Democrats should relax owners

Not all owners are slumlord. There are even Democrats who hold leases and collect rents.

Yet homeowners are the perceived enemy as Democrats fret about what to do about ending the federal moratorium on evictions. As of August 1, there is no longer a federal obstacle preventing landlords from evicting tenants who cannot pay their rent. Some states and cities still ban evictions, but that only covers about a third of the country, leaving several million tenants behind on rent newly vulnerable to eviction.

Last year, the Center for Disease Control and Prevention used emergency powers to impose the current moratorium on evictions. But a June 29 Supreme Court ruling said the court would overturn any extension of the moratorium after July 31, unless Congress passes a law making it federal. It would require at least 10 Republican votes in the Senate, to overcome the filibuster, and those votes don’t seem to exist. So Democrats who have narrow majorities in both the House and Senate likely cannot pass a law preventing deportations, and President Biden says he lacks the power to do so through executive action. .

Democrats are now arguing among themselves over who to blame for the expiration of tenant protection, with the usual liberal-moderate split. They have yet to attack the landlords, but it seems inevitable with the ongoing evictions and the media are sure to start highlighting the plight of the newly homeless tenants. Homeowners are not the enemy, however, and lost in politics is the fact that homeowners have their own bills to pay, including mortgages, utilities, and property taxes. If landlords are supposed to provide free housing during recessions, then someone has to rewrite most leases in America.

Kate Barrington, Crossroads Rhode Island Rent Relief Case Manager, left, chats with Luis Vertentes, a tenant from East Providence, RI, second right, in a meeting ahead of an eviction hearing , Monday August 2, 2021, in Providence. Rhode Island tenants threatened with eviction after a federal moratorium on their eviction for unpaid rent was lifted are taking their case to court. Vertentes agreed to leave his residence, which he has not paid rent for four months, in about three weeks. Right, owner Roy Loiselle, second from left, is attorney Murray Gereboff. (AP Photo / Charles Krupa)

[Are you are struggling tenant or landlord? We’d like to know how you’re coping.]

Main source of income

There are undoubtedly ruthless owners who want nothing but their money and will do anything to get it. Large business owners have access to other aid programs that Congress has put in place, and many of them can probably afford to continue to offer forbearance. But most of the country’s owners are individual investors, including mom and pop owners who own a few units as their main source of income. Some rely on these properties to fund their retirement. While some landlords unfairly harass their tenants, there are also tenants who abuse the eviction moratorium to dodge rent, with no intention of paying it back. No anecdote explains the complexity of the problem.

Congress passed $ 47 billion in aid for qualifying tenants, which is supposed to be indirect aid for landlords, as they are the ones who end up getting the money. But the program is still under construction. The Treasury Department says states and cities have distributed only $ 3 billion of that money, less than 7% of what’s available. The Treasury doesn’t know why so much money goes unused, but that’s not all that surprising for a temporary new program that many people don’t even know about, with different application procedures across the country.

Landlords are permitted to apply on behalf of their tenants for federal assistance covering current or late rents, provided the tenant agrees and signs a paper or electronic application. But there are blackouts everywhere. An industry group representing homeowners recently sued the federal government for $ 26.6 billion, arguing that’s the amount of financial loss homeowners have suffered so far. The group cites research showing tenants owe an estimated $ 73 billion in cumulative rents. If states and cities allotted the full $ 47 billion Congress has earmarked for rent assistance, that would still leave nearly $ 27 billion in unmet costs related to the federal moratorium on evictions.

Members of a coalition of housing justice groups hold signs protesting the evictions at a press conference outside the Statehouse on Friday, July 30, 2021, in Boston.  (AP Photo / Michael Dwyer)

Members of a coalition of housing justice groups hold signs protesting the evictions at a press conference outside the Statehouse on Friday, July 30, 2021, in Boston. (AP Photo / Michael Dwyer)

It’s safe to assume that this figure is overestimated, like the opening bid in many lawsuits. But even so, and the us-versus-them approach to the problem – landlord versus tenant – won’t solve it. Since everything in America is politicized, however, chances are this will be the next arena of battle between the establishment and the disenfranchised.

Affordable housing problem

The United States has a legitimate affordable housing problem. Biden and his fellow Democrats intend to fix this, and it should go through the normal legislative process, as long as such a thing exists. Some liberal Democrats, however, want a moratorium on indefinite evictions as a de facto affordable housing plan. This would pervert the original intent of the moratorium and undermine Biden’s thankless efforts to convince moderate voters that his party understands at least a little something about a capitalist economy.

Tenants sign contracts with landlords – leases – which usually need to be bulletproof for the system to work. If the government can repeal leases for political purposes, all kinds of bad things will happen. Landlords will tighten lease terms further to reduce the risk of losing money. Rents will increase to compensate landlords for the additional risk of loss. Local governments will pass even more rules to protect tenants, further increasing costs.

A rental sign is displayed outside an apartment complex on Tuesday, July 14, 2020, in Phoenix.  (AP Photo / Ross D. Franklin)

A rental sign is displayed outside an apartment complex on Tuesday, July 14, 2020, in Phoenix. (AP Photo / Ross D. Franklin)

Leases must remain more or less sacrosanct. Congress has shown its willingness to protect vulnerable tenants under extraordinary circumstances and has made money available to do so. The Treasury says it is investigating why payments are taking so long and is looking for ways to speed up relief efforts. When people are in pain, rude opportunists seek out a villain they can blame, while somehow profiting from the process. For now, blaming landlords for the plight of tenants is cheap theater. When the remaining billions have gone where they’re supposed to go and the pandemic is in the past, it will be a good time to put homeowners under the microscope.

Rick Newman is the author of four books, including “Rebounders: How Winners Go From Failure To Success.»Follow him on Twitter: @rickjnewman. You can also send confidential advice, and click here to receive Rick’s stories by email.

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