President Donald Trump dashed hopes for a new federal stimulus package ahead of the November presidential election. And that could leave American tenants and homeowners in deep trouble.
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Tuesday afternoon, Trump first said that he had asked his team to stop negotiating with the Democrats until after the election. He Then later suggested that he would be willing to individually approve elements of the stimulus package, including another round of $ 1,200 stimulus checks to Americans and relief to airlines, using the remaining funds from the CARES law passed that day. spring to pay them.
A second stimulus package could be a crucial lifeline for tenants and some landlords. While the coronavirus pandemic has wreaked havoc on the country’s economy, it has also disrupted the country’s rental housing market. Months of layoffs and holidays have left millions of Americans unable to pay their rent. Homeowners, meanwhile, were forced to assume property taxes and mortgage payments in the meantime.
In total, some 30 to 40 million Americans are at risk of deportation due to the pandemic. Last month, the Centers for Disease Control and Prevention took historic action by declaring a national moratorium on evictions. Public health experts feared that if millions of people were evicted from their homes, it could exacerbate the spread of COVID-19 and complicate efforts to reduce transmission.
The CDC’s moratorium did not automatically offer protection to tenants. Instead, tenants should proactively inform their landlords that they cannot be evicted under the ordinance by meeting certain specifications. Gaps in the design of the moratorium have led to thousands of tenants facing eviction hearings.
When the CDC order was announced, housing experts said it was only “slowing the time for evictions.” This is because the moratorium did not come with the financing of rent assistance. And now that Trump has signaled that his administration will no longer participate in stimulus negotiations, it is less and less likely that rent relief will come soon.
“The president threatened to collapse the rental market with his blatant inaction,” said Noëlle Porter, director of government affairs at the National Housing Law Project.
Emergency rental aid approaching bipartite deal
While Democrats and Republicans disagreed on how much money they wanted to allocate for another stimulus package, lawmakers on both sides of the aisle moved closer to the need for relief rents, said Diane Yentel, president and CEO of the National Low Income Housing Coalition.
“It is extraordinarily reckless and irresponsible of Trump to blow up the negotiations now, when so many tenants and small landlords are struggling and there is a growing bipartisan agreement on the urgent need for rental assistance. ’emergency,’ Yentel said.
The Democratic-controlled House of Representatives passed a $ 2.2 trillion package last week that included $ 50 billion in emergency rent assistance funds, while extending the ban on evictions by 12 months . The legislation has also allocated up to $ 80 million per state to a homeowner assistance fund.
In August, Trump had tweeted that he was “ready to send rent assistance payments to hard-working Americans,” despite a lean stimulus package proposed by Senate Republicans last month did not include money for rent relief.
Separately, a stimulus proposal released in september by the House Problem Solvers Caucus, a bipartisan group of lawmakers, called for $ 25 billion to be set aside for rent assistance.
Housing advocates and rental industry officials have argued that lawmakers need to approve around $ 100 billion in emergency rent assistance to avert an eviction crisis, although some argue that it takes more money than that.
This spring and summer, the CARES Act stimulus package provided a temporary lifeline, thanks to the additional $ 600 in weekly unemployment benefits it distributed to unemployed Americans. An additional $ 300 in unemployment checks in recent weeks has also helped, although those funds are depleted.
Even with rising unemployment, many families have struggled to raise enough money to pay their rent. Delays in unemployment checks earlier in the pandemic created a mountain of unpaid rents for tenants, making it harder to catch up on payments.
““Landlords have become the safety net of the rental crisis. ““
To complicate matters, millions of Americans were already burdened with rents before the pandemic, meaning they were spending more than a third of their income on housing, leaving little for other necessities or to build an emergency fund.
Some reinstated could now spend several more months receiving financial support, digging them into a deeper hole that will be all the more difficult to get out of once the CDC’s ban on deportation is lifted in January, advocates say. .
“The longer the federal government waits to act, the steeper the financial cliff will be for tenants when the moratorium on evictions expires this winter,” Yentel said.
In the meantime, homeowners are expected to shoulder this economic burden. “No rent assistance, reduced unemployment benefits, uneven protections against foreclosures and seemingly endless moratoriums on evictions – landlords have become the safety net of the rental crisis,” said David Howard, executive director of the National Rental Home Council.
Homeowners are particularly vulnerable, according to housing industry officials. Many of these landlords only own one or two properties, and the rent goes to pay the mortgage and taxes, with little left over for a financial cushion. Some have warned that these landlords could eventually choose to sell their homes, which could end up displacing tenants and reducing the supply of rental housing.