American Bar Association President Patricia Lee Refo sent a letter on Sept. 5 to House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, House Minority Leader Kevin McCarthy, and Senate Minority Leader Chuck Schumer asking them to address the devastating problems the pandemic has caused for the rental real estate market. Refo renewed the ABA’s call for immediate action to extend the congressional moratorium on evictions and to provide rental and mortgage assistance to renters and property owners to cover missed payments during the pandemic.
In the letter, Refo explained that a recent evictions moratorium implemented by the Centers for Disease Control and Prevention (CDC) would only remain in effect until Dec. 31. That moratorium would further require landlords to shoulder significant financial expenses during the time they would not receive rent revenue from families unable to pay. Failure by Congress to act could lead to a sharp spike in unemployment and homelessness, as well as extreme demands on community health and housing services. Early estimates indicate that approximately $100 billion in federal rental assistance is needed to prevent housing instability.
“The CDC’s eviction moratorium is a necessary measure that provides critical relief from the threat of eviction for adults and children across the country and will help control the spread of COVID-19,” Refo said. “However, the moratorium is only a temporary and incomplete remedy. Federal rental assistance also is necessary to address the mounting rental debt and landlord expenses.”
It is estimated that 30 million to 40 million people (29%-43% of renter households) could be at risk of eviction for nonpayment of rent due to COVID-19 related job and wage loss. As the country works to contain and recover from the pandemic, housing stability is of paramount importance.
The letter warns that the steep decline in rent payments places property owners in financial peril and will have a devastating impact, especially among small property owners who lack the financial ability to sustain short and long-term nonpayment of rent. Individual investors own approximately 22.7 million out of 48.5 million rental units in the housing market. These “mom and pop” landlords primarily own single-family rentals and small apartment properties. More than half (58%) of small rental property owners lack access to credit to cover emergencies, such as lost rent payments.
Refo points out that supporters of this action include 32 national housing advocacy organizations, 40 local mayors and government officials, as well as the National Apartment Association, National Association of Home Builders, National Association of Realtors, and many other stakeholders. The letter stresses the need for Congress to prioritize and promote housing stability because the need is urgent, and relief is needed now.