Scott Meyers
The self-storage industry has proven to be a resilient force throughout the pandemic, thriving at a time when many of its renters are struggling to survive another day.
There are more self-storage units in the United States than in all other countries combined. With more than 50,500 self-storage facilities in 2021, the industry has grown considerably in the last fifteen years. According to a recent survey, 38 percent of Americans said they have used or plan to use self storage in the future. In 2020, the number of households renting self-storage units reached an all-time high of nearly 13.5 million, an increase of 3.5 million households since 2005, according to the Self Storage Association’s (SSA) “Self Storage Demand Study” for 2020.
The 2022 Self-Storage Almanac, the thirtieth edition by MiniCo Publishing, shares the SSA’s optimism: “Amid a pandemic, election, and recession, the sector has proven itself a bulwark in times of trouble. Storage thrives in periods of disruption, and the United States has rarely seen such disruption in nearly every area.”
Self-storage facilities are good at generating passive income for their owners—they are less expensive to install or acquire, and then maintain, compared with other commercial structures such as shopping centers or office buildings. But like other rental properties, storage units are sometimes prone to owner neglect, leaving renters ensnared in various problems that plagued the industry even before the pandemic.
According to the Better Business Bureau, some of the most common complaints by storage unit renters include hidden or additional charges, unreasonable terms buried in the fine print of contracts, property theft, poor security, a lack of cleanliness, and animal or insect infestations. There are also numerous reports of people’s possessions being wrongfully auctioned off, as was the case with one active member of the Air Force, whose belongings were sold by a Massachusetts storage company while he was deployed overseas in 2019. Among the items that were sold were “mementos that belonged to a cousin who had been killed in action while also serving in the military; his grandfather’s military medals; a dresser handmade by his great-grandfather; and family photographs,” according to Military.com.
While there is an abundance of research about self-storage facilities and their profitability, unfortunately, it reduces renters to nameless demographics. Industry reports do not take into account the number of people who rent storage units out of desperation rather than convenience, perhaps after seeing their home destroyed by a natural disaster, being evicted after losing a job, having their life upended by medical debt, or fleeing from domestic abuse or sexual assault.
About 10 percent of U.S. households now rent a self-storage unit. The average monthly rental cost of a unit is around $190, depending on the size, according to ConsumerAffairs. As more storage facilities are built to keep up with demand and record-high occupancy rates, millions of people are fighting to get by as their personal finances continue to be jolted by inflation and the rising cost of living.
Self-storage lien laws vary from state to state and city to city. Many of these laws are outdated and detached from the difficult realities of today’s economic climate. In Florida, self-storage facility owners can deny renters access to their personal property after just five days of delayed rent payment—without notice or judicial process.
The pandemic demonstrates how easily any financial disruption can prevent people from making ends meet. For the working poor, missed payments can bury them deeper in a financial hole. The residential eviction crisis is an example of what happens when temporary government protections lapse while the underlying laws that govern an industry remain unchanged.
The CARES Act, the economic stimulus bill signed into law by President Donald Trump in March 2020, in response to the pandemic, included a limited residential eviction moratorium for landlords that received federal assistance, but it expired in late July of that year. The Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services issued a broader eviction moratorium that lasted until the end of 2020. The moratorium was extended twice after that, first by Congress and then by President Joe Biden, until July 2021. An attempt by the CDC to extend it again was struck down by the U.S. Supreme Court in August 2021.
The Eviction Lab at Princeton University that at least 1.36 million residential evictions were prevented in 2021 due in large part to those policies. On average, 2.7 million U.S. households are threatened with eviction every year, a recent study.
Juan Pablo Garnham, audience and community engagement editor at the Eviction Lab, tells The Progressive in an email that the federal moratoriums on evictions, along with rental assistance programs and other local policies, created historical protections for tenants.
“Across the country, renters are feeling the effect of the affordability crisis that we were living through before the pandemic,” Garnham says. “In 2022, rental prices have increased throughout the country at exceptional levels. In addition, most programs of emergency rental assistance have run out of funds, leaving tenants in need in a helpless situation.”
