Biden Extends Eviction Moratorium As Industry Begs for More Help

As part of his first wave of executive orders President Joe Biden has extended the federal eviction moratorium until the end of March.

The moratorium began in September under authority of the Centers for Disease Control in an effort to stop the spread of COVID-19. It was set to expire on December 31, 2020, but was extended by Congress for an additional month.

Biden’s order was called “prompt and well-intended” by industry associations, which also highlighted their concerns about the moratoriums as they do not address underlying financial distress and are still leaving households accumulating huge amounts of debt. 

The National Multifamily Housing Council and the National Apartment Association also noted that while President Biden’s recently announced relief proposal includes an additional $25 billion in rental assistance,  it also has a nine-month eviction moratorium, which do not fully address the $70 billion in outstanding debt nor accruing debt moving forward. “The industry simply cannot continue operation under these policies without disastrous harm to housing affordability,” the two associations said in a joint statement. 

Putting aside Biden’s relief proposal, the most recent round of government stimulus created a $25 billion renters assistance fund that many experts said was not enough to address the shortfall in rental payments. A recent Zillow analysis predicts that the additional stimulus payments will bring typical rent burdens to about half of renters’ income (down from 80%), but even with that assistance, it may be difficult to catch up completely. Moody’s Analytics estimates that nearly 12 million renters will owe an average of around $6,000 in back rent and utilities by this month. 

In short, deferred or back rent owed far exceeds the $25 billion the legislation provides, and mom-and-pop or smaller landlords are feeling the most pain as larger apartment companies may be better positioned to access stimulus funds.

Renters are also likely to continue to struggle even as the stimulus rolls out. 

“Even though supplemental assistance has resumed, there are financial wounds to heal from the three-month period when some renters were sending more than 80% of their unemployment benefits out the door on the first of the month,” said Chris Glynn, senior economist at Zillow in a statement.

Thirty percent of tenants did not make their January rent payment on time, according to Apartment List data, and the burden of rental debt is disproportionately impacting younger and poor renters, renters of color and those receiving government benefits. What’s more, at least 3 million renters who lost their jobs in March were still out of work in November, and more than a million of those are in the particularly hard-hit hotel and food services industries.

“Additional financial support is urgently needed to prevent displacement, stabilize millions of Americans who continue to struggle under the weight of COVID-19 financial impacts and ensure rental housing providers can continue operations and keep their residents stably housed,” NMHC and NAA said.