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The Department of Housing and Urban Development says that it will extend a ban on evictions in single-family houses with mortgages issued by the Federal Housing Administration, a protection that would be far narrower than the now-expired eviction moratorium in the CARES Act, CNBC.com reported. The expired moratorium also included properties backed by government-sponsored lenders Fannie May and Freddie Mac, and was estimated to have covered nearly a third of the country’s rental units. “HUD’s new moratorium only applies to a slight fraction of the units covered under the CARES Act and does nothing to protect the overwhelming majority of renters in the United States from eviction and its devastating consequences,” said Emily Benfer, an eviction expert and visiting professor of law at Wake Forest University. The federal eviction moratorium in the CARES Act expired at the end of July, and since it required tenants in protected properties to get 30 days notice of their eviction, proceedings will be able to start as early as next week, said Eric Dunn, director of litigation at the National Housing Law Project. At the same time that federal protections against eviction come to an end, many states that paused their own proceedings have now allowed them to resume. Since July 15, eviction moratoriums have lapsed in Michigan, Maryland, Maine and Indiana. Read more.

In related news, with less than two weeks before a statewide moratorium on renter evictions expires, California lawmakers on yesterday declined to back a plan that would have provided tax credits for landlords while sending a separate proposal that would protect tenants back for additional negotiations with Gov. Gavin Newsom (D), the Los Angeles Times reported. Three other bills dealing with affordable housing and homelessness were also sidelined for the year as the Senate and Assembly appropriations committees rushed to meet an end-of-the-month deadline for acting. The Assembly Appropriations Committee sidelined a measure by state Sen. Anna Caballero (D-Salinas) that would have created a process for preventing evictions for three years as long as a landlord and tenant reach an agreement on forgiving rent in exchange for the landlord receiving a tax credit. Senators moved forward a bill by Assemblyman David Chiu (D-San Francisco) that would prevent evictions for up to a year. The measure, AB 1436, would block evictions of renters who missed payments during the COVID-19 “emergency period,” which would end 90 days after the state of emergency order is lifted or April 1, 2021, whichever occurs first. Landlords would also be allowed mortgage forbearance under the legislation. He cited a U.S. Census Bureau survey from last month that showed 4.3 million renters in California reported “little to no confidence” in their ability to pay rent in August. The measure is opposed by groups including the California Chamber of Commerce and the California Apartment Assn., which represents 50,000 owners and managers. Debra Carlton, an executive vice president of the association, said the delay in rents until 2021 will be a burden for senior landlords who depend on rentals for income and owners who need the revenue to pay mortgages and repairs. Read more.

Additionally, New York Gov. Andrew Cuomo (D) signed an executive order yesterday expanding a coronavirus-related emergency moratorium on evictions and foreclosures of commercial properties until Sept. 20, the New York Post reported. The move gives business owners heavily impacted by state-ordered closures associated with COVID-19 more another month to meet their rental obligations. “While we have made great progress in keeping New York’s infection rate low, this pandemic is not over and as we continue to fight the virus, we are continuing to protect New York businesses and residential tenants who face financial hardship due to COVID,” Cuomo said. It’s an extension from an original March 20 eviction moratorium impacting commercial and residential renters, although Cuomo recently signed another bill allowing tenants some protections if they can prove they’ve been negatively impacted by the coronavirus. But commercial tenants are feeling the crush — and have been for five months. A recent survey by the NYC Hospitality Alliance found over 80 percent of bar and restaurant owners couldn’t pay their full July rent. Nearly 40 percent said they wouldn’t be able to pay at all. Read more.

