Mortgage payers, renters need relief
Find money to fund cancellation of payments during pandemic
On May 6, Lorenzo Perez got a notice on the door of the Walnut Creek apartment he shares with his wife, Lesly Ordonez, and their two children. It said they had three days to pay rent or quit.
In other words, the landlord was threatening to evict the family.
“I haven’t worked since March 15, so of course I’m very worried,” Perez, a grill cook, told me. “The most stressful thing is that we don’t know when things go back to normal.”
Getting back to normal could take months, most likely years.
Perez’s rent is $1,950 per month, and when we talked last week he said they owed $2,500. Perez and Ordonez, who remain in the apartment, haven’t paid May rent, and they still owe money for April.
Perez shouldn’t worry about eviction because last month the Contra Costa County Board of Supervisors passed an eviction protection and rent freeze ordinance. But rent moratoriums during the coronavirus are a temporary salve. What happens when the moratoriums expire? There are more than 33 million people in this country who’ve filed for unemployment since midMarch.
How in the world are jobless renters and homeowners going to catch up?
The coronavirus is an unprecedented scourge that requires radical action. There’s much yet to be learned about the virus, but here’s one thing we know for sure: stable housing is necessary to protect public health.
State officials estimate between 1.2 million to 2.3 million households are struggling to pay rent, and while there’s a wealth of proposals to help cashstrapped households, like the one by state Senate democrats that would give renters 10 years to pay back rent, only one goes far enough.
Rents and mortgages should be canceled during the pandemic.
Before I continue, let me be clear: I’m not suggesting that landlords and lenders should eat the cost of delinquent payments. The stock market, while volatile, retains vitality because the Federal Reserve injected trillions —
trillions — of dollars into financial markets. There’s money available for anguished workers.
In “Stabilizing Shelter: Rent and Mortgage Cancellation at State and Federal Levels,” a brief released earlier this month, researchers at UC Berke
ley’s Othering & Belonging Institute referred to the Rent and Mortgage Cancellation Act of 2020, a bill proposed by Rep. Ilhan Omar, DMinn. Among other things, the act establishes relief funds for landlords and lenders, and it would be retroactive to April 1.
“If immediate action is not taken, families will be forced from their homes and cause the housing market to suffer irreparable damage,” Omar told me. “Congress has a responsibility to prioritize the needs of the American people over profitdriven corporations.”
Terra Thomas, a 35yearold freelance florist, hasn’t paid rent on her apartment near Lake Merritt since April. She’s participating in a statewide rent strike organized by the Alliance of Californians for Community Empowerment.
“People can’t work,” Thomas said. “For a while, it was literally illegal for people to do the jobs that they have.”
Sally Richardson, a professor at Tulane Law School, said balloon payments could devastate households nationwide.
“People who have not been able to earn an income for the past two months — and potentially for the next few months, depending on how the pandemic continues — will simply not have sufficient financial resources to make up two, three, four months of lost rent or mortgage payments,” she said.
Richardson said canceling rents and mortgages would face legal challenges, but something has to be done.
“If the housing system collapses, that will have longterm effects that will last much longer than COVID19,” she said. “The worst thing would be to turn what has been a major public health crisis into a major housing crisis.”
The subprime mortgage crisis that fueled the Great Recession in 2009 left its mark on Oakland. The majority of foreclosed properties in the city were in East Oakland and West Oakland, two areas hampered by racial and economic segregation. After decades of redlining, the systemic and discriminatory practice of refusing to issue loans or insurance to neighborhoods inhabited by black and brown people, these communities were targeted with predatory loans.
The federal government saved the banking and automotive industry while the public was left to sink.
“We worry about repeating what happened after the Great Recession where communities of color were really devastated, but some corporations were able to take advantage and really profited,” Nicole Montojo of the Othering & Belonging Institute said.
On Tuesday, Oakland City Council extended eviction protection for tenants until Aug. 31 or until the local emergency is declared over.
“It’s not as if we’re just trying to solve an economic problem,” said Councilwoman Nikki Fortunato Bas, who authored the legislation. “We’re actually trying to protect the health of everyone in our communities and that means making sure people have a safe home to shelter in place.”
Bas told me she supports canceling rents and mortgages. Daniel Bornstein, of Bornstein Law firm, which specializes in real estate litigation, is against it. But he had a counter solution: get local and state officials to create a pool of wealth that tenants can tap for nointerest loans. The money for the program could come from local billionaires, and cities would then use the interest from the money to administer the program.
It doesn’t sound so unconventional when considering that Twitter and Square CEO Jack Dorsey donated $1 billion of his Square equity to coronavirus relief. Just last week, Dorsey donated $10 million to close the digital divide for Oakland students.
“Someone needs to tap (the billionaires) on the shoulder, and say, ‘Now is the time to be there for us. What are you waiting for? This is crisis,’ ” Bornstein said.
Perez, 32, and his family have lived in the Walnut Creek apartment complex for 10 months, and he said they’ve never been late with rent before the coronavirus. When I reached the property manager’s office, I was told they couldn’t comment. Attempts to reach the property owner were unsuccessful.
“We’re not the only ones that this is happening to,” Perez said. “There’s a lot of people suffering, and people should try to remember that and help in any way if they can.”