As the cliché goes, “2020 was an unprecedented year.” The COVID-19 pandemic seemingly overnight knocked the nation’s economy to its knees and marched the health care system to the edge of an abyss where we continue to teeter. The virus took on average 906 lives each and every day and started a culture war over an individual’s right to ignore public health guidelines. For housing providers, who immediately had to grapple with operational challenges and adaptation to new COVID-19 safety regulations, the pandemic and its economic devastation broke the most important link in the housing ecosystem chain of events – the timely payment of rent.
Despite a bipartisan, rapid response at the outset of the pandemic, Congress and the Administration remained deadlocked for most of the year, taking nine months to finally reach an agreement on additional, much-needed support in December 2020. To be sure, in many ways we all would like to forget 2020 ever happened and move on to a hopefully better 2021. Yet, it is important to do some reflection on the advocacy front, where the battles were lost and won to protect the industry from the ongoing effects of the pandemic. Follow along the timeline as we revisit NAA’s COVID-19 federal advocacy to date.
National Emergency and Congress’ First Response
On March 13, 2020, the last day of the NAA Advocate Conference in Washington, D.C., the President declared the COVID-19 outbreak a national emergency. What followed in the next two weeks was a rapid succession of legislating by the Congress. By March 27, three bills totaling $2.1 trillion were passed in quick succession: the Coronavirus Preparedness and Response Supplemental Appropriations Act, the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The common thread of these bills was allocating resources to fight the virus, helping businesses survive the economic displacement and supporting impacted individuals and families. NAA added its voice and that of the apartment industry to these first deliberations, stressing the importance of assistance for rental housing providers and renters alike, and we worked quickly to ensure that compliance resources were made available to support the industry as they operationalized these new requirements.
These bills were of mixed benefit. On the positive side, the “boost” of federal unemployment benefits and individual “recovery rebate” checks would prove critical for partial or complete rent payments. Also, substantial allocations of federal grant funding for state and local governments would eventually be used to support rental assistance programs. Even with some challenges with program requirements implemented by states and localities, these resources helped housing providers fill growing gaps in rental income.
Expanded mortgage forbearance options for housing providers with federally backed loans and temporary business loans through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) were on their face helpful. Unfortunately, both would prove only marginally beneficial as time went on, as the latter excluded segments of the multifamily industry from eligibility.
Of most concern, the CARES Act imposed an eviction moratorium for residents at properties with federally-backed mortgages or that receive funding from federal housing programs, regardless of actual impact from the pandemic and without any other guardrails. The legislation also failed to set aside dedicated emergency rental assistance funding, a crucial federal resource that NAA and many other housing groups urged Congress to deploy. Ultimately, not being able to agree on the right structure to deploy rental assistance, Congress opted for direct payments to individuals.
Quick Lessons Learned and Leaning into Advocacy
From the passage of the CARES Act going forward, NAA’s advocacy efforts would ramp up dramatically and were defined by two factors. First, we learned more about how the pandemic and economic instability was truly impacting our members and what they really needed to survive the crisis and ensure industry viability in the long-term. We would learn that using programs like mortgage forbearance or PPP loans to fill the hole left by unpaid rent were at best weak band-aids and that the only true way to address the crisis was rental assistance. Only financial assistance could stabilize renters experiencing financial challenges and provide quick relief directly to struggling housing providers who needed help to cover their expenses in light of rental payment shortfalls. Second, we quickly saw the direct impact of eviction moratoria on industry operations. Housing providers, especially small firms, were steadily draining reserves and even personal savings to keep their businesses afloat. They could not be asked to carry the burden of the pandemic alone. Funding robust rental assistance and ending eviction moratoria would form the core of our efforts going forward.
The House Acts: A Very Mixed Bag
As NAA and the apartment industry bombarded Congress almost nonstop from April through October (nearly 75,000 letters were sent over this period), partisan fighting stopped any real negotiating by policymakers, even as NAA continued to educate them on the need for rental assistance and further relief for the rental housing industry and the dire consequences of continued extensions of the federal eviction moratorium. Lost was the unified voice that had marked Congress’ initial legislating in March.
In May, House Democrats passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, a massive $3.4 billion COVID relief bill that left no aspect of the crisis untouched or unfunded but also included numerous items unrelated to COVID-19 that were guaranteed to be nonstarters for Republicans. For rental housing, the bill provided for $100 billion in emergency rental assistance, albeit through a distribution system of concern. On the other hand, the HEROES Act also imposed a 12-month eviction moratorium for virtually all rental housing, continued restrictions on consumer reporting and placed significant limitations on the debt collection process, which would leave the heavy burden of the financial impacts on COVID-19 solely on housing providers.
Senate Republicans, on the other hand, stuck to a very narrow band of proposals costing around $500 billion, but could never actually pass a bill. And while the Administration attempted to negotiate a compromise, it became clear over the summer than neither side could or would get to a deal and that the politics of the fall elections were becoming too much of a distraction. Throughout the wax and wane of negotiations, apartment advocates sent nearly 75,000 letters to Congress to continue to ensure that our industry’s voice was heard and housing remained an important part of the COVID-19 relief discussions.
When the pandemic started, the narrative was framed to suggest an intrinsic link between housing and health and to protect vulnerable populations of renters through emergency action at any cost. The view seemed to be that housing providers could absorb any lost rent. NAA was quick to respond to the inaccuracies being perpetuated that rent needs only cover mortgage payments, and housing providers had no other expenses with which to contend. That narrative slowly shifted over the summer. Now, the needs of housing providers and their residents are tied together as a result of NAA’s advocacy and thousands of advocates speaking to policymakers in one voice.
