Needs of Millions Grow During the Pandemic - Time is Running Out

Nov 18, 2022 7 min read
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For millions of Americans impacted by COVID-19 and dependent on subsidies for housing and income, time has run out. With the Federal Eviction Protection Program ending July 24th, followed by the expiration of the federally backed enhanced unemployment benefits on July 31st, the massive impact this will have on the US economy is unparalleled. Furthermore, the shockwave this will send through the millions of lives impacted will cause an extensive fallout on our nation's health, safety and well-being for years to come. 

What does this mean for evictions, unemployment benefits and consumer debt in the immediate future? There is a lot of news on these topics, as well as impacting legislation in process--so let’s break this down: 

Federal protection for renters 

As discussed, the federal moratorium shielding renters from eviction since last March expires Friday July 24th, even as skyrocketing COVID-19 infection rates halt most state-by-state reopening efforts. The federal moratorium only covers renters living in homes with federally backed mortgages, an estimate by the Urban Institute to be around 12.3 million households. (30%  of all renters in the U.S.) After the federal moratorium lapses on Friday, landlords can proceed in the process to evict delinquent tenants or ask them to immediately come up with months of unpaid rent. If you’re a renter affected by this, please visit the Consumer Financial Protection Bureau’s protection for renters resource for more information. 

How states are dealing with evictions and rent

Early on in the pandemic, most state governments took it upon themselves to enact state-wide eviction bans. With several of those eviction moratoriums expired or lapsing soon, some states such as California, New York and Florida have extended rent protections due to the ongoing rise of COVID-19 cases. However, other states such as Texas and Wisconsin have let their eviction protections lapse. In Milwaukee, Wisconsin eviction rates have jumped by over 40%

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In other states, they’ve passed their own rental assistance funding programs. 

After just four days, Louisiana had to shut down their  $24 million program aimed to help residents pay their rent. The program had expected to benefit approximately 10,000 residents by providing up to three months of direct payments to landlords of eligible tenants, but was hit with four times as many applications seeking aid amid the continued economic fallout from the coronavirus pandemic.  

Nevada is currently accepting applications (run, don’t walk)  by providing $30 million in support using Coronavirus Relief Funds authorized under the CARES Act. Their state program also provides additional support to the existing $30 million in rental assistance which has already been allocated. 

Many housing experts agree this will undoubtedly put more pressure on struggling renters already scraping by. If you’re in need of further help, consult a lawyer to fully understand your rights in your state by locating the nearest Legal Aid office here. Legal Aid provides attorneys free of charge to qualified clients who need help with civil matters, including evictions. 

Congress is running out of time

With the Senate back in heated session, legislators in Washington are discussing the details of the next bill, and if that will include rent protections or eviction stays. What does this mean right now? Currently, federal eviction protections past July 31st are unknown as millions wait on bated breath for vital legislation to pass. 

While Treasury Secretary Steven Mnuchin has indicated passing a second stimulus bill sometime between July 20 and the 31 would be top priority, Congress has only until August 7th before both chambers recess for an entire month. With re-election on the mind of many Republicans and Democrats, they remain divided on a number of key issues including extending the federal unemployment enhancement, reopening schools and housing assistance, to name a few. According to a recent article on covering a series of topics titled the Coronavirus Crisis, the aggressive deadline of August 7th “puts pressure on Republicans in Congress and the White House to agree on their demands so that bipartisan negotiations can begin in earnest. Republicans have not released a detailed list of their demands, but McConnell has ruled out a large spending package such as the roughly $2.5 trillion CARES Act that passed in March. He is expected to unveil the Senate GOP proposal this week that is estimated to cost around $1 trillion.”

What efforts are underway to extend federal unemployment benefits?

More than 51 million people nationwide have filed for unemployment since the beginning of mandates to shelter-in-place. Unemployment benefits vary by state, ranging from $235 and $1,220 per week in assistance depending on where you live. Meaning, the additional $300 to $600 per week in Federal Pandemic Unemployment Compensation has been a major lifeline in many people's financial stability--especially in those states with the lowest unemployment compensation. However, unless leaders in Washington can agree and act soon, that financial stability will disappear on July 31st. Worse yet, some will see those funds go away a few days before the end of the month. 

While The Heroes Act was passed by the House of Representatives in May, it did not pass in the Senate. Meanwhile, Congressional Democrats continue to push for an extension of unemployment benefits with the proposal of The Worker Relief and Security Act proposed by Democrats Sen. Michael Bennet, Sen. Jack Reed and Rep. Don Beyer. This legislation would extend unemployment benefits until the state of emergency for COVID-19 is officially declared over, with benefits continuing for another 30 days after before expiring. For those still on unemployment, they would receive tapered down weekly funds, depending on the state’s unemployment rate. 

It’s important to note, even if Congress does come to an agreement to extend the aid before July 31, it will take two to four weeks for states to reinstate the benefits according to the Economic Policy Institute, undoubtedly sealing the fate that a lapse is inevitable.

What happens on July 31 if federal unemployment assistance is not passed?

Check with your state and local unemployment websites. If you are still eligible for unemployment benefits you will continue to receive them from your state without the additional $600 weekly federal assistance. 

A significant change in consumer spending habits

If you’re unemployed and finding it difficult to make ends meet, that extends to credit card debt. People are earning less and have a lower sense of job security, leaving little room for discretionary spending. In return, banks, retailers and credit card companies have been  reducing their exposure by tightening their lending standards and extending relief to customers such as pausing payments, reducing or forgiving late fees and eliminating interest charges. In most cases, lenders are doing this to avoid larger problems down the road. This assistance is not included in any government legislation so it’s best to contact your individual lenders directly. 

Look to local resources for more assistance

As a large majority of the nation waits for leaders in Washington to come to agreement on a second COVID-19 related stimulus package, the impact of these expiring moratoriums has already been set into motion. As this will undoubtedly place more strain on those most severely impacted, resources available on the local level are becoming more imperative. Tenants facing eviction are encouraged to contact an attorney and review their rights according to their local housing regulations. As for the immediate future, state and local leaders will be expected to carry most of the heavy lifting in creating additional emergency assistance programs as the pandemic continues to maintain a firm grasp on the health and financial stability of millions of Americans.   

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