Rental Housing COVID-19 Impact: Eviction Moratorium and Rent Relief
September 3, 2021
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Even with the virus coming under control in the United States, tenants, landlords, and property managers still feel its effects. Let’s take a quick look at the eviction moratorium, its upcoming expiration, and the state of rent relief efforts.
The Eviction Moratorium
The CDC’s moratorium on evictions expires on July 31, 2021. Although the deadline has been extended multiple times before, the most recent extension was only for a month, making it the shortest extension to date. Meanwhile, the Supreme Court upheld the existing moratorium in a close 5-4 vote, with one concurring opinion from Justice Kavanaugh, who said he voted yes because it ends soon. The Biden administration said it will not pursue another extension, so the clock is ticking on the pandemic relief.
Under the eviction moratorium, it is illegal to evict a tenant for failure to pay rent if the tenant:
- Earns less than $99,000 a year (or less than $198,000 for households filing jointly)
- Experienced a substantial loss of income during the pandemic
- Exerts efforts to pay rent
- Risks homelessness if evicted
Note that the moratorium is not automatic—tenants must have applied for the protection with an affidavit swearing that they meet the criteria.
When the Moratorium Expires
What happens when the moratorium expires? It seems likely that there will be a wave of evictions, but nobody knows how big that wave will be.
Over the course of the pandemic and the moratorium, eviction numbers have been about two thirds lower than they would be in a typical year (about 312,000 this year, compared to about a million in a typical year, according to the Princeton Eviction Lab.)
In our survey of 440 landlords and 1300 tenants who use Innago, 18.2% of landlords said they plan to evict at least one tenant once the moratorium expires. 14.7% of tenants said eviction was very likely, and 26.5% said it was somewhat likely. Given that annual eviction rates nationwide are usually between two and three percent, our data is in line with predictions of a sharp spike in evictions.
Our survey also shows that tenants fear eviction at a greater rate than landlords are planning it, which highlights the importance of clear communication with your tenants. There is a good chance they are afraid, but aren’t in danger—make sure your tenants know what you are doing to get through this hardship together.
With landlords having borne the brunt of keeping a roof over people’s heads during the pandemic, many don’t have the cash to wait out the hardship with tenants who cannot pay. Rent relief promises a solution to this issue by providing tenants with a year’s worth of back rent, arrears, or utility bills.
The problem is, Congress has been promising this solution since December 2020, and has grossly under-delivered on a nationwide scale. There are a few bright spots, but given the current state of rent relief overall, it is not certain that the program will be implemented in time to stem the tide of post-moratorium evictions, especially in states that have adopted expedited eviction proceedings in response to court backlogs.
The US Treasury Department set aside almost $45 billion for Emergency Rental Assistance (ERA) to be distributed to states. ERA provides tenants with up to twelve months of rent relief, dating back to April 1, 2020, plus an additional three months if necessary to avoid homelessness in certain cases.
Although the sum has been divided into two separate programs, ERA1 (passed in December 2020) and ERA2 (passed in March 2021), the eligibility requirements for either program are designed to be nearly identical by the Treasury Department. ERA qualifiers must have all of the following:
- A significant loss of income because of the pandemic (or qualify for unemployment benefits)
- A risk of homelessness as a result
- An income at or below 80% of the area median (or qualify as a low-income family in accordance with the U.S. Housing Act of 1937)
The low-income requirement alone alienates a number of people who are behind on paying rent. But even qualified applicants are having a hard time navigating the bureaucratic slog that applying for these programs entails. According to the Washington Post, states have spent only $1.5 billion of the initial $25 billion on rent, arrears, or utilities. The rest has either been reallocated by states or is waiting to be claimed through the slow application process.
As of July 10, Washington D.C. had only distributed one fifth of its allotted $200 million in rental assistance, with a soft deadline for applications set for mid-August. Renters in D.C have faced many hurdles to getting rent relief, including technological barriers, language barriers, and having to upload lengthy paper leases one page at a time. Once the application is in, responses often take two months or more, meaning that the applicant falls further behind on rent.
D.C is a case in point. Application processing centers are understaffed, and the bureaucracy has proven a barrier. What’s more, rent relief has been poorly publicized. The Rental Home Council has reported that 40% of eligible tenants who owe back rent have not applied for rent relief, in large part because they simply do not know it exists.
And that’s if they’re willing to apply in the first place. Some landlords have grown frustrated at their tenants’ lack of initiative. Here, rent relief provides another opportunity for communication. A lot of tenants may be overwhelmed at the thought of thousands of dollars of back rent or may be putting off applying for some other reason.
If your tenants qualify for rent relief, you can guide them through the process and make it more accessible to them. Just be aware that they are the ones who sign and file the forms. Ask your attorney or your local landlords group for help if you want to get involved.
It’s too early to know about ERA2, the second half of the rent relief package, but if ERA1 is any indication, the story is likely very similar. Although states are slowly increasing the number of people they approve for assistance each month, their progress has not been nearly fast enough to protect the nearly 1.2 million renters (according to the U.S. Census Bureau’s Pulse Survey) who are at risk of eviction once the eviction moratorium expires on July 31.
The CDC says that 48.1% of Americans are fully vaccinated, and 55.6% have received at least one dose. Even without a pandemic still threatening half the country’s population, evictions of this magnitude would have devastating economic consequences and result in mass homelessness. So far, the efforts to stave off this crisis have been complicated and slow.