Given demand, supply, and rising rents, it might seem as though 2022 is on target to be a great year for multifamily housing. That’s entirely possible, but lurking in the background is unfinished business in the form of some worrisome issues, including:

  • Billions of dollars from 2021 that remain owed to landlords.
  • Federal money is not reaching landlords.
  • ​Why the Supreme Court is likely to be involved.
  • Little supply, massive demand, and years of “underbuilding” are driving up rents.
  • Affordability is a growing issue.
  • Inflation is a potent problem.
  • The pandemic isn’t over.


Billions of dollars from 2021 that remain owed to landlords

The Covid-19 virus has created a massive strain on the healthcare system, and just about every business, institution, and organization that can be named has felt the pandemic’s impact. The federal government responded with a series of measures designed to avoid an outright depression, including the establishment of a national eviction moratorium.

However, the nationwide moratorium program organized by the Centers for Disease Control and Prevention (CDC) was different from virtually all other federal efforts to offset the virus. For instance, while $953 billion was allocated for the small business Paycheck Protection Plan (PPP) and $40 billion was set aside to support passenger airlines, the moratorium effectively took money from landlords, including multifamily property owners. 

The Supreme Court, in a 6-3 ruling against the moratorium, explained that “the moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means.”

Meanwhile, while landlords were deprived of billions of dollars in rental income, property taxes continued as did utility bills, the need for repairs, insurance costs, and other expenses. 

Under the Fifth Amendment’s taking clause, the government cannot take assets from private citizens without “just compensation.” For this reason, up to $25 billion was set aside under the 2021 Consolidated Appropriations Act (called “ERA1” by the Treasury) and $21.55 billion through the American Rescue Plan (ERA2) to repay rent, rental arrears, and utilities. 

Federal money is not reaching landlords

Federal compensation money has been sent to state and local governments for distribution but not directly to landlords. The Treasury Department said that as of late November, it “anticipates that a substantial portion of the first round of reallocation will happen voluntarily — in a collaborative process among grantees and Treasury.”

What we know from Treasury disclosures is that, as of October 31st, the latest available at this writing, almost $24.2 in ERA1 funding had been received by state and local governments, while the ERA2 fund had disbursed a little more than $1 billion. That’s a total of roughly $25.2 billion, a little more than half (54.1%) of the $46.55 billion set aside by Congress. 

However, state and local governments may try to limit the funds actually owed to landlords. For instance, California says “landlords can choose to accept 80 percent of any unpaid rent owed from April 1, 2020, through March 31, 2021. If a landlord accepts this funding, the landlord agrees to forgive the remaining unpaid rent for that covered period.”

And, adds the state, “if a landlord chooses not to participate, the tenant can still apply for relief valued at 25 percent of unpaid back rent they owe for the covered period.”

Why the Supreme Court is likely to be involved

Even if the entire $46.55 billion is paid to landlords, there is the very real question of whether that sum is enough to cover investor losses. 

Moody’s Analytics, in an August 2020 commentary, estimated that the final bill from eviction prohibitions was likely to be far more than the federal government expected.

“The eviction moratorium the president has ordered simply calls on government agencies to consider whether this is necessary and to identify funds to provide temporary help to renters,” said Moody’s. “The order doesn’t even extend the recently expired federal eviction moratorium on renters in multifamily properties with mortgages backed by Fannie Mae, Freddie Mac and the FHA. This previous moratorium potentially helped nearly one-third of renters.” 

The commentary adds that “the executive order also does nothing to address the growing amount of back rent that is owed, currently estimated to be closing in on $25 billion, and that will approach $70 billion by year’s end under our baseline outlook for the economy. An estimated 12.8 million renter households will owe back rent by then, and they will owe an average of $5,400.”

In July 2021, the National Apartment Association (NAA) announced it was suing the federal government, estimating that landlords “are now left to shoulder $26.6 billion in debt not covered by federal rental assistance.” 

Because this dispute involves big numbers as well as constitutional issues, it’s likely to end up in the Supreme Court. That’s what happened after the federal government took over Savings & Loan Associations in the 1980s and 1990s. S&L Investors sued the federal government and won the 1996 Winstar case. That decision and similar S&L cases created more than $30 billion in potential liabilities for the federal government, according to The Washington Post.

It’s also possible that additional claims will arise from eviction moratoriums. While the federal moratorium is over, several jurisdictions have eviction bans that will continue into 2022.

Supply, Demand, and Underbuilding

There’s no doubt that rental units remain in demand. According to the National Association of Realtors (NAR), a decline in annual construction activity during the past 20 years has resulted in an “underbuilding gap,” a shortage of some 5.5 million housing units. 

The underbuilding gap is not likely to be resolved anytime soon. Despite attractive hourly wages, construction workers are hard to find. The Bureau of Labor Statistics (BLS) says that in October, the latest month available at this writing, there were 410,000 job openings in the construction industry. 


Home prices have soared during the past two years. According to Redfin, as of early December “the median home-sale price hit a new all-time high of $360,250, up 14% year over year. This was up 30% from the same period in 2019.”

Higher prices normally result in fewer transactions, and that’s the case today. Existing home sales in December were down 7.1% from a year earlier, according to the National Association of Realtors (NAR). However, bidding wars are now common, and the typical home was on the market for just 19 days. 

Existing home demand coupled with an extreme inventory shortage have resulted in higher rental rates because people who can’t buy typically rent, increasing apartment demand. 

Zillow reports that “in 19 of the nation’s 50 largest metros, the typical renter is spending more than 30% of their monthly income on rent.” The Apartment Guide said in December that “nationwide rent prices for both one-bedroom and two-bedroom apartments have increased significantly year-over-year at 21.3 percent and 16.7 percent, respectively.”

Another result of multifamily demand is the increasing development of single-family build-to-rent (SFBTR of SFR) new construction. These are single-family, generally smaller, housing units that require little maintenance and are a middle-ground between rental units and home purchases. 

Entire new home projects are now being built for rental usage. 

“Over the past three years,” says Cushman & Wakefield, “the average size of a SFR community has grown 25% — from 72 to 90 homes. As more capital flows into the sector, community sizes will continue to grow and provide investors the opportunity to scale.”

According to the National Association of Home Builders (NAHB), 16,000 SFBTR units were constructed in the third-quarter, the highest total on record. This may not seem like a big number, but in the context of a severe national inventory shortage, every unit counts. 


Economists, securities analysts, and the Federal Reserve have debated for months whether rising prices mean the country is facing excess inflation or if such increases are just a temporary condition, a response to the restarting economy.

At the end of 2021 the government reported that “the all-items index rose 6.8% for the 12 months ending November, the largest 12-month increase since the period ending June 1982.”

The highest inflation level in nearly 40 years is tough to overlook, and it could create a range of results for landlords in 2022. High inflation levels could justify additional rent, while at the same time they might also mean higher costs for interest, taxes, and operational expenses. 

The Pandemic

The emergence of the Covid-19 virus in late 2019 set-off a U.S. health emergency of historic proportions. By the end of 2021 more than 50 million people in the US had been infected while 800,000 died from the disease, more deaths than in the 1918 flu pandemic. 

As we enter 2022 the pandemic is not over, and that’s a concern. Could we go back to a federal eviction moratorium in the coming year if the caseload expands? That seems unlikely given two negative Supreme Court decisions as well as political opposition in Washington, but at the state and local levels the answer might be different.

Catch up on industry trends, news and conversations at, or click here.