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Evictions expected to spike as states end moratoriums that offered relief during COVID-19

Real Estate - Residential
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By Michael Braga
USA Today

Elizabeth Anderson is the kind of person who goes out of her way to help people in need.

Old folks stuck at home? She’ll clean their bathrooms and vacuum their carpets. Neighbors with hungry kids? She’ll share what she has left in her kitchen. A woman standing at a bus stop with small children late at night? She’ll offer them a place to stay.

Elizabeth Anderson could lose her house in Charleston to foreclosure. (Photo/Provided)

Now the 57-year-old Charleston resident needs help herself. When the spread of coronavirus shut down her bed-and-breakfast cleaning business in March, she lost her income and was unable to pay the rent on her house. That put Anderson among thousands of Americans staring at the abyss of homelessness as states begin to lift moratoriums on evictions that have been in place since the start of the pandemic three months ago.

Twenty-four states are processing evictions again, and that number is likely to climb to at least 30 states by the end of June.

Not all renters in those jurisdictions are vulnerable. Nearly 30% continue to be protected by a federal moratorium under the Coronavirus Aid, Relief and Economic Security Act that will remain in place until July 25. The rest — like Anderson — live in properties that are either not subsidized by the federal government or are owned by landlords with loans that are not federally backed.

For these unprotected renters, the threat of eviction is very real — especially for those at the bottom of the economic ladder. Tens of millions of workers are unemployed, and the economy is likely to remain shaky until there’s a vaccine and consumers feel safe enough to travel, dine out and go to theme parks and movies again. Homelessness could come at any time.

Communities of color face disproportionate risk.

“Back rent is coming due, and renters are no more able to pay it now than they were at the beginning of the crisis,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition, which advocates for affordable housing. “We are very concerned about a wave of evictions and a spike in homelessness unless there’s some sort of federal intervention.”

Yentel points to the Heroes Act, which calls for $100 billion in emergency rental assistance, as the best solution, saying the money is needed to keep people in their homes and to keep landlords from losing their investments. The $3 trillion bill, which passed the House of Representatives last month, is unlikely to win approval in the Republican-led Senate, and things could get a lot worse when the federal moratorium on evictions expires at the end of July.

“Even before COVID, we were in the middle of a severe housing crisis,” Yentel said. “We had 8 million of our lowest-income renter households spending at least half of their income on rent. And when you have such limited income to begin with, you’re always one financial emergency away from not being able to pay.

“COVID is that emergency,” she said.

‘I know he has a plan for me’

Coronavirus was certainly that emergency for Anderson.

“I have an app that does my scheduling and it just went crazy — unbooking all my assignments due to COVID on March 17,” Anderson said.

Consistently able to generate about $500 a week from her cleaning business, Anderson made more than enough before the crisis to cover $975 a month in rent for the three-bedroom ranch house she lives in with her 29-year-old son, her granddaughter, her niece and grandniece, who were evicted from their own home a short time earlier.

After the crisis hit, Anderson had only $600 in savings. She said she blew through it pretty quickly, adding that she never expected any relief from her landlord. He told her he understood about the pandemic but still wanted his money — and as soon as the moratorium lifted, he was going to file an eviction notice.

True to his word, he filed to evict May 15.

Contacted by USA Today, Marvin Fuzz said Anderson owes him four months’ rent, and he can’t afford to let her live there for free.

“I have a mortgage to pay, homeowners insurance and taxes,” he said. “If I don’t collect any money, the bank will own the house, and it won’t let her live there for free either.”

Anderson said she has not been able to collect unemployment insurance because of glitches in South Carolina’s system. She didn’t receive a coronavirus relief check in spite of having applied.

The only way her family has been able to survive, Anderson said, is thanks to the generosity of food pantries and “by the grace of God.”

“I know he has a plan for me,” Anderson said. “I pray every morning, every day. I pray for God to pull me out of this, to pull us all out of this, cause it’s not just about me.”

One eviction every 7 minutes

Rental property experts said the eviction crisis — or the affordable housing crisis — has been going on for a lot longer than three months.

It dates back to the Ronald Reagan presidency in the 1980s, when the federal government slashed funding for public housing, according to Yentel. A slight surplus of affordable housing quickly turned into a deficit.

Then came the Great Recession of 2007-2009, when millions of homeowners defaulted on their home loans and moved into rentals. Throw in baby boomers downsizing from homes to apartments and millennials too burdened by student loans to make a purchase, and soon there were too many renters chasing too few rental properties coast to coast.

Since the 1960s, rental costs have spiked 61%, while the wages of renters have stagnated — increasing by only 5%, Yentel said. Renters pay a greater percentage of their income for shelter, putting them in an increasingly precarious position. They weren’t able to save for a rainy day.

“Before the pandemic, there was one eviction every seven minutes — 300,000 every month,” said Alieza Durana, who studies evictions with Princeton University’s Eviction Lab. “There were more evictions annually than there were foreclosures at the height of the Great Recession.”

