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As an eviction crisis has seemed increasingly likely this summer, everyone in the housing market has made the same plea to Congress: Send money — lots of it — that would keep renters in their homes and landlords afloat, according to a New York Times commentary. City officials have called for such rent relief. So have landlord associations, tenant advocates, legal aid lawyers, housing researchers, public health experts and economists. Now millions of renters have been covered by a national eviction moratorium, an unprecedented order by the Centers for Disease Control and Prevention to help control the coronavirus pandemic. But there is still no money, according to the commentary. Congress has yet to adopt a new aid package that includes broad rent relief. It hasn’t passed any other cash assistance lately either. Expanded unemployment benefits, worth $600 a week, expired at the end of July, along with a more limited eviction moratorium. There have been no new stimulus checks. And additional unemployment benefits created by executive action by President Trump have not yet reached many workers. That means that while the new order has halted most evictions through the end of the year, there remains no mechanism to cover what those tenants cannot pay — or to control the cascading consequences when rent dries up, according to the commentary. Tenants will still be on the hook for all this unpaid rent when the moratorium expires Dec. 31. And landlords in the meantime may find it increasingly hard to make repairs and cover the mortgage. For this reason, even advocates cheering the moratorium call it a half measure. And landlord groups warn it could destabilize the housing market even more.

Relying on a public health law intended to prevent the spread of an illness, the Trump administration said yesterday that it is implementing a national four-month moratorium on residential evictions, USA Today reported. The moratorium, announced by the Centers for Disease Control and Prevention, was the latest measure by the administration to get a handle on the economic fallout from the coronavirus pandemic absent an agreement with Congress on a more far reaching package that would have the force of law. To stop evictions, health officials are relying on the 1944 Public Health Service Act, which gives the administration broad quarantine powers. The moratorium, which will run through Dec. 31, applies to individuals earning less than $99,000 a year and who are unable to make rent or housing payments. The move drew a mixed reaction from housing experts: praise that it would potentially keep tens of millions of Americans in their homes but concern that it only moves back a deadline, potentially setting people up for evictions next year because they would continue to accrue back payments during the pause in evictions. It’s also not clear how the move affects landlords, who must continue to make their own payments. Read more. 

In related news, California’s legislature passed a bill late on Monday granting renters who are financially affected by the COVID-19 pandemic a reprieve from evictions, which were set to resume today when prior relief expires, the Wall Street Journal reported. The bill passed with supermajorities in both houses of the Democratic-controlled legislature in the final hours of its two-year legislative session and addresses what advocates had said was a looming wave of evictions. Democratic Gov. Gavin Newsom, who crafted the compromise with legislative leaders, tenant advocates and landlord groups last week, immediately signed the bill into law. It takes effect immediately. Backers say it will help keep California’s 17 million renters housed as the state’s economy remains largely closed during the pandemic. The measure would forestall until Feb. 1 evictions for tenants who declare that they have lost income due to the impact of COVID-19 on the economy. All back rent owed by the tenant from March 1 through Aug. 31 of this year would be converted to consumer debt and couldn’t be used as grounds for eviction. To receive continued protection, a tenant would have to pay at least 25 percent of their cumulative rent between Sep. 1 and Jan. 31. The remaining balance would also become consumer debt, which landlords could pursue in small-claims court starting March 1 of next year. Even the bill’s strongest supporters said it was only a stopgap that leaves tenants treading water financially unless and until the federal government provides additional stimulus funds to keep families and landlords afloat. Read more. (Subscription required.) 

Proceedings for the eviction of retail tenants are picking up across the country as courts reopen and states’ moratoriums on evictions are expiring or getting curtailed as the economy reopens, the Wall Street Journal reported. In Miami, a luxury-shopping-center landlord began legal proceedings to evict Saks Fifth Avenue two weeks ago for nonpayment of rent amounting to $1.9 million as of early July. In other parts of the country, smaller retail landlords also have filed lease termination and eviction notices to restaurants, bridal shops, entertainment operators and co-working tenants that haven’t paid rent and weren’t able to come to mutually agreeable modifications to their leases. Before the pandemic, most of these disputes end up getting resolved before the sheriff throws them out, but lawyers said they are seeing higher volumes of disputes which could lead to more evictions. Tens of thousands of leases have been modified, including deferrals or discounts, landlords say, in exchange for lease extensions or other concessions. While overall retail rent collections have improved to 77 percent in July from around 54 percent in April, some tenants, particularly from the apparel, fitness and theater categories, have continued to struggle with payments, according to data from Datex Property Solutions, a real-estate data firm that tracks rent collection on thousands of properties across the country. During the coronavirus-shutdown period that started mid-March and extended to as late as August in some cities, tenants have implored their landlords for deferrals and lower rents to stay in business. States also imposed moratoriums on commercial-real-estate evictions, which offered temporary respite until they expire. New York Gov. Andrew Cuomo extended the state’s moratorium until Sept. 20 from a previously extended Aug. 20 deadline. Landlords said they have modified tens of thousands of leases over the past few months, including deferrals or discounts in exchange for lease extensions or other concessions, such as the removal of clauses that prohibited certain types of tenants in the neighboring space, such as direct competitors or other uses of common-area space. But for some, negotiations reached a stalemate and landlords said they have no choice but to resort to litigation.