CBL & Associates Properties Inc., one of the country’s largest mall owners, plans to file for bankruptcy by Oct. 1 after the coronavirus pandemic forced almost all its properties to shut down temporarily, disrupting rent collection, WSJ Pro Bankruptcy reported. Founded during a building boom in the 1970s, CBL owns and operates about 90 second-tier shopping centers around the U.S., including locations in smaller and less wealthy cities. The company said yesterday that it has reached a deal on a debt-for-equity swap with bondholders that would erase $900 million in debt and at least $600 million in other obligations. The mall owner’s rents slowed to a trickle since the World Health Organization in March declared COVID-19 to be a pandemic. Some of CBL’s biggest tenants, such as J.C. Penney Co., have filed for bankruptcy as mall closures dragged on, a process that makes it easier for those retailers to close stores permanently and walk away from leases. Penney has said that it would close eight of its 47 stores at CBL properties. While those eight stores bring in only $2.1 million in annual rents, CBL risks losing other tenants in those shopping centers with leases tied to the presence of large anchor tenants like Penney. A number of other CBL tenants have filed for bankruptcy since the pandemic, including GNC Holdings Inc., Aldo Group Inc. and RTW Retailwinds Inc., the parent company of New York & Co. Other tenants such as Macy’s Inc. have recently said they would permanently close certain stores. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. 

Mall of America, the biggest in the U.S., had its value cut by 16 percent in a new appraisal as the pandemic added to the struggles it already was facing from changing shopping habits, Bloomberg News reported. The 5.6 million-square-foot mall outside Minneapolis was reappraised at $1.94 billion, reduced from $2.31 billion, according to a monthly report on the property’s debt filed by trustee Wells Fargo & Co. Malls suffered from the bankruptcies of apparel and department stores as consumers turned more to online shopping, a trend that’s accelerated since the coronavirus forced many businesses to shut their doors in March. Reappraisals are required under the terms of many contracts for commercial mortgage-backed securities when loans are delinquent. Hotel and retail properties have had the highest delinquency rates, leading to transfers to workout specialists, known as special servicers. About 24 percent of hotel and 14 percent of retail CMBS debt was managed by special servicers in July, according to industry tracker Trepp. The Mall of America appraisal came after the owners, the Ghermezian family, missed three monthly payments on its $1.4 billion in bond debt.

Costa Hollywood Beach Resort’s unsold units were slated for a bankruptcy auction and generated plenty of interest but no qualified bidders, more than likely because the coronavirus pandemic put the hospitality industry in a historic nosedive, Law.com reported. 777 N. Ocean Drive LLC, the lender on the project that sought to foreclose on the development team after it stopped paying, is in line to buy the unsold units under its $43 million stalking-horse bid. The lender, an affiliate of New York-based private equity firm Madison Realty Capital, offered a credit bid, which counts against the overdue loan. Bankruptcy Judge A. Jay Cristol of the Southern District of Florida set a hearing on a final sale for Aug. 26. “In this market, especially after COVID hit, it’s a little bit harder to take out a secured lender that’s coming in with a credit bid of $43 million. It’s a lot of money,” said debtor’s attorney James Moon. Moon, a partner at Meland Budwick in Miami, said he doesn’t know if the pandemic is to blame but guesses that’s the reason for an absence of bidders. Over 180 groups expressed interest, signing confidentiality agreements with broker Cushman & Wakefield, but none qualified. The 326-unit Costa Hollywood condominium-hotel became distressed before the coronavirus pandemic. The lender, which issued $70 million in project financing in 2016, filed for foreclosure in Broward Circuit Court in April 2019 against the development group, Costa Hollywood Property Owner LLC. It’s led by developer Moses Bensusan, CEO of the Liberty Grande LLC real estate firm. Costa Hollywood, which owns 43 unsold residential units, nine commercial units and the common area, filed for chapter 11 reorganization last September. Qualified bids were due last Thursday, but with no bidders an auction scheduled for Monday wasn’t held.

