As eviction bans end, renters and landlords urge fiscal help

Tenants, landlords agree funds needed to make payments

As various moratoria on evictions from rental units expire, tenants and landlords are focused on getting more federal aid to make rental payments. (Erik McGregor/LightRocket via Getty Images)
As various moratoria on evictions from rental units expire, tenants and landlords are focused on getting more federal aid to make rental payments. (Erik McGregor/LightRocket via Getty Images)
Posted July 24, 2020 at 1:19pm

Sen. Sherrod Brown took to the Senate floor Thursday afternoon to warn of an imminent peril to millions of the nation’s renters: the end of an eviction moratorium on Friday that covers 12 million households.

“Right now, millions of Americans are in danger of losing their homes,” the Ohio Democrat said, urging Republicans to pass a bill to extend the eviction ban eight months and expand it to cover all renters, not just those in apartments with federally backed mortgages. “This problem isn’t some distant cliff. This starts tomorrow.”

The July 24 eviction moratorium was enacted as part of March’s roughly $2 trillion coronavirus relief bill, but as the COVID-19 pandemic resurges, unemployment insurance and other direct financial aid may be even more important for renters struggling to make their monthly payments.

If landlords stop getting paid, it could spread the economic harm already being wrought by the coronavirus, warned Cindy Chetti, senior vice president of government affairs at the National Multifamily Housing Council.

“We're very much concerned about a domino effect,” she said. “What is today a serious health and financial crisis could ultimately turn into a housing crisis if we don't continue to have those kinds of direct payments and benefits for our residents, so owners and operators can also pay their bills.”

The rental housing industry is watching the federal aid and the moratoria closely as Senate Republicans negotiate over the size and reach of the next economic relief bill. GOP senators are divided over the need, how much money to provide, and in what form.

Senate Majority Leader Mitch McConnell, R-Ky., said Thursday that the legislation would be introduced Monday at the earliest. There's little indication in early reports that it will include specific housing relief. And some Republicans oppose an extension of the $600-per-week additional unemployment benefit thought by many to have kept rent payments flowing in the first four months of the pandemic. 

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“It’s not enough to say, ‘thou shall not evict,’” said Rep. David E. Price, D-N.C., chairman of the Transportation-HUD Appropriations Subcommittee. “There has to be money in the system so renters can meet their obligations and money goes up the chain.”

Price supports extending the eviction moratorium but called the expanded unemployment insurance the “most important” government support keeping renters in their homes. “But that’s not sufficient,” he added, saying rental assistance was needed in addition to the moratoria and unemployment insurance boost.

“The danger here is not that we’ve done too much. The danger — and I think it’s a profound danger — is that we’ll do too little,” he said.

It's difficult to say just how large the wave of evictions might be if Congress doesn't act. The data are mixed. Some private data suggest tenants have largely been able to make rental payments since the pandemic took hold in March. Census Bureau survey data paints a more dire picture. 

Landlords and tenant advocates alike say Brown was right to number those at risk in the millions. They say the Republican outline for the next round of relief doesn’t go nearly far enough to keep renters from falling into homelessness when evictions begin again. Both sides want Congress to maintain the expanded unemployment insurance, send out more stimulus checks and provide billions in emergency rental assistance.

Eviction moratoria

The many moratoria on evictions have a range of expiration dates, some of them superseding others. 

Congress, for example, set July 24 as the expiration for federally backed housing, but the Federal Housing Administration, Federal Housing Finance Agency and the Department of Agriculture all extended their administrative eviction and foreclosure moratoria until the end of August — although they don't cover the same set of rental units.

A hodgepodge of state and local eviction moratoria also went into place during the pandemic. Forty-two states and the District of Columbia suspended evictions for all rental units. But at least 20 such moratoria have already ended, and those that remain in place face lawsuits from landlords.

“The eviction moratoria have been really important. They're kind of the first line of defense against what we see as this big wave of evictions coming on the horizon,” said Martha Galvez, a research associate at the Urban Institute. "But they're not a permanent, structural solution, right?”

“Eviction moratoria don't end up paying the rent, eviction moratoria don't help landlords pay their mortgages,” Galvez added. “It just stops the eviction process.”

According to some data, most people appear to still be paying their rent. 

NMHC surveys show rent for 95.9 percent of apartments was paid in June, barely changed from the 96 percent paid in June 2019. That gap was slightly larger in April, when the pandemic was hitting hardest, with 94.6 percent still paying rent, a 3.1 percentage point drop. 

