Around 750,000 Households Face Eviction in 2021 Following Moratorium Ban: Goldman Sachs
Goldman Sachs economists predict that some 750,000 renter households are likely to lose their homes this year following the Supreme Court’s decision to block the federal eviction moratorium and the slow pace of emergency rental aid delivery.
Basing their prediction on rent delinquency data from real estate companies, federal agencies, and the National Multifamily Housing Council (NMHC), a trade and advocacy group for the apartment industry, Goldman analysts disclosed their prediction in a report released Sunday. It estimates that between 2.5 million and 3.5 million U.S. households are behind on their rent and, when the eviction moratorium expires at the beginning of October, between 1 million and 2 million households will face a higher risk of eviction.
“The strength of the housing and rental market suggests landlords will try to evict tenants who are delinquent on rent unless they obtain federal assistance,” the Goldman analysts said. “And evictions could be particularly pronounced in cities hardest hit by the [pandemic crisis], since apartment markets are actually tighter in those cities.”
The U.S. Supreme Court on Aug. 26 blocked the eviction moratorium enacted by the Centers for Disease Control and Prevention (CDC), opening the door for property owners to evict residents behind on rent. The ruling came after the CDC on Aug. 3 issued a federal moratorium for 60 days, expiring on Oct. 3.
Following the Supreme Court ruling, the NMHC issued a statement saying it agrees with the decision. While the trade group said that it supported a voluntary, short-term halt to evictions to help families struggling amid the pandemic, it argued that a “long-term eviction moratorium was never the right policy.”
“It does nothing to speed the delivery of real solutions for America’s renters and ignores the unsustainable and unfair economic burden placed on millions of housing providers, jeopardizing their financial stability and threatening the loss of affordable housing stock nationwide,” NMHC said in a statement.
At the same time, federal rent assistance has been slow to reach vulnerable households. Last year’s pandemic relief legislation established the Emergency Rental Assistance (ERA) program with $25 billion in funding (pdf), while the American Rescue Plan Act in March provided another $21.5 billion in rental assistance (pdf) in what’s known as ERA2. But disbursement of aid has been slow, driven chiefly by application processing delays, according to the U.S. Department of Treasury.
Treasury said in an Aug. 25 release that state and local programs have, as of July 31, spent around $5.1 billion of the $25 billion under the ERA to help vulnerable renters. While the use of ERA2 funds was not included in the Treasury’s reporting, the National Association of Home Builders estimated that, of the total $46.5 billion Congress appropriated under ERA and ERA2, less than $6 billion has been spent to date.
While Treasury noted that grantees have had access to around 40 percent of their allotted ERA2 funds since May and that some of them were using up their remaining ERA funds and were transitioning to ERA2, the slow pace of aid disbursement overall risks these funds becoming reallocated.
“Too many grantees have yet to demonstrate sufficient progress in getting assistance to struggling tenants and landlords,” Treasury noted in the release. “After September, programs that are unwilling or unable to deliver assistance quickly will be at risk of having their rental assistance funding reallocated to effective programs in other high-need areas.”
With a view to boosting the pace of emergency rental aid disbursement, Treasury announces a number of additional policies designed to streamline the application process. At the same time, Treasury Secretary Janet Yellen, Housing and Urban Development Secretary Marcia Fudge, and Attorney General Merrick Garland sent a letter to state and local governments on Aug. 27, urging officials to enact their own eviction bans.
“Our bottom line is this: No one should be evicted before they have the chance to apply for rental assistance, and no eviction should move forward until that application has been processed,” they wrote.