Jeff Daybell: The beginnings of a new housing crisis

(Trent Nelson | The Salt Lake Tribune) People protest the possible eviction of renters at 379 E 1st Ave (Hawthorne House) in Salt Lake City on Saturday, Aug. 15, 2020.

The perfect storm for evictions is about to come ashore, and it will impact landlords, renters and the economy as a whole.

According to the Eviction Lab at Princeton University, Utah has a renting population of approximately 824,000. A recent study conducted by Stout Risius Ross estimates that 29% of renters in Utah will face a rental shortfall or are eligible for eviction.

The potential for a serious crisis is already here, but we can make changes to help calm the storm before the damage is really felt. Here’s how it started.

In February 2020, the winter tourist season essentially ended, along with the associated job opportunities. The grim realities began to appear and forced the government to restrict the public on almost everything. Schools switched to online learning, travel halted, businesses closed and the courts stopped trials. Many were furloughed or victim to mass layoffs by their companies.

At the time, it felt like a short-lived inconvenience, but as July turned to August and schools have been forced to decide how to begin the coming school year, it has become obvious that we are still in the thick of it.

The government lockdown significantly impacted business and, in turn, individuals’ ability to pay rent or mortgages. Gov. Gary Herbert suspended the filing of eviction proceedings for renters who were behind on rent starting April 1 and going through May 15 — a lovely band-aid. Congress passed the CARES Act, which suspended eviction proceedings nationwide if the landlord and tenant met certain eligibility criteria — a nicer band-aid. The CARES Act expired July 25 so what does this mean for renters now?

Remember the subprime mortgage loan problem that caused the 2008 housing market crash? Well, a very similar event is happening now and has the potential to wreck our economy if not avoided. While renters have been protected from eviction until July 25 under the CARES Act, those same renters still owe that rent. Assuming renters have received the forbearance under the CARES Act since April, they now owe rent from April, May, June, July and August.

I wouldn’t be able to make a balloon payment equal to five months of my mortgage or rent, could you?

If renters have agreed to defer rent from April to August, they now have an apartment with payments that greatly exceed the fair market value of the rent listed on their original lease. Renters are either going to have to pay a significant premium or an impossible balloon payment to get caught up.

As I’ve taken eviction defense cases across the state, some judges still require a three-day move out, while some judges will consider the circumstances and grant seven or more days. If you fail to move within the allotted time frame, the police and landlord will show up on your doorstep to remove you and your family from the home.

The storm is exactly this: Unemployment has hit our renter population in a significant way; the additional unemployment payments ended at the end of July; Congress has yet to pass a meaningful measure to protect this vulnerable population; many renters have a deferral agreement and will struggle under the burden of a significant increase in their monthly rent.

What we need is an immediate response for our neighbors and long-term reform of equitable landlord/tenant laws and rules of civil procedure. Without the collaboration of owners and tenants along with our state government we will face devastating consequences, ultimately widening income inequality and economic instability far beyond the storm of the pandemic itself.

Jeff Daybell | executive director Peoples Legal Aid

Jeff Daybell, is executive director of Peoples Legal Aid, Salt Lake City.