Multi-Unit Residential Properties and Moratorium Takings: Aggregate Losses and Industry Impact

When eviction moratoriums prohibited landlords from removing non-paying tenants during the COVID-19 pandemic, the financial burden fell hardest on owners of multi-unit residential properties. While a single-family landlord might face the loss of one or two rent checks monthly, multifamily property owners with dozens or hundreds of units experienced exponential, compounding losses that threatened entire portfolios. This article examines how eviction moratoriums created aggregate damage calculations unique to multifamily properties, the differential impact on corporate versus small-scale landlords, the cascading financial consequences across property operations, and why these losses may constitute compensable takings under the Fifth Amendment.

The Scale of Multifamily Rental Housing in America

Multi-unit residential properties represent a substantial portion of the nation’s housing stock. Approximately 43 million American renters occupy rental housing, with millions residing in buildings containing 5 or more units. Of these:^1^3

• Buildings with 2-4 units account for approximately 6.2 million rental units nationwide (13% of all rental units).^4
• Larger multifamily buildings (5+ units) house tens of millions of renters in urban and suburban markets.
• Properties with federally backed mortgages—including loans purchased or secured by Fannie Mae or Freddie Mac—numbered in the hundreds of thousands and were subject to the CARES Act’s 120-day eviction moratorium.^5^7

The eviction moratoriums applied broadly to this housing stock, creating financial strain across property types, from small apartment buildings to large institutional portfolios.^8^10

Calculating Aggregate Losses: The Multifamily Multiplier Effect

For multifamily property owners, the financial harm from eviction moratoriums scaled geometrically rather than arithmetically. Unlike single-family landlords who might lose one month’s rent from one tenant, multifamily owners faced simultaneous nonpayment across dozens or hundreds of units.

Example Calculation: 100-Unit Apartment Building

Consider a mid-sized apartment complex with 100 units, each renting for $1,500 per month:

Monthly Gross Potential Rent: 100 units × $1,500 = $150,000

If the eviction moratorium lasted 15 months (March 2020 through June 2021), and the property experienced typical pandemic-era collection rates:

Pre-Pandemic Collection Rate (2019): 95% of rent collected = $142,500/month^11^13

Pandemic Collection Rate (2020-2021): 70-80% of rent collected = $105,000-$120,000/month^14^12^11

Monthly Revenue Loss: $22,500 – $37,500 (15-25% decline)

Cumulative Loss Over 15 Months: $337,500 – $562,500

This represents lost rental income alone, before accounting for continued operating expenses.^9^18

Severe Nonpayment Scenarios:

The aggregate losses became catastrophic when properties experienced severe nonpayment. Survey data shows:¹⁵^19

• The share of landlords collecting less than 50% of charged rent increased from 2.9% in 2019 to 9.1% in 2020.^15
• Nearly 10% of small landlords and 8% of mid-sized landlords were owed 50% or more of charged rent by the end of 2020.^16
• In some markets, landlords’ rental revenues fell by 20% or more during early months of the pandemic.^13^15

For a 100-unit building collecting only 50% of rent:

Monthly Loss: $75,000 (50% of $150,000)

Cumulative Loss Over 15 Months: $1,125,000

Impact on Larger Portfolios:

Institutional landlords managing thousands of units faced losses in the tens of millions of dollars. By the end of 2020, Goldman Sachs estimated landlords were owed up to $17 billion in back rent nationally. The National Apartment Association claimed landlords had absorbed nearly $27 billion in losses by August 2021. Another estimate placed past-due rent at approximately $57 billion by the end of 2020, with additional billions accruing in 2021.^20

In Los Angeles, petitioners in a recent Supreme Court case documented that back rents owed by unremovable tenants had ballooned to over $20 million by the time the local eviction moratorium concluded in 2024.^22

Corporate Landlords vs. Small-Scale Owners: Differential Impact

The pandemic revealed stark differences in how eviction moratoriums affected large corporate landlords versus small and mid-sized property owners.

