Rent’s due. Now what? Experts warn a housing crisis shadows the health crisis

Rent's due. Now what? Experts warn a housing crisis shadows the health crisis

Wednesday marks the first of a new month, a day when rent comes due for millions of Americans for the first time since the coronavirus outbreak shuttered much of the country and caused widespread job losses.

Federal, state and local governments have scrambled to enact policies to keep renters who’ve seen their source of income disappear from getting evicted in the immediate future while treading carefully around measures that could adversely affect landlords and the real estate market at large.

But experts say those initial steps are nowhere near enough to protect low- and middle-income renters and handle what they say is the next biggest issue on legislators’ plates after ensuring the stability of the health care system.

“In terms of the across the board, really big, social policy, human need issue, this is it,” Andrew Scherer, a law professor at New York Law School, told NBC News of what he sees as an impending crisis. “This is what’s looming.”

More than 43 million American households are rental properties, though the U.S. Census says renters are a historically undercounted population given that “many of them are young and mobile, multicultural, or low-income.” Just last week, a record number of Americans, more than 3 million, filed for unemployment, a number that is near certain to continue rising in the weeks ahead.

“This is a tipping point moment, where so many find themselves joining the ranks of the housing insecure,” said Paula Franzese, a Seton Hall University law professor.

“More must be done…to protect low- and moderate-income renters,” she added. “Eviction pauses, while providing welcome temporary relief, are a mere stopgap measure that, without a forgiveness program for rent arrearages, only provide a brief respite from inevitable eviction.”

In the massive $2 trillion relief package, Congress provided a 60-day delay in foreclosures for borrowers with federally backed mortgage loans while allowing six months of forbearance for those experiencing economic hardship because of the outbreak. For those who’ve taken out federally backed mortgage loans for multifamily properties, that period will be 90 days while those landlords will not be able to evict or charge late fees to tenants who do not pay rent over that time or be able to initiate legal action against tenants.

The federal government also provided many Americans with a $1,200 check, in addition to expanded unemployment benefits for those who’ve lost their jobs.

At the state and local level, eviction moratoriums of varying lengths have been put in place. In New York, where the outbreak has hit hardest, the eviction moratorium is among the longest at 90 days.

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California Gov. Gavin Newsom issued an executive order barring evictions through the end of May for those hit by the outbreak. Tenants must notify landlords within seven days of failing to pay and provide documentation proving their circumstances.

In Michigan, another hard-hit state, Gov. Gretchen Whitmer issued an executive order suspending evictions through April 17 while in Arizona, Gov. Doug Ducey announced $5 million in funding to assist those struggling with paying rent because of the outbreak.

For a variety of reasons, experts said the moratoriums, while necessary in the short term, aren’t enough to deal with the housing crisis. For starters, the vast majority of renters do not live in properties that are supported by federally-backed mortgages. And unless further legal action is taken, there is nothing stopping a landlord from evicting a tenant as soon as the moratorium passes, seeking to collect rent immediately.

“I think that is a huge risk, and I don’t know if anyone has quite figured out the solution to that one,” Solomon Greene, a senior expert at the Urban Institute, told NBC News of landlords being able to evict once the moratoriums pass. “I don’t think that is hypothetical. I think that is likely to happen because we are seeing so many people losing their jobs.”

Asked Sunday about what his message to renters is, President Donald Trump said he believes landlords “are going to take it easy.”

“I think a lot of people that are owed money are going to take it easy,” the president said. “They don’t, sort of, have a choice. But a lot of concessions are made, just like the insurance companies. A lot of concessions are being made that wouldn’t have even been thought of three weeks ago. Not even thought of. So, a lot of really positive things are happening.”

Trump’s presidential rivals, former Vice President Joe Biden and Sen. Bernie Sanders, I-Vt., have both backed calls for rent forgiveness over the near future. On Tuesday, Biden called for “a temporary ban on evictions nationwide.”

“No one should be forced out of their home in the middle of a pandemic,” he tweeted.

The movement to cancel rent is gaining the most ground in New York, where activists and lawmakers have called for it.

New York state Sen. Michael Gianaris recently unveiled legislation that would allow for commercial and residential renters directly affected by the outbreak to skip paying rent over a 90-day period while landlords could subtract the amount they lose from mortgages owed.

The apartment industry has cautioned about such measures, saying that while more needs to be done to protect renters, many landlords operate on small margins and will not be able to sustain a substantial loss of income.

“Lack of rental income puts entire properties in jeopardy and will harm the nation’s limited rental housing supply,” said Greg Brown, senior vice president of government affairs for the National Apartment Association, one of the industry’s main trade groups.

“Even without money coming in, rental property owners still have basic financial obligations, including mortgages, property taxes, payroll, insurance and utilities — all expenses that bolster other sectors of the economy — and any relief measures must ensure owners’ financial obligations can still be met or delayed without penalty,” Brown added.

Meanwhile, the National Multifamily Housing Council, another apartment trade group, called on the industry to hold off on evictions for three months while developing payment plans for residents as part of a broader proposal it is promoting.

For rent forgiveness to work, Franzese said the financial burdens “must be shared by federal and state government and the private sectors.” Otherwise, those “much-needed rent forgiveness policies unduly burden landlords who remain obliged to pay property taxes and remit mortgage payments.”

Robert Silverman, professor of urban and regional planning at SUNY Buffalo, said the amount needed to counterbalance the relief going to renters would quickly make rent forgiveness “less and less popular” of an option.

“You’d almost have to have on the other side, some type of mortgage or tax forgiveness for landlords on their properties and that part of the equation hasn’t really been talked about as much,” he told NBC News, adding that additional income subsidies to those renters would “help more because they, from the bottom-up, try to address the whole problem in a systematic way.”

Ultimately, Scherer said the federal government has the best ability to tackle this wider problem.

“It seems to me that if you can bail out the airline industry and the hospitality industry,” he said, “you certainly should be able to bail out people who’ve lost their jobs as a consequence of the crisis that we’re in.”

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