December 8 was a momentous day for shareholders of Mid-America Apartment Communities, which owns 300 apartment complexes across the country. That’s when their company announced that it was doing well enough, even during a pandemic, to increase the dividend paid to investors by 2.5%.
For some Mid-America tenants, however, December 8 was disastrous. That day, the company filed expulsion lawsuits against 13 tenants in Florida, Georgia and Texas, according to court records.
Despite a federal moratorium prohibiting evictions of tenants who attest to being affected by Covid, eviction cases continue to scour the country. These procedures harm tenants in several ways: Evictions often lead to job losses, academic research shows, and typically show up on credit reports, making it difficult for renters to find new residences. Eviction fees can also be added to rent bills, increasing the amounts ultimately owed by tenants to their landlords.
Acknowledging the ravages of evictions, President-elect Joe Biden called on Congress to provide an additional $30 billion in rent assistance, on top of the $25 billion provided in the December 2020 stimulus package. He also called for a an unspecified amount of money for legal aid and an extension of the moratorium, which was imposed by the Centers for Disease Control and Prevention, until September 30.
But a moratorium only works if it’s enforced well, tenant advocates say, and actual evictions still happen, legal aid practitioners say.
Diane Yentel, president and CEO of the National Low Income Housing Coalition, said Biden’s proposal could be a huge help for struggling families. But she said simply extending the CDC ban was insufficient.
“While the CDC order imposes criminal penalties on landlords who violate the moratorium,” Yentel said, “no entity or person is enforcing the order and there is no mechanism for tenants to file complaints against tenants. owners who violate the ordinance. … An eviction moratorium issued by the Biden administration should prohibit all stages of the eviction process, including notices, filings, hearings and physical evictions.” Criminal penalties include fines and jail time.
Meanwhile, eviction claims continue to rise, with many filed by large, successful corporations. And while eviction filings are only the first step in the process of evicting tenants, they often scare tenants into leaving without a fight, lawyers say. As a result, these deposits alone may increase homelessness or create the kind of overcrowding the CDC hoped to avoid with its ban.
Since Sept. 2, for example, when the CDC announced the moratorium, Mid-America has filed 384 evictions in 23 counties across 5 states, according to court records. Documents submitted by tenants in many of these cases indicate that they cannot pay their rent because they have been affected by Covid, an attestation that the CDC ban requires.
Mid-America owns 102,000 homes in 16 states and its recent evictions were filed even as it prospered. In addition to increasing its dividend, its share price has risen 11% since September 2.
A Mid-America spokeswoman said the company’s eviction processes “are in full compliance with the terms of the CDC order as well as state and local laws and ordinances.” The company only initiates eviction proceedings as a last resort, she said.
“We offered a range of rent deferral agreements as well as the ability to end leases with no termination fees,” the spokeswoman added. “We have also provided information on where to apply for financial assistance from various government, charitable and civic organizations.”
Other big, wealthy business owners are also filing eviction suits against tenants during the moratorium, according to a database compiled by the PE Stakeholder Project, a nonprofit that examines the impact of eviction companies. community investment capital. The ban is set to end on January 31.
Ventron Management is one such company. A major Canadian real estate company that owns 21 apartment complexes in Georgia and Florida, Ventron had filed 649 eviction suits in those counties by the end of the year, the data showed. Another is Blue Magma Residential, a Tampa company that filed 344 evictions during the period; it has over 10,000 apartments in 18 locations.
NBC News could not determine how many of these actions were filed against tenants who filed CDC certificates.
“We’ve seen more than 30,000 eviction requests by large landlords since the moratorium took effect,” said Jim Baker, executive director of the PE Stakeholder Project. “We’re not suggesting that the majority of them are violations of the law, but we think someone should look into whether or not the companies are actually following the law.”
Also troubling, tenant advocates say, is the fact that some of the biggest businesses pursuing evictions during the moratorium have received government assistance, according to loan records.
Ventron, for example, received between $2 million and $5 million through the Paycheck Protection Program last April, a federal forgivable loan initiative aimed at helping small businesses survive the pandemic. Ventron filed about 250 eviction actions the week after the company received the PPP money, court records show.
Ventron did not respond to two emails seeking comment.
Blue Magma Residential received between $1 and $2 million in PPP last April. He also received a $150,000 economic disaster loan from the Small Business Administration in June.
Blue Magma did not respond to an email seeking comment.
“Real estate companies receiving this money shouldn’t be evicting people,” said Scott Klinger, of Jobs with Justice, a nonprofit that promotes union rights and published a report on businesses that received government support and filed for evictions. “This prompts a broader discussion about how we ensure corporate accountability when we provide federal assistance to businesses.”
Mid-America hasn’t received PPP funding, but it did get another kind of government support last summer when the Federal Reserve paid $3.3 million to buy $3 million worth of the company’s bonds. . The purchases were part of the Fed’s debt buying program designed to bolster the corporate bond market and companies issuing debt, according to the records. This market had been depressed by investor fears about Covid-related financial problems among companies.
The Fed’s bond purchases gave Mid-America a boost, helping it raise $450 million in new debt in August, likely at a lower cost than the company would have paid otherwise.
The Mid-America spokeswoman did not respond to criticism of businesses filing evictions while receiving federal aid.
Questions about evictions among businesses receiving government aid are rising as a second PPP program is being launched. The $900 billion stimulus package passed by Congress late last year includes an additional $284 billion in PPP funding.
Ebony Denise Turner of Miami is facing an eviction brought by her landlord, Blue Magma Residential. She contracted Covid in late summer and was granted a leave of absence from her job at the Transportation Security Administration, according to court filings. She took a pay cut, she told NBC News, and couldn’t pay her rent. She paid what she could, she said, and filed a CDC form showing she was affected by Covid, which was reviewed by NBC News.
Blue Magma filed for eviction anyway in October, according to court documents. After that, the company stopped returning calls and emails from Turner, she said. She now lives with her sister and was approved for housing assistance through a local nonprofit in late December. Blue Magma said the rental assistance money was not enough, Turner said.
“At the time I got sick, there was no accommodation, no understanding,” Turner said in a phone interview. “After knowing everything that is going on, it is shocking to me. I never thought this would happen to me.”
Turner is scheduled to attend an eviction hearing with a mediator on Wednesday. The amount her landlord says she owes includes late fees and eviction fees, Turner said. She added that the apartment complex was not well maintained and that her complaints about a hole in her kitchen floor and a fungus growing on her front door had not been resolved.
Blue Magma did not respond to questions about Turner’s case.
Research confirms that large business owners pursue eviction actions more aggressively than their smaller counterparts. A 2016 study by the Federal Reserve Bank of Atlanta analyzed evictions in the Atlanta area and found that business owners are more likely to file eviction notices than small property owners, noting that ” some of the biggest companies file eviction notices on a third of their properties within a year.” Private equity rental property owners ‘have particularly high eviction rates’, the study also found..
The report also concluded that “large business owners backed by institutional investors are significantly more likely to pursue eviction than others,” suggesting that owners are pursuing evictions to satisfy investor demands. profitability. The researchers note that eviction filings may be a rent collection technique and recommend further research to determine whether higher rates of actual evictions are being pursued by these landlords.
The higher number of evictions among business owners can be explained at least in part by the cookie-cutter mindset at the top of these businesses, said National Housing executive director Shamus Roller. Law Center. “They create rules about when someone gets kicked out and take away as much discretion as possible from front-line workers,” he told NBC News. “Most people have a hard time kicking out someone they know. The corporate structure removes that knowledge and feeling.