Corporate Landlord Behavior: Aggressive Eviction Filings

Contrary to assumptions that large landlords were better positioned to absorb losses, many corporate landlords aggressively pursued evictions despite moratoriums and ERA availability:^23^25

• Four large corporate landlords investigated by Congress—Pretium Partners (Progress Residential and Front Yard Residential), Invitation Homes, Ventron Management, and The Siegel Group—filed nearly 15,000 eviction actions during the first 16 months of the pandemic.^24
• These companies filed nearly three times as many evictions as initially reported.^24
• Pretium Partners filed at least 1,700 eviction actions from September 2020 onward.^25
• Ventron Management filed to evict almost 30% of its residents (approximately 2,000+ tenants) from April 2020 through mid-2021.^23
• One large landlord filed to evict over 2,000 tenants during the pandemic, representing over a quarter of that company’s tenant base.^25
• In May 2021, corporate landlords accounted for 74% of eviction filings in DeKalb County, Georgia, 62% in Maricopa County, Arizona, and 53% in Hillsborough County, Florida and Harris County, Texas.^25

Small and Mid-Sized Landlords: Financial Distress

In contrast, small property owners (1-5 units) and mid-sized landlords (6-19 units) faced severe financial distress but were least likely to pursue evictions or receive assistance:^26^28^8^11

• Small landlords were the most likely to have tenants deeply behind on rent payments during the pandemic.^8^26
• Small landlords with $50,000 or less in liquid assets were the hardest hit, with about half reporting rental income losses of 10% or more.^26
• Landlords of 1-5 units represented as much as 73.3% of all landlords but were the least aware of and least likely to participate in ERA programs.^29
• Among property owners reporting pandemic-related rent delinquency, only 33% participated in a rent relief program.^29

These small landlords lacked the administrative capacity, legal resources, and financial reserves to navigate complex ERA applications or pursue lengthy eviction proceedings.^28^26

Geographic and Demographic Disparities:

The financial burden also fell disproportionately along racial and geographic lines:^16

• Landlords of color pursued disinvestment strategies (deferred maintenance, missed mortgage payments, property sale listings) at an elevated rate compared to white landlords.^15
• Owners of properties in neighborhoods with more non-white residents experienced both decreased rent collection and were more likely to pursue evictions and late fees, even controlling for payment rates.^16
• In Minneapolis, the number of landlords who received less than 90% of rent due more than tripled in 2020 compared to 2019, and the number receiving less than 50% of rent due doubled.^9

Cascading Financial Consequences Beyond Lost Rent

Multifamily property owners faced not only lost rental income but also unabated operating expenses that compounded their financial distress.

Fixed Costs That Continued During Moratoriums:

Even when tenants stopped paying rent, property owners remained obligated to pay:^17^18^9

1. Mortgage Payments: Approximately 7% of landlords missed mortgage payments during the pandemic. While the CARES Act provided forbearance for multifamily borrowers with federally backed loans, this forbearance was temporary (initially 30 days, with extensions up to 90 days total) and available only to borrowers current as of February 1, 2020.^6^5
2. Property Taxes: Local governments did not suspend or reduce property tax obligations, forcing landlords to pay taxes on properties generating little or no income.^18^9
3. Insurance Premiums: Property and liability insurance remained required and continued to accrue.^18
4. Utilities (where landlord-paid): Many multifamily properties include water, sewer, trash, or common-area utilities in rent, requiring landlords to continue paying these costs.^2
5. Maintenance and Repairs: Properties require ongoing maintenance regardless of rent collection.^31^18
6. Employee Wages: Larger multifamily properties employ on-site managers, maintenance staff, and security personnel whose wages continued.^8

Example: Operating Expense Burden on a 100-Unit Building

For a 100-unit apartment complex losing $30,000/month in rental income:

• Mortgage Payment: $60,000/month (assuming $10 million loan at 4.5% interest)
• Property Taxes: $8,000/month ($96,000 annually)
• Insurance: $2,500/month
• Utilities: $5,000/month (common areas, water/sewer)
• Maintenance: $3,000/month
• Staffing: $10,000/month (property manager, maintenance technician)

Total Monthly Operating Expenses: ~$88,500

If the property collected only $105,000/month instead of the expected $142,500, the owner faces a monthly cash flow deficit of approximately $16,000 after expenses. Over 15 months, this deficit totals $240,000—requiring the owner to deplete reserves, incur debt, or default on obligations.^11^26

Disinvestment and Portfolio Liquidation

Unable to sustain losses, many multifamily property owners resorted to disinvestment strategies that threatened the long-term viability of affordable rental housing:^21^26

Deferred Maintenance:

Landlords cut expenses by deferring property maintenance and repairs. This disinvestment creates a negative feedback loop:^31^26

• Deferred maintenance reduces property condition
• Poor property condition reduces desirability and market rents
• Lower rents reduce property value
• Lower property value threatens mortgage covenants and refinancing ability

A study of small rental property management during COVID found that the pandemic may deplete small rental housing and lead to more rigid management styles as landlords attempt to recoup losses.^28

Forced Property Sales:

The financial stress pushed many landlords—particularly small owners—to sell properties to stop the bleeding:^27^26^8

