Harris County, Texas, where Houston is located, had 600 eviction cases on its docket for the week of Sept. 21, despite the fact that city streets were flooded from Tropical Storm Beta and a moratorium on evictions was ordered three weeks previously by the Centers for Disease Control and Prevention.
Meanwhile, Noel Wilson, a former teacher who began renting out her San Bernardino, California, home two years ago to help pay for graduate school, told The Washington Post that her tenant owes her $14,350 in back rent and she has depleted her savings to keep up with her mortgage payments.
The COVID-19 pandemic has created a crisis in housing, for both tenants and landlords. The nation’s stay-at-home orders and business closures needed to help contain the virus created widespread economic suffering.
Now, Congress needs to enact a national economic strategy to help struggling renters who face housing instability and small-property owners experiencing financial difficulties because their tenants cannot pay their rent.
The American Bar Association, the largest voluntary association of lawyers and legal professionals in the world, is urging Congress to immediately prioritize American housing stability and safety through emergency rental, mortgage and foreclosure relief to the millions of tenants and landlords experiencing hardship.
This assistance is desperately needed to supplement and reinforce the important but limited protections American families received under the Sept. 4 evictions moratorium issued by the Centers for Disease Control and Prevention.
While the CDC’s moratorium provides critical relief from the threat of eviction for adults and children in many locations across the country, it doesn’t include federal rental assistance to address the mounting rental debt and landlord expenses.
It’s a temporary and incomplete remedy. As the debts of both renters and property owners accumulate, they will suffer severe financial harm when the moratorium expires at the end of the year.
What’s more, without financial relief, the eviction crisis will resume as soon as the moratorium ends.
For example, a staggering 30 million to 40 million people (29 percent to 43 percent of renter households, according to The Aspen Institute analysis of U.S. Census data) could be at risk of eviction for nonpayment of rent due to COVID-19-related job and wage loss. And the upheaval of an eviction can have a devastating impact on the tenant’s ability to keep a job or seek new work.
Equally pressing, the steep decline in rent payments places property owners in financial peril and will have a severe impact, especially on small-property owners who don’t have the financial resources to sustain themselves if their tenants can’t pay the rent.
Many of these landlords began losing rent payments in March or April, and the losses are expected to continue through the end of 2020. At the same time, they face increased operating expenses to heat buildings and remove snow in many states.
Because small-property owners provide more than half of the affordable housing stock that rents for $750 or less, many could be forced to increase rents to recover from financial hardship or sell their properties, moves that could further deplete the United States’ affordable housing supply.
If tenants are unable to pay their rent, it will also have a direct impact on property owners’ ability to pay property taxes, which are crucial to sustaining community resources, especially schools and state and local governments.
On average, funds from local governments supply 45 percent of school budgets, and 80 percent of these funds come from property taxes.
For property owners, financial help must go beyond the foreclosure moratorium and forbearance programs under the Federal Housing Administration and Federal Housing Finance Agency. Only a fraction of rental housing properties is covered by such programs.
An estimated $100 billion in federal rental assistance is needed to prevent widespread housing instability. The Urban Institute estimates that the cost of rental housing assistance for six months ranges from $48 billion, which would help 8.8 million households, to $96 billion, which would assist 17.6 million households.
Numerous industry groups, state and local government officials, and national advocacy organizations across the political spectrum support federal legislation that includes $100 billion in rental and mortgage assistance.
Supporters include 32 national housing advocacy organizations, 40 local mayors and government officials, as well as the National Apartment Association, National Association of Home Builders and the National Association of Realtors.
Emergency rental and foreclosure relief during the nation’s health emergency is critical to prevent permanent harm to tenants, property owners and communities. The need is urgent. Relief is needed now.
Congress should act without further delay.