Typically, when storage renters default on their payments, their possessions can be auctioned off by facility owners to cover the difference, without having to go to court. These items may not always have the highest monetary value—such as old family photographs, heirlooms, or other keepsakes—but they are often priceless to their owners. Just as residential tenants facing the threat of eviction have an of suffering depression, anxiety, and other adverse health issues, the possibility of people losing their possessions only intensifies the strain on their lives as they are thrown further into turmoil.
At the height of the pandemic in 2020, the contents of hundreds of self-storage units were auctioned off in New York City. In accordance with the state’s lien laws, storage facility owners have the right to lock renters out of their units and sell their property when they fall behind on payments. Late that year, then-Governor Andrew Cuomo extended a state residential eviction moratorium, and while there were both federal and state moratoriums for housing evictions, they did not shield storage unit renters.
Lisa Pearlstein, director of the City Bar Justice Center’s Legal Clinic for the Homeless in New York City, tells The Progressive that she had concerns about how the pandemic would affect storage unit renters. Because she works with families experiencing homelessness who receive storage eviction notices, she understands how devastating the prospect of losing their possessions can be.
“I’ve seen storage facilities place a lock on a storage unit until the bill gets paid, and clients can’t get vital documents that are in there.”
“My clients are all on public assistance or in a shelter, so they get grants and their arrears paid,” Pearlstein says. “But when the pandemic hit, I knew they would probably get relief, but I thought about everybody else who was not eligible for public assistance and wouldn’t be able to get relief. I wondered if there was going to be a tsunami [of storage unit evictions] a year after the pandemic.”
She also notes that sometimes renters store important financial documents and personal papers in the units, which could cause much grief if they’re lost or destroyed.
“My clients put their birth certificates in storage,” Pearlstein says. “I’ve seen storage facilities place a lock on a storage unit until the bill gets paid, and clients can’t get vital documents that are in there. It’s a big problem and it definitely comes up.”
Last year, near Denver, Colorado, the belongings of hundreds of renters were auctioned off. Some renters tried to pay what they could as a gesture of good faith to the facility owners, but their belongings were sold anyway. In some cases, they were not even notified that their possessions were being sold.
Los Angeles was the first major city to address the problems the pandemic caused for self-storage renters. On May 27, 2020, Mayor Eric Garcetti signed an allowing storage renters up to three months to pay missed rent on units and prohibiting facility owners from charging late fees or auctioning off the contents of the units. These were only temporary protections, not a permanent solution for those who fell under long-term financial hardship due to the pandemic. As the reported at the time, “it’s not rent forgiveness; at the end of the three months after the city’s emergency is over, all back payment is due.”
In Minnesota, efforts to reform storage laws had been going on for nearly a decade, with consumer protection advocates clashing with storage facility owners. Last year, storage renters won a significant victory.
In 2021, the Minnesota state legislature adopted a new law governing storage liens. HF 1205 updated a 1988 law that had not been amended since 2014 and permitted renters who were behind on payments to retrieve only items valued under $50. Worse, the old law treated storage evictions like residential evictions, which can cause problems with people’s credit and standing for years.
Minnesota state Representative Esther Agbaje, who had a distinguished legal career before being elected to the state legislature in 2020, was the lead author of the bill. In her previous job, Agbaje often gave advice during eviction clinics and was familiar with consumer protection laws. She says her experience gave her a fresh perspective on the issue, which helped during negotiations over the legislation.
The way the law was previously written set people up for failure, she says, “because if they defaulted, they were getting a residential eviction on their record.”
“In Minnesota, that stays with you for a long time,” Agbaje tells The Progressive. “If they close out a storage unit or forget about it, then try to look for another place to live so they can get back on their feet, they’re going to have this on their record. A lot of people didn’t know, and that would set them back even further.”
The new law allows renters to retrieve items valued up to $125 if they receive public assistance, qualify for legal aid services, or are survivors of domestic violence or sexual assault. It also permits renters to retrieve personal documents and health aids or other medical equipment.
There is plenty of room for additional and better regulation of the self-storage industry. “It is important to look at these smaller laws that aren’t as flashy but are hurting working and poor people, who just need help, and what we can do to remedy the situation,” Agbaje says, “so [that] we’re not having all these pitfalls in our economic and legal landscape.”