Rental Housing Providers Need Immediate Relief
As more than 44 million Americans have applied for unemployment benefits since mid-March, 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 maintain apartment communities and pay employee payroll, utilities, mortgage payments, insurance premiums and, importantly, property taxes. Nationally, apartments contribute a total of $58 billion in property taxes. Significant shortfalls in rent could affect local governments’ already strained budgets and their ability to pay for essential services, jobs and pensions.
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.
- 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 barriers, adjust for the temporary nature of the assistance, and ensure quick and efficient distribution of funding to renters across the income spectrum who are financially impacted by the crisis and in most need.
- Better tailor the federal eviction moratorium 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, 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:
- Defer to states and localities on eviction moratoria as they are best suited to make decisions in light of eviction law, court processes, and relevant market conditions.
- Further, any extension of the moratorium should be should be predicated on housing providers' acceptance of federal emergency rental assistance funding and limited to those negatively impacted by COVID-1.
- Any continuation of the notice to vacate restrictions must include language that ensures property owners can effectively manage their properties during the crisis.
- Expand the availability of mortgage forbearance protections and align the protections with existing moratoria.
- Congress should:
- Allow housing providers of all multifamily properties to seek forbearance.
- Provide borrowers who request forbearance with greater flexibility in repayment schedules.
- Expand coverage to other property-level financial obligations.
- In no case should an eviction moratorium exceed the covered period for forbearance or be extended to cover the repayment period.
- 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.
- Provide targeted liability protections from COVID-19-related litigation for apartment firms that work to follow applicable public health guidelines in reopening.