Chuck E. Cheese is looking for two more months to negotiate with its landlords over deferred rent, while it also proposes paying part of the full amount due, Bloomberg News reported. CEC Entertainment Inc., parent of Chuck E. Cheese and Peter Piper Pizza, asked to pay reduced rent depending on the status of its operations, rather than forgoing payments in full, attorney Alfredo Perez of Weil Gotshal & Manges, said at a status conference yesterday. The company reached an agreement with the unsecured creditors' committee that provides a sixty-day holdout period for CEC to pay landlords a portion of rent for restaurants that are either closed, open for takeout, or open with limited capacity, Perez said. Judge Marvin P. Isgur of the U.S. Bankruptcy Court for the Southern District of Texas to set hearings for next week for further objections on the matter. CEC earlier asked the court’s permission to put off paying rent for 141 locations that were closed for in-person dining as a result of government measures aimed at preventing the spread of the coronavirus. After getting Judge Isgur’s approval earlier this month to defer rent payments for roughly 21 days on top of the two-month deferral already allowed, CEC reached initial agreements with landlords at 40 of the locations. An additional 10 landlords have signed on to the settlements as of yesterday, while others are in various stages of “getting done,” Perez said.

While the overall amount of foreclosures continued its coronavirus-moratorium descent, Attom Data Solutions found that the share of zombie properties grew during the third quarter of 2020, National Mortgage News reported. In an analysis of data pulled the week of Aug. 17, Attom’s Vacant Property and Zombie Foreclosure Report showed 215,886 properties in the foreclosure process and approximately 7,960 — or 3.7 percent — sit vacant. The share rose from 2.97 percent in the second quarter and from 3.2 percent the year before. Meanwhile, zombie properties totaled 7,652 and 9,612 during those respective time periods. Overall, zombie foreclosures represent one in every 12,486 U.S. residential properties as of the week of Aug. 17. "Abandoned homes in foreclosure remain little more than a spot on the radar screen in most parts of the United States, posing few, if any, problems from neighborhood to neighborhood," Todd Teta, chief product officer with Attom Data Solutions, said in a press release. "But the latest numbers do throw a small potential red flag into the air, given the increase in the percentage of zombie foreclosures." New York again led the country in zombie properties at 2,136, though that total continues to tick down. Florida followed with 1,028, then 971 in Illinois and 887 in Ohio. By zombie share of total foreclosures, Indiana leads at 8.5 percent, followed by 6.8 percent in Kansas, 6.5 percent in Ohio and 6.3 percent in Rhode Island. About 1.6 percent of all 99.4 million homes sit vacant in the United States, totaling over 1.57 million single-family homes and condos.

More than 300 malls in the U.S. are categorized as "Class B" malls, according to real estate research firm Green Street Advisors. With their middle-of-the-road sales productivity, mix of national and regional tenants and one or more anchor vacancies, Class Bs are right in that gray area: Some will weather the current storm, but many will not, Bloomberg News reported. Rent and occupancy at B malls were already falling before the pandemic, but they were less likely to have several anchor vacancies or poor sales like the worst-performing malls in the U.S., those Cs or Ds. About 11 percent of B and B+ malls now have two anchor vacancies, while nearly a third of B- malls have two empty anchors or more. When malls have one anchor vacancy and other anchors start to follow, “that’s when things start to accelerate to the downside,” said Zachary Klein, a real estate and leisure analyst at Fitch Ratings. Since many leases include so-called co-tenancy clauses that let other retailers break leases or pay less if key tenants leave, an anchor vacancy can spell more bad news ahead for middle-tier malls. Although many bankrupt retailers continue operating while restructuring under chapter 11, they’re planning to shut down droves of lower-performing stores. All in all, as many as 25,000 stores could close in the U.S. this year, mostly in malls, according to Coresight. That would demolish the previous record of about 9,800 closures, set in 2019.

When Brooks Brothers filed for bankruptcy last month, court filings showed it owed as much as $1 billion to thousands of creditors, including $10 million to one of its biggest landlords: Simon Property Group. Now the nation’s premier mall operator is also its owner, the Washington Post reported. In recent weeks, Indiana-based Simon snapped up bankrupt retailers Brooks Brothers and Lucky Brand, and bid on another, J.C. Penney. It also is reportedly in talks with Amazon to turn space once filled by Sears and other department stores into e-commerce warehouses. Analysts say the succession of deals gives Simon a roster of iconic brands for rock-bottom prices and steady rent. Others see an act of desperation that will only delay the inevitable demise of dozens of flailing malls across the country. The company’s foray from landlord to owner shows just how deeply the coronavirus crisis has reshaped the retail industry. Like many of its peers, Simon temporarily shut all 175 of its U.S. malls and outlets in March, and was reported to have furloughed about 30 percent of its workforce. It delayed more than $1 billion in redevelopments. Major tenants like the Gap stopped paying rent, while others began pulling out of leases. Apparel chain Abercrombie & Fitch, meanwhile, is suing Simon, alleging that it “wrongfully extracted rent payments” during the pandemic. In all, Simon collected about 51 percent of retailers’ rent payments in April and May, and about 70 percent in June and July, executives said on an earnings call this month. Now the company is investing millions to prop up some failing retailers, in hopes of keeping occupancy rates up and rent payments coming in.