What the Eviction Moratorium Extension Means for Owners

Posted by Written with love by the Livable Content Team on May 1, 2021 9:00:00 AM

With days to go before the end of a nationwide eviction moratorium, the Centers for Disease Control and Prevention has extended the federal order until June 30. The previous extension was due to expire at the end of March, which was already an amendment to the original end-of-January extension...

After over a year of restrictions on everything from live performances to dining out, we are beginning to see cities across the nation open up. This means that some of us will actually start venturing out again, seeking entertainment and community outside the walls of our homes. Even more importantly, it means that employers in these hard-hit industries are hiring again, with an April U.S. jobs report showing the lowest level of unemployment-insurance claims since the start of the pandemic. 

Yet even as the recovery continues, and stimulus checks have once again gone out, many tenants are still not prepared to pay their rents. This has led the Biden administration to extend the Trump-era national eviction moratorium from the end of March to the end of June. Read on to see how owners will be impacted and how a rental relief program with direct payments to owners could help. 

Stay Well, 

Daniel Sharabi 

Livable CEO

 

Eviction Moratorium Extended to June 30

With days to go before the end of a nationwide eviction moratorium, the Centers for Disease Control and Prevention has extended the federal order until June 30. The previous extension was due to expire at the end of March, which was already an amendment to the original end-of-January extension. 

To be eligible for protection, renters must show they have tried to get government help to pay rent, and that they have earned no more than $99,000, or $198,000 if filing jointly. They must also declare that they: can’t pay because of Covid-19 hardships, are making timely partial payments that are as close to the full payment as they can and are likely to become homeless if evicted.

 

“The Covid-19 pandemic has presented a historic threat to the nation’s public health,” said CDC Director Rochelle Walensky. “Keeping people in their homes and out of crowded or congregate settings—like homeless shelters—by preventing evictions is a key step in helping to stop the spread of Covid-19.”

Yet even as the nation’s renters may be breathing a sigh of relief, multifamily owners are still under increasing financial pressure to keep up with mortgage payments, pay their property taxes and properly maintain their properties. This struggle is particularly hard on the nation’s smaller landlords, who own more than half the country’s rental stock. More than half of those “mom and pop” landlords have tenants who have missed payments during the pandemic, according to a new survey from the National Rental Home Council. Of those, more than one-third said they have had to take funds from their savings or get a loan to make payments for mortgages and maintenance on their properties.

 

“Though politically popular and well-intentioned, eviction moratoria push renters and their housing providers closer to the brink of financial ruin and jeopardize the stability of 40-million rental homes,” explained Bob Pinnegar, president and CEO of the National Apartment Association. “These policies need to end, and we instead need to focus on swift distribution of federal rental assistance to keep renters securely housed and ensure housing providers can pay the bills that keep housing safe and operational.”

Thankfully the recent stimulus package included additional funding for rental assistance and renters at risk of losing their housing in many states can now apply for federal assistance with their rental payments from a now-$50-billion pot. These applications opened in March and require the cooperation of both housing providers and their residents.

 

The requirements vary depending on state and local jurisdictions, but in many states, landlords with low-income tenants who are behind on rent can actually apply directly for financial assistance on their residents’ behalf. In California, for example, owners can receive up to 80 percent of all back rent from the period between April 1, 2020, and March 31, 2021, if they also agree to forgive the remaining 20 percent of the rent. This payment goes directly to the landlord, not the tenant, but the tenant must formally declare that they are unable to pay their rents in order to get the funds to the property owners. 

“We know that tenants and landlords have been stressed. They have been worried about what's going to happen. And we can now give them a program that gives them a clear path forward of how to help resolve the unfortunate situation where a lot of folks fell behind on their rent,” said Geoffrey Ross, deputy director for federal financial assistance at the California Department of Housing and Community Development.

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