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ICC announces voluntary utility disconnection moratorium will be extended while landlords push back against extension of eviction moratorium

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The Illinois Commerce Commission has announced that it will continue to help residents who are struggling to pay their utility bills due to the coronavirus pandemic.

Spokeswoman Victoria Crawford said the moratorium on disconnections has voluntarily been extended by several state regulated utilities through the winter of 2021 for eligible low-income residential customers, and those who self-report to utilities that they are experiencing financial or COVID-19 hardship.

“There had been an agreement in place that had put a moratorium in place on residential shutoff until September 30, but now that has been extended,” Crawford said. “We went back to the utilities (companies) and said, ‘Hey, we would like to see you extend the moratorium,’ and most of them did.”

Crawford said Ameren Illinois, Aqua Illinois, Illinois American Water, Commonwealth Edison’ Peoples Gas and North Shore Gas, and Utility Services of Illinois have committed to extending the moratorium on utility disconnections for Low Income Home Energy Assistance Program qualified residential customers and those financially impacted by COVID-19.

”Low-income families and those impacted by COVID-19 should not have to fear losing basic services like electricity, heat or fresh water,” Crawford said.

* Meanwhile, Gov. Pritzker’s 30-day eviction moratorium expires at the beginning of next week. From a press release…

The Neighborhood Building Owners Alliance (NBOA), in cooperation with its affiliate members, conducted an online survey of nearly 400 Chicago housing providers to determine the effect of COVID-19 on the stability of the City’s rental housing market. The survey was conducted September 29 through October 2, 2020.

The survey focused primarily on September rent collections, which was a month after the $600 additional federal unemployment benefit expired and when many tenants had exhausted their state unemployment benefits. The survey also asked the respondents to indicate the type of buildings they owned, and where those buildings were located. […]

Rent collections are down.
Rent collections in the month of September were significantly lower than usual. The industry standard for a safe level of rental collection is 95% payment of full rent, but the NBOA survey showed that only 54% of respondents had received that amount. Alarmingly, 29% of respondents indicated that their rent collections were below 85%, which is considered the industry threshold for profitability. As such, it is likely that about one-third of respondents are losing money on their buildings.

The problem is worse on the south side of the City of Chicago and in the south suburbs. On the north side of the City, 51% of respondents indicated their rent receipts met the industry standard, but on the south side it was only 34%.

Housing providers are facing arrearages of 180 days.
The survey also tried to measure just how far renters are behind in their rent. Forty-three percent of respondents reported having at least one tenant who was more than 180 days (six months) in arrears. When broken down by region, the survey indicated 48% of respondents with holdings primarily on the south and west side reported having at least one tenant more than 180 days in arrears, while 38% of respondents who own primarily on the north side reported at least one tenant seriously behind in their rent.

Vacancies are on the rise.
The survey also measured the availability of vacant units, finding that 42% of respondents reported a vacancy rate of more than 6%, which is just at the edge of a safe level. Alarmingly, 21% of respondents indicated a vacancy rate of 11% or higher. At this level, housing providers face additional financial burdens due to non-productive units (which may be on top of units paying reduced or no rent).

Tenants are not always communicating their needs to housing providers.
Half of respondents said they had residents who were refusing to communicate with them. This lack of communication is a serious problem and hampers housing providers’ ability to manage their buildings. When housing providers are not receiving communications from their tenants, they are neither able to budget for expenses nor negotiate accommodations or payment plans.

Thoughts?

posted by Rich Miller
Tuesday, Nov 10, 20 @ 2:26 am

Comments

When the eviction moratorium began, it was anticipated this would be “14 days to flatten the curve” or perhaps an additional 30 days. Our legislature still has not acted to respond to this crisis, dumping all of the responsibility on the governor. Either the governor or the legislature, needs to promptly come up with a framework to at least provide relief for small landlords (perhaps those who own less than 5 or 3 units). Or to means test tenants who may still be employed, or have the ability to pay, before continuing a blanket “no rent - no eviction” order. There are a number of mom and pop landlords that saved their hard earned dollars to buy a 2 or 3 flat, living in one unit and renting the others, or who bought a condo or townhome to invest their retirement savings and provide extra income, that now have the burden of paying taxes, maintenance, possibly a mortgage, utilities or association dues, with no payment coming from the tenant.

