Tina Simpson, JD, MSPH
Principal
In July 2020, the moratorium on evictions of tenants in federally subsidized or financed homes imposed by the CARE Act expired. Congress remains at an impasse as to the extension of stimulus support, including eviction protections afforded to tenants. With the Senate having adjourned until September, and a $2 trillion-dollar gap between the respective Republican and Democratic relief packages, timely extension of the moratorium is unlikely. This leaves millions of vulnerable renters exposed to housing instability and homelessness in the midst of a dangerous pandemic.
Earlier this month, President Trump issued an Executive Order directing federal agencies to “take all lawful measures to prevent residential evictions and foreclosures resulting from financial hardships caused by COVID-19.” In doing so, he acknowledged the magnitude and pervasive impact of the looming housing crisis, one which places an estimated 30 – 40 million individuals at risk of eviction before the end of the year. However, despite the President’s cavalier claim that his Executive Order will “solve that problem”, the Order has little, if any, tangible or practical effect. Indeed, some housing advocates, like Diane Yentel, the President of the National Low Income Housing Coalition (NLIHC), identify the Order as actually doing active harm, by both easing public pressure for action by Congress and “mislead[ing] renters that they are protected when they are not.” It is fair to conclude that the Order seems to be more practice in political deflection than in providing any response to an issue that will further compound an unmanaged public health and economic crisis.
In the absence of immediate and meaningful action to ensure housing stability, the repercussions of this crisis will be both significant and long-lasting. The purpose of this article is to examine the magnitude and projected impact of the problem, to outline the steps that have been taken to date to mitigate the issue through the expired CARES Act and the “legally dubious” (but certainly toothless) Executive Order, and finally, to identify the necessary steps that must be taken now to respond to this crisis.
Understanding the Crisis
As in many circumstances, the Coronavirus Pandemic has not so much created new problems as accelerated existing economic trends and magnified inequalities. Prior to the Pandemic, America was already facing its worst housing crisis in a century. A 2017 study by the Brookings Institute reported that nearly 48% of all renters spend more than 30% of their income on housing, placing them at high risk of housing insecurity. Dragging incomes, particularly among lower-income families, and the steady erosion of affordable housing options have translated to an increase in housing insecurity across the nation. The NLIHC indicates in their report “The COVID-19 Eviction Crisis” that, prior to the pandemic, 25% of all renters were spending more than fifty percent of their income on rent per month and, of those below the poverty line, one in four spent upwards of 70% on housing costs.
CONGRESS’ RESPONSE TO THE PANDEMIC: THE CARES ACT
And then there was the pandemic. In a context where many live paycheck-to-paycheck and 40% of Americans would reportedly struggle to meet an unexpected $400 emergency expense, the impact of the shutdown and economic recession associated with the pandemic has been devastating. By July of 2020, roughly fifty million Americans filed for unemployment insurance. In the face of this economic instability by the end of July, 26.4 percent of Americans had missed a payment, either rent or mortgage.
The CARES Act passed by Congress in March aimed at stabilizing the economy and minimizing mass displacement in a time of a pandemic. It constituted the largest financial assistance package ever passed by Congress—providing $2.2 trillion in economic stimulus and support, including expanded unemployment benefits and federal loan programs. It also banned evictions from federally subsidized housing units and foreclosure actions on homes financed or insured by federal programs. Tenant protections ended in late July, however, homeowners are protected from foreclosure until August 31, 2020, and may apply for a full twelve months of forbearance on their loans, enabling many to stay in their homes despite an inability to pay their mortgage. No such additional protections are available to tenants, who must now rely on state or local rules and resources, as applicable.
It is notable that the CARES Act did not forgive rent or provide additional funds specifically to meet rental payments, it only delayed a landlord’s ability to evict tenants from their property. Without financial aid to renters to help cover the cost of back rent and help people stay in their homes, renters will be evicted. Additionally, landlords are experiencing financial repercussions as a result of their inability to collect rent from tenants. Consequently, while the CARES Act federal ban on some evictions was an indispensable stop-gap measure (that needs to be continued), it was never going to be enough to respond to underlying issues in the long term.
ENTER THE EXECUTIVE ORDER
On August 8th, President Trump signed an Executive Order directing federal agencies to evaluate the housing crisis and how the issue can be met based on existing authority and funds. More specifically, under the order:
- The U.S. Departments of Health and Human Services (HHS) and Center for Disease Control and Prevention (CDC) are to determine if steps taken to curb evictions based on failure to pay rent impact the spread of COVID-19 from one state to another, or one possession or another;
- The Secretaries of Treasury and Housing and Urban Development (HUD) are ordered to identify federal funds available to aid renters and homeowners struggling to pay rents and mortgages due to COVID-19 related causes;
- The Secretary of HUD is ordered to support renters and homeowners indirectly by supporting entities such as public housing authorities, landlords, affordable housing owners;
- Finally, the Director of the Federal Housing Finance Agency (FHFA) must review federal resources and authorities that may be used to forestall foreclosures and evictions.
