Pandemic-stricken renters face double whammy at month's end
Tenants relying on the federal government to remain in their homes face a double whammy at the end of the month.
The CARES Act pandemic relief bill, signed into law in March, provided a $600 boost to unemployment benefits and prohibited landlords from evicting tenants who fail to make rent in properties that receive federal assistance. Both of the measures expire by the end of the month, which means that tenants who are behind on their rent could be forced from their homes, according to Doug Bibby, president of the National Multifamily Housing Council.
“The U.S. could be headed toward historic dislocations of renters and business failures among apartment firms, exacerbating both unemployment and homelessness,” he said in announcing new data on the scale of the problem.
His organization created a “Rent Payment Tracker” that found a slight dip in rent payments since the pandemic hit the nation. Since April, tenants who paid their rent in the month that it was due is roughly 2% lower when compared to the same period last year.
The slippage has so far been negligible, but Bibby suggests that could change when the $600 payment ends as millions of jobless workers receive this benefit.
“It is clear that state and federal unemployment assistance benefits have served as a lifeline for renters, making it possible for them to pay their rent,” he said. “Unfortunately, there is a looming July 31 deadline when that aid ends.”
The organization did not have an estimate for how many evictions could occur after the $600 payment and moratorium end. However, state eviction moratoriums for properties that don't receive federal assistance have already started to expire, and a tsunami of evictions is expected to occur in those areas.
The federal moratorium has created an unintended consequence as it is estimated that 25% of the 5.4 million renters in New York City haven't paid rent since March because they cannot be evicted, according to the Community Housing Improvement Program, which is a trade association for owners of rent-stabilized properties.
The CARES Act prohibits landlords of rental properties that receive federal assistance from initiating an eviction for 120 days from the bill’s enactment, which was March 27, 2020. Landlords can also not charge late fees, penalties, or other charges during this period for nonpayment of rent.
These safeguards end on July 25, at which point landlords must give tenants who are behind on their rent a 30-day notice before removing them from their home. This means that tenants who are facing this situation have until Aug. 24 to remedy things with their landlords, and the soonest that an eviction could occur is Aug. 25.
The House has advanced legislation that extends both programs. The Heroes Act, the House Democrats' bill, was approved in May and extends the eviction protections for 12 months from the bill’s enactment for all renters and homeowners and not just renters in properties that receive federal assistance. The bill also extends the $600 enhanced unemployment benefit into next year. The Republican-led Senate is not expected to vote on this bill.
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