Frank Celio, who rents properties in Illinois and Northwest Indiana, says eviction bans are putting a financial strain on landlords like him.
Frank Celio owns a brown and beige single-family home in Hegewisch, a working-class neighborhood on Chicago's Far South Side just blocks from the Illinois-Indiana state line.
He said his father used to live in the home, nestled in the middle of the block on the quiet, tree-lined street. Today, Celio said he rents the home — and wants to evict the tenants.
But Celio said the eviction process has gotten a lot more complicated since the start of the coronavirus pandemic.
"The government won't let us get him out of there. ... It's really, really frustrating because in the past I could just easily make a motion to evict — and that would be the end of it," Celio said. "I can't even do that now — and it's my property. I can't do nothing with it."
Landlords like Celio, who owns properties in Illinois and Northwest Indiana, are navigating a series of new eviction moratoriums that vary by location. While these efforts have been lauded by housing advocates, landlords like Celio say the protections favor renters. And experts say these new rules could lead to a surge in foreclosures for landlords down the road.
How many homes do these regulations affect in the Chicago area? Cook County Sheriff Tom Dart, whose office is responsible for enforcing evictions, said last month that more than 250,000 households in the county are now at risk of eviction.
"You definitely don't want an influx of homeless people," Celio said. "However, [officials] need to do more to make this an equitable and fair transition for both involved."
The latest protections for renters came on Sept. 2, when the White House made the surprising announcement that the Centers for Disease Control and Prevention would put a moratorium on evictions until the end of the year under its broad powers to prevent the spread of the coronavirus. The measure would forbid landlords from evicting anyone for failure to pay rent, providing the renter meets certain criteria.
In Illinois, the moratorium is even more stringent. Gov. JB Pritzker in April issued an executive order prohibiting evictions for 30 days. That order has repeatedly been extended and is currently set to expire Sept. 22. And in July, Chicago City Council passed an ordinance that requires landlords to give long-term renters 120 days notice if they will not be renewing their lease.
Making matters more difficult for landlords like Celio, the U.S. economy hasn't recovered from the coronavirus as quickly as some economists anticipated. The U.S. Department of Labor reported last Thursday that more than 857,000 American workers filed new claims for state unemployment benefits during the first week of September — about the same as the previous week. Illinois reported about 25,000 new unemployment claims per week during that span. And there were more than 548,000 people collecting unemployment throughout the state in the last week of August, the most recent numbers provided by the Department of Labor.
And cash-strapped tenants shouldn't expect help from the federal government anytime soon. A coronavirus relief package again stalled in Congress this month, meaning supplementary income from a second stimulus check or expanded unemployment benefits remains in limbo.
The impact on small landlords
Chicago attorney Carol Oshana represents landlords who mostly "own just one building" to supplement their income.
These small landlords, which Oshana called "mom-and-pop shops," also known as single-family rentals, make up about 34% of the estimated 45 million renter households in America, according to the Joint Center for Housing Studies at Harvard University.
In the Chicago metropolitan area, as of 2018, single family rentals make up about 20% of the 1.3 million rental units, according to Joint Center for Housing Studies.
"My landlords are very desperate. They have [renters who] are working but don't want to pay," Oshana said.
"It's extremely difficult to get somebody out right now. Extremely. Even if they are the worst tenants. Even if they are having the police called over and over again. It's very difficult," she said.
Oshana says landlords for large corporate housing complexes have more money and access to lawyers to get tenants out.
"Tenants know big landlords will go after them and their credit. Small landlords can't even afford lawyers," Oshana said. "Also, big landlords don't live in the building. Smaller landlords are harassed by their tenants who refuse to pay."
The Trump administration has said that leftover money from the CARES Act and Development Block Grants would help landlords whose tenants don't pay under the CDC protection plan. But experts wonder if that funding is adequate, or if millions of landlords around the country will be left unable to pay their mortgages.
Oshana also predicts that many landlords will lose their properties if eviction moratoriums aren't lifted soon. "We're going to have a lot of foreclosures because the tenants aren't paying the rent," she said.
"They have no incentive to work with me"
Katrina Bilella said she's feeling the pain from the pandemic, both as a landlord and as a tenant. In 2017, the native of Miami, Florida, was living in Chicago working in human resources.
She found a new job in Colorado in 2018 and moved away, leasing her Logan Square condo near Palmer Square Park to a friend.
Last October, that friend moved out and new tenants moved in. But Bilella said rent payments stopped soon after the pandemic hit Chicago in the spring.
"My tenants have not replied to me in three months," she said. "They have no incentive to work with me. They haven't paid me since March, and they have no reason to. There is no consequence for not doing so."
To make matters worse, Bilella said she lost her human resources position in Colorado. With no income and no rent payments from her Chicago tenants, Bilella moved in with relatives in Brooklyn.
She said she's using her savings to make the mortgage payments on her Chicago condo.
"I honestly don't know much longer I'll be able to do that, and I'm really hoping I don't have to find out when I no longer have anything in my savings," Bilella said.
In late March, Congress passed the CARES Act Eviction Moratorium which provides rental assistance and housing grant programs for federally-backed mortgage loans such as those backed by Fannie Mae or Freddie Mac.
"I personally found no benefit in the CARES act to my situation," said Bilella, who lives in a 100-unit condo complex and thus is ineligible for the program.
Bilella said she is working with her mortgage company on a forbearance arrangement, but that is not a certainty. And, she said, the arrangement might only delay her payments by 90 days.
But making the mortgage payments is just one expense, she says.
"I have to pay [Homeowners Association] fees, taxes, homeowners insurance and maintenance on the unit," she said.
For Celio, he too doesn't qualify for the CARES Act because he owns the rental home.
"I am fortunate that my property is owned free and clear and that's a great thing. But there are other bills that need to be paid. I have property taxes and utility bills that need to be paid," Celio said. "I have other properties where I can dip into and help prop this one property up but it's tough."
Celio said he would like to sell the Hegewisch home because he's soured on investing in the city.
"I don't think I'll be buying any more property in Chicago. It's just not worth it," Celio said. "The tenant and landlord laws are against us, the landlord."
Michael Puente covers Northwest Indiana and Chicago's Southeast side for WBEZ. Follow him on Twitter @MikePuenteNews.