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Warnings about an \u201ceviction tsunami\u201d have yet to materialize. Extended moratoriums and rental assistance programs have delayed evictions in some areas, some housing experts had predicted 40 million evictions last fall. As reported by the news blog, fivethirtyeight.com, those experts are \u201cstill waiting.\u201d

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

Some renter protections are still in place or just now expiring in some states and jurisdictions, so an eviction surge could be looming in those areas. But housing experts had expected a U.S. eviction tsunami in September, after the national eviction moratorium was lifted. Although there\u2019s been an increase in evictions, it hasn\u2019t resulted in a tsunami, so far.

Evictions at Low Levels

The fivethirtyeight article cites information from a website called \u201cEviction Lab\u201d which tracks eviction data that\u2019s been made public. That data doesn\u2019t cover the entire nation, but it shows that, as of October of last year, evictions in most parts of the country were 40% lower than an historical average, and have not returned to pre-pandemic levels.

So what\u2019s going on? It\u2019s difficult to know for sure, but there are various theories. Some housing experts think that some renters are still enjoying the benefits of the stimulus payments, extended unemployment insurance, and rental assistance programs, along with the moratoriums. There\u2019s also a theory that many \u201cmom-and-pop landlords\u201d have worked out deals with renters to avoid evictions. And there are some who feel that the eviction data just hasn\u2019t been very accurate.

The fivethirtyeight authors believe it\u2019s probably a combination of those three, but there is no nationwide database to track that data. They say as many as one-third of U.S. counties don\u2019t publish an annual report on the number of evictions that make their way through courts. And then there are the so-called \u201cinformal evictions,\u201d which are not tracked at all. That happens when landlords refuse to make repairs or abruptly change the locks on rental units. The blog suggests that informal evictions could be five times more common than the formal ones.

Predictions Were Likely Exaggerated

Despite the lack of solid figures for the current status of U.S. evictions, the warning about a tsunami of 40 million evictions was very likely exaggerated, by a lot. That figure was largely based on something called the U.S. Census Bureau\u2019s Household Pulse Survey which asks Americans how confident they are in paying their rent, on a weekly basis. And then week-after-week, between 25 and 33% didn\u2019t think they\u2019d make rent.

That survey was used by the Aspen Institute and the COVID-19 Eviction Defense Project to come up with projections about how many households were at risk. The figure was between 12.6 million and 17.3 million households or 30 to 40 million renters. That made for some big headlines and the passage of legislation for almost $50 billion dollars in rent assistance.

The government hand-out probably protected a lot of renters. But as the fivethirtyeight blog points out, the legislation was probably \u201cbased on an overestimate\u201d that was determined by renter confidence levels, and not facts. The Aspen researchers included responses from people with no confidence, a slight amount of confidence, and a moderate amount of confidence in being able to pay rent. Plus, they included not just the people who were already behind on the rent, but those who were up to date and just feeling worried.

As the blog points out, while a third of the renters said they were not feeling very confident about paying rent, only 13.9 percent were both low on confidence AND behind on their rent. So how many renters were truly at risk? Fivethirtyeight calculated that number at 6 million households and 14 million renters. That\u2019s less than half of what Aspen had predicted, at the low end.

The Aspen research grabbed the most headlines, but there were other estimates that came out a lot lower. The Urban Institute crunched the numbers from the Census Bureau\u2019s Household Pulse Survey but only included people who were already behind on their rent. That report determined that 10 million renters were at risk of eviction. The National Multifamily Housing Council estimates were also showing lower numbers, although that organization only covers multi-family.

Single-Family Ecosphere

But the single-family ecosphere also fared well. We were reporting on how well our affiliates were doing with rent collection during the pandemic. Our affiliate in Jacksonville, who renovates and manages a large number of single-family rentals, says he hasn\u2019t noticed a big surge in evictions. He attributes that to Florida\u2019s landlord and business-friendly environment.

He says: \u201cSince the outbreak of Covid, we have remained in one of the strongest rental markets I have experienced in 25 years as a professional landlord. Businesses, families, homeowners, and renters are moving to Florida because of these fundamentals which allows our state and real estate markets to continue to grow both on the equity and rental side of the business.\u201d

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Thanks for listening. I'm Kathy Fettke.

Links:

1 - https://fivethirtyeight.com/features/what-happened-to-the-eviction-tsunami/