Why an Eviction Ban Alone Won’t Prevent a Housing Crisis

By Emily Badger for The New York Times.

As an eviction crisis has seemed increasingly likely this summer, everyone in the housing market has made the same plea to Washington: Send money — lots of it — that would keep renters in their homes and landlords afloat.

City officials have called for such rent relief. So have landlord associations, tenant advocates, legal aid lawyers, housing researchers, public health experts and economists.

Now millions of renters have been covered by a national eviction moratorium, an unprecedented order by the Centers for Disease Control and Prevention to help control the coronavirus pandemic. But there is still no money.

Congress has yet to adopt a new aid package that includes broad rent relief. It hasn’t passed any other cash assistance lately either. Expanded unemployment benefits, worth $600 a week, expired at the end of July, along with a more limited eviction moratorium. There have been no new stimulus checks. And additional unemployment benefits created by executive action by President Trump have not yet reached many workers.

That means that while the new order has halted most evictions through the end of the year, there remains no mechanism to cover what those tenants cannot pay — or to control the cascading consequences when rent dries up.

Tenants will still be on the hook for all this unpaid rent when the moratorium expires Dec. 31. And landlords in the meantime may find it increasingly hard to make repairs and cover the mortgage. For this reason, even advocates cheering the moratorium call it a half measure. And landlord groups warn it could destabilize the housing market even more.

“We’re not comfortable with any protracted moratorium, because we just simply don’t agree that is the answer,” said Greg Brown, the senior vice president of government affairs with the National Apartment Association. “We think rental assistance in and of itself is the answer. That said, if this is the approach that’s going to be taken, you absolutely have to have it connected to rental assistance.”

If that wasn’t clear to Congress a week ago, or a month ago when broad coronavirus relief talks in Washington broke down, representatives may soon be hearing from distressed landlords.

“We needed to have a significant external event to change the status quo of the negotiations,” Mr. Brown said. “And perhaps this is that event.”

Already irate, the Rent Stabilization Association, which represents 25,000 landlords in New York City, on Wednesday called the moratorium a form of “pandemic politics” at their expense.

The American Action Forum, a right-leaning policy group, called the moratorium a humane response but also a “delaying tactic” for the housing crisis without accompanying financial assistance.

A sweeping stimulus bill passed by the Democratic-controlled House in May included $100 billion of such assistance, to be funneled through an existing Department of Housing and Urban Development grant program. But that bill was not passed by the Senate. And in negotiations over a new relief package, rental aid has been a less prominent priority, as Democrats and the White House have argued over the bill’s total cost, unemployment payments and aid to state and local governments.

Now with the moratorium in place, the effects on landlords may not be immediately visible. Many property owners are accustomed to vacancies and occasional months without rent payments (and those who evict tenants in more normal times can often expect the process to take months). But researchers warn that the strain will build, particularly on the small mom-and-pop landlords who own a few units and count on that income for their retirement.

“Some of them aren’t going to make it,” said Jenny Schuetz, an urban economist with the Brookings Institution. “It’s the real estate equivalent of a family-owned small business.”

Those small-scale rental properties, often older and with higher maintenance costs, are more likely to be lower-income housing than newer corporate-run apartments. If the owners can’t keep paying their bills, she said these properties could be put up for sale or enter foreclosure.

Should private equity firms buy them up — as they did with many single-family homes during the Great Recession — rental properties that are relatively affordable today may become less so.

Abigail Staudt, a lawyer with the Legal Aid Society of Cleveland, said the moratorium without rental assistance wasn’t a permanent fix for tenants and would amount to a hardship for small landlords.

“And who is providing affordable housing — it is often the small landlord,” she said.

What could happen next won’t be as visible as the unemployment crisis, reported in weekly and monthly national data. It won’t be easy to track in the housing market; multifamily transactions are less transparent than sales of single-family homes. And it won’t be as clear as seeing families lining up at food banks, Ms. Schuetz said. Most families in need of housing never turn up at shelters looking for a place to stay.

“It’s not as if one day everyone’s fine, and then the next day everything is horrible,” said Peggy Bailey, the vice president for housing policy at the Center on Budget and Policy Priorities. But she warned that the absence of rental assistance would make it harder over time for tenants and landlords to recover from the economic crisis.

“We’re just asking people to get further behind and expend their savings and do all sorts of things that have longer-term implications than just even the next six months,” she said.

Emily Badger writes about cities and urban policy for The Upshot from the Washington bureau. She's particularly interested in housing, transportation and inequality — and how they’re all connected. She joined the Times in 2016 from The Washington Post.