ROCHESTER, Minn. — Sheala Hall’s family owns six rental properties in communities surrounding Rochester, and the aftermath of Minnesota’s eviction moratorium is taking a financial toll.
“Unfortunately, your mortgage payments, your insurance, your taxes don’t go away,” she said.
Of the family’s combined 19 rental units, 10 occupants are behind on rent payments, with six making partial payments in an effort to maintain their housing.
The remaining tenants have applied to receive rent support through the state’s federally funded RentHelp program, but only one back-rent payment has been received.
“It hinders being able to update the properties,” Hall said, noting thousands of dollars in unpaid rental income are logged each week.
One of the family’s apartments suffered water damage before a tenant eventually moved out. It now sits vacant with $20,000 invested in repairs, but more work is needed to make the one-bedroom unit inhabitable.
“It’s, for the most part, repaired,” Hall said. “The bathroom is kind of in limbo right now.”
The Hall family’s circumstances are not unique.
Statewide, 49,602 applications for COVID-19 rental assistance have been submitted, with 30% of requested payments sent.
Another quarter of the applications have been approved, but checks and deposits are delayed for verification to meet federal standards.
Minnesota Housing Commissioner Jennifer Ho said progress is being made, but she understands the delays fuel frustration.
“I know if you are a property (owner) that hasn’t been paid or a renter who hasn’t seen that payment, it doesn’t matter that my rate has picked up,” she said.
The state agency reports that a combined $19.2 million in payments have been distributed to more than 4,090 Minnesota households since Oct. 4, bringing the total to more than 24,280 payments with $120.2 million distributed.
Randi Callahan, Three Rivers’ housing advocacy services manager, said the Southeast Minnesota RentHelp assisters have seen payments start to increase, but the agency is also continuing to get new referrals.
In Olmsted County, 1,874 applications have been filed, seeking a combined $10.08 million. As of Oct. 4, payments on 27% of the application had been sent, with another 28% approved.
Michelle Hill, owner and chief operating officer of Matik Management, said she’s noticed the increase in payments, but more is needed to help property owners who are feeling the pinch.
The management company has received 11 payments from 56 applications, but Hill noted several applications didn’t get finalized until Matik took over the accounts and helped finalize applications.
The process requires cooperation between tenants and landlords, and advocates on both sides have noted that relationships can be tense following months of payment struggles while people were unemployed or had added costs related to the COVID-19 pandemic.
More requests expected
Ho said RentHelp navigators, counties and court officials have helped move applications forward and the state is seeing an uptick in applications.
With no established deadline for filing, she added requests are likely to continue as Tuesday, Oct. 12, marks a shift in the state’s eviction moratorium.
“What Oct. 12 does is the properties no longer need to provide the 15-day pre-eviction filing notification,” Ho said.
It also means property owners can start seeking evictions for nonpayment of rent related to tenants who don’t apply or don’t qualify for RentHelp assistance.
So far, only 9% of applications statewide have been declined, withdrawn or put on hold.
The percentage is lower in Olmsted County, where 25 eviction cases have made it to a virtual courtroom since Aug. 1. Of those, several have moved forward without tenants contesting, but others stalled due to last-minute RentHelp applications.
Travis Ohly, an attorney who represents property owners, said the potential for future filings will likely slow court action until payment is made, an application is denied or eviction protections end June 1.
“I don’t know that the flood gates are going to open,” he told Olmsted County District Court Referee Gail Baker between recent eviction hearings.
He said initiating an eviction action can cost $500 to $700, which could end up being lost if the tenant files for RentHelp and the case suddenly ends. With some property owners facing potential foreclosure on rental properties, he said it’s not a risk worth taking.
“There are really big concerns, not just for tenants, but property owners,” he said, citing a client who has 32 apartments in the same building that are waiting for state payments for back rent.
Kayleen Asmus, an attorney with Legal Assistance of Olmsted County, agreed the pressure is being felt on both sides, with tenants as anxious as landlords.
“I know our tenants … especially if there are other reasons they are going to need to leave, they really want to pay,” she said, noting they’re hoping to guard against future damage to their credit rating or ability to rent a home.