Rental Housing Providers Need Immediate Relief
Given that 33 million workers applied for unemployment benefits since the first week of May, the apartment industry anticipates that a significant number of their residents will be affected. Moreover, as the crisis continues and renters’ savings are depleted, these ongoing challenges will interfere with renters’ ability to pay their rent, which could have cascading effects not only on the rental housing system, but state and local governments and the broader economy.
At the same time, rental housing providers are gravely concerned about their ability to keep up with their financial responsibilities. Owners and operators rely on rental income to pay employee payroll, mortgages, taxes, insurance and, importantly, use these funds to maintain continuity of essential services for apartment communities as many renters must shelter in place.
We urge Congress to take steps as part of the next phase of COVID-19 legislation to protect renters, housing providers and the stability of the nation’s rental housing stock. Congress must consider the substantial consequences of the HEROES Act on the affordability and availability of housing and impacts on communities across the country:
- Create an emergency rental assistance program for those who are impacted by the COVID-19 crisis and struggle to cover housing expenses.
- An emergency rental assistance program would provide temporary support to enable the renters to focus their limited resources on food, healthcare and other essentials.
- The Emergency Solutions Grant (ESG) Program should not be used as the primary delivery system for rental housing assistance in the next phase of Congress' COVID-19 relief because it is geared towards assisting homeless shelters and at-risk populations - not the tens of millions of renter households that may need assistance due to the COVID-19 crisis.
- The creation of income limitations to qualify for emergency rental assistance could exclude middle-income renters who are experiencing a loss or reduction of income, due to COVID-19, and require temporary, short-term rental assistance to make ends meet.
- Congress should:
- Look to lessons learned from past disaster relief efforts, where housing agencies worked with residents and owners to ensure rent payments go directly to the property.
- Utilize multiple federal programs through HUD and take advantage of the implementation infrastructure of these existing rental assistance platforms.
- Allow existing programs to be modified to waive many of the current statutory and regulatory requirements and adjust for the temporary nature of the assistance, urgency and the realities of working in a shelter in place environment.
- Better tailor the CARES Act eviction moratorium provision and safeguard owners’ ability to effectively manage their communities.
- The financial implications of a prolonged, blanket eviction moratorium would be catastrophic.
- Our industry understands the importance of housing stability and the benefits of minimizing displacement during this crisis, yet we believe any limitations on evictions must be narrowly tailored to give all sides a better chance at surviving these difficult times.
- We urge Congress to:
- Limit the moratorium to those negatively impacted by COVID-19.
- Reaffirm that properties with a federally backed mortgage from USDA, VA, HUD, Fannie Mae or Freddie Mac or dwellings that receive federal assistance or benefit from HUD’s housing programs must comply, as Congress intended.
- Strengthen the language to emphasize housing providers maintain the ability to issue notices to vacate in cases of criminal activity or other urgent concerns.
- Clarify “notice to vacate” requirements should conform to existing state and local eviction law and court processes. Including recently enacted COVID-19 related mandates, renter protections are robust and are already embedded in state and local requirements to prevent the immediate removal of a tenant.
- Allow more housing providers access to mortgage forbearance and ensure fairness and flexibility in its terms.
- Congress should:
- Provide borrowers who request forbearance with greater flexibility in repayment schedules; for example, give borrowers the option of modifying loans to add the balance accrued during forbearance to the mortgage amount.
- Expand forbearance to cover other property-level financial obligations.
- Target the protections of the eviction moratorium be afforded to those negatively impacted by COVID-19.
- Affirm that necessary evictions can move forward.
- Congress should:
- Expand the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) to include all multifamily businesses.
- Property management companies operate across multiple locations and provide essential services for the millions of Americans living in rental housing. Expanded access to the PPP will allow them to maintain a high level of service, consistency and care for residents.
- Congress must:
- Ensure that residential property management firms are eligible as borrowers under the provision granting waivers for businesses with 500 employees or more working across more than one physical location.
- Compel the SBA to reverse its decision in the Interim Final Rule denying PPP eligibility to residential developer and owner firms.