September 20, 2020

Millions of Americans Are About to Lose Their Homes. Congress Must Help Them.

By failing to contain the coronavirus, the United States is allowing what began as a temporary disruption of economic life to do lasting damage to the nation’s prosperity and prospects. With little chance of an imminent economic rebound, millions of Americans who have lost their jobs during the pandemic are now in grave danger of losing their homes, too.

Twenty-two percent of households say that they don’t expect to be able to make their next monthly rent or mortgage payment, according to a Census Bureau survey.

Temporary limits on evictions, imposed in the early weeks of the U.S. crisis, are gradually ending, and a growing number of lenders and landlords are seeking to evict those who cannot pay.

The plight of desperate tenants and homeowners is attracting far less attention than it did during the housing crisis that peaked in 2008, perhaps because this time the problems did not begin in the housing market, or perhaps because this crisis arrived so abruptly. But the alarm bells ought to be ringing: The United States is on the verge of allowing a mass dislocation of lower-income households that could dwarf the last crisis.

The immediate need is for Congress to impose a nationwide moratorium on evictions and then to give people who have lost their jobs the money required for rent or mortgage payments. The moratorium is necessary because it takes time to distribute aid; it would protect people from losing homes while help is on the way. The aid is necessary because erasing obligations, as some have proposed, would merely move the crisis up the food chain. About 47 percent of rental units are owned by individual investors, who must pay their debts, too.

Much of the necessary money can be provided by continuing the $600 weekly payments that the federal government has made to unemployed workers since April. The Urban Institute calculates that those payments provide roughly two-thirds of the $5.5 billion in monthly aid required to keep people in their homes. (Even with those payments, the institute estimates that the government needs to provide another $1.8 billion in monthly housing aid. That number is a minimum: It would not cover other obligations, especially missed utility payments, which can also lead to eviction. North Carolina residents, for example, underpaid utility bills by $218 million from April through June, The Washington Post reported.)

The House passed a bill in May that more than addresses these needs. In addition to extending supplementary unemployment benefits through January, it provides $100 billion in aid for renters — about $16 billion a month for the next six months — and another $75 billion in aid for homeowners, both substantially reserved for lower-income households. It also imposes a 12-month moratorium on tenant evictions and a 60-day grace period for homeowners facing foreclosure. It includes funding to help people who do lose their homes, including $11.5 billion for homeless shelters and support services.

Senate Republicans have not offered a counterproposal. After insisting for months that additional federal aid was not required, Republicans have acknowledged the need to do something, but even as existing measures begin to expire this weekend, they have yet to agree on the details. Notably, a draft proposal that circulated Thursday included no mention of direct housing aid, while calling for a sharp reduction in unemployment benefits.

In the absence of aid, millions of Americans could lose their homes in the coming months.

But even the House legislation is not sufficient to address the crisis. Congress also needs to provide expert assistance to tenants and homeowners facing the loss of homes.

People regularly get evicted even when the law is on their side. The federal government, for example, has imposed a moratorium on evictions from properties with mortgages backed by the federal government, but only 14 states require landlords to certify that their property is not covered. Everywhere else, courts are basically operating on the honor system.

Landlords are almost always represented by legal counsel, while tenants rarely have professional help — which, predictably, does not go well for many of them. A study of eviction cases from 2006 to 2016 in Kansas City found that tenants prevailed in just 161 out of 77,000 cases in that time.

In 2017, New York City began a new program to provide lawyers to low-income tenants facing eviction, initially in about 10 percent of the city’s neighborhoods. The early evidence suggests that it makes a difference. In the first year, 84 percent of tenants who received legal representation were able to avoid eviction.

Congress also should resurrect the National Foreclosure Mitigation Counseling program, created in 2008 in response to the last housing crisis. The program, which ended in 2018, provided counseling to more than two million homeowners, helping many to avoid foreclosure through loan modifications or negotiated sales.

The price for such counseling is relatively modest: The foreclosure mitigation program cost $853 million over 10 years. The benefits can be enormous. The loss of a home is also the loss of an investment, and of a community. Moving can make it harder to keep a job. It can force children to transfer to a new school. And the black mark of an eviction or a foreclosure makes it harder to rent a new home, let alone buy one.

The need for such measures is not merely a product of an unexpected public health crisis. It also reflects the fact that millions of lower-income households were teetering on the brink of eviction during the previous decade of economic growth.

Affordable housing is in desperately short supply. Roughly one in four low-income households spend more than half their income on rent, leaving little cushion for any loss of income. Even before the coronavirus struck, more than half a million Americans were homeless, many of them forced to sleep on the street. Even the most generous proposals before Congress would leave that harsh reality largely unchanged. They would address the immediate crisis, but not the enduring crisis.

That is an appropriate priority for now, but in the coming months, Congress ought to take the lessons of this crisis, and the last one, and act to ensure every American has access to affordable housing. There is no justification for providing aid to people facing eviction during a public health crisis, but not to those who face eviction during an ordinary July.

Food stamps are available to every American who demonstrates need, because people need food. Housing aid ought to be available on the same terms, because people need shelter, too.