The Timing Gap Problem: Why Rental Assistance Arrived Too Late for Many Landlords
When Government Relief Comes After the Damage Is Done
The eviction moratorium began on September 4, 2020. Emergency rental assistance didn’t start flowing until May 2021—nine months later. For landlords already bleeding cash for eight months, that nine-month gap was catastrophic. By the time government finally attempted to compensate them, many had already depleted reserves, fallen into mortgage default, and faced foreclosure. This article examines how the timing gap between moratoria implementation and rental assistance distribution created an additional, often overlooked dimension of economic harm.^1
The Timeline That Killed Small Landlords
The Federal Moratorium:
- September 4, 2020: CDC issued eviction moratorium
- December 31, 2020: Moratorium set to expire
- January 31, 2021: Extended by Congress
- October 3, 2021: Finally ended
Total federal moratorium duration: 13 months
Congressional Rental Assistance Appropriations:
- December 27, 2020 (nearly 4 months in): Congress appropriated $25 billion in emergency rental assistance^2
- March 11, 2021 (6 months in): Congress appropriated additional $21.55 billion^3
Total appropriated: $46.55 billion
When Assistance Actually Reached Landlords:
Minnesota RentHelpMN—The Critical Case:
- Moratorium began: April 2020 (Minnesota’s Governor-issued order)^1
- First payments made: May 2021—14 months later^1
- Result: Landlords waited over a year with zero assistance while continuing mortgage and property obligations^1
As Minnesota landlords’ amicus brief emphasized:
“RentHelpMN did not make any ERA payments until May 20, 2021—over 14 months into the eviction moratorium.”^1
Why The Gap Existed
Administrative Barriers:
Rental assistance programs required complex infrastructure that didn’t exist:^1
- Program Design: Governments had to craft eligibility rules, verify tenant hardship, and establish payment processes^1
- Coordination Requirements: Landlords AND tenants had to coordinate—tenants had to apply, provide documentation, and cooperate^1
- Tenant Cooperation Obstacles: Many non-paying tenants had no incentive to apply for assistance. If they were living rent-free, why involve themselves with applications?^1
- Income Verification: Programs required tenants to prove income “at or below 80% of area median income” in order to receive assistance—but moratoria protected ALL tenants, regardless of income^1
The Eligibility Gap:
This created a fundamental mismatch:
- Moratoria protected: ALL renters regardless of financial hardship
- Assistance covered: ONLY tenants qualifying for emergency assistance
Many non-paying tenants fell into this gap: protected by the moratorium but ineligible for rental assistance^1
Landlord Information Barriers:
Small landlords didn’t know about the programs or how to access them:^1
- No proactive outreach to landlords (programs focused on tenant awareness)
- Complex application processes requiring detailed documentation
- Limited participation by small landlords (least likely to be aware of programs)^1
As the Minnesota Multi Housing Association documented:
“Small landlords were the least likely to participate in or be aware of the ERA program.”^1
The Cascading Financial Crisis During The Gap
What Happened During the 9-14 Month Waiting Period:
Month 1-3 (September-November 2020): Initial Crisis
Landlords began experiencing:
- Tenants stopped paying rent immediately
- Mortgages still due (no payment suspension for landlords)
- Property taxes still accruing
- Insurance premiums still due
- Maintenance emergencies still required
Landlords began depleting emergency savings they had accumulated for other purposes.^1
Month 4-6 (December 2020-February 2021): Deepening Depletion
- Credit card debt accumulated to cover operating expenses
- Mortgage payments increasingly missed
- Some landlords began receiving foreclosure notices
- Refinancing became impossible (lenders refuse to refinance non-performing properties)
- Credit scores collapsed from late mortgage payments
As the Minnesota brief documented:
“Many small landlords cannot afford to go months without rent. The financial stress from the pandemic pressured landlords, particularly small ones, to sell properties to stop the bleeding.”^1
Month 7-9 (March-May 2021): Total Financial Collapse
By the time rental assistance FINALLY began flowing (May 2021):
- Accumulated losses reached 7-9 months of rent-free housing
- Landlords had already experienced the worst financial pressure
- Many properties were already subject to foreclosure procedures
- Damage was done before assistance arrived
Even then, assistance was inadequate^1
Minnesota’s Delayed Inadequacy: The Perfect Storm
RentHelpMN Timeline:
- Program launch: Delayed—not fully operational until 2021
- First payments: May 20, 2021—14 months into moratorium^1
- Problems:
- Slow processing of applications
- Limited funding relative to need
- Tenant eligibility requirements excluded many^1
By October 2022—20 months into aid distribution:
Renters had applied for $111 MILLION MORE in assistance than had been distributed.^1
By November 2024:
$124.8 MILLION in outstanding rent debt remained in Minnesota—unpaid rent from the moratorium period—with no assistance available.^1
Why Assistance Failed:
- Insufficient Funds: Available ERA funds were exhausted while demand remained enormous^1
- Ineligible Tenants: Many non-paying tenants were ineligible for ERA (income too high, pandemic hardship not documented, didn’t apply)^1
- Landlord Gaps: Even when tenants received assistance, amounts were often only partial, not covering the full accumulated debt^1
The Mortality Rate Among Small Landlords
Documented Consequences:
Landlords faced several paths during the gap period:
Path 1: Financial Collapse and Foreclosure
- Unable to meet mortgage obligations
- Lenders proceeded with foreclosure
- Lost property entirely^1
Path 2: Property Sale at Distress Prices
- Desperate to stop losses
