'Not a rent holiday:' Trump's new eviction action leaves renters on the hook for months of backpay
Renters who take advantage of the Trump administration’s new eviction moratorium could wind up owing months of back rent starting in January.
This week, the Centers for Disease Control and Prevention used its authority to halt evictions for a broad swath of American renters through December 31 as a way to help stop the spread of COVID-19.
While the moratorium covers more renters than the one under the CARES Act, it is only a deferral of rent until the end of the year. Renters will be responsible for paying back that delayed rent starting in 2021, plus any late fees that accrued this year.
Read more: Here’s how to negotiate with your landlord if you’re facing eviction
“The eviction moratorium is not a rent holiday,” a White House spokesperson who asked not be named told Yahoo Money, noting payback of rent is subject to the lease terms and state and local law. “Renters are expected to make their best efforts to seek government assistance and work out partial payment plans with landlords to avoid falling behind on rent.”
‘It’s not very feasible’
But some housing advocates said the moratorium without rent relief is not enough, especially as millions of lower income Americans are still out of work and so far, the number of workers filing for unemployment benefits remains above a million a week.
Read more: Coronavirus stimulus checks: What’s stopping a second round of payments?
“It’s not very feasible,” said Aisha Thomas, an Atlanta attorney and volunteer with the Fulton County Housing Court Assistance Center “They should have included some sort of monetary funding support for rent relief, [so] when their rents become due in January, they really don’t have five months of rent.”
Similarly, Rep. Maxine Waters, (D-CA), the chairwoman of the House Committee on Financial Services, said in a statement the effort “falls badly short” of what’s needed to help Americans who are struggling to pay rent during the pandemic.
Read more: Coronavirus: Here's what to do if you can’t pay rent
She also noted the extra steps renters need to take to prove they need the rent deferral, including signing an official CDC form declaring they’re at risk for homelessness. Renters still could face penalties and fees for not paying their rent on time.
“Most importantly, without emergency rental assistance, millions of families will be faced with paying many months of accrued back rent in a lump sum,” Waters said in the statement, “meaning that evictions are only being delayed, not prevented.”
‘The spiral effects of non-payment’
The moratorium is a short-term solution only, said Jeff Taylor, co-founder of Digital Risk, a risk and technology consulting firm for banks and GSEs, and could have ramifications for landlords and the broader economy if a permanent solution isn’t found.
“The spiral effect of non-payments include mortgage obligations, company payroll, maintenance for safe and healthy living quarters, and state and local property taxes,” Taylor said. “It is important that Congress work together to create workable solutions to keep people in their homes, while protecting the safety and soundness of the multifamily finance industry.”
But gridlock remains on the next stimulus package, with Democrats pushing for a $2.2 trillion package, while Republicans aim for $1.3 trillion. Although Treasury Secretary Steve Mnuchin and Speaker House Nancy Pelosi (D-CA) conversed on Tuesday, discussions between both parties remain at a stalemate.
The White House official also told Yahoo Money that the administration is ready to work with Congress for any further coronavirus aid.
“Past due rent collection will remain a problem, and it’s up to the federal government to respond to this unprecedented crisis by providing relief to both tenants and landlords to protect and preserve the residential ecosystem,” said Jason Haber, broker at Warburg Realty. “The [eviction moratorium] is an important measure to prevent not only mass evictions, but also mass homelessness throughout the country.”
Dhara is a reporter Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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