Rental Companies That Took PPP Money Are Fueling Looming Eviction Crisis

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Rental Companies That Took PPP Money Are Fueling Looming Eviction Crisis
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Rental Companies That Took PPP Money Are Fueling Looming Eviction Crisis, Watchdog Analysis Finds

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Rental Companies Stealing Taxpayers PPP Funds

WASHINGTON, D.C. – A new analysis from government watchdog Accountable.US finds that least three rental companies that have benefited from the SBA’s Paycheck Protection Program (PPP) – each having taken between $5 and $10 million in taxpayer money – have been busy filing eviction and debt collection cases against struggling tenants during the pandemic. It is reminder why the Senate needs to follow the U.S. House’s lead and pass adequate emergency rental assistance as millions of Americans are likely to face the very real prospect of homelessness come January.

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While the Trump administration’s September 1st moratorium announcement delays evictions for four months, it does not prevent them and fails to address the eventual “sky-high past-due balances.” Worse, the president’s action “introduces potential criminal penalties for millions of renters.”

The Seriousness Of The Looming Eviction Crisis

“It’s clear the looming eviction crisis is serious when even landlords that asked taxpayers for help during the pandemic are preparing to kick families out of their homes as soon as they are legally allowed,” said Kyle Herrig, president of Accountable.US, which has been monitoring CARES Act spending as part of its www.COVIDBailoutTracker.com project. “It’s a stark reminder of why Trump’s Senate allies need to join the House in passing emergency rental assistance that will help keep millions of families in their homes. Will these opportunistic rental companies vow to pay back every dime of the millions of dollars in PPP money they took before giving their tenants an ultimatum in the middle of a recession and public health crisis?”

KEY FINDINGS FROM THE ANALYSIS

  • CAPREIT, a major apartment complex owner that has taken up to $10 million in PPP funds and has gloated how it could “charge max rents” in low-income properties, has filed at least two evictions cases in Maryland and what appear to be 32 debt collection cases against tenants in Virginia. The previous expiration date for evictions in Virginia had been September 7 and Maryland’s expired July 25.
  • Redwood Living Inc.—which has poured nearly $27,000 into GOP campaigns—took up to $10 million in PPP money as it filed at least four evictions against Ohio tenants. Ohio did not set a statewide eviction moratorium so evictions could proceed after the national moratoriums expired.
  • McKinley Companies, LLC took up to $10 million from the PPP as it filed at least seven eviction cases against Florida tenants. Florida’s eviction moratorium had been set to expire September 1.

Accountable.US is a nonpartisan watchdog group that exposes corruption across all levels of government.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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