In early September, Cristina Velez lost her job running the staffing team on a Covid-19 treatment trial. Faced with a $2,440 rent bill on the Boca Raton, Fla., home she shares with her daughter, Velez began calling her landlord, Progress Residential, to ask whether it would give her time to come up with the money.
“I told them I was affected by Covid, but it didn’t matter to them,” Velez said. “They are not very patient.”
On Sept. 8, Progress gave her an ultimatum — pay the rent or deliver the premises, a Palm Beach County court filing shows. Just over two weeks later, Progress filed eviction proceedings against Velez, demanding $4,210.14 in rent and legal fees, delivering the papers to her door.
Not once, Velez said, did Progress representatives tell her about a nationwide eviction moratorium ordered by the federal government to let tenants hurt by Covid-19 stay in their homes if they couldn’t pay their rent. The moratorium, issued by the Centers for Disease Control and Prevention on Sept. 4, bars landlords from evicting tenants who affirm that they’ve been harmed by the coronavirus for nonpayment of rent.
“I said, ‘There’s got to be something for people affected by Covid and being furloughed,'” Velez, 46, reported telling Progress. “There’s nothing we can do,” the company representative replied, she said.
Velez said she sold her car to pay Progress.
From early September to Oct. 17, despite the CDC eviction ban, almost 10,000 eviction actions have been filed in 23 counties in Arizona, Florida, Georgia, Tennessee and Texas by large corporate landlords like the one that owns Velez’s house, court documents show. After at least one landlord group lobbied the Trump administration, the CDC clarified its ban on Oct. 9, opening the door for still more such actions. New eviction filings have jumped since then, court records show. During the week of Oct. 12, for example, almost 2,000 proceedings were recorded in the five states, almost twice the number from the previous week.
The evictions are part of a database compiled by the Private Equity Stakeholder Project, a nonprofit that examines the impact of private equity on communities. It began compiling eviction statistics after the pandemic hit, although it isn’t known how many evictions are related to the coronavirus.
Large landlords filing numerous evictions include prosperous U.S. public companies like Invitation Homes, which owns and leases 80,000 single-family homes nationwide. The company is thriving — its earnings rose by 54 percent for the first six months of the year, and its stock price has jumped by 80 percent since the market bottomed out in March. Court records show 122 eviction filings by Invitation Homes in the five states during the period.
Velez’s eviction action is one of 97 cases filed against tenants by Progress Residential since the CDC announced its ban. Progress, a large and well-funded landlord, owns and leases 40,000 single-family homes nationwide. It is owned by Pretium Partners, a $3 billion hedge fund that invests in distressed properties.
A spokesman for Progress declined to comment on the record about its interactions with Velez in the eviction filing.
In a statement, the spokesman said: “Progress Residential continually engages with tenants on matters related to their leases. While each matter is unique, we are committed to working with tenants, as appropriate, to try and provide assistance during these extraordinary times.
“Progress Residential complies with applicable law, including the CDC Moratorium, in enforcing rental evictions. Importantly, as part of the CDC Moratorium, tenants are required to provide a declaration that makes clear they are unable to pay rent due to the impact of Covid-19.”
Pretium, the company that owns Progress Residential, is overseen by Donald Mullen, a former Goldman Sachs partner who headed the bank’s mortgage and credit operation until he left in 2012. Mullen’s work at Goldman emerged in a 2010 Senate investigation into the causes of the mortgage crisis when investigators published a 2007 email he wrote about the “serious money” Goldman was poised to make as the mortgage market began to collapse.
Through a spokesman, Mullen declined an interview request about eviction proceedings by Progress Residential and his work at Pretium and Goldman.
Other big landlords filing evictions are owned by private equity firms, such as the Carlyle Group, with 42 actions, the documents show. The top eviction filer, according to the documents, is Ventron Management LLC, a Canadian real estate firm that has brought 281 proceedings.
“The decisions of large companies to advance evictions despite the moratorium quite literally threatens the health of residents and the broader public,” said Jim Baker, executive director of the Private Equity Stakeholder Project. He said the five-state figures are likely to be only the tip of the iceberg.
Kristi DesJarlais, senior vice president at Invitation Homes, cast doubt on the eviction figures collected by the nonprofit. “We question the veracity of the list,” she said.
In addition, she said eviction wasn’t a course the company wants to pursue. “We have been doing what the CDC order directs since early in the pandemic,” she said in a statement, “working with our residents facing Covid-related financial hardships and offering a variety of payment options so they can stay in their homes.”
Ventron didn’t respond to an email seeking comment. A Carlyle spokeswoman declined to provide an on-the-record statement.
‘An overreach of authority’
When it announced the ban on Sept. 1, the CDC said it was crucial to stopping the spread of the coronavirus. Many tenants, out of work because of Covid-19 shutdowns, are struggling to pay their rent; the CDC estimated that up to 40 million people could lose their homes without eviction protections in place.
The CDC action followed the expiration in late August of a narrower eviction moratorium in the CARES Act. Under the CDC ban, tenants are responsible for paying the full amount of rent owed.
The recent rise in evictions may be related to a new CDC notice on Oct. 9 clarifying the terms of the ban, tenant advocates say.
The new CDC notice specifies that landlords can begin eviction proceedings now, even though they aren’t supposed to remove tenants before the end of the year. The new notice also said landlords aren’t required to notify tenants about the ban or its terms.
Landlords are also free to challenge tenants’ sworn attestations of harm from Covid-19, according to the CDC’s clarification, and the agency made it clear that there is no administrative appeal process for tenants faced with such challenges.
The notice from the CDC this month narrowed what had been a broad ban on evictions, tenant groups say, and it gave landlords the upper hand. They warn that a tsunami of homelessness will result, along with lasting financial damage to renters.
