NEW YORK (Reuters) – More than $ 21.5 billion in past-due rent looms over Americans struggling to make ends meet, global advisory firm Stout, Risius and Ross estimated Wednesday as Republicans and Democrats scramble for a new aid package COVID-19.
FILE PHOTO: Sandra Cruz, who lost her job due to the outbreak of coronavirus disease (COVID-19), was four months behind on her rent and fears she will be evicted, and her daughter Gabriella is waiting for a ride after picking up free food. distributed by the Chelsea Collaborative in Chelsea, Massachusetts, USA, July 22, 2020. REUTERS / Brian Snyder / File Photo
Senate Republicans this week proposed a new plan that would not reinstate the recently suspended federal eviction ban, which entailed a rent suspension by a third of tenants. In addition to the stress, the improved federal unemployment benefits of $ 600 a week will evaporate this Friday.
Without a solution soon, the likely result “will be a staggering increase in homelessness unlike what we’ve seen,” said John Pollock, an attorney for the Center for Public Justice and coordinator of the National Coalition for Civil Law to the Council ( NCCRC), who helped develop the eviction tracking tool with Stout, Risius and Ross.
The unprecedented amount of arrears does not change the macroeconomic situation, said Moody’s Analytics chief economist Mark Zandi. But for tenants, “it is catastrophic. Very few people will be able to pay for this, ”he said.
A debt spiral could haunt displaced tenants “for life,” he added.
During the spring and early summer, as unemployment rose to levels never seen since the aftermath of the Great Depression of the 1930s, a mosaic of federal, state, and local eviction bans kept tenants in their homes.
On Friday, the eviction ban covering one-third of tenants in buildings with federally-backed mortgages expired. Rent deferred for four months is now due, as is all rent where local and state eviction moratoriums also ended.
When rent is lost over such a long period, the low end of the market turns into a house of cards and “begins to fall,” said Emily Benfer, who co-created the Housing Policy Scorecard COVID-19 in the eviction from Princeton Lab University, a national eviction research center.
“The risk of eviction increases, the risk of foreclosure and bankruptcy continues, property taxes go unpaid, leaving communities and schools without resources,” said Benfer, visiting law professor at Wake Forest University.
The Democratic-controlled House of Representatives passed a measure in May that would have extended the improved unemployment aid through January and allocated $ 100 billion for rental assistance. It would also have extended the federal ban on evictions for up to a year.
The Republican-controlled Senate package released Monday focuses on getting children back to school, workers back to work and winning the fight against the virus, the Office of the Senate Majority Leader said in a statement.
It proposes to reduce improved unemployment assistance to $ 200 per week, and does not mention housing, evictions, or reinstatement of the eviction ban.
The Senate Republican Communications Center did not respond to requests for comment.
The Senate Banking Committee, which oversees housing, cited a statement Tuesday by Senate Banking President Mike Crapo (R-Idaho).
“I can’t answer that yet,” he told reporters when asked about an extension of the eviction moratorium. “I hope there is something related to rental assistance.”
An avalanche of applications is hitting eviction courts across the country as hearings are intensifying again online, in courtrooms that require social distancing, and even at the Columbus, Ohio Convention Center. In July alone, 21% of tenants did not pay rent, according to research firm Apartment List.
Stout and the NCCRC analyzed the results of the census survey and income data to create their eviction tracker, which uploads data weekly. Of the 44 million homes they rent in the United States, 17.3 million cannot pay the rent and are at risk of being evicted, the tracker estimates.
Reports from Michelle Conlin; Editing by Tom Lasseter and Richard Chang
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