Close to Home: Pandemic policies left landlords behind

In 2020, government determined that the pandemic could impact the rental housing market for tenants who indicated they were impacted by COVID. Public officials disregarded the fact that everyone, tenants and landlords, were victims of this pandemic. State and local officials chose to consider only the potential impact on tenants’ ability to pay rent.

Too bad for mom-and-pop local providers of single-family housing. Somehow, tenants were victims, while landlords were not.

Further, government didn’t require a letter from a doctor or an employer demonstrating a tenant’s impact. Legislation gave tenants the ability to pay 25% of the rent, which is still in effect. Government created a program for those earning less than 80% of median income — that’s $90,900 for a family of four in Sonoma County — allowing a landlord, if the tenant agreed, to receive 80% of the rent due. The catch? The housing provider had to forgive the other 20%.

More than 70% of Sonoma County’s rental housing units are single-family homes. The vast majority carry a mortgage and are owned by mom-and-pops relying on rent payments for the house itself and, of course, their income.

In one recent example, the owners of single-family home rented at $2,300 per month received $7,475 over 13 months. The balance owed was $22,425. Was the landlord also a victim? Then, when they served an eviction notice at the end of the lease, they ended up in court, settling the lost rent, plus $9,000 in attorney fees, to have the tenant vacate so they could sell the home and stop their losses.

In this case, the victim was an employee of a local school district who refused to demonstrate a COVID impact. The owners ended up with $35,000 in repairs on top of the lost rent and attorney fees.

Now the home is for sale, and a new family will buy it and be a happy addition to this neighborhood.

All told, that’s just over $66,000 in unanticipated costs due to government deciding that the only victims are tenants, while our mom-and-pop investor was treated as a greedy perpetrator. Good for the new owners, bad for the seller who lost tens of thousands of dollars, and bad for future tenants who have fewer rental options because of cases like this one.

The unintended consequences that governments at all levels have created? Single-family rental properties will be sold as quickly as they are vacated — and new homeowners are eager buy them. In Santa Rosa, 44 single-family rental homes have been sold over the past year, mainly to first-time homebuyers.

So long as we fail to make progress on the housing supply crisis, rents will rise and supply will diminish — even more rapidly when we use bad policies. Good going, government by the people, for only some of the people, apparently.

Ross Liscum of Santa Rosa has been a local real estate broker since 1978.

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