Many renters are bracing for July 31, when the Center for Disease Control’s (CDC) national eviction moratorium expires – for the final time. According to Eviction Lab at Princeton, the moratorium led to a record-low number of evictions, with filings down 58% from March 2020 through May 2021 versus the historical average. And now, some renters may be relying on federal assistance to pay back rent, which is still owed despite the pause on evictions. To date, the Federal government has allocated approximately $47 billion to states for Emergency Rental Assistance, and enhanced unemployment benefits have helped to buoy income losses due to the pandemic.
A new Freddie Mac research report examines the potential impact of the expiring moratorium on renters as rental assistance funds become available.
“While the steady return to normal pre-pandemic routines brings a sense of optimism, the economic impact of COVID-19 will have a lingering effect, particularly on renters who owe back rent and were protected by eviction moratoriums,” said Corey Aber, Senior Director, Mission, Policy and Strategy, Freddie Mac. “We found that there is likely enough rental assistance available, and the deployment and accessibility of these funds is vital to supporting renters and property owners in need as the country transitions to a post-pandemic normal.”
Economists estimate that between $8.4 and up to $53 billion may be needed to prevent a wave of evictions after the CDC’s moratorium expires, indicating a potential gap in available assistance funds. And while the unemployment rate has dropped from 14.8% in April 2020 to 5.8% in May 2021, Freddie Mac emphasizes that “there are still many who experienced substantial financial stress during the pandemic and may yet still be unemployed or underemployed.”
“As eviction moratoriums come to an end, rent subsidies take on an increasingly important role in both keeping renters in their homes and property owners current on their mortgages,” the report states. With 56.4% of renters and 43.6% of property owners covered in a June 2021 National Low-Income Housing Coalition survey not even aware of government rental assistance as part of COVID-19 relief packages, communication, access, and distribution will be critical in setting renters up for success in the next phase of pandemic recovery.
Download and read Freddie Mac’s white paper here.