Long Beach on Tuesday passed a local law protecting tenants from evictions related to coronavirus-related hardship, but when it comes to missed mortgage payments, property owners are so far out of luck.
Gov. Gavin Newsom announced on Wednesday that four of the nation’s major banks will provide deference on residential mortgage payments, which may offer some relief, but details on qualifications are not yet clear.
In the meantime, the National Apartment Association, a trade group for landlords, is also lobbying the federal government for emergency deferral on mortgage payments and waivers on late fees.
For now, local property owners are still on the hook for costs such as basic maintenance.
“We still have to pay the plumber, the handyman,” said Malcolm Bennett, president of the Apartment Association, Southern California Cities.
While the city’s action this week eases some of the pressure on renters affected by the coronavirus health crisis for the months of April and May, renters would still have to make payments by the end of November.
Landlords, however, say everyone has been impacted by the spread of coronavirus, which has effectively shut down the city and state.
“There’s a misconception that property owners are extremely wealthy people, and they’re not,” said Tyler Mehl, co-owner of the Belmont Shore Land Company, who has been managing properties in the Long Beach area for over a decade.
Mehl’s company manages roughly 180 units, primarily in the Belmont Shore area. While most of the property owners his company works with don’t rely on their rental income to sustain their livelihood, ongoing costs associated with their properties still have to be paid.
Bennett, a member of the National Apartment Association’s Governance and Independent Rental Owners committees, said he just returned from a trip to Washington for the association’s annual legislative meeting last week.
The association is lobbying for an emergency deferral policy on mortgage payments and waivers for late fees on those payments, something the Long Beach City Council acknowledged to be outside of its jurisdiction.
“Until that’s in effect, our mortgage payments have to be paid,” Bennett said.
In a letter sent to the White House and several government agencies on Monday, a group of trade organizations representing the mortgage industry, including the Mortgage Bankers and American Bankers associations, called for a moratorium on mortgage payments for three to 12 months.
In turn, the groups asked the federal government to provide liquidity assistance to non-bank mortgage providers, who they say will be squeezed by the lack of revenue from mortgage payments and ongoing costs like real estate taxes, homeowners’ insurance and mortgage insurance, which they continue to pay on behalf of their borrowers.
Both Bennett and Mehl said that in the local rental market, partial rent deferrals and payment plans are the most likely solution for the upcoming months. Cash assistance from government sources could also help soften the blow for both sides.
“Hopefully the stimulus checks help and we also hope that people are charitable,” Mehl said. The White House and Senate leaders are finalizing a stimulus program that would pay up to $1,200 per taxpayer, based on their 2018 tax returns.
Mehl said that at least one landlord he has worked with in the past is considering some level of rent forgiveness. But as things stand now, it will be up to individual landlords to make that call.
“I don’t have that capability, because it’s not my property,” Mehl said.
So far, few tenants have reached out to inform him that they won’t be able to make rent next month due to a loss of income caused by the coronavirus crisis, he said. But property managers and landlords likely won’t get the full picture until April 1.
“Some people are scared, some people are probably ashamed,” Mehl explained.
He’s encouraging tenants to talk to their landlord, or the property management company they work with, if they’re worried they won’t be able to pay rent next month because they lost their job or their hours were reduced.
“It would be better to have a conversation with your landlord than not to,” Mehl said. “We’re here to help.”
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