Wednesday, October 7, 2020

"As Trump Abandons Stimulus Talks, Renters and Landlords Face a Financial Cliff"

"As Trump Abandons Stimulus Talks, 
Renters and Landlords Face a Financial Cliff"
By Jacob Passy

"President Donald Trump has quashed hopes for a new federal stimulus package before the presidential election in November, saying Tuesday that he had instructed his team to stop negotiating with Democrats until after the election. And that could leave America’s renters and landlords in a lurch.

As the coronavirus pandemic has upended the nation’s economy, so too has it disrupted the country’s rental housing market. Months of layoffs and furloughs have left millions of Americans unable to afford to pay their rent. Landlords, meanwhile, have been forced to shoulder property tax and mortgage payments in the interim.

All told, some 30 to 40 million Americans face the threat of eviction as a result of the pandemic. Last month, the Centers for Disease Control and Prevention took historic action by issuing a nationwide moratorium on evictions. Public-health experts worried that if millions of people were kicked out of their homes, it could exacerbate the spread of COVID-19 and complicate efforts to reduce transmission.

The CDC’s moratorium didn’t automatically provide protection to tenants. Instead, renters have to proactively notify their landlords that they cannot be evicted under the order by meeting certain specifications. Gaps in the way the moratorium was designed have led to thousands of renters facing eviction hearings.

When the CDC’s order was announced, housing experts said it was merely “slowing the clock on evictions.” That’s because moratorium did not come with funding for rental assistance. And now that Trump has signaled that his administration will no longer participate in stimulus negotiations, it’s becoming less likely that rent relief will come soon. “The president has threatened to collapse the rental market with his egregious inaction,” said Noëlle Porter, director of government affairs at the National Housing Law Project.

Emergency rental aid was nearing bipartisan agreement: While Democrats and Republicans differed on how much money they wished to allocate for another stimulus package, lawmakers on both sides of the aisle were getting closer on the need for rent relief, said Diane Yentel, president and CEO of the National Low Income Housing Coalition. “It’s extraordinarily reckless and irresponsible for Trump to blow up negotiations now, when so many renters and small landlords are struggling and when there is growing bipartisan agreement on the urgent need for emergency rental assistance,” Yentel said.

The Democratic-controlled House of Representatives last week passed a $2.2 trillion package that included $50 billion in emergency rental assistance funds, while extending a ban on evictions for 12 months. The legislation also earmarked up to $80 million per state for a homeowner assistance fund. In August, Trump had tweeted that he was “ready to send Rental Assistance payments to hardworking Americans,” though a trimmed-down stimulus package advanced by Senate Republicans last month did not include money for rent relief. Separately, a stimulus proposal released in September by the House Problem Solvers Caucus, a bipartisan group of lawmakers, called for $25 billion to be set aside for rental assistance.

Housing advocates and rental industry officials have argued that lawmakers need to approve around $100 billion in emergency rental relief to stave off an eviction crisis, though some argue that more money than that is needed.

This spring and summer, the CARES Act stimulus package provided a temporary lifeline, thanks to the extra $600 in weekly unemployment benefits it distributed to out-of-work Americans. An extra $300 in unemployment checks in recent weeks also helped, though those funds have run out. Even with the boosted unemployment though, many families struggled to put together enough money to afford their rent. Delays in unemployment checks earlier in the pandemic created a mountain of unpaid rent for tenants, making it harder to catch up on payments.

Complicating matters, millions of Americans were already rent-burdened before the pandemic, meaning that they spent more than a third of their income on housing, leaving little left over for other necessities or to build an emergency fund. Some renters could now go many more months with receiving financial support, digging them in a deeper hole that will be all the more difficult to get out of once the CDC’s eviction ban lifts in January, advocates say. “The longer the federal government waits to act, the steeper the financial cliff that renters will be pushed off when the eviction moratorium expires this winter,” Yentel said.

In the meantime, landlords are being expected to carry this economic burden. “With no rental assistance, reduced unemployment benefits, spotty foreclosure protections, and seemingly endless eviction moratoria — landlords have become the backstop to the rental crisis,” said David Howard, executive director of the National Rental Home Council.

Mom-and-pop landlords are especially vulnerable, housing industry officials say. Many of these landlords only own one or two properties, and the rent goes toward paying off the mortgage and taxes, with little left over for a financial cushion. Some have warned that these property owners could eventually opt to sell the homes they own, which could end up displacing tenants and shrink the supply of rental housing."

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