Cited among the reasons for exploring ways to assist renters, while not providing direct assistance, is recognition of the possibility that displaced individuals and families may end up in homeless shelters where, according to the CDC, the spread of the virus may be intensified. Furthermore, these families and individuals may end up crossing state lines to live in crowded homes of extended family members, sometimes bringing the virus with them and furthering the pandemic’s reach.
While the language of the Order is characteristically expansive in scope and aspirations, there is little output that is actually required or possible as a result of these directives. Additionally, as an Executive Order, the President has no authority to allocate additional funds to meet this directive or to unilaterally expand upon Congressional action. No specific relief is identified, or, likely available given these restrictions. The limitations of the Order are evident from a review of the text itself: Agency leaders are only ordered to evaluate needs and identify available recourses within their existing repertoire of tools and budgets.
Understanding the Consequences of Continued Inaction
The unprecedented scale and complexity of the crisis make it difficult to quantify the impact that a looming homelessness pandemic would have on the United States.
Firstly, the shelter and affordable housing systems are not prepared to accommodate a significant influx of families in need. According to Shelterforce, both shelters and affordable housing systems were operating above capacity before COVID-19. They further note that “In the middle of a pandemic with an easily communicable virus, street homelessness is particularly dangerous because of the difficulty of social distancing and lack of hygiene access.” And yet, if the shelter and rehousing systems cannot support additional bodies, what choice will those evicted have but live in their vehicles or tents if they have one, and on the streets if they don’t.
In the long and short term, those evicted will likely experience increased and lasting hardship as they now face an uphill climb in convincing a new landlord to rent to them given their history of eviction. On a personal and individual level, evictions are almost invariably associated with the danger of further poverty spirals. The Aspen Institute’s Financial Security Program (FSP) notes that families and individuals with past evictions experience “harm to their financial security, health, education, and well-being…[and] displaced families often have few options except substandard homes in dis-invested neighborhoods that offer little access to good jobs or transit.” Additional vulnerabilities stem from the eviction including the impact on children’s and adolescents’ school attendance and ability to keep up with academics during the tumultuous eviction process and subsequent move.
The tumult and trauma of eviction on an individual and community level should also not be lost among the statistics and policy analysis. Emily Benfer, the Director of the Health Justice Advocacy Clinic at Columbia University summarized the experience trenchantly:
Children across the country will watch as their beds and toys are piled on the curb or locked up in storage. On top of the emotional trauma, eviction always leaves physical wreckage in the aftermath: family photographs, unmatched shoes, beloved childhood books left as trash on the sidewalk. Eviction is a jagged, downhill slide, with no ladder back up. [emphasis added]
Finally, people of color are disproportionately impacted by the risk of eviction with Americans of color making up 80% of the families and individuals facing eviction. Additionally, persons of color are twice as likely as their white counterparts to be evicted. The report by NLIHC further states that “…people of color are most at risk of being evicted during the COVID-19 pandemic. A report co-authored by City Life/Vida Urbana and Massachusetts Institute of Technology showed that in the first month of the Massachusetts state of emergency, 78% of eviction filings in Boston were in communities of color.”
While it may be difficult to contemplate the economic, social, and human consequences of mass evictions, displacement, and resulting homelessness because of its scale, the impact, on both an individual and collective level is intuitive and inescapable. The Innovation for Justice program at the University of Arizona law school developed a cost of eviction calculator which predicts the costs of, “…increased emergency shelter, inpatient and emergency medical care, child welfare services, and juvenile delinquency for each person evicted,” and provides an overview, by the community, on the cost of allowing evictions.
Direct support to renters would enable them to avoid eviction and the consequences of it altogether. This includes costs related to mental health and the development of substance use disorders (SUD) associated with it, which aren’t considered by the cost of eviction calculator. While the NLIHC calls for a minimum of $100 billion in rent relief, the calculator indicates that if there are 23 million evictions, far less than currently predicted, the total cost nationwide will be around $128.7 billion. Either the payments can be made to renters now to help avert disaster, and possibly cost the nation less, or they can be made up afterward through the high cost of homelessness and the added pressure on an already overburdened system.
Therefore, in addition to prompt action by Congress to extend the tenant protections of the CARES Act, we also strenuously advocate for the prompt promulgation of the HEROES Act (also known as the Emergency Rental Assistance and Rental Market Stabilization Act). This would provide $100 billion in emergency rental assistance to be administered through HUD. Stabilization through additional congressional action, when combined with additional efforts to develop further affordable housing options, comes at a lower cost than the fallout associated with mass evictions and homelessness.
TL/DR Takeaways
While much remains unknown about the Coronavirus or the long-term impact of the shutdown of sectors of the economy, there are a few things we can say with confidence:
- The burden for unemployed people to find rentals and the ability to pay the rent during a historic economic downturn likely will overwhelm many, forcing those who had viably and ably supported their families pre-pandemic into homelessness.
- During a public health crisis of a highly communicable disease where people are counseled to shelter-in-place and practice social distancing, evictions of millions of vulnerable individuals fall under the “very bad” ideas category.
- The Administration’s Executive Order does nothing to prevent evictions or protect tenants or homeowners.
- Immediate action must be taken by Congress to (1) extend the moratorium on evictions and then (2) provide direct assistance to renters in order to avoid future eviction while protecting landlords and the economy.