Act Now to Prevent a Wave of Post-Emergency Order Evictions
We are quickly approaching a moment that will significantly test the resiliency of our housing system amidst COVID-19 and historic unemployment. Eviction moratoriums are beginning to lift in cities and states across the country, yet many people remain out of work. Meanwhile, the extra $600-per-week of federal unemployment benefits are scheduled to end at the end of July. Soon, both renters and housing providers will face stark choices about their finances and living arrangements.
We can preserve rental housing and keep residents housed - but we must act now.
Rent Needs to Get Paid – And Not Just for the Reasons You Think
91 percent of the rent a tenant pays goes to mortgage holders, financial institutions, taxes, maintenance costs, payroll for staff, and utilities. Less than 10 percent goes back to the property owner.
If rent doesn’t get paid, the fragile system and all the costs connected to housing begin to break down. Housing providers and their residents are caught in the middle: trying to make things work with short-term payment plans, borrowing from damage deposits, or, in some cases, letting rent go unpaid which ultimately adds mounting debt for the resident.
Some government programs are meant to help housing providers with government-backed mortgages with forbearance, but the implementation of those programs have been inconsistent. Many mortgage companies are not offering true forbearance which prevents housing providers from passing savings on to their renters.
The patchwork approach to housing assistance isn’t sustainable. We need a holistic solution that will keep residents in their homes and prevent a catastrophic collapse of the rental housing market akin to the 2008 mortgage crisis.
The Government’s Role
People aren’t working in large part due to government orders that businesses remain closed, meaning the government should continue to take responsibility to replace the wages of those that cannot work as a result. The federal government must renew the emergency unemployment assistance to allow people to cover the essential costs of living.
We continue to call for emergency rental assistance specifically that puts cash into the pockets of residents impacted by COVID-19. Not everyone is eligible for unemployment insurance. Those in need should not fall through the cracks and rental assistance is a proven way to keep people in their homes.
Additionally, legislators at all levels should tailor ongoing eviction moratoriums to those truly experiencing financial hardship due to COVID-19. The broad nature of the current orders mean that grandstanders and the small fraction of renters who are abusing the ban can take advantage, leaving housing providers with few options for recourse even when unsafe behaviors take place. Instead, we need targeted solutions that actually address the core issue of helping residents keep up with their costs of living.
Mortgage relief is complicated given the vast array of lenders and loans for small landlords, commercial housing providers, home equity lines of credit, bridge loans, and more. It is difficult for policymakers to craft legislation that address every type of loan that could benefit a housing provider and their residents. But it is a tool in the government’s tool chest worth exploring with bankers, mortgage lenders, and the rental housing industry. A true forbearance program that satisfies creditors and helps renters would be welcome and we stand ready to work on it.
Over the last 10 years, King County created just one new home for ever three new jobs. There are not enough homes for everyone who needs one. Now is the time to invest in housing creation, put people back to work, and bring the cost of housing down every everyone. Nothing else is going to do it.
Are you a Landlord? You Can Help Too
Thank you for providing homes in your community. People need places to live and raise their families and you play a part in that. COVID-19 has been tough for everyone and we know housing providers are no exception.
We know that evictions are a last resort when all other options and solutions have been exhausted. If your resident needs help, and you can make a payment plan work, please try. We are all in this together and keeping people housed while covering some of your costs is a short-term way you can help if you’re able to.
You should also reach out to your lender and learn your options for mortgage relief. Make sure to learn if your loan is government backed, ask if there are credit penalties to missed payments, and determine how repayment of missed months works in your situation.
And finally, two-way communications is essential. Keep in touch with your residents and maintain a conversation about their current situation. You can also help make sure they know about unemployment options and any local rental assistance resources.
Here is a list of Washington resources and some suggestions that can help you and your residents.