Who will pay when the rent comes due?

MEGAN BASHAM, HOST: It’s Tuesday the 15th of September, 2020. Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Megan Basham.

MARY REICHARD, HOST: And I’m Mary Reichard. First up: eviction protection and its consequences.

The economic shutdowns in response to COVID-19 triggered widespread job loss. To help homeowners and tenants, the federal government in March allowed them to defer mortgage and rent payments for up to four months, without losing their homes or being evicted. Those payment deferrals though expired at the end of July.

BASHAM: But then the Centers for Disease Control and Prevention made an unprecedented move. The agency tasked with addressing the nation’s health issues made it illegal for landlords to evict tenants hurt by job loss.

WORLD’s Sarah Schweinsberg reports now on what this policy means for those who pay rent and those who collect it.

SARAH SCHWEINSBERG, REPORTER: Josh Wilkins is a single dad. He and his 3-year-old daughter live in a large apartment complex just off the interstate in Layton, Utah. His employer laid him off more than three months ago.

WILKINS: I’m a union sheetmetal worker and I make really good money when I’m working. 

From April to July 31st, the federal government added an additional $600 to all unemployment checks. Wilkins says that money really helped.  

WILKINS: Thank God for that extra $600… 

After that bonus expired, President Trump signed an executive order in August that offered an extra $300 per unemployment check. In Utah, those payouts just kicked in.

Still, Wilkins says money is tight. He’s relieved that per the CDC’s new order, his landlord can’t evict him for the rest of the year. 

WILKINS: It costs so much for a two bedroom apartment you know anymore, just like for with utilities and everything. It’s like $1,473 a month, I think I pay and that’s a lot, you know anymore.

But many landlords and property-owners are frustrated with what they feel are policies that only help renters.

The Trump administration did make landlords eligible for mortgage payment deferral, but only if their rental property mortgage was backed by the federal government. Only a third of landlords qualified.

At the same time many landlords experienced a decline in tenants paying rent. The steepest drop is in low-income rentals or what the industry calls C-Stock. 

Bob Pinnegar heads the National Apartment Association.

PINNEGAR: This is where a lot of our workforce lives, especially in service sectors, because it’s, frankly, more affordable. January through March 80 percent of the rents were collected in the first 15 days of the month for C class properties. In July, it dropped to 37 percent. As the residents are feeling economic distress, it’s transferring itself over into the operators as well.

Sid Lakireddy directs the California Rental Housing Association. He points out that while most landlords still paid their mortgage and collected less rent, they also had to pay to keep the lights on. 

LAKIREDDY: Water companies aren’t forbearing. Electric companies aren’t forbearing. Oh, yeah, property taxes. We don’t have forbearance here in California. So all those other bills are still due. And that’s what stretching property owners and really frustrating them at this point. 

Once eviction bans expire, tenants will have to pay back rent. But landlords aren’t counting on that.

Joel Griffith is a financial regulations scholar at the Heritage Foundation. He’s skeptical most tenants will be able to pay their debts.

GRIFFITH: Especially in a situation where somebody has not actually saved those funds to make a payment. They could certainly declare bankruptcy. And in many instances, those landlords simply will not be able to collect what is owed them.

Low-income housing advocates say the eviction bans are necessary. Without them thousands of people could be turned out, placing them in danger. 

Diane Yentel heads the National Low Income Housing Coalition. 

YENTEL: It’s a very important preventative measure. If it’s upheld by the courts, it will protect 30 to 40 million renters and keep them housed over the next few months. 

Adam Murray directs the Inner City Law Center in Los Angeles. He sympathizes with landlords. He also worries that when deferred rents do have to be paid, struggling tenants will face eviction anyway. 

So, he argues the federal government should give banks additional funds so they can forgive mortgages… and then landlords can forgive rent. 

MURRAY: We should put some resources as a country into bolstering these financial institutions but require them to forgive mortgages for this period of time and then require those mortgage forgiveness to translate into rent forgiveness.

In the meantime, some housing analysts worry about the future of low-income housing if landlords continue to see a drop in rent payments. 

Michael Tanner is a senior fellow at the Cato Institute. 

TANNER: You’re going to see a deterioration of the housing. Landlords are simply going to stop fixing up apartments. The second is that landlords when they have a vacancy are going to be reluctant to rent to low income people. If bringing in low income people in person into your apartment means they may not pay the rent and you can’t do anything about that, you’re going to be less likely to rent to them. And the long term what you’re going to do is see less apartments built. That’s going to drive up rents for everyone.

Back at his apartment complex, Josh Wilkins says if he can’t pay his rent upfront and ends up owing back rent, he believes his relationship with his landlord will save him from eviction.

WILKINS: I’m sure they would help me out or send me to some programs that would help me out with rental assistance.

Other renters may be banking on relationships with their landlords as well. Most landlords own less than five units and know the families living in them. They understand the financial pressures these families are facing. Landlords are feeling the squeeze, too.

Reporting for WORLD, I’m Sarah Schweinsberg reporting in Layton, Utah.

(AP Photo/Andrew Harnik, File) In this May 20, 2020, file photo, signs that read “No Job No Rent” hang from the windows of an apartment building during the coronavirus pandemic in Northwest Washington. 

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.