Heather Hollingsworth/AP Photo
Denise Wall stands in her home, June 18, 2021, in Shawnee, Kansas. A judge in Kansas’s most populous county has begun evicting tenants who are behind on rent in advance of a federal moratorium expiring.
On Thursday, the Centers for Disease Control and Prevention extended its eviction moratorium for one month, to the end of July. Democrats had been urging this for several days. But the Biden administration signaled very loudly that this would be the final extension, meaning that tenants across the country who are behind on their rent will find themselves at risk of mass dispossession in a matter of weeks. With housing prices soaring, landlords have plenty of incentive to create vacancies and charge top dollar. There should be exceedingly little comfort in this announcement.
A moratorium on foreclosures was also extended for one month, but here you see the critical difference in how the country treats homeowners relative to renters. The Consumer Financial Protection Bureau plans in the coming weeks to advance a rule to force mortgage servicers to hold off on foreclosures for most borrowers through 2021. So those borrowers get strong, more lasting regulatory protections, including a requirement that servicers actually work out a resolution with them. Renters just have to brace themselves.
That fits with the norm of public policy in America, which biases itself in favor of homeownership. One reason why the foreclosure crisis that occurred in the Great Recession was so shocking was that homeowners were actually treated the way we normally treat renters, with callousness and cruelty, presenting them next to no options to stay in their homes under a byzantine, virtually inaccessible legal regime. To foreclosure victims, it was a scarring event; to most low-income renters, it was Tuesday.
Even when policymakers set aside the mortgage interest deduction and the first-time homebuyer tax credit, and actually notice the millions of people in this country who rent, somehow the system always manages to grind so slowly as to make the help ineffectual, if not useless. This was emphasized this week with a proposal out of California that seemed revolutionary.
Gov. Gavin Newsom, whose name will be on the ballot in a matter of months in a recall election, said on Monday that the state will pay off all past-due rent that accrued during the pandemic for tenants making 80 percent of the median income in their area or less. You could call it a debt jubilee, which has its origins in the Torah’s Book of Leviticus. It sounds miraculous, until you realize it’s actually already been approved. California will not need to add one dime to cover the amount of back rent eligible for cancellation; they have a $5.2 billion kitty to draw from, and $2 billion to take care of unpaid water and utility bills besides. The money comes from federally approved rental assistance programs.
The fact that it hasn’t been already used to wipe out past rental debt, to the extent that Newsom had to announce a new initiative, is the bigger story. Through May 31, the rental assistance programs authorized in relief bills in December and March had delivered just $32 million to California borrowers, not even 1 percent of the total available amount. Arizona has released 10 percent of its aid, which looks like a model of efficiency comparatively.
This has been the norm for the rental assistance program. Nationwide, $46.6 billion has been made available by Congress. But a study from the Joint Center for Housing Studies at Harvard University found that only between 2 and 3 percent of renters were able to receive funds from rental assistance programs. By contrast, 10 percent of all renters, between three and five times as many, managed to cover rent through personal or payday loans.
There are many reasons for the rental assistance failure, from the lack of education about the aid, the hundreds of different local programs with varying levels of requirements, to technological barriers for poor tenants needing an internet connection to fill out forms, and landlords who refused to participate, perhaps relishing the prospect of eventual eviction instead. But all of it boils down really to one thing: There’s simply no established program in existence today that gives cash support to renters.
Giving away money is quite hard, but only because there’s never been any interest in setting up a decent way to do it.
The Section 8 housing program involves vouchers that are in incredibly short supply, and that program has no mechanism to help renters who are past due. Rental assistance had to be essentially invented on the fly, in hundreds of localities, because tenancy is primarily a local rather than federal concern. Lawmakers had to authorize programs at the state or even the city level. Add in all the verifications of debt and the need for cooperation with landlords and you inevitably have a system that won’t get renters the help they need swiftly. “Giving away money is actually quite hard,” one housing group leader told The New York Times, and that’s true, but only because there’s never been any interest in setting up a decent way to do it.
Recognizing what a mess they might have on their hands after July, the Biden administration is now rushing to figure out how to get the money out. Associate Attorney General Vanita Gupta has penned a letter to state judges proposing that they require landlords who file for eviction to first apply for federal aid. This could eliminate the problem of landlords refusing to take part in rental assistance programs. The Treasury Department also released additional guidance.
Of course, even if these disparate actors figured out how to get money to renters to wipe out their debts, they could be evicted for everything but nonpayment of rent. And again, landlords are well incentivized to do so, due to the runaway housing market and the lure of charging higher rents. In the five states and 29 cities monitored by Princeton University’s Eviction Lab, even with the moratorium in place, 6,000 eviction filings were introduced just last week.
This is life in America for those without the money for a down payment or the credit history for a mortgage. We have oriented policy toward homeownership, which proved disastrous in the housing bubble of the mid-2000s and isn’t looking so hot as prices surge now. We make life pretty tough on renters, as one false move, even if outside of their control, usually leads to dispossession. Renters get no benefits from their housing decision the way homeowners do, and they’re getting markedly less relief in the pandemic. And even when they’re made whole, the experience is like walking across fire.
We could actually make policies that equalize the relationship between homeowners and renters, and think ahead to create emergency systems that won’t struggle to deliver help. But that would involve making renters visible in policy circles, instead of the ghosts that they are.
