An eviction moratorium issued Tuesday by the Centers for Disease Control and Prevention is drawing a chorus of disapproval from multifamily housing advocates who say the action is overly burdensome and interferes with their own obligations to provide safe and affordable housing.
The moratorium halts evictions for renters who expect to earn less than $99,000 this year on their own or less than $198,000 if they file jointly. It also applies to any renter who did not report income in 2019 or received a stimulus check earlier this year.
To qualify, tenants must provide a sworn declaration that states an eviction would leave them homeless or force them into “close quarters in a new congregate or shared living setting,” and they must affirm that they have used “best efforts to obtain all available government assistance for rent or housing.”
Unless the CDC order is extended, changed or ended, the order prevents tenants from being evicted or removed from where they are living through December 31. Tenants are still required to pay accrued rent and could be evicted for reasons other than not paying rent.
Bob Pinnegar, president and CEO of the National Apartment Association, said its members are deeply concerned with the CDC order because of “the potential to decimate the rental housing industry.”
“Without direct rental assistance, rents cannot be paid, and owners face a financial crisis of their own by not being able to maintain properties and pay their mortgages or property taxes,” he explained. “This action risks creating a cascade that will further harm the economy, amplify the housing affordability crisis and destroy the rental housing industry. This global housing crisis cannot be blamed on the rental housing industry, nor can the industry bear the brunt of the pandemic alone. We need balanced, reasonable solutions for all Americans.”
Pinnegar said the government has unilaterally enacted a moratorium until the end of the year and could use similar authority to extend it further into 2021.
“Forcing an entire industry to subsidize its residents could lead to extensive foreclosures, which will cost people jobs, homes and retirements,” he said. “It could affect millions of Americans in a very negative way.”
A study in July by the National Association of Hispanic Real Estate Professionals found that 39% of landlords with fewer than 20 units were worried about being able to cover their operating costs over the next quarter.
Congress has yet to adopt a new aid package that would provide broad economic relief for Americans hurt by the coronavirus pandemic.
Pinnegar said industry stakeholders are more adamant than ever that direct rental assistance is needed.
“An eviction moratorium, especially one that encompasses nearly all renters, is overreaching,” he said. “Our members have been working with their residents on payment plans and connecting them with organizations that provide rental assistance, but some residents will view an eviction moratorium as a rent holiday and reduce the industry’s ability to provide that assistance.”
He added, “Rental housing providers don’t want to evict anyone. It is an action of last resort. However, an extended moratorium will force many to operate housing at a deficit. Owners will have to find ways to cut costs, which means delaying maintenance when possible, potentially laying off the staff that keeps properties running and, in some cases, being unable to pay the mortgage or property taxes. We realize that not all residents are not going to pay, but this is not a high-margin business. If they lose 10% to 15% of their revenue through people not paying, it is going to wreak havoc on the industry.”
Phillip Kash, a partner at HR&A Advisors, an urban planning firm, and his colleagues have worked on housing eviction prevention efforts across the country.
For example, in Wake County, North Carolina, the local government collaborated with HR&A Advisors on an intervention program. The three-step program offers eviction prevention, which aims to provide financial assistance to tenants and landlords to cover rent shortfalls resulting from a loss of income; eviction mediation services, which provide pro bono legal support through a partnership with Legal Aid of North Carolina for tenants who need legal counsel to negotiate settlements with their landlords; and relocation assistance, which will provide transitional services and relocation support to residents whose housing could not be stabilized through the interventions.
Unlike similar programs that some local and state governments have pursued elsewhere, the Wake County program asks landlords to share in the cost of recovery by forgiving a portion of rent owed. In this way, the program asks renters to contribute a portion of their reduced income and distributes the remaining rental costs between their landlords and the county’s emergency rental assistance funds. This also reduces the total public funds needed to prevent eviction, allowing the county to serve more households.
In New Haven, Connecticut, city officials estimate 8,000 to 10,000 families could be subject to some form of housing insecurity given their precarious financial state related to COVID-19-connected job losses.
“It will be one of the most significant things we face as a city and a state over the course of the fall and the winter, dealing with families who are facing true economic crisis,” Michael Piscitelli, economic development administrator, told the New Haven Register.
The city has announced it will use $800,000 of its federal CARES funding to help about 300 families and homeowners resolve back rent and mortgage issues.