A new survey published Monday by researchers from the University of Pennsylvania offers more specific insight into the pandemic's effect on landlords in Los Angeles: More than half of 1,300 property owners surveyed in December last year said their business would face financial distress within six months if their situations didn't improve.
The poll found that, compared with before the pandemic, more owners are facing delinquent rent payments and problems filling vacancies. That, in turn, has challenged their ability to pay their mortgage, property taxes and the costs of building upkeep.
The survey results show the ripple effect that missed payments from tenants can have on landlords' ability to maintain their properties — and in some cases, their main source of income.
"There clearly is a lot of challenges being faced by property owners," said Vincent Reina, the survey's coauthor. The research is part of a collaboration between the Housing Initiative at Penn and six cities to analyze how local governments are responding to housing challenges brought on by the pandemic.
The poll left the definition of financial distress open but listed some examples: needing to sell assets, reduce services or lay off staff or being unable to pay mortgages or property taxes. In December, nearly 29% of those surveyed said they would reach that level of financial distress in less than three months.
Landlords are not a monolith: There are Wall Street firms that own tens of thousands of homes; secretive limited liability companies that pool investments from wealthy individuals; and the mom-and-pop landlords who own a few units and manage them as a full- or part-time job.
A study from the progressive think tank Institute for Policy Studies and other left-leaning groups found that 61 "billionaire landlords" with very large portfolios have seen their wealth collectively increase $24.4 billion during the pandemic — a far cry from the hardship reported by smaller owners in the L.A. survey.
L.A. property owners with five or fewer units were most likely, at 37%, to report an expectation of financial distress before three months. Owners with 30 or more units were least likely to expect financial distress before three months, but the percentage was still 20.3%.
The survey results could overstate the financial burden on landlords. The poll didn't survey landlords broadly, rather only those with at least one tenant who had applied to an L.A. city rental assistance program launched early in the pandemic that contained far less money than recent efforts.
Still, Reina said that many distressed tenants probably did not apply for relief — meaning the survey may have left out many struggling landlords — and that the sample of 1,300 property owners represents a significant share of the city's housing stock.