Did You Forget We Have a Housing Crisis?
If the nation is faced with $15 billion in combined rental debt because of pandemic, and the federal government set aside $47 billion to help renters catch up, what exactly is the problem?
Publisher’s Riff
The price of everything is high and showing no signs of slowing. Among those key items is rent, and at the worst possible time as the population still hasn’t had a chance to fully shake off the pandemic (which, who knows, could worsen as we head into winter). This is from an early October report in Bloomberg’s CityLab …
Every one of the nation’s 100 largest metro areas has seen month-over-month rent growth over the last five months, according to Apartment List economist Christopher Salviati — a phenomenon he’s never seen before. Data from Zillow shows a similar national increase, up an average of 11.5%, or $200, compared to last August.
“We’re seeing an unprecedented level of rent growth,” Salviati said. “Our national index shows rents up 12.4% year over year, after a pretty modest dip early last year due to the pandemic.”
Gilbert, Arizona, a suburb south of Phoenix, saw rent skyrocket 24% between March 2020 to September 2021, said Jeff Andrews, data journalist at Zumper. Metro areas that are primarily single-family suburbs, such as Orlando and Atlanta, are also seeing big spikes (21% and 15%, respectively).
The U.S. has long been behind on providing enough affordable housing options, said National Low Income Housing Coalition Vice President of Research Andrew Aurand, and the pandemic has exacerbated the problem further. While the federal government allocated $46 billion in emergency rental assistance, that relief has been slow to arrive in many parts of the country. “It’s a crisis,” he said. “Housing instability has a lot of detrimental impacts on families.”
Here’s the latest Zumper National Rent Report …
Meanwhile, the most recent data show that we’re still faced with a situation where the vast majority of the nearly $47 billion in federal rental assistance funds have not yet been distributed to struggling renters: just 17 percent of that money has been disbursed or just under $8 billion, according to the National Multifamily Housing Council as of early October …
With less than 17 percent of the $46 billion in rental assistance funds having been disbursed as of August 2021, the Treasury Department plan gives grantees that failed to obligate at least 65 percent of the ERA 1 funding until November 15, 2021 to submit a Performance Improvement Plan to the Treasury for approval, to avoid a federal clawback of their allocation. If grantees do not submit an adequate plan, 10 percent of their ERA 1 funds will be considered to be “excess” and subject to recapture. Grantees with expenditures less than 30 percent as of September 30, will be subject to recapture amounts for the difference between its reported expenditures and the amount of expenditure needed to reach the 30 percent threshold. Grantees can also avoid recapture by the November 15 deadline if they are able to certify that their expenditure ratio is at least 30 percent, or if they have obligated at least 65 percent of their allocation.
Basically, state and local governments will lose those federal rental relief funds if they don’t get it together by November 15th and disburse them. According to PolicyLink - as of September 2021 - the combined national rental debt for 6 million households is $15 billion … that’s, actually, about 32 percent of the total $47 billion in available federal rental relief. The share of low-income renters behind on rent are at their highest in these states …
Meanwhile, large low-income cities like Philadelphia are still having trouble disbursing that same federal rental assistance, reports WHYY …
Philadelphia has received what could be the final tranche of federal funding for its Emergency Rental Assistance Program, potentially leaving thousands of needy renters and landlords out of luck.
Since launching in May, the program has distributed just shy of $200 million to 33,456 households hit hard by the pandemic, according to a city dashboard.
To date, the city has received 66,597 applications, with more rolling in each day.
“It’s a difficult situation when you have a program that provides assistance and support for folks, but you don’t have enough resources to provide the help that’s out there, that’s needed,” said David Thomas, president of the Philadelphia Housing Development Corporation, the nonprofit managing the program.
That’s, of course, happening when not only $39 billion of federal rental assistance throughout the country is just sitting in whatever account untapped, but when in Pennsylvania, the Republicans who control that state’s legislature refuse to release $7.5 billion in federal pandemic relief that could easily be used, in part, to provide rent relief and avoid a statewide housing calamity.
Bigger Questions
So, the big mystery: If we’re all still in the middle of a pandemic emergency, which has also ruptured the economy, and the federal government provided more than double the amount of current national rental debt ($47 billion in federal rental aid for a $15 billion rental debt problem) then what exactly is the problem? Why is it taking so long and why is it so hard to get this relief to struggling renters? It doesn’t make any sense.
Second: What exactly is going on with state and local governments that they can’t disburse the money in an efficient and expeditious manner … knowing that we’re still in the middle of an emergency?
Third: There is now $39 billion in federal rental relief left over (to, once again, fix a $15 billion national problem), and the federal government is obviously aware that state and local governments are not moving fast enough. So, why exactly can’t the federal government just disburse those funds directly to renters?
