The Rental Eviction Tsunami

In the coming days, the federal unemployment subsidy will expire. The subsidy provides $600 a week in unemployment benefits to workers impacted by the pandemic. The federal eviction moratorium will also be ending. Both are scheduled to end this week. Congress is now considering two competing stimulus packages with the House Democrats pushing a $3.5 trillion package and the Senate Republicans wanting a $1 trillion package. The White House, meanwhile, wants a payroll tax cut. With the legislatures so far apart on the next stimulus package it will be difficult for them to come together before time runs out. Likely, they will issue another stimulus package without providing a long-term solution to the looming eviction crisis.

The Trump Administration wants a payroll tax cut. Currently, the payroll tax is 15.3%, equally paid for by the employee and the company that pays them. Trump’s payroll tax would give employees an additional 7.65% on their paychecks. Companies will also see a reduction on their payroll costs by 7.65%. The payroll tax is what funds Medicare and Social Security.

However, a payroll tax cut will only benefit those that are currently working. It will not benefit those on unemployment. Companies will also not have an incentive to add more workers to their payrolls.

Another demand for the new stimulus package is another moratorium on evictions. However, the apartments owners are arguing that instead of another moratorium on evictions, Congress should instead provide a rental assistance package. The apartment owners are arguing that a moratorium will only exacerbate the problem because renters will eventually be forced to make up the rent payments, they are behind on. The apartment operators add that the lack of rent payments makes it difficult for them to meet payroll and make mortgage payments on their rental properties.

A rent payment assistance program will keep residents in their homes and allow the owners to meet their own obligations, according to the National Apartment Association.

The National Apartment Association is reporting an 8 percent drop in rent payments during the last two months. According to the Urban Institute, about 12.3 million households, “or about 30 percent of all renters nationwide,” qualified for the federal moratorium.

If the rental moratorium is allowed to lapse at the end of July, landlords can begin issuing 30-day eviction notices and begin to evict renters by the end of August.

The House has passed a $100 billion rental package that would ban evictions for a year and give tenants 18 months to make up rental payments. However, the Senate package does not seem to include any rental assistance, although the final package is not yet available.

Tracking evictions rates across jurisdictions are difficult because each jurisdiction maintains its own set of rules, laws and datasets about evictions. However, Princeton University has launched the Eviction Lab, a dashboard (link) tracking eviction nationally. However, their data currently has historical data from 2016 and current data is limited to a handful of cities.

Without a rental assistance package, the housing crisis in the nation will be the worst ever.

Don't hold back, you know you want to comment, go for it!

This site uses Akismet to reduce spam. Learn how your comment data is processed.