The Register Citizen (Torrington, CT)
Bail out the rental housing market — or it could collapse on us
There is a new problem in the housing sector, and the push for a solution has led to uncommon agreement between landlords and tenant advocates calling for relief. That problem: Millions of America’s renters no longer can pay next month’s rent. In Connecticut, roughly 19 percent of tenants are behind on their rent — and, to this point, the federal government has offered no relief except the patchwork CDC eviction moratorium, which runs through the end of the year. States like Connecticut have been passed the burden of targeting their limited resources at the massive rental housing crisis that looks likely to crest in 2021.
Connecticut is facing a rental crisis that begs for a cash injection, and at the same time, the state’s budget deficit is projected to exceed $1.25 billion. What can the state do in this situation? For one, it could build on the crucial housing assistance programs that it has already implemented. The Connecticut Department of Housing just launched Phase 2 of the Temporary Rental Housing Assistance Program, or TRHAP. The state has already committed $40 million to this effort. Phase 2 of TRHAP targets resources specifically to landlords of buildings with fewer than 10 rental units that live in the building themselves.
The state is wise to recognize the vulnerability of many of these small, multifamily property owners. Connecticut could take the additional step of broadening the program to all residential buildings with fewer than 10 rental units to keep more of the most vulnerable tenants secure in their homes, while preventing small landlords from losing their properties.
Such a program should be directed toward preserving Connecticut’s supply of older small multifamily housing, or SMF. This housing is often characterized by its affordability and low cost relative to other rental options in a community. Much of Connecticut’s stock of nonsubsidized rental housing is in small multifamily buildings of two to nine units. Affordable housing in Connecticut is scarce, and SMF disproportionately houses lowerincome residents and people of color. In addition, owner-occupied landlords of small multifamily units are disproportionately people of color, making these buildings an important wealth-building tool for minority-owned small businesses and individuals of color who have been historically shut out of these opportunities.
These small multifamily buildings are much more common than you may know, and they are present in every corner of the state. For example, in Fairfield, 11 percent of all housing units are in buildings of two to nine units. And in cities like Norwalk and Bridgeport, small multifamily buildings make up an even larger proportion of the housing stock. In many communities, these small developments are practically the only rental options available.
At the Partnership for Strong Communities, we have studied Connecticut’s SMF stock and have come away convinced that preserving this resource is essential to the health of our rental housing market. Housing instability does not just affect renters or landlords — it has negative impacts on the whole economy. Renters and homeowners alike have an investment in keeping the rental market strong. Research from the Brookings Institution has shown that rent payments have an important multiplier effect on the local economy — that is, these rent checks pay for a lot more than just rent. They also go toward property upkeep, mortgage and utility payments, and property taxes. In Connecticut, where public schools are largely funded by property taxes, this is especially crucial.
Furthermore, this crisis has the potential for long-term negative impacts on the multifamily housing market, which could affect affordability and new construction for years to come. Multifamily properties become much less secure and attractive ownership opportunities if potential buyers and investors perceive a risk of long-term income loss should another pandemic or disaster leave owners in the lurch again. Insurers and private investors would need to assess this risk moving forward, and those adjustments could make owning and holding these properties an infeasible financial option in some communities.
Connecticut’s eviction moratorium ends at the end of the year, and policymakers must act quickly to ensure that the state’s residents maintain stable housing through the COVID-19 pandemic and recession. A targeted grant program — much like the one New Jersey implemented earlier this year — could alleviate much of the burden on tenants and landlords struggling to pay for housing. The state doesn’t have the resources to solve this problem on its own, but it can use this time to refine a program that targets these properties and their tenants for relief while we wait for the federal resources that must be delivered. And if this program is targeted toward Connecticut’s existing stock of unsubsidized affordable housing, it could help the state preserve a resource that it will need in the months and years following COVID-19.
Connecticut’s eviction moratorium ends at the end of the year, and policymakers must act quickly to ensure that the state’s residents maintain stable housing through the COVID-19 pandemic and recession.