With thousands of Coloradans out of work thanks to COVID-19, Gov. Jared Polis in late April enacted a statewide moratorium on evictions and late fees for past-due rent.
But even with rising unemployment, and without the threat of evictions, many landlords and property managers have reported only slight impacts on rent payments — so far.
According to a recent survey of 84 Colorado apartment management companies by the nonprofit Colorado Apartment Association, nearly 90 percent of tenants paid their rent in full by May 5 — up from 84 percent in the first few days of April.
Colorado Springs property owners have reported similar results.
Deanna Kirkby, a rental portfolio manager for the property management company Springs Homes for Rent, said 100 percent of tenants in their 98 local units are current on rent.
Amy Scheller, owner of Crystal Pines Property Management, said all her tenants have already paid, or have set up payment plans to do so.
Dana Lowry, owner of management company Grand West Properties, said even before the moratorium, he started sending letters to residents to express his concerns over rent, and a willingness to work with them during the pandemic.
“What I stressed was that they would still need to pay rent, but that there would be no late charges and no eviction proceedings,” he said, “but also that I needed to have them talk to me about some sort of reasonable payment plan.”
Lowry said it’s “without question that some of the residents are having a more difficult time paying rent,” but he’s found collecting their dues in increments over the course of the month, rather than insisting it be paid on the first, has “certainly been helpful to many” who rent from him.
“And the surprising thing is that just about all the residents have been able to pay the month’s rent during that month,” Lowry said. “They have not needed to stretch out payments beyond the current month for which the rent was due.”
Of 74 total units in his four Colorado Springs apartment communities, Lowry said only two tenants have made no effort to contact him about payment.
For those who haven’t, he’ll begin eviction proceedings as soon as he can — but he’ll need to wait until Colorado courts resume hearing eviction cases.
Since the state’s courts have been restricted or closed, only emergency eviction cases have been heard — where a tenant is posing a public safety risk by, for example, running a methamphetamine lab from the property.
Lowry also has one other eviction case from before the pandemic that he’ll seek to process as quickly as possible.
In that case, when the tenant was told their lease would not be renewed at the end of its natural term, they refused to leave, so Lowry filed for eviction.
But two days before his scheduled court date to request a writ of restitution, the courts closed due to the pandemic.
Lowry has lost money on the unit every day since.
“One out of 74 units being offline isn’t as big a percentage as it might be for other [property owners], but on the other hand, we’re in the middle of some very uncertain times,” Lowry said. “And because we don’t know how long this will last, and how much more difficult it’s going to be for people to come up with ways to pay rent, to get assistance, and so forth — I’m worried that things can get a lot worse before they get better. So having a unit offline is definitely worrisome for that reason.”
Because eviction is a lengthy process, Michelle Lyng, a spokesperson for the CAA, said the moratorium is also preventing landlords from evicting tenants whose circumstances have little to do with COVID-19.
“The eviction process is at least two months long,” Lyng said. “So for someone who didn’t pay their rent in January, they may have been in the process of being evicted when the moratorium came down from the governor. So that had nothing to do with COVID-19, and that person has now been living in a unit, essentially rent-free, for five months.”
Breaking down where rent revenue goes, Lyng said across the country about 52 percent of rent payments go toward paying a landlord’s mortgage and property taxes — which help pay the salaries of first responders, teachers and government employees. Another 27 percent goes to paying employees and 10-15 percent goes to maintenance costs and capital expenditures.
“So the rental housing market is really an ecosystem,” Lyng said.
“When the renters don’t pay their rent, property managers and owners can’t pay their mortgages or property taxes and then can’t pay their own employees. So there’s a really trickle-down effect for the entire economy.”
In El Paso County there are 105 evictions initiated before the moratorium that are now on hold.
Jacqueline Kirby, spokesperson for the El Paso County Sheriff’s Office, said the agency has not received a timeline from state and local courts for when it will be expected to serve eviction notices, but evictions could resume June 1, if the moratorium expires.
While Colorado tenants have managed to stay on top of rent so far during the pandemic, that won’t necessarily hold.
“I think what’s really scary is that we’re dealing with two crises that are related and interconnected but don’t have the same timeline,” said Zach Neumann, a Denver attorney and founder of the COVID-19 Eviction Defense Project, which has about 50 attorneys offering pro bono services to tenants facing eviction.
“So there’s the public health crisis related to COVID-19, which is slowly resolving and then will very rapidly resolve when a vaccine is broadly available, and an economic crisis that is trailing. So unemployment is expected to increase through the end of the summer and maybe longer, and then gradually decrease through [the] middle of the year in 2021. And so really I think the question is: ‘When does the economic crisis abate to an extent you can lift these moratoriums and return to business as usual?’”
If the moratorium expires in June as currently scheduled, Neumann said he anticipates a flood of evictions.
“Because people have had access to various federal benefits in some cases, we think some evictions will be avoided. But as we move into July or August I think that number will go up dramatically. … As people spend their stimulus checks and the federal portion of unemployment insurance goes away, we think that number will get bigger and bigger,” Neumann said.
Based on what he called a “conservative analysis” of the eviction situation, Neumann said the COVID-19 Eviction Defense Project anticipates 400,000-500,000 people will be at risk for eviction across the state.
“And this story isn’t that landlords are the bad guys,” Neumann said.
“I think landlords are struggling, I think tenants are struggling, and we’re facing an unprecedented economic crisis where the different actors in the housing system across the board — from financial institutions to landlords to tenants — are all really facing challenging conditions.
“It’s basically an industry where, overnight, revenue has been cut by 20 to 30 percent based on a tenant’s inability to pay. And so we need broad-based solutions.”
As for the moratorium currently in place, Neumann called it a “great first step,” but noted a lasting solution will likely involve extending the moratorium and creating provisions to keep tenants housed and giving them more time to catch up on unpaid rent, as well as federal legislation with broad support for renters.
“We need support for renters that pays rent directly to landlords so they can stay housed,” Neumann said.
“So then your medium- and small-sized landlords can retain their properties and continue to manage those investments. Because otherwise I think you’re going to see mass disruption in the sector. You’re going to have tenants going homeless, and also significant foreclosures on your mom-and-pop landlords who don’t really have access to credit like the bigger corporate actors do.”