Since the first reported cases in the Commonwealth in early March, COVID-19 has caused major disruptions in all aspects of the housing sector. Hundreds of thousands of people who have experienced job or income losses are worrying about how to afford rent or mortgage payments in the months ahead. While an initial influx of support in the form of federal and state emergency measures has helped to maintain housing security for many, many of these expanded benefits will soon expire. The data indicate that if unemployment remains high or increases in the coming months, many households will not be able to continue to make housing payments without new and continued support. Failure to tackle this impending reality now could endanger the housing stability of many across the state.
While overall rent and mortgage payment collections may be strong, some households are having more difficulty making housing payments than others. White survey respondents were more likely to have made full rent and mortgage payments in June compared to non-white respondents. Additionally, respondents under 30-years old were far less likely than other groups to have made full payments, particularly when compared to respondents over the age of 60.Figure 2 – Non-white residents are less confident they will make full June housing payments
Figure 3 – Younger residents are more likely to be behind on housing payments
It is clear that even with the expanded supports, there are still households that are struggling to make housing payments. In a May research brief, the Metropolitan Area Planning Council (MAPC) estimated that roughly 15,500 households need additional support right now in order to keep current on housing payments, totaling $13.8 million a month. MAPC makes the important distinction that a failure to provide additional assistance to people of color and households that speak a language other than English at home will serve to deepen and exacerbate existing patterns of inequality.
Strong rent and mortgage payment collections thus far can largely be attributed to emergency response measures on the federal, state and municipal levels. In terms of the federal response, the CARES Act provided expanded unemployment assistance, one-time stimulus checks, and the Paycheck Protection Program (PPP) for small businesses to keep employees on their payroll, among other measures.
On the state level existing rental assistance programs such as the Rental Assistance for Families in Transition (RAFT) and the Massachusetts Rental Voucher Program (MRVP) have been heavily utilized over the past few months. The RAFT program in particular has made important changes to provide assistance in response to the crisis – eligibility was greatly expanded, the program requirements were simplified, and MassHousing provided an emergency infusion of $5M to the program in late March.
Some Massachusetts residents are not eligible for benefits such as unemployment assistance, including any households with undocumented workers. Additionally, certain types of income, such as tips and gig economy wages are treated differently in calculating benefits.
In response to the immense need for immediate support, many municipalities have or are in the process of setting up temporary emergency rental assistance (ERA) programs to help fill the gap and help those newly laid off due to the crisis stay in their home. Most are funded through the use of local Community Preservation Act (CPA) funds, Affordable Housing Trust Funds, Community Development Block Grant (CDBG) and other local funds. The goal of these programs is to provide people with short-term support to help them stay in their homes.
Additionally, the Massachusetts eviction and foreclosure moratorium was signed into law on April 20, 2020 and took immediate effect. The moratorium is in effect until August 18, 2020 or 45 days after the Governor lifts the COVID-19 state of emergency that began on March 10, 2020. The Governor can also extend the moratorium in 90 days increments while the state of emergency remains in effect. The moratorium has been extremely effective in halting formal evictions and foreclosure petitions. Thousands of evictions that were in process when the moratorium began have been suspended, and new eviction filings have gone from several hundred a week in February and March to under ten per week since mid-April. Foreclosure petitions have gone from over 500 in January and March to zero in April and May. These measures are certainly providing temporary protections for households who have fallen behind on their payments.
Figure 4 – Eviction filings & foreclosure petitions have effectively been halted by the moratorium
Many of the emergency response programs have been instrumental in ensuring housing stability in these first months of the crisis, many are set to expire on July 31, including the expanded unemployment assistance that has been particularly vital. While these measures will expire, economic hardship will continue as we are likely facing a lengthy recovery.
Meanwhile, the eviction and foreclosure moratorium is set to expire in mid-August unless extended by Governor Baker. At that point, any homeowners that have not received manageable forbearance agreements, and any renters that have not come to a repayment agreement for arrearages with their landlords may be facing foreclosure or eviction. Even for tenants that have worked out an agreement, the ability to repay forgone payments in the near term seems grim. Among renters who are already behind on rent, survey results indicate that only 21 percent believe it is “very likely” they will catch up on rent before the eviction moratorium ends in August. Among renters who are current on payments, 22 percent of those surveyed do not expect to be able to pay more than four months of rent, and only 55 percent of survey respondents anticipate being able to pay more than six months of rent.
Figure 5 – Many households already behind on rent will not be able to catch up before the eviction moratorium lapses in August. Many of those who are current on rent may not be able to hold on for much longer.
While no large new federal stimulus has passed, legislators and advocates are pushing for measures that would help bolster housing stability for those who need it. The National Low Income Housing Coalition (NLIHC) has identified the following funding priorities:
In addition, the New England Housing Network (representing a broad coalition of affordable housing organizations from each of the New England states) identified the following federal funding priorities:
Citizens’ Housing and Planning Association (CHAPA) has requested urgent budget appropriation for the following programs in Massachusetts:
The combination of these measures would go a long way toward ensuring housing stability Massachusetts residents. Based on the scale of the potential need at the end of the summer, the proposed state and local measures alone would likely be insufficient to cover the gap. Due to the pandemic and ensuing economic fallout Massachusetts is projecting considerable budget shortfalls in both FY20 and FY21, and this housing assistance gap is not the only financial gap we face on the state level.
We face a housing cliff this summer of potentially enormous magnitude. A failure to address this gap will jeopardize the housing security of thousands of households across the Commonwealth and across the country. These household level crises reverberate upward, and could have a protracted impact on the health and stability of our regional economy. All indications are the health and economic impacts of the crisis will continue to be widespread and that the brunt of the crisis will fall disproportionately on low-income black and brown households, furthering existing patterns of racial inequality in our state and around the country. Bold leadership will be needed on the local, state and federal level, and soon, since the pieces required to address this need have not yet aligned.