that the land upon which they were born, from which they derived their sustenance, and to which they would all eventually return, belonged TO them instead of them belonging to IT.

60

@44:

I seriously doubt it. He owned several popular local restaurants, the last of which he divested out of 15 or so years ago; that alone probably set him for life. His late mother was the one who originally purchased this property decades ago and she insisted he and his brother (who still runs a successful contracting business) "keep it in the family". In fact, the ONLY reason it's still standing and hasn't been leveled and converted into another plot of hamster-box "four over ones", like every other piece of real estate on our block, is because they didn't need the money they could have gotten from selling it to a developer.

61

@49:

I haven't lived here for 13 years, my spouse has; I've only lived here for a little more than five. Also, not everyone wants to work themselves into the grave for the sole purpose of being able to brag about "having the most toys" when they die. I work to live, I don't live to work.

@55:

It's in the link I cited, which, once you locate the parcel number shows both the valuation of property and buildings, plus the tax levy and exempted amount - if any - owed. Seniors over 61, disabled people, and those with incomes below a certain amount qualify, per KC regs.

https://www.kingcounty.gov/depts/assessor/TaxRelief.aspx