It “puts more power back in the hands of landlords at the expense of low-income renters,” said Diane Yentel, president and chief executive of the National Low Income Housing Coalition, a nonprofit. “It creates new burdens for renters and creates new holes in protections for renters.”
A spokesman for the CDC didn’t respond to a request for comment about the initial ban and the subsequent changes to it.
Landlord advocacy groups criticized the initial ban and lobbied to change it. One, the National Apartment Association, took credit for the CDC’s clarification, describing on its website “first-hand conversations with the Trump administration and the U.S. Department of Justice” to battle the ban. The association and other landlord groups are also contesting the legality of the moratorium in court.
“From our perspective, the CDC order was an overreach of their authority, and landlords needed clarification on how to proceed,” said Bob Pinnegar, president and chief executive of the National Apartment Association. “It’s been seven months, and we have members experiencing some financial burdens as a result and carrying a lot of debt.”
‘Ethically challenged evictions’
While the CDC ban centers on Covid-19-related harm among renters, it doesn’t bar evictions for other reasons, such as those related to health and safety threats by tenants, property damage or criminal activities.
Eviction filings tallied by the nonprofit may well include such cases. But some who work in evictions say landlords at times make faulty claims when pursuing them.
Joe Ferguson is a constable in Pima County, Arizona, and among his tasks is delivering eviction notices to tenants. He works to help combat their removal and explain what their options are.
Many evictions in Pima County are wrongful and violate the CDC moratorium, Ferguson said.
“As we get closer to Dec. 31, there is intense pressure by some landlords to push through ethically challenged evictions,” Ferguson said. “Some evictions need to go forward, but in other cases it’s people relying on the legal system to go through loopholes.”
As new eviction filings pile up, so do difficulties for tenants. Because evictions can appear on tenants’ credit reports, renters may have more difficulty finding new homes, with other landlords likelier to reject their applications. Evictions often push renters into poverty, research shows, with mental and physical health declining along with the likelihood of finding a job.
The recent rise in eviction filings will push many renters to move out even if they qualify to remain in their homes under the CDC ban, tenant advocates say.
“In many states around the country, you can’t cure an eviction once it is filed,” said Shamus Roller, executive director of the nonprofit National Housing Law Project. “People are going to get notices and are going to feel they’ve been evicted and will move out. The CDC order created an incentive for unethical behavior by landlords.”
Pinnegar said the National Apartment Association is encouraging its members “to operate in a legal and lawful manner.” He said he doesn’t expect massive homelessness.
To be sure, the coronavirus has imperiled small, local landlords who have limited cash to sustain their operations. Tenant groups worry that those landlords will be forced to sell their properties to bigger operations, increasing the number of rental units in the hands of institutional landlords.
One consolidation deal was announced Oct. 19, when Pretium Partners, Progress Residential’s owners, announced a joint purchase of Front Yard Residential Corp., a public real estate investment trust that owns 14,500 rental homes, with Ares Capital, a private equity firm. Front Yard has filed 97 eviction proceedings in the five states since Sept. 1, the documents show. Pretium and Ares said they will pay $2.4 billion for Front Yard.
After the deal goes through, Pretium will be the nation’s second-largest owner and operator of single-family rental homes, it said.
In the meantime, other large and prosperous companies that have ramped up eviction filings include Greystar Real Estate Partners, a private investment firm, which has filed 61 eviction notices, and Eaton Vance, an asset management company, with 48 eviction proceedings. Eaton Vance is being purchased by Morgan Stanley in a $7 billion deal; Morgan Stanley itself, through its AMLI Residential unit, initiated 22 eviction proceedings since Sept. 1.
Eaton Vance, Front Yard and Morgan Stanley all said that they work with tenants in difficulty and that their eviction filings were proper and in accordance with the CDC moratorium. Greystar didn’t respond to an email request for comment.
Don Smith has also had problems with Progress Residential, although they aren’t Covid-19 related. Smith and his family, who are tenants in Apopka, Florida, had to move out in July. He said his wife has stage four breast cancer and uses a wheelchair; facing huge medical bills, they could no longer afford the rent.
Smith contacted Progress and told it that they were leaving the premises; he said Progress thanked him for letting the company know.
But on Sept. 24, Progress filed eviction proceedings against Smith in court, demanding payment of rent owed and legal fees amounting to $4,218.37.
Smith said he knew nothing about the filing until NBC News contacted him. Now he is concerned that he will have to make the additional payment to clear the eviction from his record.
“They weren’t a good landlord. I wouldn’t call them good at all,” Smith said in an interview. “The sinks were rusting out, and they just painted over it. They’d only fix what they had to.”
Progress declined to comment on the record about its interactions with Smith.
If the CDC moratorium expires without a replacement, a wave of evictions is likely, housing advocates say.
“When you hit Jan. 1, people will owe tens of thousands in back rent,” said Chris Groninger, chief strategy officer for the Arizona Bar Foundation, a nonprofit that helps low-income people. “We are creating poverty as we speak.”
By jumping through hoops, Cristina Velez of Boca Raton has managed to pay enough to hang on to her rental home. She has a new job, but she has still had to battle demands from Progress to pay $450 in legal fees associated with her eviction filing.
When Velez challenged the propriety of the eviction after talking with NBC News, the Progress representative told her that the court wouldn’t have allowed Progress to make the filing if the eviction wasn’t valid. That is false, said Roller of the National Housing Law Project — courts don’t verify the accuracy of initial eviction filings.
Velez said the representative declined to detail the process at Progress when she asked about it. According to Velez, he said: “I don’t have to tell you what my process is. We have a company to run.”