• Owners of about 13% of units covered in one survey said they were forced to take steps to sell one or more units as a result of the pandemic.^26
• Higher levels of portfolio losses were strongly associated with owners moving to sell their properties.^26
• Small landlords who could not afford to go months without rent felt pressure to sell their properties.^9

This forced liquidation raises concerns about consolidation of rental housing in the hands of large corporate landlords who can better withstand financial shocks:^32^21

• If individual landlords lose homes to foreclosure, more corporate control over the rental market is likely.^33
• Corporate landlords expressed excitement about profiteering opportunities post-pandemic, with one executive calling the crisis “kind of exciting times” and “what you live for.”^32
• At the end of December 2019, real estate investment funds had $142 billion ready to spend on distressed and opportunistic real estate investments.^32

The concentration of rental housing in corporate hands has been associated with increased eviction rates and negatively impacted unit quality.^33

Loss to Lease and Vacancy Losses

Beyond direct rent nonpayment, multifamily owners experienced additional financial harm through loss to lease and increased vacancy.

Loss to Lease Defined:

Loss to lease is the difference between market rent (what a unit could command in the current market) and contract rent (what a tenant actually pays under an existing lease). During the pandemic:^34^36

• Market rents in many areas declined due to economic uncertainty and reduced demand.^37
• Landlords unable to evict non-paying tenants could not re-lease units at market rates to new, paying tenants.^18

Example Calculation:

A 200-unit building with 150 units occupied at an average contract rent of $1,000/unit, but market rent of $1,100/unit:

Loss to Lease = (Market Rent – Contract Rent) × Occupied Units = ($1,100 – $1,000) × 150 units = $15,000/month or $180,000/year^35

However, during the pandemic, this calculation reversed in many markets: tenants paying $0 occupied units that could have been leased to new tenants at market rates, creating massive loss to lease.

Increased Vacancy and Downtime:

Survey data shows:^19

• Many landlords reported increased overall vacancy numbers and more difficulty leasing vacant units.^19
• Premature vacancies increased as tenants broke leases or moved out.^19
• Nearly 49% of Minneapolis landlords reported their businesses were affected by at least one pandemic-related impact, most commonly an anticipated decline in cash flow and increased rental arrears.¹⁹

Downtime (gaps in income due to non-contiguous lease terms) increased as unit turnover took longer and re-marketing became more difficult.^36

Mortgage Defaults and Foreclosure Risk

The compounding losses placed multifamily properties at heightened risk of mortgage default and foreclosure.^38^17^31

Mortgage Delinquency Statistics:

• As of December 2020, 427,000 mortgages were 90+ days delinquent, and 178,000 were in active foreclosure.^14
• Approximately 7% of landlords missed mortgage payments during the pandemic.^11
• More than one in four renters with incomes under $25,000 reported being behind on rent.^14

Multifamily-Specific Foreclosure Risk:

While the CARES Act and FHFA provided temporary foreclosure moratoriums on federally backed loans, these protections were:^39^41^5

• Time-limited (initially 60-120 days, with extensions)
• Conditional on borrowers being current as of February 1, 2020
• Not applicable to non-federally backed loans

Once moratoriums expired, properties with sustained rent collection problems faced foreclosure proceedings.^41^31

Impact on Affordable Housing:

Foreclosures and forced sales of multifamily properties threatened the supply of affordable housing:^42^31

• Even large, government-subsidized nonprofit housing projects saw steep declines in rent collection.^21
• The New York City Housing Authority’s rent-collection rate fell from 95% pre-pandemic to 60% in 2023—long after COVID lockdowns ended—resulting in more than $500 million in unpaid rents.^21
• Unpaid rent for affordable-housing operators surged from $10 million in 2020 to $100 million in recent years, with arrears projected to grow another $50 million.^21
• As many as 20% of tenants still hadn’t resumed rent payments they froze during the pandemic years later.^21

One real estate official warned: “We may be facing a catastrophic failure of our rental housing providers.”^21

The Takings Clause Argument: Physical Taking of Multifamily Property

Recent federal court rulings have recognized that eviction moratoriums may constitute physical takings requiring just compensation under the Fifth Amendment’s Takings Clause.^43^45^47^18

Key Legal Developments:

In 2024, the U.S. Court of Appeals for the Federal Circuit ruled (7-3) that landlords may sue the federal government for losses incurred during the CDC’s eviction moratorium. The court held that:^44^46^43

• The eviction moratorium compelled landlords to provide free public housing without compensation.^43^9
• The moratorium deprived landlords of the fundamental right to exclude, a core element of property ownership recognized in Cedar Point Nursery v. Hassid (2021).^22^18
• Landlords may pursue takings claims seeking just compensation for rent lost during the moratorium.^45^44^43

