Multifamily industry leaders and affordable housing advocates are pushing Congress to include rent relief funding—perhaps as much as $100 billion—in the next round of federal stimulus programs designed to help tenants and landlords with the economic fallout from the ongoing COVID-19 crisis.
“The urgent health and housing needs of people experiencing homelessness and millions of America’s lowest-income renters can’t wait. Inaction is expensive and addressing the long-term housing needs of millions of people experiencing homelessness or on the brink of homelessness during a pandemic is a public health necessity,” Diane Yentel, president & CEO of the National Low-Income Housing Coalition,” told Multi-Housing News. “When Congress returns, they must immediately work to secure investments in the solutions needed to safely and stably house the lowest-income people during and after this pandemic. Now more than ever, housing is health care.”
NLIHC research estimated between $76 billion and $100 billion in emergency rental assistance would be needed to keep the lowest-income households stably housed over the next year during and in the immediate wake of the COVID-19 pandemic. This week, Sen. Sherrod Brown, D-Ohio, said he is planning to introduce a $100 billion rent relief bill similar to the Emergency Rental Assistance and Rental Market Stabilization Act proposed by U.S. Representatives Maxine Waters, D-California, and Denny Heck, D-Washington. The bills are aimed at providing relief to renters and multifamily property owners.
Industry leaders and the housing advocates say the new measures are needed because the initial $12 billion included in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in late March was just the first step but far more resources are needed, particularly now that at least 33.5 million Americans are unemployed due to the pandemic.
A joint letter dated May 6 from 115 housing advocacy, public health and other organizations noted that even those who received the CARES Act stimulus checks and expanded unemployment benefits, “will still be severely rent-burdened and at risk of homelessness unless Congress provides targeted emergency rental assistance.” The letter states that despite temporary moratoriums on evictions, rent arrears will accumulate and people who have lost income due to the COVID-19 outbreak will struggle to pay the back rent once it is due.
Jonathan Cohen, COO of Universe Holdings in Los Angeles, a privately held investment firm specializing in value-add multifamily opportunities, said that worries landlords who are making deferment agreements with tenants who may be struggling to pay rent because of job losses. Universe’s current portfolio is in Southern California and Cohen noted California has mandated rent deferments for people who request them and the length of time to repay the back rent depends on the location with Los Angeles giving tenants a year while others range from 90 to 180 days at this point. The state also has temporary moratoriums on evictions for those who can document COVID-19-related loss of income.
“Some people are going to amass so much debt that they’re not going to be able to maintain it,” Cohen said.
Both the House and Senate bills propose funding to be distributed through the Department of Housing and Urban Development’s Emergency Solutions Grant program and are structured as grants so that renters would not have to repay any assistance they receive. The House bill would allow for housing relief for up to two years and possibly cover up to six months of back rent and late fees, according to Forbes.
While he wasn’t familiar yet with the details of the proposed House and Senate bills, Cohen said the plan to use the existing HUD ESG network sounds similar to how Section 8 housing payments are paid to landlords. A concern would be whether or not the federal government would attach strings to those kinds of payments that would impact owners, he noted.