Need for emergency rental assistance grows during the coronavirus pandemic

Some members of Congress are calling for a bold federal commitment to emergency rental assistance during the coronavirus pandemic. Although many states have temporarily suspended evictions, just protecting low-income renters during the crisis is not enough. When the eviction orders are eventually lifted, renters will still be on the hook for months of unpaid rent, and could still lose their homes. The country could see a wave of evictions when this crisis is over.

Most states have shut down businesses and issued stay-at-home orders as COVID-19 cases rise. More than 16 million people have already filed for unemployment, and early shutdown orders are now being extended into May. This has led many renters and lawmakers to push aggressive steps so that people do not lose their homes. There have been growing calls for rent strikes around the nation. A state Senator in New York has also proposed legislation to cancel rent for 90 days and help landlords with mortgage forbearance.

But not all states even have eviction protections. Millions of low-income renters are not receiving federal assistance. Housing advocates and lawmakers see a critical need for a large, national source of rental assistance to fill the gap. If renters can continue paying rent during the crisis, they will not face loss of their homes as the economy slowly re-opens. It also means that landlords will be able to make their mortgage payments and keep up with needed repairs. 

Last month, Congressman Denny Heck (D-WA) introduced H.R. 6314, the Emergency Rental Assistance Act of 2020. The legislation would provide $100 billion in emergency rental assistance for low-income renters through the pandemic. The funds would be a supplement to the Emergency Solutions Grants (ESG) program. ESG typically supports homeless shelters and services, but can be used for short-term rental assistance as well.

The bill would expand eligibility for ESG rental assistance. ESG rental assistance is normally restricted to people with incomes at 30% or less of Area Median Income (AMI). The new legislation would allow renters earning up to 80% of AMI to qualify.

The legislation would also raise the rental assistance amounts to 120% of the Fair Market Rent (FMR). This is an increase from 80% of the FMR allowed under the original program. It means if renters are in apartments where rents are higher, they can still qualify for assistance. Tenants pay 30% of their income towards the rent, and the ESG program pays the remaining rent up to the FMR level.

Low-income renters at risk of homelessness can qualify for assistance during the six months after the legislation is enacted. Up to $50 billion of the funds will be allocated directly to states, counties and cities using the formula for current ESG grantees. These funds have to go out within 30 days after the law passes. If a local grantee decides not to participate, their funds will be administered by their state.

The Emergency Rental Assistance Act of 2020...legislation would provide $100 billion in emergency rental assistance for low-income renters through the pandemic.

The remaining $50 billion will be disbursed within 120 days of the law passing. These funds will be disbursed according to a formula to be developed by the Secretary of Housing and Urban Development (HUD). The idea is that these funds will fill in gaps or respond to changing needs around the country. The formula must consider the standard allocation of funds, but it must also consider other factors. More funds may be directed to areas with more extremely low-income renters facing severe housing cost-burden or areas with greater unemployment.

Congress has already passed a $2.2 trillion stimulus package, the largest in our nation’s history. It included $12 billion for housing programs and an eviction moratorium for renters and homeowners in federally backed housing. Democratic leaders in the House have been working on another large stimulus package as a follow-up. It will likely provide another round of Economic Impact Payments to individuals. It will also likely extend unemployment insurance and add other measures that will help small businesses and farmers.

There has been a push to include the $100 billion for emergency rental assistance in the new House stimulus package. Congressmen Jesús “Chuy” Garcia (D-IL) and Adriano Espaillot (D-NY) have sent a letter to House and Senate leadership, with 49 other representatives signing on. The letter calls on the leadership to include emergency rental assistance in the next stimulus bill.

In a press release, Congressman Garcia spoke of the urgent need for emergency rental assistance. He said, No one should lose their home because of the coronavirus pandemic, and Congress must act now and include emergency rental assistance in the next stimulus package. I am proud of the work we have done so far to keep people in their homes, but as unemployment climbs to historic highs and our most vulnerable constituents face unemployment and months of back-rent, we have to do more to ensure that families who are already suffering don’t face eviction and homelessess due to this crisis.”

Although the House has been moving forward on this fourth stimulus package, it is not clear if it will be considered in the Senate. Republicans have the majority in the Senate, and many do not want to pass another large stimulus bill right away. Republican leaders have said they want to see the impact of the first round of stimulus assistance. In the short term they would rather see more limited bills that address gaps in the first stimulus.

Without federal action, some cities and states are providing emergency rental assistance on their own. Some, like the District of Columbia, have redirected unspent federal funds. The District’s Department of Housing and Community Development re-directed $1.5 million in HOME funds for emergency rental assistance. Some local governments may use Community Development Block Grant (CDBG) funds to provide temporary rental assistance.

Other cities have used their own funds. Chicago created a Housing Assistance Grant program that will give $1,000 each for 2,000 recipients. Los Angeles is reviving a program to help households in low-income and immigrants communities who are struggling financially. States like Nevada, Delaware and Minnesota have approved limited emergency rental assistance programs.

The last coronavirus stimulus gave low-income and working class Americans much needed help with Economic Impact Payments and a boost to unemployment insurance. However, it provided billions more for industry and small businesses. These investments were needed because people need to have jobs to come back to once the crisis has passed. But people need to pay their rent now or face the threat of homelessness.

A patchwork of state and local emergency programs cannot meet the enormous needs of low-income renters during this crisis. $100 billion for emergency rental assistance may seem like a lot of money, but it will help millions of low-income renters keep a roof over their heads. It will also keep landlords afloat and the rental market more stable. It will mean that low-income renters will not face crushing housing debt when eviction protections are lifted. It is a case where helping people has more of an impact than helping big business.