With an eviction moratorium issued by the Centers for Disease Control and Prevention in September set to expire at the end of the month, and Congress and the White House still unable to pass a new coronavirus relief bill, Rep. Ilhan Omar, D-Minn., has renewed her push for legislation that would cancel mortgage and rent payments through the duration of the pandemic.
In April, Omar originally introduced legislation that would cancel all mortgage and rent payments during the pandemic, a position pushed by activists across the country. The plan includes a relief fund for landlords and mortgage holders to cover losses incurred from missed payments.
“Congress has a responsibility to step in to stabilize both local communities and the housing market during this time of uncertainty and crisis. In 2008, we bailed out Wall Street,” Omar said. “This time, it’s time to bail out the American people who are suffering.”
On Wednesday, with estimates showing that some 40 million Americans will soon face the prospect of eviction, Omar highlighted her plan in a tweet.
“Cancel rent and mortgage payments,” she wrote as Congress debated the potential eviction catastrophe.
Per the legislation, the suspension period for rent and mortgage payments would be backdated to April 1 and last until 30 days after the Federal Emergency Management Agency ended the state of emergency it declared for the coronavirus pandemic in March. Nonpayments wouldn’t adversely affect credit scores or result in fines.
Omar’s bill has only 30 co-sponsors, all Democrats, and would almost certainly be doomed in the Republican-controlled Senate, which has declined to vote on a number of COVID-19 relief bills passed by House Democrats. Negotiations for another round of stimulus are ongoing in Congress, with a bill for $900 billion proposed by a bipartisan group of senators providing $25 billion in rental assistance. Experts say that without some form of rent assistance, there could be calamitous effects beyond millions of Americans being left homeless.
“As many as 40 million Americans could face eviction when the federal moratorium expires this December,” Omar told Yahoo News. “That’s millions of people without a roof over their head in the middle of winter. Many more will face foreclosure, or be forced to backpay thousands of dollars in rent that they simply can’t afford during a pandemic and economic crisis. This is a devastating and entirely preventable crisis. My bill would cancel rent and mortgage payments so people can stay in their homes and have a roof over their head. It also establishes a relief fund [for] landlords and mortgage holders to cover losses from any cancelled payments. That means relief for the millions facing eviction next month and to landlords who aren’t collecting rent right now. Extraordinary times call for extraordinary measures, and this is no exception.”
Many states and cities have their own moratoriums on evictions for those who’ve lost income due to the pandemic, resulting in a patchwork system that could protect some Americans if there is no federal extension. Advocates of the moratoriums say they are particularly important during a pandemic, when displacement and overcrowding can lead to increased cases and deaths, as one study released earlier this week found.
“America is plagued by two coexisting crises: the spread of COVID-19 due to eviction and the eviction crisis itself,” Emily Benfer, chair of the American Bar Association’s Task Force Committee on Eviction and a co-author of the study, told Yahoo News. “Moratoriums are a critical component of any pandemic mitigation strategy and are as essential as hand washing and self-quarantining to stopping the transmission of COVID-19. But without rent relief to address the $25-35 billion in rental debt, moratoriums alone cannot end the eviction crisis and protect families from severe and devastating harm from eviction and foreclosure when the rent isn’t paid.”
Benfer noted that moratoriums don’t take into account the fact that tenants and homeowners, many of whom have lost jobs due to the pandemic, will be responsible for back rent or mortgage payments. Another problem is the domino effect that would have an impact on the larger housing market when regular payments aren’t made to landlords and mortgage holders.
Mary K. Cunningham, vice president for metropolitan housing and communities policy at the Urban Institute, said there should be a pairing of a moratorium with rent and mortgage assistance in order to avoid those consequences. She estimates that an adequate federal relief plan would cost between $11 billion and $13 billion per month.
“A number of landlords are not getting paid, so they’re holding the bag right now, and many landlords are small mom-and-pop landlords who can’t really face the rent cut,” Cunningham told Yahoo News. “They may not be paying their local taxes or paying their mortgage or not putting in maintenance to their properties, so I think there’s a serious risk to the loss of affordable housing with leaving landlords in such a vulnerable position.”
“The moratorium is an extended period without payment, so it can have a sort of waterfall effect,” Ingrid Gould Ellen, faculty director of the Furman Center for Real Estate and Urban Policy at New York University, told Yahoo News earlier this year. “If landlords can’t pay their mortgages, then investors — some of whom are pension funds — can’t get their payments. Landlords can’t pay their property taxes [to support] local governments who are reeling from the fiscal effect of this crisis already, and they may not be able to afford maintenance to keep properties safe.”
In much the same way that the pandemic has disproportionately affected poorer Americans and communities of color, the impending housing crisis is falling along the same lines. Studies have shown widening housing disparities based on race and income along with an increase in evictions in minority and low-income neighborhoods.
According to the Federal Reserve Bank of Philadelphia, there has been a 70 percent increase from last year in people paying rent with a credit card. Homeowners have more flexibility than renters in working with their lenders, but as of September, 9 percent of the nation’s 48 million homeowners with mortgages were behind on their payments.
“If America fails to end the eviction crisis, it will be one of our country’s greatest failures,” Benfer said. “The U.S. has yet to provide any meaningful support or protection to the most vulnerable communities, the same communities that lack access to health care and life-sustaining resources. Meaningful support means prohibiting evictions and retroactive stimulus or rent relief to address nearly a year of extreme hardship.”
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