U.S. homebuilding accelerated by the most in nearly four years in July in the latest sign the housing sector is emerging as one of the few areas of strength in an economy suffering a record slowdown because of the COVID-19 pandemic, Reuters reported. Housing starts increased 22.6 percent — the biggest gain since October 2016 — to a seasonally adjusted annual rate of 1.496 million units last month, the Commerce Department said on Tuesday. Data for June was revised up to a 1.22 million-unit pace from the previously reported 1.186 million. July’s construction pace was the fastest since February, the month when a record-long U.S. economic expansion abruptly ended as the coronavirus began spreading rapidly around the country, triggering business shutdowns and widespread stay-at-home orders. With last month’s increase, new home building is just 4.5 percent below February’s pace of 1.567 million units.

Though Trump signed an executive order last week directing agencies to study the need for a new moratorium, it did not directly stop evictions across the country, the Washington Post reported. In New Orleans, city courts have received more than 500 eviction complaints since late mid-June when a state eviction ban was lifted. There are no signs of it slowing down after Trump’s action, local officials say. In Milwaukee, where thousands of people are still waiting for unemployment benefits, legal aid attorneys discussed presenting Trump’s executive order to judges in the hope of stopping the recent spike in local evictions but determined it would not work. Trump’s order was appreciated, but there was “nothing definitive that the court could act on,” said Colleen Foley, executive director of Legal Aid Society of Milwaukee. “I hope there is something coming down the pike, [but] right now we can’t act on it.” Trump’s executive order directed some regulators to study whether an eviction moratorium was necessary and others to investigate whether they could appropriate money for rental assistance. But it fell short of reinstating the federal eviction ban that prohibited evictions of 12 million renters in government-backed properties that expired last month, as many had expected.

U.S. home builder confidence rose for a third straight month in August to match its highest level ever as record-low interest rates spur buyer traffic, data released showed showed in the latest indication the housing market is a rare bright spot in the economic crisis triggered by the coronavirus pandemic. At the same time, however, a growing number of home owners are falling behind on their mortgages with tens of millions still out of work and growing signs that the labor market recovery is softening, Reuters reported. The National Association of Home Builders/Wells Fargo Housing Market Index rose 6 points to 78, matching a series record set in 1998. But even as home builder confidence surges, more homeowners affected by the crisis have stopped paying their mortgages, a separate report showed. The delinquency rate for residential mortgages rose to 8.2 percent in the second quarter, up nearly 4 percentage points from the first quarter and the largest quarterly increase on record, according to the Mortgage Bankers Association. Loans backed by the Federal Housing Administration, a program used by many first-time buyers and those with lower incomes, saw their delinquency rate jump to almost 16 percent — the highest since the survey began more than four decades ago.

Regus Corp., which rents furnished office space to businesses and individuals on short-term deals, has put a small portion of its portfolio in New York, Chicago, San Francisco and other cities into chapter 11 bankruptcy as urban office markets face heavy pressure during the coronavirus pandemic, WSJ Pro Bankruptcy reported. Demand for temporary office space in large cities has fallen since businesses around the country adopted work-from-home policies. Regus said in court papers filed yesterday in the U.S. Bankruptcy Court in Wilmington, Del., that the chapter 11 filing buys the company time to continue negotiations with some of its landlords. Regus offers on-demand office and co-working space in more than 1,000 locations across the U.S. and Canada, court papers said. The chapter 11 covers about 2 percent of the company’s U.S. portfolio at some locations in large cities. James Feltman, a managing director at management firm Duff & Phelps LLC who has been retained by Regus, said in a declaration that the business has cut pricing to attract and retain new occupants while taking steps to reduce costs and preserve liquidity. Some occupants, meanwhile, have either fallen behind on occupancy fees or refused to continue paying them to preserve their own cash, Feltman said. Regus, owned by global workspace provider IWG PLC, has negotiated forbearances and rent deferrals with certain landlords and in some instances negotiated permanent modifications to leases to “bring them in line with the COVID-19-adjusted market realities,” Feltman said. Negotiations hit an impasse with landlords at locations covered by the chapter 11 filing, he said.