BOARD PERSPECTIVE
BY BOBBY HUTCHINSON , JLAC CHAIR ELECT
Putting Colorado Eviction Rates in Context
In August 2021 , the Supreme Court ’ s rejection of the Biden Administration ’ s eviction moratorium provoked a wave of outrage from lawmakers , renter advocates and housing experts . ‘ Millions of residents will be forced from their homes ,’ they declared . ‘ Prepare for an eviction tsunami .’ One widely cited study from the Aspen Institute estimated more than 30 million Americans were at risk of imminent eviction . Seven months later , as nationwide eviction rates remain well below their pre-pandemic average , it ’ s increasingly clear that an ‘ eviction tsunami ’ has not and will not arrive .
During the first quarter of 2022 , eviction filings in Colorado remained historically low . Across the first three months of the year , just 1,860 total eviction actions were filed across Colorado – less than 75 % of the pre-COVID standard for Q1 . Nationwide , the disparity between pre- and post-COVID eviction rates is even more dramatic . According to the Eviction Lab at Princeton University – the nation ’ s leading resource on eviction and rent payment trends – evictions in most states and cities remain 40 % below the historical average .
Anyone reading the news today couldn ’ t be faulted for believing an ‘ eviction tsunami ’ struck the United States with full force . Eviction coverage ramped up considerably in recent weeks as Colorado ’ s filings reached , for the first time , their pre-pandemic , 20-year average . Amid new data from the Denver County Clerk , some public officials alleged that evictions are ‘ skyrocketing ’ in Colorado .
After the moratorium ’ s expiration , Colorado ’ s eviction rate increased gradually , sustainably and slowly , eventually reaching the market ’ s standard pre-pandemic rate . In the eyes of many lawmakers and media members , this increase signals the arrival of an ‘ eviction tsunami .’ To the multifamily housing industry , it signals something different : the apartment market ’ s long-awaited return to normal .
No rental housing providers are eager to evict their residents . It ’ s a costly , arduous and unpleasant process , only pursued when all other resources and options have been exhausted . That said , evictions are a necessary condition of a stable apartment market . As the economic fallout of the COVID-19 pandemic wanes , the slow return of eviction rates to the historical average is a healthy indicator for renters and rental housing providers alike .
Without the ability to evict , landlords lose their incentive to loan units to prospective renters . They need some assurance that , in the event of nonpayment , they have a mechanism to reclaim their property . For most rental housing providers , reliable rent payments are their primary source of income . They can ’ t afford to forgo rent payments any more than the average American can afford to work without a salary . Rent pays their mortgage ; it puts food on their table ; it sends their kids to college .
For folks with a poor rental or credit history , the eviction process is similarly important . Without this mechanism , rental housing providers can ’ t afford to take risks on renters with a shaky track record . These applicants will struggle enormously to find housing – already a tall order in Colorado ’ s historically tight market . The eviction process offers a safety net to rental housing providers , allowing them to take a chance on applicants with bad credit . As a result , these residents are given a shot at quality housing and a fresh start .
As we approach six months since the moratorium ’ s expiration , it ’ s time we all acknowledge that claims of an ‘ eviction tsunami ’ were misleading , intended to spur discussion around imprudent housing policies , like rent control . Colorado ’ s rental housing market is returning to normal , and there remains no indication that large or aberrational numbers of families face removal from their homes . As we emerge from the COVID-19 pandemic , let us divert less energy toward manufactured concerns , and more toward thoughtful , pragmatic solutions to the problems facing our nation ’ s housing market .
Bobby Hutchinson is the Chief Investment Officer at Redpeak .
6 | TRENDS MAY 2022 www . aamdhq . org