New Congress Must Act Swiftly to Subsidize Rental Assistance Programs and Prevent Evictions
By Jessi Russell
Update: On March 10, 2021, Congress passed a $1.9 trillion COVID-19 relief package that includes an additional $30 billion in emergency rental and utility assistance. Currently, the eviction moratorium is in effect until June 30, 2021. The Consumer Financial Protection Bureau (CFPB) will be launching a new effort to increase awareness of the moratorium’s protections.
Eviction—the forced removal of somebody from their home—upends the lives of people with low incomes. The disruption in routine, sudden loss of possessions, and the legal record that follows an eviction filing often force displaced renters to double up in overcrowded units with loved ones or, for Black, Latinx, and transgender people especially, seek shelter in overpoliced public spaces. The 2 million+ eviction notices that landlords file on average each year have lasting consequences for children’s education, health, and future earnings.
December's COVID-19 relief legislation extends the original moratorium issued by the Centers for Disease Control and Prevention (CDC) and provides $25 billion in emergency rental assistance to be distributed by states, territories, and localities. These provisions will reduce the overall housing debt owed by renters with low incomes by an estimated 19 percent, from $70 to $57 billion, but the allocation falls far short of the $100 billion that advocates have identified as the bare minimum needed to keep people stably housed during the pandemic. As many as 6 million renters’ households are expected to remain at risk of eviction when the moratorium expires.
The legislation offers guidance for distributing the $25 billion in rental assistance, including eligibility criteria, allowable uses of funds, and detailed rules for distribution. However, the limited funding will still force states and localities to make difficult decisions about who “deserves” relief most and may increase administrative burden in the process.
We are now weeks away from the eviction moratorium’s next expiration date. This rushed timeline leaves little time for state, tribal, and local governments to plan targeted outreach campaigns, let alone build systems to review applications and administer funds. Some states and localities will be able to leverage the more than 500 emergency rental assistance programs already in existence, which may lead to quicker financial relief for renters in those areas. Other jurisdictions will need to make changes to comply with the legislation’s new requirements. No matter how many months the eviction moratorium is extended, postponement alone will not stop debt from accumulating for the 14 million households who cannot pay their rent and utility bills. Moody Analytics estimates that renters with low incomes will owe an average of $5,600 in back rent and utilities by the end of January.
The legislation restricts eligibility to renters earning less than 80 percent of area median income (AMI), with priority given to households whose annual or monthly income does not exceed 50 percent AMI (for reference, 50 percent annual AMI for a family of four is about $56,800 in New York City compared to roughly $14,800 in a rural town like Athens, TN). States, territories, and localities are also required to prioritize households in which a member has been unemployed for 90 days or more.
At least 90 percent of the funds allocated to states, territories, and localities for rental assistance must be used for payment of past-due and future rent, utilities costs, and other related housing expenses. The remaining 10 percent can be used for housing stability services such as case management and tenant-landlord mediation. The legislation gives priority to payment of back rent, stating that grantees cannot allocate money to future rent payments unless households who applied and are eligible for assistance to reduce existing rental debt have received support.
Along with ordering a strengthened, legally enforceable eviction moratorium, the Biden Administration and Congress must subsidize these rental assistance programs further or else we will see a wave of program closures like those that occurred after CARES Act funding was depleted. In the meantime, community leaders now armed with a clear source of funding to establish and—for some states and localities—pilot a rental assistance program must account for the inequitable impact of the housing crisis and pandemic-related recession on Black and Latinx households. They should use tools like the Urban Institute’s Equity Subindex in choosing where to put up flyers, direct informational calls, and earmark funds.
If you or a renter you know are at risk of eviction, visit Federal Eviction Moratorium FAQ for Renters, and go here for a comprehensive list of rental assistance programs, along with information on which programs are currently accepting applications