Even with federal support, eviction films are expected to rise.
getty
Millions of Americans who lost their jobs as a result of the pandemic have fallen thousands of dollars in rent and utility bills. In one of President Joe Biden’s official acts after his inauguration, he extended the federal ban on evictions through March.
While eviction moratoriums and billions in federal rent support have been a safety net for tenants and landlords facing hardship, the question is what lies ahead for the rental housing industry to survive.
Greg Brown, senior vice president of government affairs for the National Apartment Association, talks about what he believes needs to be done to get tenants and landlords to stay away.
$ 25 billion in rent support passed in December and now more rent support is on the table with the next incentive package. Was the first $ 25 billion effective or is it too early to tell? Need more?
The $ 25 billion in rent support agreed as part of the Consolidated Remedies Act (CAA) in 2021 was a crucial first step and a life saver for tenants collecting unavoidable debt and their suppliers. housing that has been facing the American rental housing bill for nearly a year. We know that even with other financial reliefs such as enhanced unemployment benefits and incentive checks, people are still struggling, and it’s important to get special rent support so that residents don’t have to choose between paying for groceries or housing .
Unfortunately, there have been delays in distributing these emergency funds to those most in need. As long as the U.S. Department of the Treasury has issued guidance in the form of Frequently Asked Questions, and promised additional guidance, donors will ultimately determine their suitability and application processes. Differences in interpretation and additional sets of requirements can hinder participation and hinder the effective circulation of funding. And those programs created with CARES Act funding need to be updated to comply with the requirements set out in the CAA. Therefore, it is an immediate priority to ensure that tenants, and subsequently the rental housing providers, are assisted.
The federal Emergency Rent Assistance Program is certainly an essential part of sustaining and rebuilding our economy and we must also ensure that it receives sufficiently strong funding.
How does the program work? How can you apply?
The U.S. Department of the Treasury distributes emergency rent assistance money directly to eligible patrons, including the states and local governments with more than 200,000 residents, with no state receiving less than $ 200 million.
In terms of eligibility, priority is given to families who are currently unemployed and have been out of work for 90 days and families who earn 50 per cent of median area income (AMI) and below. However, jurisdictions have some flexibility to serve those with an income of up to 80 percent of AMI and can set additional criteria according to the needs of that community. The degree establishes a qualifying income based on the income the family is receiving at the time of applying for support and not on their previous income.
Applications must be made directly to state, local or tribal grant recipients. Residents can apply themselves, but property owners also have the option of applying on behalf of an occupier if the occupier gives written permission. Once a person has agreed, they will be assisted directly to the owner to pay the occupier’s balance. This tidies up the process and ensures that the money goes towards housing needs.
For specific questions on eligibility, the Treasury Department released frequently asked questions clarifying the qualifications and use of the fund, but again there is a degree of variation at the state and local level.
Is it a loan? Can it be used to repay rent?
No, the current Emergency Rent Assistance Program provides support on a grant basis, and individuals will not be required to repay any money.
The aid can be used to repay up to 12 months rent and housing related costs due to Covid-19. Licensees have to pay some arrears before they can pay money up front. If there is evidence that a resident ‘s housing status may be at risk as a result of persistent unemployment, the program can provide up to three months in prospective rent.
What is the current circulation strategy and how can the federal government develop it for the next round of stimulus?
Overall, we believe that running the rental assistance program through the Treasury will help ensure rapid deployment in the future. However, there is little money available and there is a lot of red tape and confusion about implementation at the state level that hinders the distribution of rent support.
Beyond the guards set by Congress, states and regions have ultimate control over how funds are distributed. Some states already had rent support programs from the CARES Act fund, so the federal program will help those sources where money was running out. Others need to work quickly to establish the right channels to screen applications and distribute the money in an efficient and timely manner.
We need more funding and a swift circulation process to deal realistically with the burden tenants, mom-and-pop owners and other affordable housing providers.
A number of key considerations to increase the effectiveness and efficiency of the program include:
● Reduces the amount of paper a resident has to submit. If the process is too complex or requires documents from a number of sources, this can be a hindrance for individuals who need help and stop the process while more debt arises. come up.
● Another important part of this is accepting applications in a variety of formats (electronic, paper, etc.) as you may have people with limited access to Wi-Fi, a fax machine or a printer.
● More efficient programs allow a housing provider to seek support on behalf of their residents, as well as asking about a resident’s application status, helping to moving the process forward.
Are there examples of states or regions that have implemented a highly effective rent assistance program that other leaders, including those at the federal level, can learn from?
The Colorado Rental Assistance Program, Property Ownership Retention, in particular, has attracted nationwide praise. It was originally set up using CARES Act funding, so some changes are being made to the CAA funding, but one of the most successful elements of the program has been that it has allowed seek support housing providers on behalf of the residents. This is particularly important as it allows so many people to work towards relief for those in need. In addition, if you have an owner with several residents who needs help, they will become familiar with the process, eliminating some of the confusion that a residential applicant may have for their the first time.
In addition to federal rent support, there is ongoing talk of extending a federal eviction moratorium. How does rent support work with a moratorium?
From what we have seen this year, moratoriums are working towards the goal of direct rental support. Eviction moratoriums are politically popular and well-intentioned, but they do not fulfill the goal of keeping residents in their homes – they are just kicking the can further down the road.
But this cannot wait. Bills are coming up for residents now. Many thousands, if not more, of debt is in debt. According to the Census Home Pulse Survey for the week of February 21, 27.5% of tenants showed little or no confidence in their ability to pay rent in March. At the same time, owners cannot afford the burden of American tenant housing without sufficient income.
There is a misconception that the rental housing industry is controlled by large corporate owners with significant investment support. But in reality, more than half of the country’s rental housing supply – 22.1 million units – is owned by small mom-and-pop landlords with less than five units. They have no investment to fall back on and many have fired through their personal savings trying to help and meet residents.
What solutions do landlords and tenants need to see coming from this next relief package?
The answer is simply stated, but it is going to take a lot of work and resources to accomplish. The key solution is that we need to continue to apply for fast, ongoing, targeted rental support. This issue is not going away any time soon – millions of mom-and-pop tenants and owners across the country are running on a moving target while rent arrears and other bills run up. going up.
Rent support ensures that residents in a financially stable area survive the pandemic and that housing providers can continue to do their job and providing high quality housing. In addition to increased funding, we need to see a speedy application process, guidance for states, and an effective method of distribution.
There is no way a service-providing business can operate without the need for revenue. This is a small marginal business and the strong impact of unpaid rents affects not only the viability and quality of housing stock, but the quality of our communities.
Only 10 cents of every profitable rent dollar – 38 cents covers the mortgage; 14 pence covers property taxes that fund schools, firefighters and other emergency services; 16 cents covers operating costs including routine maintenance; 10 pence covers pay, supporting 17.5 million jobs in the industry; and 12 cents cover capital costs. If owners don’t have the money to pay those bills, units will go out of business and eventually they could go in. This would not further reduce the already scarce supply of housing.