In the city of Chicago, will the city be filing suit against landlords who do not provide heat to those tenants who have not paid rent since March? Obviously there is a risk in becoming a landlord that your tenant may fail to pay, but we have a remedy for that, eviction. You may never recover your rent from a tenant who is evicted, but at least you can stop the bleeding if you get them out.

Comment by slippery slopes Tuesday, Nov 10, 20 @ 7:10 am
The moratorium has become a rent holiday for everyone. It needs to be cut back to only those impacted by COVID. Let the case go to a judge and let the resident explain their case then. Very doubtful most landlords would take a legitimate case to that point. Enough’s enough.

Comment by Just Me 2 Tuesday, Nov 10, 20 @ 7:21 am
=== Either the governor or the legislature, needs to promptly come up with a framework to at least provide relief for small landlords (perhaps those who own less than 5 or 3 units).===

If you’re talking monies and banks, and relief like unemployment, it’s not a slippery slope, it *is* a tool the federal government would need to look at, and while governors own, and governors have power, extensive and unilateral monetary policy towards any ends that would or could be an “unemployment for real estate, renters, landlords, homeowners” that’s a national type of agenda.

To halt process, to halt the enforcement at local levels of government, locals can do that, within *both* following the contract clause, but also using the law, and if the courts see where the governor has overstepped, I’m bit seeing that yet.

=== In the city of Chicago, will the city be filing suit against landlords who do not provide heat to those tenants who have not paid rent since March?===

The humanity lost during this pandemic is a sad sideshow to the nearly quarter of a million deaths by a virus. It’s not the city, it’s the virus causing so much damage.

The lack of federal leadership, with 50 states doing 50 different things in totality, and municipalities within those 50 states dealing with this *very* thing, these very issues… we’ve had no national leadership, and truly no national leadership of empathy, or using that empathy to make right very real, honest, harsh realities of roofs over heads, and heat, water, electricity for those under the roofs… and helping the landlords, mortgage holders… to help fight the virus.

===…it was anticipated this would be “14 days to flatten the curve” or perhaps an additional 30 days.===

The virus was never going to be on a timetable… we, as people, have dictated through our own actions (or inactions) made those timetables comically, tragically wrong.

Comment by Oswego Willy Tuesday, Nov 10, 20 @ 7:30 am
The simple fact is at this point the federal government has not put a moratorium foreclosure on non-FMFM held mortgages yet the state has cut of the source of funds to pay the mortgage. There has to be a happy medium of means testing and support for the small landlord. Without some corrections to the existing moratorium foreclosures will take place and at the end of the moratorium there will be chaos in the rental market.

Comment by Nagidam Tuesday, Nov 10, 20 @ 8:47 am
The voluntary disconnection moratorium does not apply to municipally-owned or operated utilities (e.g., Springfield’s CWLP, Village of Chatham’s Utility Department). There have already been reports of disconnections in Chatham and maybe Springfield in recent weeks for delinquent utility customers.

Comment by Chatham Resident Tuesday, Nov 10, 20 @ 8:48 am
Sorry meant to say “without some corrections to the existing eviction moratorium,…”

Comment by Nagidam Tuesday, Nov 10, 20 @ 8:49 am
I agree that care needs to be given to the guys owning a unit they also live in (so like a 3 flat that the owners occupy one). These are small mom & pop landlords. I don’t really care about the big management companies. They can look after themselves.

Also means testing for people not paying their rent but who could do so. I’m guessing this number is not a lot of people (most people are responsible) but it could make the whole thing go down better.

