How Congress can avoid a housing catastrophe

Congress has a rapidly closing window to stave off a coming crisis in American housing markets and some lawmakers are running in the wrong direction. To jumpstart the economy and build on the initial round of assistance to American families and businesses, Congress and administration officials should return to the bargaining table and get the job done on a COVID-19 relief package that stabilizes the economy, keeps families afloat and prevents a genuine housing catastrophe. 

More than a third of American households rent — over 40 million — and the economic impact of this pandemic leaves them especially vulnerable. Before the pandemic, one-in-four renters already spent over half their income on housing. Renters are typically concentrated in industries that have been most susceptible to layoffs. And all this comes at a time when as many as 40 percent of Americans cannot withstand an emergency expense of $400. Asking families, particularly those who rent, to meet their financial obligations without assistance — as some in Congress are considering — is a recipe for disaster.   

Making matters worse, Congress and the administration allowed federal unemployment insurance (UI) benefits to expire — a critical lifeline for those looking for work to pay their bills, and in the case of those who live in apartments, their rent. While President Trump has taken executive action to extend additional unemployment payments totaling $400 a week, uncertainty around the order — how much states will be on the hook for and which workers will be eligible — has called into question whether the measure will truly help those in need. For example, officials expect that it will take weeks for states and the federal government to disburse these funds and some states are already weeks behind in processing unemployment claims. 

We know that providing assistance to renters — through UI and direct assistance — is the best way to prevent potential evictions. How do we know that? Even in light of record-setting unemployment claims and an economy that shut down virtually overnight, people have been able to pay their rent, and apartment owners have met them halfway with flexible payment plans to keep them in their homes. Congress has a chance to keep this going. 

Instead, some in Congress have used their high perch to call for extending a blanket moratorium on evictions. Policymakers are right to show concern for housing in such a volatile and unpredictable environment. Property owners share this concern — the resident is our reason for being, and keeping them safe in their rental homes is our number one priority. Evictions are a painful, rare and expensive last resort, one that should be pursued only when other efforts fail — for unlawful activity, abuse of property, endangerment of fellow residents or property staff or failure to meet lease obligations. 

But a federal eviction moratorium is not a real solution since it puts property owners at tremendous risk. When residents can’t pay rent, property owners — who depend on it for their livelihoods and to pay their own bills — take the hit. And small building owners are much more likely to have residents with at-risk wages as a result of the pandemic; many are already struggling. These owners and operators have mortgages to pay, in addition to property taxes, insurance, and payrolls and the cost of operating and maintaining properties, which is essential to renters. Communities already reeling from lost revenue would see lost property taxes and greater unemployment as apartment businesses go under. 

So how can Congress both help the economy and make an eviction even rarer? Get back to Washington and deliver a package that helps all Americans, especially renters. 

We can weather this storm if we get things right. That means supporting and protecting renters through extended federal unemployment benefits and direct rental assistance. It starts with extending UI benefits to help renters now and avoiding longer-term eviction moratoriums to protect residents and property owners alike. Combined, this approach can prevent a deepening downturn and more pain for American families. Congress took effective first steps through the CARES Act, but the job is not finished. Now they should speed assistance for Americans who need it and put the country on the proper road to recovery. 

Doug Bibby is president of the National Multifamily Housing Council (NMHC), a national organization of more than 1,400 member firms involved in the multifamily housing industry.