Key Highlights

  • Renters have no financial relief from CARES Act while homeowners do
  • Despite eviction moratoriums in most locations, renters get no plan to defer rent payments and no option to reestablish their payments in affordable way

Renters are being advised to speak with their landlords if/when they haven’t the funds to pay their monthly rent bill due to job loss or illness from the coronavirus. Landlords, be they large conglomerates or mom and pop operations, have their own bills to pay vis a vis mortgages on their buildings, water services and utilities but many of those landlords have mortgage relief through the CARES Act mortgage forbearance clause. Renters have no such forbearance clause.

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Laurie Goodman, a former Wall Street mortgage and housing market analyst now working with the Urban Institute, said, “We haven’t done nearly as much for renters as we’ve done for the homeowners. The rental population is much, much less affluent, much less able to withstand disruptions in their cash flow than most homeowners.”

Some cities and states are looking for ways to help renters such as requiring landlords to accept a renter’s security deposit in lieu of one month’s rent or even suspending rent payments for several months altogether.  Others are calling for complete rent moratoriums.

Skip Schloming, director of the Small Property Owners Association in the Boston area, said, “The idea of asking everyone to pay their full rent is not reasonable, nor is it reasonable to ask them to pa no rent at all.”

In California, tenant activists are gearing up for statewide rent strikes. California’s Governor Gavin Newsom has ordered landlords to temporarily suspend evictions but this order does not prevent landlords from beginning the eviction process, filing notices and moving to evict tenants when the moratorium ends. The order also requires that tenants declare and document in writing that they are unable to pay their rent due to COVID-19. Such documentation is an obstacle for undocumented workers, renters working in non-traditional employment and renters dealing with medical crises.

Carolina Reid, a faculty research adviser at the Terner Center for Housing Innovation at UC Berkeley, said that save drastic action by both state and federal assistance, the economy’s downturn and the housing market could be headed toward another collapse similar to the foreclosure crisis in 2008. Reid said, “I’m worried about what happens when this crisis ends.”

 

Thanks to NPR’s Scott Arnold and The Guardian’s Sam Levin and Vivian Ho.

 

Also read: Mortgage Applications Surge +155% from One Week to the Next, Real Estate Stocks Slammed by Coronavirus Stock Market Fears, Recession This Year in US Seen as Coin Toss