Under Governor Jay Inslee’s eviction moratorium that was extended last month through the remainder of 2020, landlords are prohibited from evicting tenants for failure to pay rent. While the governor’s proclamation says the decision will maintain housing stability, some landlords behind a new lawsuit challenging that order in Eastern Washington’s U.S. District Court warn it could result in foreclosures and force out tenants – even if they have been paying their rent.
“Everybody who lives in that building is going to be affected,” Enrique Jevons said. Jevons operates 88 rental units in the Yakima area, mostly multifamily housing, and is one of the plaintiffs suing the state over the eviction moratorium.
The lawsuit challenges numerous aspects of the moratorium, citing a lack of statutory authority on Inslee’s part. But much of the plaintiff’s grievances center on the proclamation’s broad application to any tenant not paying rent, whether they are employed or not.
Behind the lawsuit is the Washington Business Properties Association, a new property rights advocacy group. WBPA President Kevin Wallace is a former Bellevue City Councilmember and runs Wallace Properties, a Bellevue-based commercial real estate company.
Wallace told Lens that the group is looking for “reasonable rules of the road” regarding evictions. “The problems we’re facing in the industry is being asked to provide our product with no cost. Without income verification, nobody has to prove they lost their job…because there has not been that requirement and no clarity from the state about the need to pay the rent. Many apartment landlords have been put in a difficult position.”
Although Inslee’s proclamation permits eviction if it’s shown by “preponderance of the evidence” a tenant refuses to enter into a payment plan, that only applies after the moratorium is lifted.
Jevons said that while most of his tenants continue to pay rent or have legitimate reasons such as unemployment, some do not – even though they still have jobs. But while the proclamation allows them not to pay, he still has to pay the mortgages on these properties along with property taxes, maintenance and repair as well as cover utilities often included in the rent. He added that having nonpaying tenants is actually worse than a vacant unit because utilities are still consumed.
“All of these expenses are such that they never go away, and then the income is such that the rent needs to cover all these expenses,” Jevons said. “Otherwise it’s unsustainable. A down payment for the property…(is a) huge upfront cost that is going to take many years to recover. You are significantly prepaying a very large portion of the amount.
He added that the moratorium is merely “kicking the can down the road. The tenant is still obliged to pay the rent. If somebody has not been paying for nine months…that individual is most likely going to be evicted.”
“The landlords want to protect their tenants,” Wallace said. “It’s in our interest to keep them in our units,” adding that collecting unpaid rent is likely going to be “impossible” for landlords. “We need the state to come in and compensate us. The governor just needs to step in and cover the bill or prevent the moratorium.”
Though the proclamation is meant to ensure housing stability, Wallace and Jevons both warn that the moratorium in place disincentives the construction and purchase of rental properties.
“That investor would not obviously be willing to pay the current market value if it has tenants that aren’t paying,” Jevons said.
If the moratorium continues into next year, Jevons said foreclosure is a possible scenario for several of his properties. However, if that were to occur the bank would take possession and force out the current tenants before reselling it.
“We’re all in this together, and the solution is not to try and push the burden on any one individual,” he said. “This is a bigger problem that can be solved.”