Eviction Costs Pushing Landlords out of California’s Housing Market

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“I still love this country, but being a landlord in Oakland, and California in general, [It’s] not worth it,” said one immigrant landlord.

Many California landlords have been hit hard by statewide eviction moratoriums, allowing tenants to not pay rent for as long as three years. But now that moratoriums have been lifted across the state, evictions for some landlords are costing tens of thousands, forcing some to sell their property and leave the rental industry in California.

According to estimates by a landlord in Alameda County who led efforts to end the eviction moratoriums in Oakland, San Leandro, and in Alameda County—which lasted from March 2020 until the summer of 2023—there’s about $1 billion in unpaid back rent for Alameda County alone.

The county had a monthly average of 310 evictions in 2019, dropping to around 55 during the pandemic, and rising to about 580 as of last October since the moratorium was lifted in the county, according to records provided by Alameda County Superior Court.

Dozens of people hold up signs protesting against an eviction moratorium while a property owner sitting in a wheelchair continues his hunger strike in Oakland, Calif., on Feb. 26, 2023. (Xue Mingzhu/The Epoch Times)
Dozens of people hold up signs protesting against an eviction moratorium while a property owner sitting in a wheelchair continues his hunger strike in Oakland, Calif., on Feb. 26, 2023. (Xue Mingzhu/The Epoch Times)

As a member of the East Bay Rental Housing Association—which represents around 1,600 rental property owners in Alameda and Contra Costa counties, Chris Moore, who has 20 rental properties of his own, told The Epoch Times legal costs to evict unpaying tenants can be more than some landlords can afford.

He said the landlord is usually right, but still the costs can be too high to fight.

“I can disprove all of them,” he said, referring to renters fighting to not have to repay. “But I have to … pay a lawyer $500 to $600 an hour. It costs $30,000 to $40,000 now to do an eviction, so I can tell you, I’m not interested in evicting the tenant.”

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In the Bay Area, he said, tenants can receive free advice and representation from attorneys, costing the landlord thousands in attorney fees.

Mom-and-Pop Landlords Struggling

Unpaid rent and little federal, state, or local relief funds for landlords won’t cripple corporate landlords or those with many units, but for those with only one or just a couple of properties such can be devastating.

Many landlords struggled to afford monthly mortgages on their properties during the pandemic, often leading to difficult decisions.

Carolyn Silas-Sams, who has not received rent since 2020 on an Oakland duplex she owns, said she ultimately had to drain her retirement account, and borrow from family members and from her life insurance to pay the $4,400 a month mortgage on the property. She’s also been on the hook for water and garbage expenses.

“I’m telling you … any level of education would not allow your brain to accept that something like this could happen, because it’s not rational,” she said.

Some rental relief was offered in her city, but prioritized tenants who earn less than $30,000. With $28 million in rental relief for tenants—to be collected by landlords—from the federal government and another $10.4 million from the state, Oakland quickly dispersed it as demand outstripped the funding, leaving many landlords on the hook for unpaid rent.

With the funds going quickly, cooperation from tenants was key for landlords to receive the assistance, but why should they care, Ms. Silas-Sams said, if there were no consequences?

“Even the program that they could have signed up for—that may have paid me something—they were too trifling to even do that. Because they didn’t have to, they didn’t have to do anything,” she said.

Many real estate professionals throughout the Bay Area are saying the same thing: the moratoriums were a blow that not all were prepared for.

When rents weren’t paid, landlords could not pay their own bills: not for weeks or months, but for years, said Jonathan Fleming, a lifelong Oakland resident who owns a real estate services company for residential and commercial properties.

“It’s one thing to tell the landlord, hey, you know, survive for six months, three months. But mostly these people had to survive for three-plus years,” he said in a recent interview with EpochTV’s “California Insider.”

Oakland Landlord Spends Six Figures to ‘Regain Ownership’

Sometimes a lump-sum settlement could cost less than attorney fees during eviction disputes, which is what one Oakland landlord elected to do for a renter who hadn’t paid full rent in over a year: paying them $30,000 to move out.

