The Biden government announced yesterday that it would extend the CDC’s federal moratorium on eviction of renters who repay rent until the end of June. The moratorium expired on Wednesday after it was introduced under the Trump administration. It had been criticized by both tenant stakeholders who claimed it left too many loopholes and landlord advocates who argued it restricted the freedom of owners.
Holden Lewis (pictured), home and mortgage expert at NerdWallet, believes that in our current recovery phase, an extension of the moratorium was necessary.
“There is so much back rent owed,” said Lewis. “I read that it wasn’t until January that there was a rent back of almost $ 60 billion. We have received $ 52 billion in rental support from both administrations to be handed out. The bottom line is that more rent back is still owed than support. This problem will continue for a few months before people get back on their feet. “
Lewis stated that the Biden administration was widely expected to take this step and that due to the sheer volume of other duties it currently faces, it will only leave it until the last minute. He also noted that if a confluence of factors increases tenant stability, we can expect the moratorium to be lifted.
Although vaccination numbers have exceeded expectations, we are not out of the pandemic yet. Employment data remains below pre-pandemic levels. despite some improvements, and job losses continue to be concentrated in low-wage and service workers who are largely renting. Even if President Biden hopes for an effective end to the American pandemic by July 4th, it is unlikely that we will find ourselves in any form of economic recovery well beyond that date. So it is likely that the moratorium will not go anywhere anytime soon.
While this news might come a relief to renters, the outlook for landlords is a little bleak. Lewis noted that many landlords across the country are facing tight pressure as costs and transportation costs rise, while many renters are still unable to pay their rents. Those struggles are then passed on to the mortgage services industry, according to Lewis, which has to bear unpaid mortgage bills due to a lack of rental payments. It’s an unfortunate picture that lasted a long time and was shown while tenants have been showing they will go to extreme efforts to pay their bills, The sheer volume of unpaid rent is a massive hurdle to overcome.
Lewis sees a solution in the form of rental assistance programs. While he expects the process to be chaotic and complicated, billions of dollars in government spending should displace some of the deadlocked bubbles of unpaid rent. If the federal government can shoulder the brunt when tenants get back on their feet, then Mortgage professionals can step in and help landlords pay bills through balloon payment programs.
If these bailouts don’t come, and the countless Americans who are paying the rent back are displaced, they could get carried away a rapidly accelerating affordability crisis. Lewis believes this could be “disastrous” for millions of Americans who have been suddenly evicted from their homes and cannot afford rent. Even so, Lewis hopes for the federal government’s apparent reluctance to allow this to happen.
“I have hope because I’m just a classic belief in throwing money on the problem after a disaster,” said Lewis. “I understand that a lot of people disagree with this, but when you have a disaster of this magnitude, it’s okay to throw money on it and worry less about the effects later.”