Minnesota Gov. Tim Walz recently extended the COVID-19 emergency through Oct. 12. Among the order’s provisions is a ban on evictions.

The White House recently issued a temporary order to stop evictions across the country through the end of the year.

Help one, hurt another

While the moves are hailed by many for helping families suffering from layoffs and income losses, the unintended consequence of the orders is that they essentially force landlords to subsidize renters who can’t pay for their housing.

Landlords who violate the edicts can face sizable fines and even criminal penalties.

Of course, apartment building owners and property management companies have bills to pay, too, including mortgages, utilities, insurance, maintenance and commercial property taxes.

Deeply behind on rent

According to an August estimate by Moody’s Analytics,  tenants across the nation owed about $25 billion in back rent, and will by the end of 2020 owe nearly $70 billion.

President Trump’s order stopping evictions contained no financial help for renters, meaning that on Dec. 31, when the order expires, they’ll owe all of their back rent. The ordered contained no financial relief for landlords either.

However, the federal CARES Act included an extra $600 per week that helped tenants pay some or all of their rent, but that expired in July. Talks in Congress to resume the assistance have stalled.

One in three owe rent

Landlords know there’s a real need for further assistance: according to the most recent Apartment List survey, one out of every three tenants failed to pay their September rent on time.

A recent news article pointed out that in a low-margin industry – after expenses, rental property owners pocket just 9 cents of every dollar received in rent – the margins have already worsened considerably in 2020. Of course, expenses are about to rise in Minnesota, due to the coming frigid weather.

After the end of the year, it is possible that eviction cases will pour into the legal system, adding yet another cost onto rental property owners.