Housing struggles in Rappahannock
COVID, economic crisis make life that much harder
With last month’s expiration of $600 in enhanced federal unemployment benefits coupled with bleak prospects for a new stimulus package, Rappahannock’s web of social service agencies and nonprofits is bracing for a surge in requests for assistance.
Of great concern are low- to moderate-income families and individuals who may struggle to pay rent or meet mortgage obligations.
An analysis by Harvard’s Joint Center for Housing Studies of the Census Bureau’s Household Pulse Survey found that renters were more likely than homeowners to lose income due to the impacts of COVID-19. In Rappahannock, where around half of renters are already paying more than a third of their income on housing costs, according to Census figures, that loss of income could put some over the edge.
“I think this is just going to be really, really devastating,” said Amy Timbers, a real estate agent who has been active on the Facebook group RappRentersNet, which tries to match landlords with renters.
Finding housing was already a challenge for many renters in rural Rappahannock, where supply is low and options are limited. But the housing market has been hot among those whose jobs weren’t impacted, despite the
U.S. economy experiencing its largest decline on record in the second quarter.
Nationally, existing home sales in June rose 20.7 percent from May and median existing home prices were up 4.2 percent from the year prior in the second quarter, according to the National Association of Realtors. In its revised 2020 market forecast, it expects existing-home sales to ramp up to 5.6 million by the fourth quarter.
Rappahannock Realtor Cheri Woodard said a property she recently sold drew scores of inquiries, mostly from city residents looking for a weekend home.
“I had at least 50 people a week who wanted to see it until it went under contract. That’s huge for here,” she said. “I wish I’d had 50 more like it because I could have sold them all.”
Local realtors predict that demand could increase further as people from the city continue to seek refuge from COVID-19 in less dense locations.
“People are wanting to escape from the city,” said Timbers. “They want to be able to sit outside. They want to be able to grow a few tomatoes. So they’re looking for some extra space. They’re still being particular. But there’s just a lot more buyers looking.”
Jason Brady at Oakview National Bank said the real estate market is going through a “COVID boom.” Record low mortgage rates have made buying even more attainable for those with good credit.
But Timbers worries that the economic impact of the pandemic, particularly on low-income households, will just exacerbate the gap between the haves and have nots.
“What’s going to happen is that middle class person is going to become even more scarce, and we’re going to end up with the rich getting a whole lot richer and the poor getting a whole lot poorer,” she said.
Around 1,200 households, or 38 percent of the total in Rappahannock County, are considered low income, according to definitions set by the U.S. Department of Housing and Urban Development. And that means they were already having a difficult time before the pandemic.
NO QUICK FIX
The Benevolent Fund, which provides residents with short-term, emergency financial help to cover things like rent and utilities payments, hasn’t seen much difference in requests for assistance yet.
But it has been providing more in dollar amounts per individual than it did a year ago and seeing more requests from people who typically would not have to ask for assistance, said Director Berni Olson.
Instead of the $600 or $700 rent requests they were getting last year, it’s now more like $1,200. That could be a reflection of what’s happening in the rental market or it could be that people with lower rents are finding ways to get by on those, she said.
The amount of rental assistance the Benevolent Fund had provided to the end of July was as much as it spent for the whole of 2019, Olson added.
Back in March, Congress approved an additional $600 a week for unemployment compensation as part of the $2.2 billion Coronavirus Aid, Relief, and Economic Security (CARES) Act. Those benefits ended July 31, but Olson said she’s not hearing from people who had been receiving them. Among those the Benevolent Fund has assisted, some have been digging into their savings to cover rent or picking up whatever jobs they can to make up for the loss of more stable income.
“If they don’t get unemployment for August, we may get an uptick for September. That’s what we’re anticipating,” she said.
The Rappahannock County Department of Social Services (DSS) said they’ve helped one family with rent, utilities and a car payment since March, about what they would during a normal year.
“We anticipate requests increasing as a result of the loss of the extended [unemployment] benefits, loss of income from parents who will have to leave or reduce work hours or have additional child care expenses due to the hybrid schooling situation,” said DSS Director Jennifer Parker.
