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One of President Joe Biden’s first actions after taking office last month was to call for an extension of the moratorium on evictions for tenants who fell behind during the pandemic.
Now the Centers for Disease Control and Prevention (CDC) have authorized an extension of the moratorium until March 31, giving tenants a lifeline of two more months.
CDC director Dr Rochelle Walensky said in a statement that the continued spread of the coronavirus, along with the housing stability issues it has exacerbated, dictate the need to extend the moratorium. “Keeping people in their homes and out of assembly places – like shelters – is a key step in helping to stop the spread of Covid-19,” she said in a statement. declaration.
Almost one in five households was behind on their rent in December 2020, according to data from the US Census Bureau. And while Biden and the CDC’s action may temporarily stem the bleeding, it can only delay the inevitable for tenants who have fallen far behind on their payments and are waiting for the promised help.
How the Biden administration plans to help tenants
Biden’s executive action is one of the first tangible steps in his American rescue plan announced last month. While much of the plan requires Congressional approval, Biden has the power to call for extensions to the eviction moratorium (like former President Donald Trump done in august.)
Biden’s plan allocates $ 25 billion in rental and utility assistance for rent relief to low- and moderate-income households “who have lost their jobs are or are out of the workforce,” according to one plan information sheet. The funds can cover up to 12 months of eligible tenant expenses, including future rent payments. Another $ 5 billion will be used to pay overdue utility bills, through programs like the Low-Income Home Energy Assistance Program.
In addition, $ 5 billion would go to emergency aid for homeless people. Funding would be distributed through states and cities to help people secure housing. The funds will be flexible, according to Biden’s plan, to provide a range of options for communities, including converting hotels to permanent housing and helping homeless service providers maintain their programming.
“If we don’t act now, there will be a wave of evictions and foreclosures in the months to come as the pandemic rages on,” Biden said when he unveiled his plan on Jan. 14. “It would overwhelm emergency shelters and increase Covid -19 infections because people have nowhere to go and cannot socially distance themselves.”
Biden said the rent assistance funding would not only help families at risk of eviction, but also “be a bridge to economic recovery for countless moms and pop landlords.”
Rent relief is slow to arrive for worried tenants
The extension of the eviction moratorium offers another lifeline for tenants as Congress examines elements of Biden’s proposed third stimulus package.
But housing advocates fear that $ 25 billion in rent relief allocated in the second stimulus package is still not arriving quickly enough to really alleviate growing bad balances – and that a continued eviction moratorium will do. that delay the inevitable for many tenants.
Funding for rent relief must first flow from the federal government to the cities and states requesting the assistance; while each state should receive a portion of the allocation, cities with populations over 200,000 can also apply for a portion of the funding.
Rent relief allowances were to be distributed at the end of January. But many parts of the country have not yet started accepting applications for help, and some do not plan to distribute funds until March. Renters requesting assistance should contact local housing groups to learn more about application deadlines and guidelines, or call the United Way 211 hotline to be directed to the appropriate agency for your area.
The longer it takes to process applications for assistance, which can be tedious for tenants in financial difficulty, the longer it will take for landlords to be paid. And it is possible that some tenants eligible for financial assistance will not receive it in time to avoid being evicted once the moratorium eventually expires for good. Past evictions can prevent tenants from getting approval for a new lease, just like a Credit check which shows that tenants have become burdened with unpaid bills and debts facing collections.
“The idea here is to get help from the tenant [in order to] help the owner, ”said Jaime Michelle Cain, a real estate attorney at Boylan Code in Rochester, New York. Cain is also a coalition leader for Under One Roof, a network of New York City landlords championing the state’s rental industry.
Cain said the lack of initial rent relief during Covid-19 highlights the lack of affordable housing in the United States Small landlords serving low-income populations may have to resort to selling their properties if the help is not starting to arrive.
What help have tenants received so far?
The original CARES law, signed in March 2020, banned some evictions and protected about half of tenants from eviction if they fell behind on rent, for example Center for Budget and Policy Priorities analysis. That moratorium expired in July, but Trump asked the Centers for Disease Control and Prevention (CDC) to recommend extending the moratorium due to the public health risk that could arise if the evictions resume.
The CDC announced in September a moratorium on evictions extended until the end of the year, to protect tenants from being evicted from their homes, the risk of becoming homeless and spreading the coronavirus. The precise announcement which tenants are eligible for eviction protections and what they should do to be covered by the moratorium, which is to report their financial situation to their landlord in writing.
When the second stimulus bill was adopted at the end of December 2020, this package extended the moratorium on evictions until January 31, 2021. The ongoing moratorium on evictions protects tenants who qualify for income ($ 99,000 for single filers, $ 198,000 for joint filers) and informs their landlord of their financial situation.
It was also the first law of the pandemic era that offered financial assistance to tenants: $ 25 billion that tenants could use to pay overdue rents, future rents, utility bills or other accommodation costs.
The amount should not completely eliminate the shortfall faced by tenants and their landlords, but it begins to reduce the rent increasingly higher. “While emergency rent assistance of $ 25 billion is clearly not enough to cover the $ 70 billion in accumulated rents or the continued need for rental assistance to keep families in stable housing, these resources are critical and desperately needed, ”said Diane Yentel, President and CEO of the National Low Income Housing Coalition, in a December press release.
The back-up plan put safeguards on who could receive the money: in short, you must qualify for unemployment or otherwise prove your financial hardship due to the pandemic to be eligible. You must also have a family income that does not exceed 80% of the median family income in your area. In Denver, for example, that means you must have an annual household income of less than $ 78,500 for a family of four. In San Francisco, meanwhile, that threshold would be $ 102,500.
The Second Stimulus Agreement also allows landlords to apply for relief funds on behalf of their tenants, if they have tenant permission to do so. This is important because many small homeowners are not eligible for most Covid-19 small business aid. The CARES law excluded passive income from eligibility for Paycheque Protection Program loans, meaning homeowners couldn’t ask for help if they didn’t employ staff to manage their properties.
Biden’s plan to offer an additional $ 25 billion in rent relief, if approved by Congress, brings the country closer to meeting the needs of tenants and landlords – and may prevent further fallout. “An effective stimulus package and a vaccination rollout will help avoid the need for additional rent assistance,” David Dworkin, president and CEO of the National Housing Conference, said in a statement.