Persistent Elevated Levels

Tenant evictions remain at elevated levels in several U.S. cities, showing little sign of returning to pre-pandemic norms. According to the Eviction Lab at Princeton University, eviction filings in a half-dozen cities and their surrounding metropolitan areas are up 35% or more compared to pre-2020 levels. This includes major cities like Las Vegas, Houston, and Phoenix.

  • In Phoenix alone, landlords filed over 8,000 eviction notices in January, marking a record high for the county.
  • Phoenix eviction-court hearings often last less than a minute, with one judge approving an eviction after the tenant admitted to missing two rent payments.
  • Overall, eviction notices have increased by 15% or more in 10 out of the 33 cities tracked by the Eviction Lab over the past year. Despite these high rates in some cities, evictions have generally settled to pre-pandemic levels across the broader U.S.

From January to May, there were approximately 422,000 eviction filings across the 33 cities and 10 states tracked, a slight decrease from pre-pandemic norms. Cities like New York City and Philadelphia have maintained lower filing rates, partly due to enhanced renter protections.

Impact of Rising Rents

The elevated eviction rates in certain areas can be linked to a sharp increase in rents, driven by pent-up demand during the pandemic. This surge has strained many lower-income tenants. Despite a recent softening, nationwide rents for houses and apartments rose by 30% from 2020 to 2023, according to the Zillow Observed Rent Index. Cities in the Sunbelt, along with places like Columbus, Ohio, and the Minneapolis-St. Paul area, are experiencing higher eviction rates.

  • Property-management software has simplified the eviction process by automating various steps. This technology removes much of the discretion from on-site staff, limiting opportunities for resolving issues with tenants.
  • According to Jyoshu Tsushima, a housing lawyer, while most landlords prefer reaching resolutions with tenants, growing eviction regulations have left many with substantial unpaid rent.

Unpaid rent remains the primary reason for eviction filings, with job losses or medical emergencies being common causes. Higher rents mean even temporary income losses can be devastating. About a quarter of American renter households spend 50% or more of their income on housing, according to Harvard University’s Joint Center for Housing Studies. While not all eviction filings result in tenants being removed, they create public records that can hinder future housing opportunities.

Pandemic and Post-Pandemic Dynamics

In 2020, the CDC's eviction moratorium and over $40 billion in federal rental assistance helped keep eviction levels low for more than a year. However, with less rental assistance available today, the financial strain in eviction hotspots is becoming more apparent. The economic boom in places like Maricopa County, Arizona, home to Phoenix, hasn't benefited the poorest residents, who face some of the nation's fastest-rising housing costs. Population growth alone doesn’t explain the spike in Phoenix's evictions; the eviction rate is higher now than before 2020, according to the Eviction Lab.

  • The shortage of affordable housing forces renters to lease units beyond their means as apartments under $1,000 a month are almost nonexistent, according to Maxine Becker, an attorney with the Wildfire Community Action Agency.
  • Las Vegas faces a similar issue, with May eviction filings 28% higher than pre-pandemic norms despite a downward trend. Apartment rents in Las Vegas jumped 27% in 2021 alone, with single-family-home rents increasing nearly 32% since October 2019.

Nevada's state legislature has passed several bills since 2023 to aid renters, but many were vetoed by Republican Gov. Joe Lombardo, including one to pause evictions for tenants applying for emergency assistance. Meanwhile, eviction-related fundraisers on GoFundMe have increased by 40% since before the pandemic, including a 10% rise between May and June this year.

Disclaimer

Please note that Benchmark does not produce investment advice in any form. Our articles are not research reports and are not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

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