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Why an Eviction Ban Alone Won’t Prevent a Housing Crisis


As an eviction crisis has seemed increasingly likely this summer, everyone in the housing market has made the same plea to Washington: Send money — lots of it — that would keep renters in their homes and landlords afloat.

City officials have called for such rent relief. So have landlord associations, tenant advocates, legal aid lawyers, housing researchers, public health experts and economists.

Now millions of renters have been covered by a national eviction moratorium, an unprecedented order by the Centers for Disease Control and Prevention to help control the coronavirus pandemic. But there is still no money.

Congress has yet to adopt a new aid package that includes broad rent relief. It hasn’t passed any other cash assistance lately either. Expanded unemployment benefits, worth $600 a week, expired at the end of July, along with a more limited eviction moratorium. There have been no new stimulus checks. And additional unemployment benefits created by executive action by President Trump have not yet reached many workers.

That means that while the new order has halted most evictions through the end of the year, there remains no mechanism to cover what those tenants cannot pay — or to control the cascading consequences when rent dries up.

Tenants will still be on the hook for all this unpaid rent when the moratorium expires Dec. 31. And landlords in the meantime may find it increasingly hard to make repairs and cover the mortgage. For this reason, even advocates cheering the moratorium call it a half measure. And landlord groups warn it could destabilize the housing market even more.

“We’re not comfortable with any protracted moratorium, because we just simply don’t agree that is the answer,” said Greg Brown, the senior vice president of government affairs with the National Apartment Association. “We think rental assistance in and of itself is the answer. That said, if this is the approach that’s going to be taken, you absolutely have to have it connected to rental assistance.”

If that wasn’t clear to Congress a week ago, or a month ago when broad coronavirus relief talks in Washington broke down, representatives may soon be hearing from distressed landlords.

“We needed to have a significant external event to change the status quo of the negotiations,” Mr. Brown said. “And perhaps this is that event.”

“Some of them aren’t going to make it,” said Jenny Schuetz, an urban economist with the Brookings Institution. “It’s the real estate equivalent of a family-owned small business.”

Those small-scale rental properties, often older and with higher maintenance costs, are more likely to be lower-income housing than newer corporate-run apartments. If the owners can’t keep paying their bills, she said these properties could be put up for sale or enter foreclosure.



Sahred From Source link Real Estate

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