One year ago, then President Trump, through the CDC, issued a moratorium on tenant evictions for non-payment of rent due to the COVID crisis. The moratorium was initially set to expire in December 2020 but was extended through July 31, 2021.
In New York State, Governor Cuomo extended the state-wide eviction ban through August 31, 2021. So, for us, the eviction ban is still in effect for the next 30 days (at least).
As of the date of this article (August 1, 2021), the U.S. Congress has not taken action to extend the Federal moratorium. It seems clear (as much as anything in this scenario can be clear) that the CDC moratorium is over. Why? The Federal courts (including the Supreme Court) have ruled and/or indicated through rulings that the CDC eviction ban will not survive a constitutional test. If the Feds are going to extend the ban, then Congress will have to act through legislation.
I’ve written extensively on this topic over the past year because I know that this subject is important to landlords and tenants. Let’s synthesize this complex and controversial subject down to its core and talk about what happens next.
There is a helpful database out there you should be aware of – The National Equity Atlas. Perhaps more than any database I’ve seen, this Atlas provides the number crunching we need to analyze what’s going on with evictions and unpaid rent. Please explore the national and regional data available here, but I will focus on Westchester County and New York State.
In New York State, there are 831,000 households behind on their rent. The estimated total amount of back rent owed is $3.2 billion, or $4,000 per household. In Westchester County, 31,402 households are behind on their rent payments, the sixth-highest total of all New York counties. Estimated county-wide unpaid rent is 151 million dollars, the fifth-highest total of all New York counties and the highest total for any non-NYC area county.
The Federal government has already allocated 47 billion dollars to handle the unpaid rent crisis. A reliable estimate (and some think this number is low) is that 6.3 million households are behind on rent and owe landlords over $21 billion. If the estimated $21 billion in unpaid rent is low by as much as 100%, then Congress has still allocated more than enough funds to extinguish all of this back rent nationwide.
So, you ask, what’s the problem? The Feds step in and pay the back rent bill, the economy is back on track, people pay their rent, life returns to normal. Unfortunately, that’s not what happening.
Congress chose to allocate the $47 billion to states and localities that must set up the systems required to distribute these funds. As of August 1, only 10% (and that might be generous) of this money has been paid to tenants and landlords to extinguish unpaid rent. In fact, the main reason why the CDC moratorium was extended earlier this summer was to give states and local jurisdictions time to get the money to where it’s supposed to go.
It was not until June 1 that New York State set up an agency to process unpaid rent claims using the $2.7 billion set aside to cover this crisis. Tenants can request relief through ERAP. When approved, ERAP covers up to one year of unpaid rent and utilities in payments made directly to the landlord.
Okay, deep breath now. How much money has N.Y. State ERAP distributed to New York tenants and landlords in distress? An article from City Limits on July 15 said this:
With seven weeks to go before state eviction protections expire, New York’s Emergency Rental Assistance Program (ERAP) has yet to cut a single check, and the organizations tasked with helping tenants say they’re hamstrung by inefficiencies as they work to help thousands submit their required forms.
This mess is already a crisis for the tenants facing eviction and the landlords stuck with mountains of unpaid rent, but it could worsen. Only a handful of states (like New York) have their own eviction moratoriums. For residents of other states, like Florida and Texas, Monday, August 2, will witness a cascade of new eviction filings. Courts in many jurisdictions will simply be overwhelmed.
Will Congress step up and pass a national eviction moratorium? Should they? Will states, like New York, get their bureaucratic act together and distribute the money already allocated to handle this problem? You tell me, and we will both know.
This problem was initially created by lockdowns to battle the COVID pandemic. Regardless of your view about the efficacy of lockdowns, what is certain is that neither landlords nor tenants had anything to do with it. We were simply caught up in a national nightmare.
It’s time for our Federal and State governments to do what must be done. Get relief to the right people now. Do everything we can to help those in need, and that includes landlords. Restore rental market normalcy and stability.
The only thing I’m sure of is this – the convoluted mess we are living through now is unsustainable.
At Sterling Property Solutions, we have a team in place that can answer all your questions and address any challenges. Please give me a ring at 914-355-3277 or send me an email at Linda@Sterlingpsi.com.