“We finally signed an agreement after two years of back and forth,” the landlord, who wished to remain anonymous, told The Epoch Times in a recent interview.

The tenant—a middle-aged man—ultimately left but his unit was “filthy” with some furniture left behind, the landlord said.

The tenant, who was sub-leasing a unit in a duplex the landlord purchased in 2022, refused to pay full rent or move due to Oakland’s COVID eviction moratorium.

Ultimately, the landlord sued him for repayment of back rent and utilities when Oakland’s moratorium ended in July.

The two negotiated for a while—which cost the landlord $75,000 in legal fees—but the tenant wouldn’t budge to pay what he owed. At one point he demanded $200,000 to settle.

After advice from his attorney, the landlord decided to forgo what he was owed and just give the tenant a lump sum of $30,000 to make him go away.

“This guy cost me $75,000 in legal fees. So, I spent $105,000 to regain ownership of my property,” after the settlement is factored in, he said.

Moving from France 15 years ago, he said his impression of the United States has since changed as he’s seen how some will take advantage to skirt their responsibilities.

He said he has learned in the United States, some will abuse the system “as much as [they] want. There will be no consequences. And on top of that, you will get a huge payoff from it.”

As for renting out properties in Oakland, he says, “Don’t do it.”

“I still love this country, but being a landlord in Oakland, and California in general, [It’s] not worth it,” he said.

Is Los Angeles Next?

In Los Angeles, landlords are currently owed an estimated $898 million in unpaid rent, according to a recent analysis by Oakland-based Policy Link, a research organization, and the University of Southern California Equity Research Institute, which focuses on advancing racial and economic equity nationwide.

Recently, the Los Angeles City Council has been considering continuing a COVID-era program providing tenants facing eviction with free legal counsel, similar to Oakland.

But for some small landlords in Los Angeles, the added protections may have unintended consequences.

“People are being extremely careful on who they select as tenants and only people with terrific credit are going to get into apartments from now on,” Daniel Yukelson, CEO and executive director of the Apartment Association of Greater Los Angeles, told The Epoch Times. “It’s going to lead to more people not being able to find housing.”

Called “Right to Counsel,” the program would, by 2029, have 200 attorneys, representing 10,000 residents, at a cost of $70 million annually. Funding will come from Measure ULA, a sales tax approved by voters in 2022 on homes sold for over $5 million.

Mr. Yukelson argued instead of using Measure ULA funds to pay for attorney services to tenants—who usually owe about $2,000 to $3,000 in unpaid rent, according to recent eviction filings—the city should instead just cover the unpaid rent, which would do the same, costing less.

Renters and housing advocates attend a protest to cancel rent and avoid evictions in front of the courthouse amid the coronavirus pandemic in Los Angeles on Aug. 21, 2020. (Valerie Macon/AFP via Getty Images)
Renters and housing advocates attend a protest to cancel rent and avoid evictions in front of the courthouse amid the coronavirus pandemic in Los Angeles on Aug. 21, 2020. (Valerie Macon/AFP via Getty Images)

“They’ll easily spend far more than that [on] hiring attorneys, which will just lead to delays for the property owner and lead to the inevitable,” he said.

Currently, there are about 71,000 eviction filings on record in Los Angeles, according to the city controller’s office, with a majority due to non-payment of rent. Most are just warnings though, with very few leading to an eviction, according to Mr. Yukelson.
In Los Angeles, just like in the Bay Area, evictions can cost tens of thousands and take months to resolve, he said in a recent interview. As such, they’re always a last resort.

“Depending on how highly contested the evictions are, hiring private attorneys will make that even worse and cost even more in legal fees,” he said.

All the while, the landlord is still not collecting rent while paying out exorbitant legal fees.

“Owners are way out of pocket. It’s very time-consuming, and so they just don’t want to go through the process,” he said.

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