Keeping Track
Ensuring that Americans are able to stay housed and not end up homeless is a top priority. So, before spending surplus or federal aid money on anything else, local officials should have simply cut checks to renters to cover them for a year or two. But, why was this made so complex, the disbursement of these critical funds? What’s funnier is that all this time throughout the pandemic crisis we've never really talked about housing and homelessness. It’s as if the public assumed everyone was able to stay in their homes.
One of the big problems with housing in the United States is that developers, property owners and corporate real estate lobbies fund local city councils and, to a large degree, candidates across the local, state and federal spectrum. Pre-pandemic, we all witnessed how they made their bread and butter off of displacing people and charging them hand over fist for rent. Post-pandemic, they have plans and strategies already deployed to capitalize off of the loss of housing and people in worsening situations. They will need to fill losses from commercial real estate, since fewer people are utilizing corporate office spaces and are working remoted. So, housing will be an area that will undergo further corporatization in an effort to make a pandemic recovery killing.
Housing presents many problems. But one of the big ones is that left and right the developers have control of the politicians. In addition, both left and right are wedded to false notions of “meritocracy” and they push populations to the brink with NIMBYism.
Solution: Answering Basic Questions
Looking at the national housing crisis and trying to understand why it’s so difficult for governments to respond effectively and simply, it will be important to sample cities and other impacted places (like Philadelphia), and push policymakers and other officials to answer these basic and essential questions …
Like: Exactly how many people are behind on rent in any given jurisdiction?
How much total rent is needed citywide to get all those indebted renters caught up on their rent? What's the total appropriation needed?
How long is that appropriation needed for?
Meanwhile, it’s important for media and advocates to also ask …
How much in total contributions are going to candidates and elected officials from the 1) banking, 2) real estate and 3) corporate property management industries? We need to determine: How much is needed from a potential competing tenant/affordable housing lobby to counter those banking/real estate/developer interests and to support like-minded candidates?
Next …
Are policymakers talking directly with the banks? You know: the ones who own the mortgage notes on residential and corporate real estate? Can’t those banks, knowing we’re all in a pandemic emergency, activate other processes which ease collection practices?
Meanwhile, advocates for affordable and available housing need to wonder and ask out loud for the public to understand …
How much is the homeless rate rising as a result of this housing crisis?
Are we making direct correlations between rising homelessness and lack of affordable housing and rise in poverty, loss in jobs and rising violence ... and are we offering a clear vision of: 1) This is how many people rise out of poverty when folks have housing; 2) This is how many jobs you create when there is more housing and 3) This is how much violence drops when you have more housing ... and, finally ...
Advocates, along with policymakers, must be able to tell the public in very simple and unequivocal terms: anyone against or not for affordable & expanded housing is poverty, is for lack of jobs and is for gun violence.
It's really all about 1) literacy to 2) keep the debate simple and accessible so the broader public understands what's going on, how they're affected and how to fix it. But, neither media or advocates make these conversations simple or just assume everyone has a college degree or a level of literacy where they can understand it all. News flash: they don’t.
Simple messaging is good. But economics and government spending won't win this debate alone. Even people on the left want to believe that some people deserve to be homeless and some don't. All roads end at meritocracy. All roads end at “I don’t wanna pay your rent for you” (… “even if you are stuck in a crisis that’s not of your own making or that someone else created”)
Almost 60 years ago, President Kennedy signed Executive Order 11063 basically saying you can’t discriminate in housing …
SECTION 101. I hereby direct all departments and agencies in the executive branch of the Federal Government, insofar as their functions relate to the provision, rehabilitation, or operation of housing and related facilities, to take all action necessary and appropriate to prevent discrimination because of race, color, creed, or national origin-
(a) in the sale, leasing, rental, or other disposition of residential property and related facilities (including land to be developed for residential use), or in the use or occupancy thereof, if such property and related facilities are-
(i) owned or operated by the Federal Government, or
(ii) provided in whole or in part with the aid of loans, advances, rants, or contributions hereafter agreed to be made by the Federal Government, or
(iii) provided in whole or in part by loans hereafter insured, guaranteed, or otherwise secured by the credit of the Federal Government, or
(iv) provided by the development or the redevelopment of real property purchased, leased, or otherwise obtained from a State or local public agency receiving Federal financial assistance for slum clearance or urban renewal with respect to such real property under a loan or grant contract hereafter entered into; and
He is why we have that. He was also, tragically, killed four days later.
When viewing the top interest grounps giving to Members of Congress, it all becomes a bit clearer as to why the housing crisis keeps getting worse. Real estate interests rank 2nd …