Application to Multifamily Properties:

Multifamily property owners have particularly strong takings claims because:^10^8

1. Aggregate Harm: A 100-unit building losing $30,000/month for 15 months ($450,000 total) suffered substantially greater harm than a single-family landlord losing $1,500/month ($22,500 total).
2. Compelled Public Service: The government effectively commandeered multifamily properties to provide mass public housing during a public health emergency.^10^9
3. Inadequate Alternative Remedies: ERA payments were grossly insufficient to compensate landlords for:^10^9
   • Tenants ineligible for assistance
   • Tenants who never applied
   • Non-paying tenants after ERA assistance ended
   • Lost time value of money
   • Inability to remove problem tenants for non-monetary lease violations
4. Physical Occupation: The moratorium forced landlords to allow continuous physical occupation by non-paying tenants, analogous to the government compelling a property owner to allow others to occupy their land.^43^18

Potential Compensation Scale:

If takings claims succeed, multifamily property owners could recover billions of dollars in compensation. For example:^44^43

• A 500-unit apartment complex losing an average of $150,000/month for 15 months: $2.25 million in back rent
• A portfolio of 10 such properties: $22.5 million in aggregate losses
• Across the multifamily industry nationally: potentially tens of billions in compensable takings

Industry-Wide Impact and Long-Term Consequences

The eviction moratoriums’ impact on multifamily housing extended beyond individual property losses to threaten the structural stability of the rental housing market.^48^42^21

Capital Flight and Reduced Investment:

Extended moratoriums deterred landlords from investing in new housing stock and likely contributed to rent increases. If property owners cannot reliably collect rent or remove non-paying tenants, investment in rental housing becomes uneconomically risky.^49^31

Rent Increases to Recoup Losses:

Landlords who survived the moratoriums have sought to recoup losses through rent increases on new and renewing tenants. One landlord explained: “These protections they’ve put into the system hurt the tenant in a negative way, they force owners to raise rent to recoup losses.”^50

Supply Reduction:

As small landlords sell properties and corporate owners consolidate portfolios, the diversity and supply of affordable rental housing shrinks. Prolonged eviction moratoriums could dampen construction of multifamily units and encourage landlords to sell rented-out properties.^51^31^21

Rigid Management Practices:

COVID-19 may lead to shifts to rigid management styles as landlords seek to prevent future nonpayment. This could manifest as:^28

• Stricter tenant screening
• Higher security deposits
• Shorter lease terms
• Reduced willingness to work with struggling tenants

Geographic Variation:

The impact varied significantly by market:^11

• Landlords with properties in New York, Miami, and San Francisco saw the greatest declines in rental revenues.^11
• Landlords with properties in Phoenix, Houston, and Dallas collected the same or more in rental income in 2020 compared to 2019.^11

Conclusion

Eviction moratoriums imposed exponential financial harm on multi-unit residential property owners, with losses scaling geometrically as the number of units increased. A 100-unit building losing 20-30% of rental income for 15 months faced aggregate losses of $450,000-$675,000, while larger portfolios experienced losses in the millions or tens of millions of dollars. These losses were compounded by unabated operating expenses—mortgages, taxes, insurance, utilities, maintenance, and staffing—that continued regardless of rent collection.

The impact fell unevenly across the industry: large corporate landlords aggressively pursued evictions and positioned themselves to profit from the crisis, while small and mid-sized landlords faced severe financial distress, deferred maintenance, missed mortgage payments, and forced property sales. This dynamic threatens to consolidate rental housing in the hands of institutional investors while depleting the supply of affordable housing owned by small landlords.

Federal court rulings recognizing landlords’ right to sue for takings claims validate the argument that eviction moratoriums constituted a physical taking requiring just compensation. For multifamily property owners, the taking was particularly severe: the government effectively commandeered apartment buildings to provide mass public housing during a public health emergency, compelling owners to house tenants without payment while bearing the full cost of property ownership.

The inadequacy of Emergency Rental Assistance—which reached only a fraction of eligible households, arrived months late, and failed to compensate for the full scope of losses—underscores that landlords bore a public burden for which they have not received just compensation. As litigation proceeds, multifamily property owners with documented aggregate losses may recover billions in compensation for what courts increasingly recognize as an unconstitutional taking of private property for public use. ^52^54^56^58^60^62^64^66^68^70^72

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This article is for informational purposes only and does not constitute legal advice. Property owners with questions about takings claims should consult qualified legal counsel.