How Preventing Evictions Benefits Landlords

How Preventing Evictions Benefits Landlords

Samuel Jacobson, Aaron Shroyer

Reducing preventable evictions through regulatory tenant protections can also benefit landlords by reducing the time, energy, and money required in the process of evictions.

Eviction imposes substantial harms on affected tenants, and the scale of this damage is enormous; an estimated 3.6 million evictions are filed annually in the United States. The crisis has driven policymakers to respond with policy solutions to protect at-risk tenants. Most of the studies examining these policies focus on their benefits for tenants, who are more likely to stay in their homes and avoid eviction when such mechanisms are in place. However, researchers and policymakers have paid less attention to the harms that eviction poses for landlords and how eviction prevention policies designed to protect tenants can benefit landlords as well.

Preventable evictions can occur in situations involving poor communication between the landlord and tenant, a tenant whose income is delayed and therefore is unable to pay rent on time, or other situations in which additional time would allow landlords and tenants to resolve their disputes and avoid the initiation (or, at least, the completion) of the judicial eviction process. Policymakers have proposed various regulatory mechanisms to reduce the prevalence of preventable evictions, including longer minimum notice periods, mandatory preeviction mediation for landlords and tenants, and initiatives to provide a right to counsel for tenants in eviction proceedings. As this article will explore, reducing preventable evictions through regulatory tenant protections also creates several substantial benefits for landlords.

Preventing Evictions Reduces the Substantial Money, Time, and Energy Landlords Expend on Eviction

For landlords, initiating and completing the eviction process is a costly endeavor in time, energy, and money. An eviction may cost landlords anywhere from $500 to $1,500 because of the requisite filing and attorney’s fees. In addition, studies have found that many landlords report that some tenants respond to an eviction filing by vandalizing the unit, which is another cost of the eviction process. As one landlord summed up in a study, “As long as you avoid eviction, you keep the [landlord-tenant] relationship amicable, but once it is ruptured, relations can go downhill fast… this reality creates an imperative to preserve the relationship.”

Completing an eviction often is a drain on the landlord’s intangible resources as well; one comprehensive study of landlords and property managers found that landlords described the eviction process as draining, emotionally challenging, and time consuming. Another study concluded that the eviction process significantly increased stress for landlords, with some likening it to “running a battlefield.” Given these challenges, a national industry representative for landlords acknowledged that, because the eviction process is so costly and burdensome, landlords are incentivized to avoid eviction unless it is absolutely necessary.

Eviction prevention mechanisms such as prefiling mediation requirements and longer minimum notice periods permit tenants to work with their landlords to cure their lease violations or reach settlement agreements. Indeed, these tools allow the parties to engage directly to resolve seemingly intractable issues without legal pressures hanging over both sides. Moreover, these mechanisms also allow tenants in public and HUD-assisted multifamily housing time to procure income recertification or a minimum rent hardship waiver to resolve lease violations. These outcomes eliminate the need for landlords to expend the significant resources necessary to file for and complete an eviction.

Preventing Evictions Lowers Costly Vacancies Among the Landlord’s Dwelling Units

For landlords, the vacancy resulting from evicting a tenant creates additional costs. Vacant units may cause a significant revenue loss. National industry representatives point out that vacancies force landlords to expend additional resources to clear the unit of any debris, repair any damages, identify new tenants, and prepare the unit for them. Vacant units are also at increased risk of vandalism and maintenance issues. Additional costs to landlords with vacant units may include nuisance fines that local jurisdictions impose for litter, failure to mow the lawn, failure to properly set waste containers out for pickup, and other issues.

Overall, properties experiencing high tenant turnover suffer from disproportionately high operating costs, which regularly lead landlords to lose as much as 18 percent of potential annual gross rents. Indeed, one prominent study found that vacancies caused by eviction commonly cost landlords 2 months in lost rent as well as additional costs to turn over the unit for the next tenant. Implementing tools to reduce preventable evictions would defray these costs for landlords by limiting the number of tenants who must be evicted for nonpayment of rent. Instead, these mechanisms would give tenants and landlords the opportunity to cure potential lease violations so that the landlord can continue to earn rent from the tenant and avoid the costs associated with tenant vacancy.

Conclusion

Although regulatory proposals for eviction prevention do promote benefits to tenants, they also benefit the landlords that they cover. These benefits are substantial, especially given the narrow margins within which many landlords operate. Landlords covered by these proposed mechanisms would generate fewer costs resulting from evictions and vacant dwelling units while continuing to enjoy the benefits of long-term relationships with their tenants. By creating an environment conducive to cooperative settlement of disputes and lease violations, these proposals would ease the obstacles that landlords face and incentivize mutually productive landlord-tenant relationships.

Works Cited

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