Are landlords doing section 8 still getting their payments?

Comment by cermak_rd Tuesday, Nov 10, 20 @ 9:43 am
== Obviously there is a risk in becoming a landlord that your tenant may fail to pay, but we have a remedy for that, eviction. ==
There is a better remedy for that. Take the tenant to court and garnish his/her wages.

Comment by Mr. Green Genes Tuesday, Nov 10, 20 @ 10:11 am
I don’t have the solution, but we cannot allow massive evictions on the south and west side starting next week.

Serious question though, given the vacancy rate why are landlords eager for the ability to evict?

Comment by JJJJJJJJJJ Tuesday, Nov 10, 20 @ 11:03 am
JJJJJJJJJJ - they aren’t eager to evict. They’re eager to get paid. Right now there are no consequences of not paying rent.

Comment by Just Me 2 Tuesday, Nov 10, 20 @ 11:23 am
===The moratorium has become a rent holiday for everyone===

The survey above from the landlords themselves would belie that notion.

Comment by Rich Miller Tuesday, Nov 10, 20 @ 12:53 pm
To anyone who thinks the pandemic is only a problem for tenants, think again. So many small landlords have been needlessly harmed by the Governor’s blanket ban on evictions, excepting only emergency situations. Too many tenants know that they cannot be evicted, and are withholding rent as a result, whether they have been harmed by COVID or not. This is unacceptable. The Governor needs to understand the damage he has caused, and do something to change it.

Comment by Steve Tuesday, Nov 10, 20 @ 1:20 pm
Here’s another important survey.
Mounting Pressures on Mom-and-Pop Landlords Could Spell Trouble for the Affordable Rental Market | Urban Institute

https://www.urban.org/urban-wire/mounting-pressures-mom-and-pop-landlords-could-spell-trouble-affordable-rental-market

The Urban Institute is a pretty distinguished research outfit.

Comment by Some Dude Tuesday, Nov 10, 20 @ 3:44 pm
A super legitimate concern is how deep will be the backlog of cases after the Governor lifts the moratorium - and how many months will it take for housing providers to recover their units? The other tenants in the building are hurt when the owner lacks the $ for repairs, scavenger, or building upgrades.

Comment by Mike RP Tuesday, Nov 10, 20 @ 4:11 pm
I have two tenants that just decided to stop paying rent due to this situation. They found out that there are no repercussions and now won’t answer their door or phones. This has to stop, I can’t keep the building afloat or make necessary repairs right now.

Comment by Brian Tuesday, Nov 10, 20 @ 4:14 pm
The eviction moratorium could have been tailored, at a minimum, to allow for pre-covid evictions to continue and to allow landlords to evict those tenants who were unwilling to cooperate in efforts to obtain rental assistance. Instead, the Governor has created a rent free zone. You know what tenants like? Not paying rent. And they get used to it. Yes, every order claims tenants must pay the rent, however, what landlords will have the resources to track down these tenants after the moratorium expires? The CRLTO prohibits them from even recovering their attorney fees. That’s throwing good money after bad. Why should small landlords pay to house people who can pay their rent and choose not to?

Comment by Rich Tuesday, Nov 10, 20 @ 4:52 pm
If tenants don’t have to pay rent. Do landlords have to pay property taxes? Value of building is net 0 because we have no rent to pay expenses. And no, large management company’s have more other owners property to manage, No rent means someone cannot pay bills; period. The resolution is not a federal problem. WE live in a democratic republic. Local autorities control and dictate local laws. Our governors would like you to believe that the federal government should do this or that. FALSE. Why is the auto industry allowed to reposses a car without court, and a landlord has to sit and wait?

Comment by Nick Thursday, Nov 12, 20 @ 11:16 am
awwww…the poor landlords. LOL

Comment by Shaun Thursday, Nov 12, 20 @ 2:27 pm