- Forced to sell at below-market prices
- Exit the rental housing market entirely^1
As the evidence documented:
“The financial stress from the pandemic pressured landlords, particularly small ones, to sell properties to stop the bleeding.”^1
Path 3: Portfolio Liquidation
- Sold multiple properties to generate cash
- Decimated their rental housing holdings^1
Path 4: Accumulated Debt
- Borrowed against credit lines to survive
- Accumulated massive personal debt
- Still held properties with negative cash flows
- Hope for eventual collection from tenants (often unrealistic)^1
The Oregon Contrast: How Fast Deployment Worked
Oregon’s Timeline:
- Moratorium begins: March 2020
- HB 4401 enacted: December 23, 2020
- First landlord payments: February 2021—just 2 months after passage^4
Oregon landlords faced a much shorter gap: approximately 11 months instead of 14-18 months.^5
Moreover:
- Oregon provided 100% compensation (not partial)^6
- No tenant eligibility screening (landlords applied directly)^4
- Direct payments to landlords^4
- Retroactive adjustments when program was updated from 80% to 100%^6
Result: Oregon landlords recovered substantial amounts before total financial collapse, preserving their properties and maintaining the rental housing stock.^5^4
The Tenant Cooperation Problem During the Gap
The Paradox:
For landlords to receive assistance, tenants typically had to:
- Apply for ERA
- Document hardship
- Authorize the agency to pay landlord directly
- Cooperate with the landlord
Why This Failed:
Many non-paying tenants had zero incentive to cooperate because they were living rent-free and benefiting from the moratorium. If they applied for assistance, they would:
- Be subject to verification and means-testing
- Admit to not paying rent (potentially triggering future liability)
- Have their landlord receive compensation (reducing their leverage)^1
Result: Many landlords were unable to access assistance because their tenants simply refused to cooperate.^1
Interest, Penalties, and Compounding Losses
During the Assistance Gap:
Unpaid rent was compounding. While waiting for assistance:
- Landlords couldn’t charge late fees (many moratoria prohibited them)^7^3
- Interest accrual was prohibited in many jurisdictions^8
- Monthly rent continued to accumulate unpaid^1
Example: An Unpaid Rent Cascade
- Month 1 (Sept 2020): Tenant owes $2,500; no assistance available
- Month 2 (Oct 2020): Tenant owes $5,000; no assistance available
- Month 3 (Nov 2020): Tenant owes $7,500; no assistance available
- …continuing for 14 months until May 2021…
- May 2021 (Month 9): Tenant owes $22,500; FIRST assistance distributed
By this point, the landlord had already incurred 9 months of uncompensated losses that accumulated damage to their financial position.
The Foreclosure Acceleration During the Gap
Mortgage Lenders Didn’t Wait for Assistance:
Mortgage companies operated on standard mortgage timelines:
- 30 days late: Notice
- 60 days late: Acceleration notice
- 90 days late: Beginning of foreclosure process
- 120+ days late: Foreclosure sale scheduled
The timing problem: If a landlord missed mortgage payments from September 2020 through May 2021 (9 months), foreclosure proceedings would already be underway by the time assistance arrived.
Many landlords couldn’t catch up because:
- Monthly mortgage obligations exceeded monthly assistance payments^1
- Accumulated principal plus legal fees made catch-up impossible^1
- Foreclosure sales were already scheduled before substantial assistance arrived^1
The Secondary Damage: Property Deterioration
During the Long Waiting Period:
Many landlords, facing financial collapse and without rental income, were unable to maintain properties properly:
- Deferred maintenance on repairs
- Reduced or eliminated maintenance staff
- Properties deteriorated (affecting tenant living conditions and property value)
By the time assistance finally arrived, properties had declined in value, and post-pandemic inspections and appraisals showed deterioration.^9
This created a permanent reduction in property value—even after assistance was distributed, the damage was already done.^9
Statutory Limits on Going Back in Time
The Fundamental Problem: Assistance Programs Couldn’t Retroactively Prevent Foreclosures
Even programs like Oregon that provided good compensation operated on a going-forward basis:
- They compensated landlords for losses
- But foreclosure sales that already occurred couldn’t be reversed
- Properties already lost couldn’t be recovered^1
Some landlords lost properties to foreclosure before substantial assistance arrived, and no assistance program could restore those lost properties.^1
The Conclusion: A Timing Gap That Governments Couldn’t Close
The fundamental problem: Governments imposed immediate, absolute moratoria (September 2020) but deployed assistance programs much later (May 2021 or even 2022 in some cases). This timing gap was inherent to the policy structure.
Governments could have:
- Accelerated program deployment (but complex to set up)
- Provided immediate liquidity through emergency loans to landlords (but was rarely done)
- Coordinated with mortgage lenders to grant payment forbearance matching the moratorium (rarely done)
Instead, the timing gap was left to create cascading defaults, foreclosures, and property losses, even in jurisdictions that eventually provided adequate compensation.
As a result, the question of just compensation becomes more complicated: Can compensation paid in Year 2 repair foreclosures that occurred in Year 1? Can it restore lost properties? Can it prevent the financial destruction that occurred during the waiting period?
The answer is largely no. Just compensation requires timely compensation—or at least compensation sufficient to prevent irreversible harm during the interim.
This article is for informational purposes only and does not constitute legal advice. Landlords with questions about compensation timing and adequacy should consult qualified legal counsel.
