July 6

Eviction Moratorium Extension has Landlords Wondering

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Landlords around the country are wondering when the madness will end as the U.S. Centers for Disease Control and Prevention (CDC) announced another month of the sweeping eviction moratorium enacted in 2020 in response to the COVID-19 pandemic. President Biden announced that July would be the “final month” that the CDC would extend the moratorium, but some landlords are skeptical since the CDC is apolitical and not directly governed by the president and many states are already working on their own statewide extensions to take effect if the national policy is lifted. Although the CDC cited concerns around spreading COVID-19 as the initial reason for the eviction ban, advocates for further extension say that current residents of rentals who will face eviction for nonpayment of rent when the ban expires cannot afford to find new places to live in today’s hot housing environment. Furthermore, they argue, there is about $47 billion in emergency rental assistance included in the president’s current proposed budget legislation that could end up in landlords’ hands in a few months.

Landlords, of course, say that they have been waiting too long already and cannot afford to wait any longer. Many landlords are struggling, thanks to tenant-focused policies that rely almost entirely on renters to seek out aid and, once it is acquired, deliver that funding to landlords in the form of rent and little to no flexibility or direct financial support for landlords when it comes to their own mortgage payments, property taxes, and maintenance costs. In fact, at the start of June 2021, about one-sixth of all renters were reported to be behind on rent, according to the Center on Budget and Priority Policies (CBPP) and U.S. Census Bureau Data. In the same study, the CBPP found that about a quarter of Americans continue to “have trouble meeting their usual expenses” and just under 10 percent cannot “afford enough food.”

This is an improvement from January 2021, when about one-fifth of renters were behind on rent payments and owed an average of $5,600. At that time, landlords were also facing steep, mounting debts, however. According to the National Multifamily Housing Council (NMHC), “Allocated rental assistance funds do not fully address the $70 billion in outstanding debt nor accruing debt moving forward,” the NMHC warned at that time. “The industry simply cannot continue operating under these policies without disastrous harm to housing affordability.”

Some states are considering using budget surpluses accumulated during the pandemic as a result of austerity measures and federal funding infusions to cancel billions in rent debt prior to the moratorium deadline at the end of July. California, for example, recently announced it might use $7.2 billion in federal funding to the state to “cancel rent debt” and “resolve unpaid utility bills.” New York has created a similar measure but plans to use the funds in that $2 billion program to “provide direct financial aid to undocumented residents not eligible for federal programs.”

In both states, the one-time rent cancellations are likely to hurt landlords more than ever since even the most active proponents of the programs are skeptical that the funds will be dispersed in a manner that helps property owners pay their own rising debts quickly or efficiently. Instead, it will likely create another extended “waiting game” while tenants continue to fall farther behind on rent while waiting for assistance. California landlord groups are advocating for rental reimbursements to be provided directly to landlords, but tenant advocacy groups say that this would be unfair since they could still be evicted later if they fail to pay rent.


Tags

CDC, distressed real estate, Moratorium, The PIP Group


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