Evictions suspended for one more month, but rent assistance is also blocked
On Thursday, the Centers for Disease Control and Prevention extended its moratorium on evictions by one month, until the end of July. Democrats have been asking for it for several days. But the Biden administration has signaled very loudly that this will be the final extension, meaning tenants across the country who are behind on their rent will find themselves at risk of mass dispossession in a matter of weeks. With housing prices soaring, there is a great incentive for homeowners to create vacant homes and charge full price. There should be extremely little solace in this announcement.
A moratorium on foreclosures has also been extended for a month, but here you see the critical difference in how the country treats landlords versus tenants. The Consumer Financial Protection Bureau plans in the coming weeks to advance a rule to force mortgage agents to suspend foreclosures for most borrowers until 2021. Thus, these borrowers benefit from strong and more durable regulatory protections, including the requirement that agents actually develop a resolution. with them. Tenants just need to prepare.
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This fits the standard of public policy in America, which leans in favor of home ownership. One of the reasons the foreclosure crisis that occurred during the Great Recession was so shocking was that landlords were in fact treated the same way we normally treat tenants, callous and cruel, not showing them off. virtually no option to stay in their home under a Byzantine, virtually inaccessible legal regime. For foreclosure victims, this was a landmark event; for most low income renters it was Tuesday.
Even when policymakers put aside the mortgage interest deduction and the first-time home buyer tax credit, and actually notice the millions of people in this country who are renting, one way or another. , the system still manages to operate so slowly that it makes aid ineffective or even unnecessary. . This was highlighted this week with a proposal from California that seemed revolutionary.
Gov. Gavin Newsom, whose name will be on the ballot in a few months in a recall election, said on Monday that the state would reimburse all past due rents accumulated during the pandemic for tenants earning 80% of income median in their region or less. You could call it a Debt Jubilee, which has its origins in the Torah book of Leviticus. It sounds miraculous, until you realize it has already been approved. California will not need to add a dime to cover the amount of rent arrears eligible for cancellation; they have a pot of $ 5.2 billion to draw from and $ 2 billion to deal with unpaid water and utility bills. The money comes from federally approved rent assistance programs.
The fact that it hasn’t already been used to clear past rental debt, as Newsom has had to announce a new initiative, is the bigger story. Until May 31, rent assistance programs allowed in relief bills in December and March had only returned $ 32 million to California borrowers, not even 1% of the total amount available. Arizona has released 10 percent of its aid, which looks like an efficiency model.
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This has been the norm for the rental assistance program. Nationally, $ 46.6 billion has been made available by Congress. But a study by the Joint Center for Housing Studies at Harvard University found that only 2-3% of tenants could receive funds from rent assistance programs. In contrast, 10 percent of all tenants, between three and five times as many, were able to cover their rent through personal or payday loans.
There are many reasons for the failure of rental assistance, from lack of education on assistance, to hundreds of different local programs with varying levels of requirements, to technological barriers for poor tenants in need of assistance. ‘an Internet connection to fill out forms and to owners who refused to participate, perhaps relishing the prospect of possible eviction instead. But it all really comes down to one thing: there is simply no established program today that offers cash assistance to tenants.
Giving money is difficult enough, but only because there has never been any point in setting up a decent way of doing it.
The Section 8 housing program involves vouchers that are incredibly rare, and this program has no mechanism to help tenants in arrears. Rent assistance must have been invented essentially on the fly, in hundreds of communities, because the lease is first and foremost a local rather than a federal concern. Lawmakers had to authorize programs at the state or even city level. Add to that all the debt checks and the need for cooperation with landlords and you inevitably end up with a system that won’t get tenants the help they need quickly. “Giving money is actually quite difficult,” said an official from a housing group. The New York Times, and that’s true, but only because there’s never been any point in setting up a decent way of doing it.
Recognizing the mess they might have on their hands after July, the Biden administration is now rushing to find a way to withdraw the money. Deputy Attorney General Vanita Gupta has written a letter to state judges asking them to require homeowners seeking eviction to seek federal assistance first. This could eliminate the problem of landlords refusing to participate in rental assistance programs. The Treasury Department has also issued additional guidance.
Of course, even if these disparate actors figure out how to get tenants money to pay off their debts, they could be evicted for anything but non-payment of rent. And again, landlords have a good incentive to do so, due to the boom in the housing market and the allure of charging higher rents. In the five states and 29 cities monitored by the Princeton University deportation lab, even with the moratorium in place, 6,000 deportation requests were filed last week.
It’s life in America for those who don’t have the money for a down payment or the credit history for a mortgage. We have shifted the policy toward home ownership, which turned out to be disastrous in the mid-2000s housing bubble and doesn’t seem so hot that prices are going up now. We make life pretty hard for tenants, because one wrong move, even beyond their control, usually leads to dispossession. Renters do not get any benefit from their housing decision like landlords do, and they are significantly less relieved from the pandemic. And even when they are healed, the experience is like walking on fire.
We could in fact craft policies that equalize the relationship between landlord and tenant, and anticipate to create emergency systems that won’t have a hard time providing help. But that would mean making the tenants visible in political circles, instead of the ghosts they are.