The rent is due — we need emergency rental assistance from Congress now

The rent is due — we need emergency rental assistance from Congress now
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Just before April 1, Mario Salerno, a New York landlord, told his Brooklyn tenants their rent was waived. He suggested that, instead of paying rent, they check in on their neighbors and look out for each other during this uncertain time.

But not every tenant has a landlord like Mario — a landlord who puts his tenants first and who is in the financial position to float everyone’s rent for a month.  

We don’t yet know how many Americans will miss their rent payment on May 1. But all renters owe roughly $50 billion to landlords each month. And the first of the month will be here before we know it. 

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The recently passed CARES Act provides temporary reprieve from eviction for some renters, but not everyone. Some states and localities have announced their own protections to help fill the gaps. A nationwide rent pause would help, but eventually, the rent will be due. We can’t leave it up to tenants and landlords to suffer the losses. We need federal assistance to help people pay rent and stabilize the housing market.

Before the pandemic, nearly four out five households eligible for federal housing voucher assistance didn’t receive it. Partisan politics have left the evidence-backed program woefully underfunded, leaving families on waiting lists for years. Nearly 11 million households were already struggling to pay the rent when COVID-19 paused the economy. Many people in these households are employed in industries hardest hit by the economic shutdown: restaurant, hospitality, entertainment, retail and construction. These industries are spread across the country, but some places face an even greater risk of losing jobs.

Protecting tenants from the risk of financial ruin, eviction and homelessness requires universal inoculation: funding the housing vouchers they are eligible for already. The cost of helping these 11 million families for a year? Sixty-two billion dollars, a little more than bailing out the airline industry.

Unfortunately, the tab will likely be higher, as the need for rental assistance grows by the day.  

So far, 22 million Americans have filed for unemployment benefits. States across the country can’t process applications fast enough, and many have antiquated systems that can’t process newly eligible applicants, such as gig workers and self-employed people. If workers are lucky to get it, unemployment insurance could be a temporary reprieve, particularly the extra $600 per week provided through the CARES Act. In addition to access issues, not all people are covered. And those extra benefits are set to expire in July.

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It’s difficult to estimate how much rental assistance will be needed over the next year. But if past pandemics help predict future ones, we are expecting unemployment of the rental population to reach 20 percent, and it could be considerably higher — perhaps as high as 40 percent in a short timeframe. If 20 percent of the nation’s 44 million renters are unable to pay their rent for three months, the lost income to landlords will be $24 billion. And if 40 percent of renters can’t pay, those numbers would double.   

We need to keep Americans in their homes. In the short term, and until widespread testing is available, our health requires us to shelter in place. Over the long term, our economic recovery depends on what we do now.

Mario, the Brooklyn landlord, reminds us we are all connected. Neighbors look out for each other. Renters pay landlords, who pay property taxes, which local governments rely upon to fund services like schools, libraries, parks. Banks use landlords’ mortgage payments to pay their investors, who help provide capital and whose interest payments not only pay individual investors but also fund pensions and insurance. Renters’ inability to pay their bills could lead to widescale default and the collapse of the housing market.  

Congress needs to look out for renters and should immediately fund emergency rental assistance. There are many ways to deliver this assistance: Emergency Solutions Grants and Housing Choice Vouchers, as well as some funding directly to landlords. There are discussions about which approach is best, but given the scope of the need, Congress should take an all-of-the-above approach to these options. And the investment should be sizable: $80 billion to $100 billion would make sure the rent is paid for the next year as we all try to survive and recover from this pandemic.

Mary Cunningham is a vice president at the Urban Institute and director of its Metropolitan Housing and Communities Policy Center.

Laurie Goodman is a vice president at the Urban Institute and co-director of its Housing Finance Policy Center.