That’s a sign that the government lifelines have worked, said Paula Cino, vice president of land-use policy at NMHC.

Galvez warned that such results risked lulling Congress into complacency.

“Because those solutions have been effective, it’s like folks are just in a wait-and-see mode, and hoping that maybe — just like we hoped the coronavirus case numbers don't go up when we know that they are — that it will just go away, that we're wrong about the scale of the problem,” Galvez said said. “But all the signs are there that the problem is real and that folks are really going to be in trouble once the extended unemployment insurance and the moratoria end.”

Gaps in the NMHC data may also give an overly rosy picture. The numbers are based only on the group's membership of multi-unit providers and exclude more affordable and subsidized apartments. They also include partial payments.

According to the Census Bureau’s Household Pulse Survey, 13.9 million renters, or 19 percent of the nation’s renting adults, didn’t pay May’s rent or had it deferred. And 23 million — nearly a third — say they have no or slight confidence they’ll be able to pay next month’s rent.

Evictions cost

Evictions can be devastating for the ousted. In an enforced eviction, the renter’s personal property will be dumped on the curb for all to see, and some to steal. The eviction is reported to credit bureaus, potentially ruining future rental applications. An eviction increases the likelihood of spiraling debts, depression, homelessness and suicide.

Renters entered the pandemic on an already shaky foundation. Half spent more than 30 percent of income on rent, and a quarter spent more than half their income. COVID-19 took away tens of millions of jobs, the main pillar keeping roofs over workers' heads.

Renters’ finances are more precarious than those of homeowners. The Urban Institute says 78 million home-owning households averaged $78,000 in 2018 annual income, far above the $41,000 annual income for the 44 million families renting. But the median mortgage payment of $11,076 a year isn’t much larger than median rent of $10,440, it said. 

The data are worse for Black and Latino renters, who were not only more likely to face housing instability heading into the pandemic, but also are more likely to catch COVID-19 and be hospitalized by it. They've also been more likely to lose their jobs. Unemployment jumped about 10 percentage points for both groups, to 15.4 percent for Blacks and 14.5 percent for Latinos in June, according to the Bureau of Labor Statistics. White unemployment rose 7 percentage points, to 10.1 percent.

Forty-six percent of Black and Latino renters said they have little to slight confidence of paying next month rent, compared to 22 percent of white renters, the Census Bureau survey found.

Sarah Saadian, vice president of public policy at the National Low Income Housing Coalition, said about 200 states and localities have created or expanded their rental assistance programs in response to the pandemic, but around a third have run out of funds.

“These individual programs are being exhausted very quickly, and it’s because they're providing millions of dollars when we need to be talking about billions,” said NMHC’s Cino.

Congressional effort

Senate Republicans' initial outline contains no new funds for state and local governments and would instead lift restrictions on how local governments can spend $150 billion provided in the March bill. According to a summary, the bill would include $13 billion for Transportation and Housing and Urban Development programs, but $10 billion of that is earmarked for airports, leaving $3 billion at most for housing programs.

“That’s a drop in the bucket compared to the needs,” said Saadian.

“If Congress doesn’t step up and the moratoria lift, you’re going to see a huge wave of eviction filings,” said Saadian. “You’re going see a lot of people kicked out of their homes during a pandemic, which is going to make it even more difficult to rein in the virus.

“You’ll see people doubling or tripling up with other households, people sleeping in cars, sleeping outside, sleeping in shelters, and it’s all completely preventable,” she said. “And I don’t think it's alarmist of us to be saying it’s going to be a real devastating event if Congress doesn’t provide rental assistance. I think it’s an understatement.”

NMHC and NIHLC are calling for at least $100 billion in emergency rental assistance.

The House included that amount in a $3 trillion bill passed in May. House Democrats say they’ll fight to get that into a final bill.

Landlords and tenants both remain hopeful that more financial support will be enacted

“On this issue, we are largely singing the same tune,” said NMHC’s Cino. “Whether the industry side or advocate side, we're talking about the need for renter support. We're all talking about an assistance program, and that actually makes me very optimistic that policy makers generally understand the potential severity of the problem here.”

Fighting rental assistance ultimately doesn’t make any political sense, said NLIHC’s Saadian.

“Deep red states like Florida, Texas, Arizona and North Carolina are seeing really huge numbers of people at risk of evictions,” she said. “It seems shocking to me that Republicans wouldn’t include emergency rental assistance in their bill when it’d go to help so many people in those states too.”

Rep. Price agreed. “I just don’t know what they are looking at in their own districts,” he said.