The consequences of COVID-19 on the housing crisis has been evasive. State governments have taken the initiative to implement moratoriums on landlord evictions. Congressional members are deciding what type of relief aid to provide to the American people. So far, the CARES Act introduced 12 months of forbearances for federal-backed mortgage payments on single-family homes and compounds.

If you live in a home backed by Fannie Mae or Freddie Mac, you can receive a deferment on your housing payments. But for millions of American citizens, not everyone lives in a property backed by the federal government. Relief aid is needed soon, or over 44 million Americans could lose their homes to foreclosure or eviction.
 

Congressional Proposals

While it is favorable that many local governments have stepped up their response to place moratoriums on rent arrears, Congress realizes that this original form of aid will not be enough to provide substantial relief to the American public for the next several months. Landlords or mortgage holders will seek assistance through the courts, and evictions and foreclosures will proceed with limited fanfare.

According to the Urban Institute of Housing Research, "Without additional rent relief or flexible cash assistance, moratoria could reduce COVID-19 transmission risks today but create an eviction tsunami later."
 

Ilhan Omar, Democrat from Minnesota

In 2008, Congress put together a bailout package for the nation's banks and mortgage entities. Omar suggested that it is now time to bail out Main Street. Executives on Wall Street have access to real-time capital, or they can easily raise funds through the bond markets.

Omar has proposed a bill that would cancel rent and mortgage payments on primary residences for the American people for one year. There would not be any income restrictions. Landlords and lienholders would recover their losses from The Rental Property Relief fund that would be established by the Department of Housing and Urban Development.
 

The Joint Center for Housing Studies

The Joint Center for Housing Studies at Harvard University suggests that renters are financially less viable and more vulnerable than property owners. Without government assistance, renters could be facing an onslaught of legal evictions once the moratoriums are lifted and the general public returns to life with some kind of normalcy.

According to the JCHS, the financial rule is for renters to spend no more than 30% of their pre-tax income on housing. Rather, more than half of all renters spend close to 50% of their income on housing costs, which includes utilities like water, gas, and electricity. This puts many renters in situation of being in dire financial straits if there is any type of decrease in income.
 

The National Multifamily Housing Council

The National Multifamily Housing Council conducted a national survey to understand how many renters paid their landlords for April's rent. According to the survey, 89% of residents made full or partial rent payments by April 19, which is down 4% from April 2019. Even though this decrease is a minor drop in percentage rates for rents paid, it could be just the beginning of what is to come.

"If the economy isn't recovering and people aren't back to employment, we will see more nonpayment, and something will have to be done. The federal government is likely going to have to provide some sort of housing package," said Matthew Murphy from the NYU Furman Center.
 

Experts Recommend Several Forms of National Relief

Mary Cunningham, from the Metropolitan Housing and Communities at the Urban Institute believes that simply canceling rent is not enough. Everyone throughout the community is interconnected. Landlords collect rent and pay property taxes. In turn, the paid property taxes go to pay for community improvements, schools, and libraries. The rent should not just be canceled. Cunningham suggests that Congress should give the money to the renters so that they can pay their rents.

Accordingly, Cunningham went on to suggest that the current housing programs should be propped up with additional federal funding, like, for example, the national funded Housing Choice Voucher Program. The government would give individual renters vouchers to pay their rents.

Congress could update the housing requirements to include more people with higher incomes, instead of just covering the current individuals who have low incomes. This type of program was implemented during the Hurricane Katrina disaster.

Currently, the state governments have offered temporary rental relief. For Arizona, evictions may proceed July 24, and June 4 for Washington state. Whatever the legislature decides, a more permanent form of rental assistance should be available to the nation to prevent a relapse of COVID-19 and another subsequent housing crisis.