The Centers for Disease Control and Prevention (CDC) has temporarily halted tenant evictions nationwide through the end of 2020 in an effort to slow the spread of COVID-19. A draft of the order was posted in the Federal Register. The move was announced by The White House on Sept. 1.
- Renters who fit the income standard cannot be evicted if they sign declarations that they have exhausted their best efforts to pay rent and are likely to become homeless due to eviction
- Renters will still owe back rent after the moratorium, which ends on Dec. 31, 2020, expires.
- There is no funding for either renters or landlords, who still have to pay their bills.
- Congress is still at an impasse over additional pandemic aid.
Here's how it will affect renters: Of the 43 million residential renters in the country, those making less than $99,000 per year ($198,000 for couples) cannot be evicted if they sign declarations that they have exhausted their best efforts to pay rent and are likely to become homeless due to eviction. They are still obligated to pay accrued rent or housing payments in accordance with their lease or contract, and landlords can still evict them for other reasons.
Besides increasing the spread of the virus, evictions have devastating physical, financial and mental health consequences for families, and an estimated 30–40 million people in America were at risk this year in the absence of robust and swift intervention, according to an early August report from The Aspen Institute. Most states in the country have lifted temporary protections against evictions.
There's no extra funding or rental assistance announced as yet, and landlords will bear the cost of maintenance etc. Legal challenges are expected against the moratorium. "This action risks creating a cascade that will further harm the economy, amplify the housing affordability crisis and destroy the rental housing industry," said the National Apartment Association in a statement.
LWP stands for Lost Wages Payment which is part of Trump's executive order. Image courtesy: Ernie Tedeschi
Next Steps in Pandemic Relief Unclear
Today's announcement will help tens of millions. However, we're in the seventh month of the pandemic, and the $1,200 stimulus checks are now a distant memory. The U.S. Congress is still at an impasse over the next stimulus bill with no compromise in sight.
The extra $600/week in unemployment benefits expired on July 31, as the unemployment rate remained elevated at 10.2%. This was replaced late last month by $300/week payments in most states. According to economist Ernie Tedeschi, this caused federal and state UI payments to be $60 billion lower in August.
The Paycheck Protection Program for small businesses expired almost a month ago on August 8. A new House subcommittee report says 99.4% of the 5.2 million loans distributed had "little or no oversight," and over $1 billion went to companies that received more than one loan, among other issues. All of this could slow the momentum of consumer spending, the backbone of the economy.