With a moratorium on U.S. evictions set to expire at month’s end, families across the country find themselves in limbo, as legal challenges multiply in a bid to protect struggling renters.
For the millions of Americans who have fallen behind on their rent as a result of the COVID-19 pandemic, June 30 — when the Centers for Disease Control and Prevention’s moratorium will sunset — will be a critical date. The looming deadline has prompted a wave of advocates to push lawmakers for more permanent protections.
The moratorium, which has been in place since September, has been defined by landlords pushing for a return to normal payments, even as nearly 11 million people remain behind in rent. Experts say the trickle of evictions could soon become a flood of renters who owe about $19 billion to landlords.
“This is solvable, but there seems to be a rush by certain property managers, owners and their lawyers to move towards an eviction cliff,” Doug Ryan, a senior fellow at Prosperity Now, told Yahoo Finance in an interview. “I think that's really quite worrisome.”
About 15% of adult renters are having difficulty in paying rent, according to analysis from the Center on Budget and Policy Priorities.
However, renters of color are facing a greater hardship, even as jobless claims hit a pandemic-era low and employers find it hard to fill staff positions. According to the CBPP data, 29% of Black renters, 21% of Asian renters and 18% of Latino renters said they were not caught up on payments compared to 8% of white renters.
“African American renter households before the pandemic were much more likely to be cost burden than white renters, meaning paying more than 30% of their household income for rental costs,” Ryan said. “So, it didn’t take much of an income disruption to make them fall further behind on rent,” he added.
Stuck in line
Amid an escalating court battle over the fate of the moratorium, states are still scrambling to disperse tens of billion dollars in rental assistance allocated by Congress and the Treasury Department to address the crisis.
Amid the slow rollout, renters around the country are struggling to stay in their homes. As of March 31, only 250 out 72,000 applicants received assistance according to the Texas House Committee on Urban Affairs.
And a jobs market characterized by increasing worker shortages is emerging as a wildcard. A rising number of Republican-led states are rejecting increased unemployment benefits meant to help Americans during the pandemic, which may exacerbate the rent conundrum.
“If governors choose not to access these additional federal dollars for unemployment insurance, come July, the landlords are going to be even more out of pocket because more renters will have less income to pay,” Ryan told Yahoo Finance.
In April, three months after Congress allocated $25 billion in relief, 40 states were accepting applications. Yet an additional 15 Treasury ERA programs had to close due to an overwhelming number of applications received, according to the National Low Income Housing Coalition.
That means thousands of tenants across the country are stuck in line for assistance.
“So many people in Massachusetts are waiting six to eight weeks just to get an initial response about their rental aid application,” said Helen Matthews, a representative at City Life/Vida Urbana, a nonprofit in Boston.
“It can take several months to actually receive that aid. In the meantime, landlords are pushing to evict while they’re in this process,” she added.
Some experts believe there’s a need to extend the moratorium at a federal level, but acknowledge that some states are opposed to the idea. Housing advocates say the crisis calls for housing legislation to bolster the vulnerable, even as the economy recovers.
“It will protect people from evictions due to COVID related housing, which is key,” said Matthews. “Without it, there will be essentially no protections for people."