President Donald Trump plans to introduce an executive order that will provide an eviction moratorium for renters, meaning that for a specific period of time, landlords won’t be able to evict tenants who don’t pay rent. The order would be effective immediately after being signed by the president until the end of 2020.
Under the moratorium, the Centers for Disease Control and Prevention (CDC) would use its quarantine authority to protect renters from being evicted from their homes, potentially becoming homeless and spreading the novel coronavirus. Some states and cities have implemented their own renter protections during the pandemic, but this moratorium would lay out a nationwide blanket of relief.
The planned executive order is the Trump administration’s attempt to prevent a severe wave of homelessness due to the pandemic. A survey of over 4,000 Americans by Apartment List found nearly one-third of renters missed their July payment. The National Housing Law Project recently estimated that nearly 20-28 million renters could have been evicted by the end of September without intervention by the federal government.
Which Renters Would Receive Protection?
The renters’ moratorium would provide eviction protections for people making $99,000 or less per year, or $198,000 for couples filing jointly. Individuals who received one-time payments, also referred to as stimulus checks, earlier in the year would qualify for the eviction protection.
This Order does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract,” reads a draft from the CDC. “Nothing in this Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract.”
In order to be protected from eviction, renters will have to prove that they’re likely to become homeless if kicked out of their dwellings. However, renters will still be required to pay as much rent as they can afford. Renters would be required to provide a declaration form to their landlord stating they’ve tried to obtain available government assistance for rent or housing, make under the required income thresholds, can’t currently afford their rent and are at risk of homelessness if evicted.
Reports of the new moratorium come just days after the announcement of an extension on eviction protections on federally backed mortgages on single-family homes. This extension was criticized by housing protection advocates who accused the government of neglecting renters.
Secretary Treasury Mnuchin initially floated the moratorium during a testimony before the Select Subcommittee on the Coronavirus Crisis on Tuesday, saying it will significantly help “close to” 40 million renters. Mnuchin added that renter assistance—providing funds directly to people to pay their rent—would have been the administration’s first choice for renter relief, not an eviction moratorium, but added that it remains to be an agreed-upon component of the next stimulus package, as Democrats and Republicans continue to negotiate further relief.
As previously reported by Forbes Advisor, the dilemma of providing rent relief isn’t solved easily. Canceling rent creates disruption in communities and institutions that benefit from state and local government taxes paid by landlords. Eviction moratoriums may delay, not cancel, payments, and have the potential to require lump-sum payments at the end of the forbearance period. If you can’t afford to pay your rent in October, it can be even harder to come up with several months’ worth of rent when the moratorium ends.
Housing experts are already sounding the alarm on the oncoming executive order, stating it doesn’t do enough to protect renters, and further aid will be necessary.
“This action delays but does not prevent evictions,” says Diane Yentel, president and CEO of the National Low Income Housing Coalition. “Congress and the White House must get back to work on negotiations to enact a COVID-19 relief bill with at least $100 billion in emergency rental assistance.”
The Trump administration has made stimulus funds available to help offset the impact of the eviction moratorium on landlords and property owners, as reported by Bloomberg. The executive order is already being seen as an “unprecedented use” of executive authority, and could face legal challenges from landlords whose finances have already been negatively impacted by the pandemic.
The article can also be viewed on line at https://www.forbes.com/sites/advisor/2020/09/01/trumps-new-executive-order-could-temporarily-halt-evictions-for-40-million-renters/#976f9222b686