- Omer Erez
The Impending Housing Crisis of 2021
As of September 4, 2020, the CDC and Department of Health and Human Services ordered the temporary cease of all residential evictions until the end of this year. This is an attempt by the government to decrease homelessness rates in the United States. With a growing homeless population upwards of 500,000, the National Alliance to End Homelessness estimates an increase of nearly 250,000 people from the effects of unemployment during this pandemic. The Los Angeles Times calculated this jump to be a 45% increase in just these last few months of the year. Since the Great Depression, unemployment rates, which often coincide with homelessness rates, have not passed the 10% mark. However, in April 2020, the unemployment rates were reported to be 14.7% by the Bureau of Labor Statistics. With the help of the eviction moratorium, the United States can let people stay in their houses even when they cannot pay rent. In effect, this can contain the spread of COVID-19 and prevent an increase of the homeless population. This is especially helpful to homeless shelters that already experience overcrowding, and wouldn't be able to take in another hundreds of families.
Overcrowding in homeless shelters was a tremendous issue before the pandemic, but resources have depleted ten-fold due to social distancing protocols. The biggest problem is space. No space to fit thousands more and making sure to maintain a six feet distance between cots. This causes a huge problem as most families are turning to homeless shelters as their last resort. This pandemic has the potential to turn even more viral just from the lack of physical space in shelters. In addition, no access to clean water and soap to maintain their health in their new “home”. This is especially crucial to those suffering from pre-existing conditions that automatically make them more vulnerable to the exposure of COVID-19. According to the Homelessness Research Institute, back in 2016-2017, 23% of the sheltered homeless population was made up of people over the age of 50, with a vast projected increase. Families are losing their jobs and unable to find new jobs. Without a source of income, the United States faces an economic crisis, with the unfortunate likelihood of evolving into a housing crisis.
The goal of the eviction moratorium is to prevent homelessness and then, in turn, stop the spread of COVID-19. It follows the mentality of, stay home and so will the virus. The Food and Drug Administration (FDA) published on their website, “Stay home as much as possible. Avoid close contact (at least 6 feet, or about to arms’ length) with people who are not from your household.” By reducing close contact with others, the virus can stay at bay enough for first responders to focus on treating those who have contracted COVID-19, instead of additionally dealing with an influx of newly-infected daily. Just like the overcrowding of homeless shelters, hospitals are prone to be overcrowded with infectious COVID-19 patients. As of now, families cannot be kicked out of their homes, but what happens when the moratorium ends and people can’t afford to pay back rent, find a new apartment, or protect themselves from infection when they are kicked out on the streets. Then, the problem is spread to both tenants and the landlords who lose out on a lot of money and continue to.
Amidst the increase of both COVID-19 patients and the homeless population, landlords are facing their own monetary problems. Many landlords and rental agencies across America depend on rent to continue providing services to their tenants and to provide for their own family. How can they maintain these facilities without receiving any or very little rental income? As of right now, tenants cannot be evicted if they do not make rental payments, however, when this moratorium lifts, they will be responsible for paying back any late payments. This can result in big sums of money being due at once, where there are some people who struggle to make even their single due payment per month. Tenants and landlords are then responsible for coming up with a repayment plan, and if no agreement is reached or the tenant refuses to cover all missed rent, then the courts can become involved, after December 31, 2020. According to CNBC, almost 24 million Americans have no confidence in paying next month’s rent. Until July 31, 2020, many unemployed Americans received $600 in benefits per week to help out with rent and necessities, barely covering rent and necessities. In some situations, certain households are protected under the CARES Act, aiding both the tenant and landlord in receiving federal subsidization. Despite these distinct circumstances, the Senate released the HEALS Act in an attempt to indirectly help unsubsidized renters by giving tax breaks and loans to small businesses, which has since expired. However, it has been reported that these stimulus checks hardly help landlords when running a smaller property managing business. When it comes to bigger owners and landlords, owning even hundreds of properties, the effects of unemployment haven’t shown to be too significant on the landlords’ companies and their maintenance of utilities.
In efforts of simplification, as businesses struggle to stay profitable, they fire employees. Then, employees lose jobs and cannot afford rent. Instead of losing their home, the eviction moratorium lets them stay home so that COVID-19 cannot spread on the streets or in homeless shelters. By staying in their home without paying rent, landlords lose loads of money. If the tenant cannot pay the rent back after December 31st, then COVID-19 will spread quicker and the risk of public health is huge, along with the housing market as no many will be able to pay back rent let alone new rent.
The steadiness of the housing market is at a major risk coming the end of December 2020. The executive order of the eviction moratorium is simply a postponement tactic of what is bound to happen, unless Congress comes up with a solution fast as the end of the year encroaches. As of now, the House has made a single attempt in passing a $100 billion bill towards the Department of Housing and Urban Development. The Senate shut the bill down. As discussions proceed grudgingly on 1600 Pennsylvania Ave., tenants and landlords await a rental aid package in avoidance of a dreaded housing crisis.