Eviction moratorium could lead to housing crisis
The eviction moratorium recently extended by Gov. Ned Lamont is meant to help keep people in their homes during the pandemic. But it also places a significant burden on property owners. If the situation isn’t addressed soon, Connecticut could face another housing crisis that would leave many out in the cold.
Most landlords throughout the state don’t have large a portfolio of properties to help ease the burden they’ve been forced to carry. Many small landlords live in the homes they rent, and others have invested their life savings to buy real estate because of the security it provides. In most cases, these investors use their real estate to provide extra income for their family or as their retirement fund.
When the eviction moratorium was put into place in March, landlords argued that they were being asked to bear a disproportionate financial cost, as they still had to pay their mortgages and property taxes and provide regular maintenance and repairs to their property — without any income.
For more than six months, landlords have not been able to collect rent from delinquent tenants and have not had access to the court to seek any remedies. Now, that moratorium has been extended into October.
Businesses in Connecticut that provide valuable services and essential goods such as grocery and clothing stores, restaurants
and pharmacies charge for their services, while landlords are being told to provide housing at no cost. This is putting the future of residential housing into jeopardy.
Many landlords tell us they can’t hold out for much longer. Some are already being behind on their taxes while others delay costly repairs just to stay afloat.
Many fear foreclosures as they begin to fall behind on their mortgage payments. Delinquencies in the state have already more than doubled since February as Connecticut faces one of the highest rates in the nation.
Recently, $10 million was provided by the state government for rental assistance, but the narrow scope and relatively small amount compared to the need still isn’t enough.
Few people in Connecticut are eligible for the assistance, and for those who qualify, they will only receive a $4,000 maximum benefit that, in many cases, is much less than they owe. That means only about 1% of the renters in the state will benefit from this program. Expired unemployment benefits will also make it more difficult for these families to stay afloat.
Even housing advocates agree the money won’t go far enough and in order to save the state from a full-blown housing crisis. Whether it’s from Connecticut or Washington, D.C., more funds need to be allocated for housing assistance, and the qualifications need to be widened.
U.S. Sens. Chris Murphy and Richard Blumenthal have supported additional rental assistance through the federal aid package called the HEROES Act. Murphy recently noted that the money will not only help people stay in their homes but will also allow landlords to pay their mortgages.
Towns and cities throughout Connecticut who are already seeing a decline in property tax revenue are also seeking assistance from the state and federal governments. Municipalities rely on these taxes to provide essential services during the pandemic.
Money that helps tenants stay in their units will also benefit municipalities by allowing property taxes to be paid. It’s cheaper by far for the state to intervene with aid now than to rehouse thousands of families after they are evicted.
The cost of living and construction costs in Connecticut are already among the highest in the nation. By failing to allow landlords to collect rent, affordable and low-income housing will become even more difficult to develop in the state.
We hope we will continue to see additional aid for both tenants and landlords, but a real solution also includes opening the state’s housing courts. We should allow judges to decide — on a case by case basis — whether eviction proceedings should continue.
Even when housing courts do open, either virtually or in person, the huge backlog will create months of delays that will exacerbate the problem, unless additional mediators and court sessions are added. Our federal lawmakers must end the stalemate in Washington and help those who need it most.
Connecticut’s housing market has barely recovered from the last recession. It’s time to act now before we face yet another housing crisis in the state.