The United States has never seen the scale of potential housing displacement that families are facing right now. The country needs an immediate, unprecedented federal housing relief plan—with rental assistance, foreclosure protection and housing aid to state/local governments—to keep families in their homes and protect communities from deep and lasting economic scars.
The COVID-19 housing cliff that so many have warned of is here. In fact, we all just stepped off of it.
July is the beginning of what is likely to be a painful reckoning, as more than 20 million Americans face eviction this summer, with a disparate impact on African-American and Latinx families. Many of the measures that protected people in the early months of the pandemic, like increased unemployment insurance, are expiring. One of every five Americans in renter households could lose their homes as a result, and that doesn’t even begin to count homeowners at risk for foreclosure. In the face of ongoing job and income loss, hard-hit households are simply out of options.
All of this is especially worrisome for families and communities that were already economically vulnerable. Back in May, LISC laid out several policy recommendations that could help mitigate what nearly everyone in community development could see coming, from increased funding for the HOME program to expanded rental assistance to capacity-building for nonprofit developers.
Some of those measures are included in the HEROES Act, passed by the House of Representatives eight weeks ago and still awaiting Senate action. With time passing, the threat has become even more urgent; it is clear that nothing short of a massive federal intervention, with rent subsidies, mortgage assistance and foreclosure protection that extend well into 2021, will be sufficient.
This would be one of the largest undertakings of its kind because the United States has never faced this scale of immediate housing displacement—and that includes the housing collapse that led to the last recession. Stop-gap measures like forbearance will no longer suffice, not when so many people live paycheck to paycheck even in a strong economy. Families will not have the capacity to pay a backlog of rent or mortgage payments once back at work, and the crisis will continue to spiral.
Certainly, state and local governments are working alongside private and nonprofit capital providers to address some of these challenges. The New York Forward Loan Fund, for instance, includes small landlords among the businessowners and nonprofits that are eligible for relief and recovery loans (full disclosure: LISC manages the fund). It means those owners can pay their bills, even if their residents can’t pay the rent right now, which will help avoid mass evictions. In Houston, LISC is working with a consortium of public officials and local stakeholders to identify legal and financial options to protect distressed renters and landlords. Many other housing-related organizations are driving similar efforts across the country.
But, we have to be realistic: on their own, these measures will not be anywhere near enough. Even the most promising ideas need significant capital behind them, and local leaders—both urban and rural—do not have the resources to finance widespread relief, not when they too have been hit hard by economic loss. It will take bold federal action, which should include housing aid for state and local governments, to meet the scale of this challenge.
The alternative is almost unthinkable…and yet looming. Mass evictions will spread poverty and debt among millions of people. There will be major trauma to families, increased homelessness, destabilized local economies, and a ripple effect that impacts everything from schools to health to community safety and neighborhood businesses.
ABOUT THE AUTHOR
Denise Scott, Executive Vice President for Programs
With three decades of experience in community development, Ms. Scott leads LISC’s neighborhood investment efforts in 35 cities and hundreds of rural communities across the country. She previously managed LISC’s flagship program in New York City, focusing on affordable housing, commercial corridors, education, health, and jobs in some of the city’s toughest neighborhoods.