Stimulus Relief Talks Called Off, Alarming Industry Groups

Photo by Sam Bowman via Flickr

President Trump yesterday announced a halt to negotiations between party leaders in Congress over the latest proposed stimulus bill until after the election, stunning multifamily and renter advocacy groups which had been pushing hard for much-needed federal rent relief.

The President said in a series of tweets Tuesday afternoon that he had asked Congressional representatives to stop negotiations until after the November election, when (assuming the outcome of the election is in his favor) he will then look to pass a “major Stimulus Bill” that would focus on Americans and small business. He went on to say that he asked Senate Majority Leader Mitch McConnell to instead focus full time on approving his nominee to fill the Supreme Court vacancy, Amy Coney Barrett.

READ ALSO: What the Presidential Election Means for Multifamily

Just three days earlier, Trump voiced support for passing the stimulus bill, urging Congress to “work together and get it done.”

The announcement came just hours after Federal Reserve Chairman Jerome Powell called for more fiscal stimulus and a month after the Trump administration announced a nationwide eviction moratorium banning evictions through the end of the year.

However, several hours after his original tweets, Trump seemed to reverse on his earlier statements, tweeting that he was ready to sign a standalone bill to send $1,200 stimulus checks to Americans and urging the House and Senate to “immediately” approve $25 billion in aid to the airline industry and $135 billion to the Paycheck Protection Program. “I will sign now!” the president said. 

‘Untenable situation’

The president’s announcement was quickly met with disappointment and concern from multifamily trade groups and renter advocacy groups alike.

National Low-Income Housing Council President & CEO Diane Yentel called the President’s announcement to halt negotiations at a time when renters and small landlords are struggling to make ends meet “reckless” and “irresponsible.”

“The longer we wait to act, the steeper the financial cliff that renters will be pushed off when the eviction moratorium expires in winter,” Yentel tweeted Tuesday evening.

Following Trump’s later, seemingly contradictory tweets, Yentel reacted with confusion, tweeting “What is happening.”

In a statement released shortly after the news broke, National Apartment Association President & CEO Bob Pinnegar said that passing relief measures for the nation’s renters “should not be a political game.”

“Emergency rental assistance is the only policy that will keep renters safely housed and ensure rental housing providers can pay their bills,” said Pinnegar in a statement.

“Emergency rental assistance is the only policy that will keep renters safely housed and ensure rental housing providers can pay their bills,” said Pinnegar.

National Multifamily Housing Council President Doug Bibby echoed Pinnegar’s statement, saying calling off negotiations ignores the distress faced by million of Americans and puts renters and rental property owners in an “untenable situation.”

“This failure, coupled with the nation-wide eviction moratorium put in place by the Centers for Disease Control (CDC), places the stability of the entire rental housing sector in danger and potentially puts tens of millions of apartment residents at even greater risk,” said Bibby in a statement.

He called on President Trump and Congress to resume negotiations over the stimulus bill and to include significant rental assistance in order to keep the nation’s housing market afloat.

The need for rental relief

While the nationwide eviction moratorium prevents renters impacted financially by the pandemic from being evicted, it doesn’t erase any unpaid rent that may have piled up during the health crisis. What happens to both renters and landlords once the moratorium expires is what worries those in the industry the most. For months, industry organizations have been saying that stimulus checks alone would not fully address their concerns. Only billions of dollars in federal rental assistance would do that.

“NMHC continues to believe that further COVID relief is urgently needed and that it is critical that any such package includes robust rental assistance,” the organization said in a statement on Wednesday after the president’s tweets.

NMHC’s Bibby said in remarks last month that significant rental assistance from the government would alleviate, to some degree, the “negative consequences” of the eviction ban which has “jeopardized” the stability of the nation’s housing finance system.

Research from several industry groups and housing groups that study the industry has pointed to a potential ‘domino effect’ in the absence of major relief efforts. Figures from multiple reports have also  indicated a downward trend in rent payment collections nationwide, as the pandemic enters its seventh month.

In one recent study from the Joint Center for Housing Studies of Harvard University, researchers found that among the 43 million rental households in the U.S., 12.1 million households have residents with at least some at-risk wages. Jobs considered at-risk include those in services, retail, recreation, transportation and travel, and oil extraction, according to JCHS. The loss of wages in at-risk industries would push the share of renters with costs burdens to well above 50 percent.

This is a developing story. Check back later for more updates.