Coronavirus economic impact updates
Sign up to myFT Daily Digest to be the first to know about Coronavirus economic impact news.
Millions of Americans face the risk of being thrown out of their homes as a moratorium on evictions put in place during the pandemic expires on Saturday.
President Joe Biden said on Thursday that he was powerless to extend the US Centers for Disease Control and Prevention’s 11-month ban on evictions of tenants who owed back rent, and urged Congress to act.
In the meantime, an estimated 3.6m Americans say they risk eviction in the next two months. A handful of states including California and Washington have their own moratoriums that will protect renters until the end of September, but most do not.
“The pandemic has underscored just how vulnerable American renters are,” said Ingrid Gould Ellen, a professor at NYU’s Furman Center for Real Estate and Urban Policy.
The ban was designed to slow the virus’ spread by keeping displaced renters from crowding into the homes of their family and friends or homeless shelters. Studies attributed more than 10,000 Covid-related deaths to evictions early in the pandemic before the ban was introduced.
The Supreme Court has ruled that the moratorium could not be extended without new legislation. Democrats including Chuck Schumer, Senate majority leader, and Senator Sherrod Brown, urged their peers to vote in support of an extension to December 31 to give local governments time to dispense aid money, but it looks increasingly unlikely that legislation could pass both Houses in time.
“I am deeply concerned about this, because, sadly, I have seen families evicted from their homes,” said Nancy Pelosi, speaker of the House.
“It is one of the most heartbreaking situations you can see: cribs and personal belongings put on the street for all to see or take, families suffering the indignity of being forced out of their homes and having to find shelter.”
An effort by Democrats in the House to extend the moratorium failed on Friday. Biden also urged state leaders to disperse unspent emergency funds to landlords and tenants. The administration said it was able to extend the moratorium only for those living in federally assisted and financed rental housing until the end of September.
The expiration of the CDC’s emergency moratorium comes at a dangerous time in America’s battle against Covid-19. The Delta variant has fuelled a rapid increase in the number of cases across the country and forced the CDC to reverse its mask guidance.
As a part of its pandemic aid measures, Congress allocated $46.6bn for state and local governments and non-profit groups to help the 15m Americans who are in debt to their landlords. But the bureaucratic challenge of initiating hundreds of separate rental aid programmes from scratch has meant that just over $3bn has been paid out to renters and landlords.
“It is the perfect storm,” said Roshanak Mehdipanah, a professor at the University of Michigan who studies housing policy.
Aid agencies report huge demand for support. Jeff Jaynes, who runs the Restore Hope Ministries, which provides rental assistance in Tulsa, Oklahoma, said he had never received more requests for help than he had in the past few weeks. Neither the financial crisis nor the early months of the pandemic were this chaotic.
“It’s not even comparable,” Jaynes said. “It’s like comparing a major league all-star to my little league team.”
Many of the families that Jaynes works with had a main earner that lost their job early in the pandemic or had to take extended time off to recover from Covid-19 and were never able to catch up on payments. The average debt per tenant in the US is more than $3,000, the Aspen Institute estimates.
But landlords, too, say they have struggled throughout the pandemic. The National Apartment Association, a trade group representing the owners of 10m housing units across the country, is suing the federal government over the moratorium, saying that it cost them billions in lost income. Still, many in the industry maintain that there will be no mass evictions next week.
Latest coronavirus news
Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here.
“There will be no eviction tsunami,” said Douglas Bibby, the president of the National Multifamily Housing Council. “Evictions are not good for anyone.”
Bibby said that because many landlords need to recoup missed payments to cover their own mortgages, repairs and taxes on the properties, they were motivated to work with tenants to set up payment plans or assist with aid applications to recover back rent.
But for indebted tenants whose landlords reject Bibby’s approach and file eviction cases when housing courts reopen on Monday, advocates say there is little they can do to help.
“There are going to be people that fall through the cracks,” said Jacqueline Waggoner, an executive at housing non-profit Enterprise Community Partners. “But aid is coming.”