[ We need another aid bill. Elected officials have a
responsibility to stabilize both communities and the housing market.]
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THE CASE FOR A RENT MORATORIUM   [[link removed]]

 

Gianpaolo Baiocchi and H. Jacob Carlson
April 1, 2020
The New York Times
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_ We need another aid bill. Elected officials have a responsibility
to stabilize both communities and the housing market. _

, Adam McCauley

 

Last week, the U.S. Senate approved
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$2.2 trillion coronavirus stimulus package. It includes many important
elements, such as expanded unemployment benefits, and emergency aid
for small businesses and hospitals hit hard by the crisis. This is a
step in the right direction, but it is not enough.

We need Congress to enact an immediate, 90-day national rent
moratorium — a temporary suspension of rent payments that will keep
families in their homes before other dominoes start to fall.

This would be a bailout for people — for the countless families
already facing difficulties making their next rent payment and who
soon will face the real prospect of eviction. If we do not act now,
people will lose their access to housing. The social impact of
evictions on individuals, families and communities will be brutal.

Two weeks ago, unemployment claims skyrocketed
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record-breaking levels. More than three million people filed for
unemployment in response to the pandemic, nearly five times the
highest number recorded during the Great Recession. Millions more will
lose their jobs in the coming weeks and months. For those who were
already using a large portion of their income for rent and have small
savings reserves to cushion the blow, unemployment will be disastrous.

 

Today, a staggering 47 percent of renters
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more than a third of their income on rent, while one-quarter of
renters give more than half of their income to their landlord.
According to our estimates from the Survey of Household Economics and
Decisionmaking,
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percent of renters could not afford an unexpected expense of $400 with
the money they have on hand. For these households, any loss in income
is a threat to housing stability.

To use a well-worn phrase, the rent was already “too damn high” to
begin with, and the coronavirus pandemic has only intensified the
pressures on very fragile household budgets.

The eviction moratorium in states like New York is a crucial start but
only delays the inevitable. After June 20, when Gov. Andrew
Cuomo’s 90-day stay
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have lifted, renters will face unpayable debt of months of back-rent
and fees, as well as damaged credit. Housing courts will swell with
the backlog, and many people will be evicted. Similarly,
while freezing rents
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up for lease renewal is useful, it will not be enough for families
unable to pay current rent prices.

Politicians in various states have already called for a rent
moratorium. In Florida, Senator Rick Scott has proposed a moratorium
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rent, mortgage and utility payments for those making less than $75,000
a year, arguing in a tweet
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“Rather than bailing out big businesses, we should be focusing on
those that need help the most.” In the New York State Senate, a
group of Democrats led by Michael Gianaris of Queens have introduced
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bill to offer rent and mortgage forgiveness for residential and
commercial tenants affected by the pandemic.

As the 2008 financial crisis showed, huge shocks to the housing market
can have long-term impacts. Nearly eight million homes
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foreclosed in the 10 years after the Great Recession. As those numbers
rose, investors swooped in
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purchase properties at far cheaper prices. In the years that followed,
those changes led to rising rents
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in some cases, increased evictions
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In the wake of this pandemic, real estate experts warn
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the growth of “distressed assets available to vulture buyers.”

Small-scale landlords, who may not have the financial reserves to
weather the storm, need support so that they can renegotiate their
loans or push their payments off as rental income declines. On March
23, Fannie Mae and Freddie Mac
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mortgage forbearance for multifamily buildings on the condition that
they not evict their tenants. This is a start but does not account for
a majority of multifamily mortgage debt
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held by Fannie and Freddie.

A rent moratorium would be a direct and rapid infusion of resources to
the households where they are needed the most. We favor a universal
program without requiring proof of tenants’ having been directly
affected by the coronavirus: “Means testing” during a crisis, and
when the numbers are so high, risks missing many people in need and
introduces unnecessary bureaucracy and costs. A rent moratorium should
be thought of as a bailout for the most vulnerable and is less
expensive than it might appear at first glance.

Some back-of-the-envelope math: Roughly 44 million
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in the U.S. are renters, according to the latest data, and pay an
average rent of nearly 
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This puts the total national cost of all residential rent payments at
$66 billion per month.

This is a high estimate because it includes all residential rentals.
Policymakers could exclude portions of the high-end, luxury rental
market to reduce the cost. If we assume that the real estate sector
absorbs some part of this cost, the figure could come to be even
lower.

The most straightforward way to enact the policy would be for federal
legislation to suspend rent payments and offer government-funded
reimbursement to landlords. “Mom and pop” landlords who own one or
two units, accounting for less than half
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rental properties today, would be paid with public funds. But owners
of larger properties, the institutional investors, would bear part of
the cost in proportion to their size. The largest landlords would
absorb the cost entirely.

To put these numbers in context, the proposed cost to public coffers
for assistance to large businesses and local governments is greater
than $500 billion
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and the 2008 Wall Street bailout was authorized for $700 billion
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The one-time $1,200 cash payment to tax payers is projected to cost
approximately $290 billion.
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On April 1, many rent payments will cease, whether a policy is in
place or not. Already, calls for rent strikes have grown throughout
the country as tenants organize in their buildings to collectively
withhold payments.

 

Vanessa Del Campo Chacon, an organizer and tenant leader
with Inquilinxs Unidxs Por Justicia
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priority right now must be to survive this global pandemic, not to try
to make rent.”

“We need immediate measures that protect everyone’s lives, and not
some lives over others,” she added.

Congress has the responsibility to step in to stabilize both
communities and the housing market. A rent moratorium is no substitute
for a more rational and humane long-term housing policy
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protect families during this crisis.

_Dr. Baiocchi is professor and director of the Urban Democracy Lab at
N.Y.U. Dr. Carlson is a substitute assistant professor at the School
of Labor and Urban Studies at the City University of New York._

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