In a Hot Market, Renters Need Good Cause Protections

Philadelphia’s property market is hot. As first-time homebuyers struggle to break into the market, landlords are cashing out on their investments, selling off rental properties at an unprecedented rate. As reported in a 2021 study [1] from Harvard’s Joint Center for Housing Studies and the Housing Initiative at the University of Pennsylvania, 21% of Philly landlords listed properties for sale in 2020, compared with only 3.5% the year prior.

This spike in sales of rental housing causes advocates to worry Philly’s (already limited) affordable housing stock will shrink. Some buyers want to move in to the homes they’re purchasing, taking the property off the rental market. Investors may simply raise the rent, especially if repairs are required to keep the unit up to code. And repairs likely will be needed: the study also notes that over one third of Philly landlords reported deferred maintenance during 2020.

If you’re renting a home and your landlord sells the building, what are your options? Right now, there aren’t many. You can move out when your lease ends. If you can’t find a new place in time, you will likely face an eviction notice, a court date, and potentially a lockout. Many renters are left scrambling to assemble three months’ rent for first, last, and deposit on a new home, not to mention other moving costs.

In Philadelphia, 54% of all renters are cost-burdened, and 68% of renters who earn less than $30,000 annually pay more than half of their income on housing expenses. Households that spend inordinately high proportions of income on rent have sparser reserves to draw on to get through difficult times; therefore, the loss of a family’s stable, affordable unit during a rental property sale could be devastating to the family’s economic security. And with fewer affordable rentals on the market, displaced renters may find themselves hunting for a new home with scant feasible options.

Expanding Good Cause eviction protections can help stabilize renters and their communities when the property market is hot. This law states that landlords cannot refuse to renew a tenants’ lease when the tenant is in good standing, except in certain cases.

Good Cause eviction laws were implemented in Philadelphia in 2019, but there are still loopholes that need to be closed. For one, the current law only covers leases under 12 months. Additionally, the local courts have decided that a landlord selling a property qualifies as a “Good Cause” for lease non-renewal.

In response, we propose an expanded Good Cause bill that covers all leases and includes relocation fees for tenants who are forced to move due to the sale of the property. Landlords would have the option to renew their tenants’ leases and pass the lease to the new owner. If they want to deliver the property unoccupied to the new owner, they must use some portion of their profits to provide relocation fees to displaced tenants. It’s only fair for tenants getting displaced against their will to recoup some amount of the huge profits that property owners reap.

As the percentage of rental properties on the market continues to rise, Philly renters need and deserve expanded Good Cause eviction protections now.

Tell your City Council member to support Good Cause 2.0 today!

[1] How Are Landlords Faring During the COVID-19 Pandemic? PDF

Listing image CC-2.0 Valerie Everett, Flickr