The department has about $18,000 a year it can spend through its Promoting Safe and Stable Families fund to prevent a crisis in a household. That includes helping with housing costs.
In late March, as things were shutting down to prevent the spread of the pandemic, Parker advised community leaders and donor organizations to put some money aside for the summer. She worried then that when moratoriums on rent were lifted everyone would owe
money to their landlords.
“So not only would they have their current expenses, they’d have all those back expenses and all the landlords who hadn’t been able to evict people are going to come collecting,” she said.
Rappahannock has seen nine eviction cases since general district court resumed May 19, according to the court’s website. Five of the cases resulted in eviction orders.
On August 7, Virginia’s Supreme Court granted a temporary statewide moratorium on eviction proceedings related to failure to pay rent. But the moratorium, which began August 10 and remains in effect through September 7, doesn’t stop landlords from filing eviction complaints or courts from holding hearings and issuing eviction judgements, said Ann H. Kloeckner, executive director of Legal Aid Works, a nonprofit that provides legal assistance to low-income households.
What it stops are writs of eviction, the final step in the eviction process that allows law enforcement to remove someone from their home.
Kloeckner says the moratorium buys people some time to try and seek assistance, but the fact that it doesn’t stop orders being entered against tenants does little to reduce the harm they’re feeling.
“People have lost jobs, people have been temporarily furloughed, they’ve been reducing their hours. There’s so many variations on how this can affect just someone’s general abilities,” Kloeckner said, calling the $600 a week critical.
“It’s the only thing that’s kept more people from facing eviction, so I think we’re going to have even more of an issue coming up,” she said.
“In a community like Rappahannock County, you have the challenges any low-income person would have which is access to transportation, access to affordable housing, access to a decent job all of those have always been difficult in rural communities and it’s just going to become more intense as the crisis continues,” she noted.
RUNNING OUT OF OPTIONS
People Incorporated of Virginia, a nonprofit health and human services agency, is disbursing some of the $50 million the state received through the CARES Act for a rent and mortgage relief program (RMRP).
It can pay up to three months in missed payments back to April as well as current rent for people who can prove they’ve experienced a loss of income due to COVID-19 and meet certain income requirements.
So far 10 people in Rappahannock have inquired about the program and three have received assistance. The applicant’s ability to meet eligibility requirements, wait time on documentation and participation from the landlord or lending institution are some of the reasons for the discrepancy, according to People Inc.
Up until last week, the organization had to negotiate with every landlord or lending institution on any payments beyond one month past due. Now only payments beyond three months will require negotiation.
In cases where people are in need of housing, Kyle Sensabaugh, People Inc.’s director of Housing Services, says the problem they’re running into is placement.
“We have the funding there, but where are we going to put them? If there were 10 units available in some of these counties we could fill them up tomorrow,” he said.
Local real estate agents can relate. Timbers recently helped find a rental for a new teacher after a difficult and frustrating hunt. “She was looking at the worst time to be looking for a rental. And her budget wasn’t as generous as a lot of other people,” Timbers said.
For rentals, specifically, locals are competing with people coming out from the city who are used to DC prices and willing to pay much more than what someone working in the county can typically afford, she explained.
Woodard said she’s had offers from people willing to pay $3,0004,000 a month just to rent a place through the fall.
For renters who’ve lost income, however, every month is an uncertainty. And in a market like this, many are forced to pay more for less.
“I’ve seen some really ugly, nasty houses rent for way more than I ever thought they would because people are desperate,” said Timbers. And that means many are settling for homes that force them to make sacrifices.
“If you can only afford $1,000 a month and you can’t find anything at $1,000 you’re willing to pay $1,200 because you have to have a roof over your head,” Timbers said. “But you really can’t afford $1,200. That extra $200 blows your budget.”
For some, the extra $600 a week made that extra $200 possible for a time.
“And now that’s gone,” Timbers said. “And now what do you do?”
The moratorium, which began August 10 and remains in effect through September 7, doesn’t stop landlords from filing eviction complaints or courts from holding hearings and issuing eviction judgements.