“Eviction Tsunamis” and the CDC
After the CARES Act moratorium ended in July, activists began predicting total calamity in the fall amid what they characterized as a “tsunami” of evictions. Analyses by economists and others raised significant doubts about these claims, but it was ultimately moot as the Trump Administration issued an order from the U.S. Centers for Disease Control (CDC) halting evictions in all rental housing through the end of the year. Industry concerns with the CARES Act moratorium were now exponentially amplified as essentially every housing provider was captured under this umbrella, as opposed to the more tailored restrictions under the CARES Act. While NAA continued its advocacy with Congress and the Administration, we began to pursue legal avenues, joining a lawsuit against the CDC order on behalf of a rental property owner in western Virginia and arguing that the CDC exceeded its authority with its order. It was important to recognize that the agency has no expertise or business delving into housing concerns and to establish a precedent for future moratoria to be deployed for any future emergency. While our immediate request for a temporary injunction against the order was declined, the large case is still pending.
As we engaged in multiple avenues to protect the industry’s interests, we continued to aggressively lobby Congress and the Administration to ensure they understood the consequences of continued extensions of federal eviction moratoria. NAA Chairman Mike Holmes and member Travis Sheets, Vice President and General Counsel at BH Companies, led a meeting with White House officials to emphasize the need for emergency rental assistance, discuss concerns around the CDC eviction requirements and urge them to issue supplemental guidance to make it easier for rental housing providers to operationalize the new policy. Our concerns were heard and, in October, the CDC issued guidance to address many of the industry’s concerns. First, property owners could access the courts during the period of the order, were not required to notify residents of these protections and it was made clear that the validity of residents’ attestations could be challenged in court, thus continuing the courts role as a neutral arbiter. While there continues to be inconsistent enforcement of the order around the country, this development was a step in the right direction.
Election 2020, A New Administration and Congressional Endgame
Finally, the Presidential election came, went and we had a new Administration on the horizon with an entirely different set of goals as it related to housing. Based on their respective campaign platforms for President, we have some sense of the philosophy of President-elect Biden and Vice-President-elect Harris on housing. I believe we can expect their support on efforts to reduce barriers to construction and reforming the Section 8 Housing Choice Voucher (HCV) Program. We will disagree on issues like source of income protection and resident screening. As with any new Administration, NAA has already started discussions with the transition team about our priorities, their objectives and where we can work together.
True to form, Congress only completed their negotiations on a COVID package two days prior to Christmas. But, in classic 2020 style, the President announced shortly after that passage of the bill that he was disappointed in it. It did not have enough in direct stimulus payments to individuals and had too much foreign aid (this was part of the annual federal appropriations package which rode along with the COVID relief legislation and was negotiated between the Administration and Congress). After several days of high drama, the President ultimately relented and signed the legislation.
Of greatest importance to the apartment industry, the COVID bill contains emergency rental assistance in the amount of $25 billion that goes directly to housing providers and is eligible for both future rent and rent arrears. This should be invaluable to owners and operators who have gone many months without rent due to the eviction moratorium, especially small housing providers who are barely hanging on. The current Treasury Department and the transition team for the Biden Administration are now working on guidance for the program, and we expect dollars to start flowing in February.
As in any negotiation, the bill has trade-offs, including a 30-day extension of the CDC order on evictions. While not ideal, this is much shorter than what was originally proposed by the activist community. Any extension is not entirely surprising given the resurgence of spread of COVID-19 and the worsening economic displacement. Our hope is that now that emergency rental assistance is finally flowing, future moratoriums can be avoided.
Celebrate the Tangible and Intangible
The advocacy work by the apartment industry in 2020 culminated in a major victory with the $25 billion emergency rental assistance program. This is a tangible victory. Not so tangible but as important is the power of our grassroots advocates who mobilized every time we asked, even during a pandemic. We must maintain and harness that energy for future battles – and there will be many – when the voice of the industry will be critically needed once again.
Our grassroots mobilization also helped us secure another intangible victory – an acceptance by policymakers the needs of residents and housing providers are on equal footing. That will be extremely important looking ahead to discussions around additional funding to replenish what was lost to housing providers because of the federal eviction moratoria.
The Future is…Different
Washington D.C. has changed dramatically from 2020 to 2021. Most prominent is the Democratic Party’s control of the White House and both chambers of Congress. This will mean a more challenging environment in several areas for the apartment industry but also opportunities for success in others. To be successful in this new environment, NAA must expand our place in the conversation. We have to bring solutions to the nation’s housing challenges, not simply say “NO!” to proposals with which we do not agree. Moreover, we must continue to be an honest broker of information, experience and data for policymakers and their staff.
It is also important to note that there has been an evolution on issues like eviction and housing affordability. These concerns and others like resident screening and ex-offender reentry are now part of larger debates around health care equity and social justice. We fully anticipate a rise in federal, state and local efforts to impact laws in these areas that are adverse to the rental housing community. NAA is devoting substantial, additional resources to support the work of our affiliates in their campaigns around these issues. Taken together with the lessons we have learned and the advocates we recruited to the cause in 2020, NAA is well positioned for success. Every affiliate and member can and should be part of that effort too. Only together can we win.