All but six states across the country have implemented either a statewide eviction moratorium or suspended court eviction proceedings due to the novel coronavirus outbreak, according to a report by Chicago-based real estate investment firm Marcus & Millichap.
Illinois was identified as one of 37 states with a statewide moratorium. Seven other states have temporarily suspended court eviction proceedings.
The special report, titled “Global Health Crisis – Multifamily” noted that lenders of federally backed mortgages have suspended foreclosures and evictions for 60 days beginning March 18. The report also warns that those who do evict might find it difficult to attract new tenants.
Recommendations from the National Multifamily Housing Council, an apartment industry advocacy group, were also cited in the report. The group called on landlords to implement a 90-day moratorium on evictions for those directly impacted by the pandemic, abstain from rent increases for 90 days and identify resources to help residents with basic needs like food and health care.
Communication both with tenants and lenders is key to establishing “realistic expectations for rental income, so that owners can anticipate any losses and put plans in place to maintain cash flow,” the report advised. “Additionally, owners facing financial uncertainty should reach out to lenders to discuss loan forbearance options and talk to property managers about logistics and operational procedures.”
The report also provides insight into hurdles multifamily building owners will face in the short term. “The extra costs to maintain clean common areas through increased labor and sanitation, as well as the likelihood for more maintenance expenses linked to wear and tear as residents spend more time than usual in their apartments will be hurdles,” the report stated.
Recently built apartments also might be harder to fill due to a drop in search activity as a result of stay-at-home orders.
While some of these challenges will eventually abate, the report noted that it is still uncertain how long it will take for the economy to recover: “A longer-term headwind could be the slowdown of household creation amid more people moving back in with their families or seeking roommates due to financial burdens.”