The heaviest concentrations of evictions were in the South and the Rust Belt, Durana said. Virginia and the Carolinas are among the hot spots. As migration increased rapidly, communities sought to block the construction of housing for lower-income neighbors in their backyards, which kept the stock of affordable housing from growing.

According to the Eviction Lab, South Carolina has the highest eviction rate in the country. The city of Charleston evicts more people each month than some states.

“If you listen to the Chamber of Commerce, we have 55 people moving to the region every day,” said Otha Meadows, president and CEO of the Charleston Trident Urban League. “But those who go to work here every day — teachers, policemen, firemen — can’t afford to live here because of the lack of affordable housing.”

Meadows said his organization tries to save as many people as it can — including Anderson — from losing their homes. “But there are not a lot of options for people who cannot afford their rent,” Meadows said.

Dakota Ewing, who used to make $18 an hour at a Charleston pain management company — more than double the minimum wage in South Carolina — said his income wasn’t sufficient to cover expenses. He took a job in January with a trucking company, and he spends most of his time driving from one end of the country to the other, hauling everything from bottled water to beef.

The new job didn’t save him when the pandemic hit.

Ewing’s employer had to shut down for a couple of weeks. He got behind on his bills, and his landlord was quick to evict in May. Ewing, 26, worked it out with a phone call. His realtor set up a payment plan. The eviction got dropped, as did the late fees.

“But it’s crazy that they didn’t even wait for the 30-day mark,” Ewing said. “It would be one thing if I was notorious for not paying on time, but I’ve never been late in my life.”

The solution to the eviction crisis, Ewing said, is to raise the minimum wage in South Carolina. It might have been enough 15 years ago, but it’s not nearly enough today.

And don’t be so quick to kick people out of their homes, he said. “People are going through a lot right now. It shouldn’t be that we’re making it harder on them.”

Hardest hit by COVID-19

There’s some disagreement among rental property experts about how many people might be evicted as states lift their moratoriums and how many will have to live in the streets.

Andrew Rybczynski, managing consultant with Costar Group, a commercial real estate research and analytics firm based in Washington, said there will be a spike in evictions, but it might not be as large as some people expect because a lot of renters are in good shape thanks to government pandemic aid — the additional $600 in unemployment benefits and the $1,200 relief checks.

A survey by the National Multifamily Housing Council, which advocates on behalf of the apartment industry, shows 93% of renters are making full or partial payments.

Rybczynski said he does not expect a major increase in homelessness because — as in the Great Recession — people will move in together or move back with their parents.

“That said, we do anticipate American households coming under strain toward the end of the year,” Rybczynski said.

Rental property analysts agree that people at the lowest end of the economic spectrum — especially people of color — will suffer the most.

“The groups most at risk before COVID and the ones being hardest hit by the crisis are minority groups,” said Robert Pinnegar, president and CEO of the National Apartment Association, which represents owners of apartment buildings across the USA. “From an economic recovery standpoint, many were working in hotels and restaurants that were closed and are just now starting to open, but they won’t return to full employment for a long time.”

Pinnegar said he keeps a special watch on apartments rented to the lowest-income tenants.

“The next round of stimulus will be critical to maintain their lifestyle and their ability to buy food,” Pinnegar said. His organization advocates for the $100 billion in rental assistance in the HEROES Act languishing in Congress.

Solomon Greene, a fellow at the Metropolitan Housing and Communities Policy Center at the Urban Institute, a Washington think tank that studies cities and neighborhoods, pointed to a survey involving 133,000 participants conducted by the U.S. Census Bureau. Greene said blacks and Latinos were 11% more likely than whites to miss paying rent in May and twice as likely to feel nervous about making rent payments in June.

A Pew Research Center survey revealed that Hispanics and blacks were more likely to have experienced or to have known someone who experienced job loss because of coronavirus than whites. Members of the two groups were far more likely than whites to report not having enough emergency funds to cover three months of expenses.

RobertsJoel Roberts, chief executive of PATH, a Los Angeles organization that serves homeless populations in California, said minorities are far more likely to live in the streets. African Americans represent only 6.5% of the state population but 40% of those experiencing homelessness.

Roberts said homelessness in America had been trending slowly downward before COVID-19. The total number of people living on the streets or in homeless shelters had dropped from 650,000 to 500,000 since the Great Recession. Roberts said the ranks are poised to swell.

“With unemployment at around 15%, homelessness is predicted to increase by 250,000,” Roberts said.

For many Americans, that outcome is unacceptable.

“This is not a time to force people out of their homes,” said Gina Chiala, executive director of the Heartland Center for Jobs and Freedom, an organization that advocates on behalf of low-wage workers in Kansas City, Missouri. “It will deepen their poverty. It will take them two years to get back to where they were when they had a house.”

It’s completely immoral, said Tara Raghuveer, housing campaign director and founder of KCTenants, a tenants rights group based in Kansas City.

“If COVID clarified anything, it’s the complete immorality of homelessness,” she said. “There is just no reason it needs to continue in the United States — the richest country in history — in a time of pandemic, when a home is also what we need most to stay healthy.”

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