Will the Governor’s COVID-19 Executive Order Protecting Renters Hurt Valley Apartment Owners?

Article originally posted on Phoenix Business Journal on April 3, 2020

While thousands of unemployed renters in Arizona are taking advantage of protections Gov. Doug Ducey put in place to keep them from being evicted if they can’t pay their monthly rent, their landlords are wondering just how long they’ll be able to absorb those costs.

Sean Kia, co-founder and principal of Los Angeles-based Tides Equities LLC who has been buying apartment communities in metro Phoenix during the past several years, said he plans to work with every resident impacted by the COVID-19 pandemic.

“We are creating payment plans with each resident that will allow for interest-free partial payments,” Kia said.

Right now, it’s a bit too early to determine how many renters will ask for such breaks.

“We’ll have a better idea once we start collecting rents in the coming weeks and months,” Kia said.

Sean Kia, co-founder and principal of Los Angeles-based Tides Equities LLC.

Meanwhile, the CEO of Houston-based Camden Property Trust (NYSE: CPT), which oversees four multifamily properties in the Valley, told the Houston Business Journal on Thursday that the company has launched a $5 million program to provide financial support to residents at its properties nationwide who lost their source of income as a result of the COVID-19 pandemic.

Residents at Camden properties who can show coronavirus-related income losses are eligible for up to $2,000 per household under the Camden Cares Resident Relief Program. The company has two multfamily properties in Phoenix, one in Scottsdale and one in Mesa, according to its website.

On the other hand, Courtney Gilstrap LeVinus, CEO of the Arizona Multihousing Association, is worried for her members.

While she’s encouraging AMA members to work with renters on payment plans — she doesn’t want to see anyone evicted amid a public health crisis — LeVinus said property owners will be in a real crunch if the ongoing economic crisis leads to many renters without the ability to pay.

“There’s not a lot of protections out there for building owners — residential and commercial,” she said. “There’s a cooperative agreement with the governor’s office and banks that operate in Arizona. Most of them have agreed to 60 days forbearance. It’s not clear in that cooperative agreement if they’re working with multifamily.”

Patrick MacQueen, an attorney with MacQueen & Gottlieb PLC in Phoenix, said some multifamily owners may be eligible for a forbearance while they suspend eviction actions for renters unable to pay as a result of coronavirus-related issues.

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Apartment owners are worried how long they'll be able to handle late tenant payments.