The pandemic crisis is finally winding down for much of the country, with both vaccinations and the economy surging. But the Covid-19 housing crisis hasn’t even hit yet, and Washington’s efforts to head it off have stalled.
A federal moratorium on evictions is set to expire June 30, leaving millions of tenants facing long-term damage to their credit and the potential loss of their homes if they can’t scrape together more than a year’s worth of back rent. Now, the Biden administration is racing to end a bottleneck that has prevented state and local governments from distributing nearly $50 billion in rental assistance that Congress allocated to keep those tenants from going over a financial cliff.
“While it is positive that large numbers of hard-pressed renters are now getting relief, it’s not close to OK that there are places where help is not moving fast enough,” said Gene Sperling, a senior adviser to the president and the White House’s point person on coordinating relief efforts. “And that is why we will soon announce new, stepped-up efforts to get relief to renters most in need.”
White House officials said they would be releasing more information “in the coming weeks.”
The disruption in housing relief is the latest example of bureaucratic chaos impeding Washington’s sprawling Covid-19 economic rescue. An effort to help millions of struggling small businesses by providing forgivable loans has repeatedly run into problems, and similar snags plagued attempts to distribute enhanced unemployment benefits.
Nearly all of the more than $46 billion Congress set aside for rent relief over the last four months has already been distributed to state and local governments to disburse to residents in need, with the remaining funds required to go out by May 10. But very little of that money has actually reached distressed tenants and their landlords — many of whom are themselves hurting for cash because of the crisis.
“This is stuck in some sort of 50-state, maybe 1,000-county, morass,” said Jerry Howard, CEO of the National Association of Home Builders, which has sued to overturn the eviction ban on behalf of its landlord members. “You have private citizens who are still obligated to pay their mortgages and the operations of these apartment buildings, and they’re not even able to break even.”
Behind the impasse is the amount of time it has taken to access the federal money. Hundreds of state and local governments had to set up systems to dole out the funds so they could figure out who needs relief and verify how much they owe, and to make sure the assistance gets to landlords.
“What we’re charged with doing is not simply getting the money out and then sort of doing basic reporting or monitoring; it’s our job to help stand up systems around the country,” a senior Biden administration official said. “You’re talking about hundreds and hundreds of grantees.”
Many of those governments had to start from scratch, devising plans on the fly to meet an enormous need: Some 10 million delinquent renters nationwide were projected to owe about $57 billion in back rent and late fees thanks to the crisis, according to an Urban Institute estimate before relief funds went out.
“The states are working as hard and as fast as they can, and I’m sure that’s true for the local governments as well,” said Stockton Williams, executive director of the National Council of State Housing Agencies.
Housing finance agencies had to “hire new staff and contractors, and they have to create entirely new networks to move an enormous amount of money to millions of people” who urgently need it, he added.
“Emergency rental assistance is a big new program, it has a really hard job to do, and it is still relatively early in the process that Congress envisioned to help renters who need it,” Williams said.
Under the relief law passed in December, the Treasury secretary is directed to start reallocating rental relief funds away from jurisdictions that have failed to disburse at least 65 percent of the funds by Sept. 30 to those that have gotten more money out the door.
The program got off to a rough start. Congress allocated the first $25 billion tranche of funding in late December. The Trump administration put out the first guidance on the new emergency rental assistance program’s requirements on Jan. 19, a day before leaving office. Biden administration officials say that guidance imposed too many requirements on grantees, so they released their own. Many grantees were unsure of which requirements they would be held to in the long run, according to senior administration officials.
“In the first month of this administration, we corrected the ill-advised guidance we inherited while getting out the remaining dollars from the December package so that scores of grantees could stand up rental assistance programs across the country,” Sperling said.
There are no hard numbers yet on how much money has gotten into the hands of tenants and landlords, but housing advocates say it’s not nearly enough. The White House will get the first interim data from grantees in late May, according to a senior official.
That’s partly by design: “You can’t ask them to spend all their time sending us reports,” the official said, adding that one of the concerns with the Trump guidance was the level of documentation required.
Housing advocates are pushing for an extension of the federal ban on eviction for nonpayment of rent while local officials get it together. The moratorium was imposed by the Centers for Disease Control and Prevention as a Covid-19 emergency safety measure, so the streets were not filled with people experiencing homelessness during the pandemic.
“The longer the federal eviction moratorium is in place, the better local communities can take the time needed to ensure that these historic resources get to the renters and small landlords who need it most,” said National Low Income Housing Coalition President and CEO Diane Yentel.
In the meantime, federal lawmakers are left with little to do but express concern to the White House.
Senate Banking Chair Sherrod Brown (D-Ohio) says the ban provides “essential” protections while grantees work to disburse the federal funds.
“The next step is for state and local governments to distribute this vital assistance to renters and their landlords quickly so that families can catch up on their bills and stay in their homes long after any moratorium expires,” said Brown spokesperson Alysa James.
House Financial Services Chair Maxine Waters (D-Calif.) pressed Treasury Secretary Janet Yellen to provide more guidance at a March 26 hearing.
“I am growing increasingly concerned with how the program is being implemented by grantees,” Waters said.
“There is confusion out there, and I’m worried about what is happening with this confusion, and whether or not our landlords are going to abandon us and not go for another moratorium,” Waters added.
In the latest sign that the federal government is anxious about evictions, the Consumer Financial Protection Bureau and the Federal Trade Commission on Monday sent letters to the largest landlords in the country reminding them of their duty to inform tenants of their rights under the CDC moratorium.
Landlords have already sued to stop the existing moratorium in courts around the country. The National Association of Realtors — one of the most powerful lobbying groups in Washington — funded one such challenge that appeared to gain traction with a federal judge in D.C. last week. U.S. District Judge Dabney Friedrich grilled government lawyers on the limits of the CDC’s authority on Thursday and said she hoped to issue a decision soon.
Just 5 percent of professional landlords had accessed relief funding in all the places they operate, according to an April survey by the National Multifamily Housing Council. Twenty-six percent had received no relief funds, while another 42 percent had been able to access them in some areas.
There is no measure of how many individual investors — the mom-and-pop landlords who own nearly half of the rental units in the country — have been able to access relief. Thirty percent of those landlords are themselves considered low- to moderate-income, with annual household incomes below $90,000, according to the Brookings Institution.
“This has been a very, very tough time,” said Greg Brown, head of government affairs at the National Apartment Association, a landlord trade group.
Plenty of small landlords are at the breaking point, having gone into debt to keep up with mortgage payments, property taxes and maintenance bills, and may be forced to sell their properties at fire-sale prices to investors snatching up rental properties.
“Short-term policies have created long-term threats to the industry,” NAA’s Brown said, adding that his group has been pressing the administration to “do everything you can to get these grantees to get moving to get these dollars out.”
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