New Report Estimates Renters Will Owe $34 billion in Past-Due Rent by January

By Brian Skinner, Esq.

In August I wrote that we are in the middle of the most severe housing crisis has ever faced. Even before the COVID-19 pandemic hit, many were suffering from unstable housing and the situation has only worsened.

The current economic recession, coupled with job and wage loss, has magnified and accelerated the existing housing crisis. On September 1, the threat of wide-spread evictions was mitigated when the Centers for Disease Control and Prevention (CDC) and the U.S. Department of Health and Human Services (HHS), issued an order intended to protect tenants who can’t afford to pay rent from eviction. The order came at a time when state and local bans imposed at the beginning of the pandemic were expiring.

However, despite the CDC’s mortarium on evictions, the order does not cancel rent, nor does it prevent landlords from adding late fees or interest for missed payments. Landlords can require the full amount of all missed rent on December 31, 2020.

The National Council of State Housing Agencies released a report this week that finds that households across the U.S. are on track to owe as much as $34 billion in past-due rent by January and up to an estimated 8.4 million of those households, 71% of which have income under $50,000, could be subject to eviction when the CDC order elapses.

The report estimates that as of September 14, 2020 there are between 9.7 million and 14.2 million renter households in the United States that may be unable to pay rent and at risk of eviction. This translates to between approximately 23.3 million and 34.0 million individual renters. Renter households have already accumulated between $12.2 billion and $16.7 billion of shortfall in their owed rent. By January 2021 the rent shortfall for these households will be between $25.1 billion and $34.3 billion.

Given the slow economic recovery, it is reasonable to expect a continuation of elevated unemployment, high rent burden among low-income renter households, continued accumulation of unpaid rent, and continued risk of eviction beyond January 2021.

A new Pew Research Center survey finds that, overall, one-in-four adults have had trouble paying their bills since the coronavirus outbreak started, a third have dipped into savings or retirement accounts to make ends meet, and about one-in-six have borrowed money from friends or family or gotten food from a food bank.

These financial concerns are not felt equally by all Americans. Those in lower-income families are at least about twice as likely as those in upper-income families to say they regularly worry about making ends meet in various ways. For example, 59% of lower-income adults say they worry at least almost every day about paying their bills, compared with 15% of upper-income adults. About half of those in the lower-income tier also say they frequently worry about saving for retirement, debt or health care costs, while about a quarter or less of their upper-income counterparts say the same.

Women, black and Hispanic adults, those younger than 65, and those without bachelor’s degrees are the most likely to report regularly worrying about most of these financial issues.

State housing finance agencies in 33 states have established emergency rental assistance programs since the virus struck. Ohio has two programs in development to provide financial relief for renters who experienced a loss of income resulting from the COVID-19 pandemic and have experienced homelessness or are at risk of losing housing. West Virginia does not appear to have established any programs that specifically provide financial assistance to those renters impacted by the pandemic.

Earlier this year, Gov. Jim Justice indicated that he recognizes the impact on families and the economy itself that a rash of evictions and foreclosures would cause, but he has so far failed to offer any solutions other than a plea that “landlords, and our banks, please give these people a pass for right now. They really, really need it.”

In West Virginia there is a shortage of rental homes affordable and available to extremely low-income households. Approximately 63,376 or 32% of renter households, are considered extremely low income.

To avert a catastrophe, the Governor could call the legislature into special session to enact legislation that not only would curb evictions and foreclosures, but also provide financial relief to renters who will be unable to pay their rent when it comes due.

As I noted in my previous article, this is not a crisis that can be addressed retroactively. Action must be taken now since the cost of inaction is enormous, in both lives and money. The economic impact of the pandemic on renters, landlords, and communities is extraordinarily large. It is imperative to the preservation of families and communities that both the federal government and the states act to ensure everyone has access to affordable housing.

Brian is the former counsel to the West Virginia House of Delegates Judiciary Committee and counsel to the West Virginia Senate Minority Caucus. He was also general counsel to the West Virginia State Health Officer and Commissioner for the Bureau for Public Health. He has almost two-decades of experience as a strategic advisor and chief legal counsel to both executive and legislative branch public officials.