End of eviction moratoriums threatens millions.
Rocketing job loss could see evictions soar
With Utah’s eviction moratorium set to expire Friday, the state is scrambling to launch a $4 million program this week to help tenants cover their rent payments.
Nevada is using $2 million from a state settlement with Wells Fargo for a renters’ assistance program, while Austin is determining who’s eligible for its $1.2 million program through a lottery. Philadelphia is offering struggling renters up to three months or $2,500 in help but has warned up front: “Funding is limited. Not every applicant will receive assistance.”
Across the country, dozens of state and local programs have emerged to prevent a potential wave of evictions as the country’s unemployment rate reaches historic highs and moratoriums that prevent landlords from removing tenants from their homes begin to expire.
But these patchwork measures aren’t likely to be enough to prevent millions of people from losing their homes in the coming months, housing industry officials and economists say. Amherst, a data and analytics real estate estate firm, now estimates that up to 28 million renters, or 22.5 percent of all U.S. households, are at risk of eviction or foreclosure because of the coronavirus.
House Democrats included $100 billion for a national rental assistance program in their
sweeping $3 trillion coronavirus rescue bill this week.
But Republicans quickly rejected the proposed legislation, and some tenant advocacy groups say $100 billion won’t be enough. Many communities were already suffering a housing affordability crisis that made renters more vulnerable to financial shocks from the coronavirus pandemic, they say.
“Rental assistance is a short-term measure,” said Tara Raghuveer, the homes guarantee campaign director at People’s Action, a national tenants’ rights group. As the economy continues to deteriorate, Raghuveer said, “we will have a come-to-Jesus moment; there will be a moment when we realize that what we need is a more comprehensive solution.”
The number of Americans struggling to pay their rent or mortgage has exploded since March as unemployment rates reach heights unseen since the Great Depression. As of May 7, nearly 4.1 million homeowners were getting mortgage relief, up 7 percent from the end of April and up 2,600 percent from the beginning of March, according to Black Knight, a mortgage technology and data provider.
The problem is most acute among renters, who are more likely to hold the kinds of jobs that have been lost during the pandemic, economists say.
Thirty-three percent of renters still have not paid their May rent at all or in full, compared with about 25 percent during the same period in April, according to a survey by Apartment List, an online rental marketplace. More than 40 percent of renters said they were worried about covering their next month’s rent, while only 20 percent of homeowners shared the same concern, according to a survey by the Urban Institute released last week.
The numbers would be worse if not for the $1,200 stimulus checks and enhanced unemployment insurance passed by Congress in the Cares Act, said Ed Mills, a policy analyst for Raymond James Financial.
“There is no doubt that there is a severe economic shock that has occurred, but it has been somewhat mitigated,” he said. “So far what we have done seems to have prevented some of the worst-case scenarios from playing out.”
If the economy doesn’t quickly recover, a national rental assistance effort may become a more pressing issue, Mills said. After 9-11, the Federal Emergency Management Agency leveraged the Stafford Act, typically used after a natural disaster such as a hurricane, to provide up to 18 months of rental and mortgage assistance to people affected by the attacks. A similar program could become necessary this time, Mills said.
“We have a precedent of providing housing assistance,” he said. “Not all disasters destroy your home. Sometimes it destroys your income.”