Up for Growth Legislative Brief: H.R. 6314
The Emergency Rental Assistance Act’s Approach to Keeping People in Their Homes
As the coronavirus pandemic continues to ravage the health system, the economy, and labor markets, millions of households are facing incredible economic and health burdens. Access to quality, affordable housing is critical both to stopping the spread of the virus and to mitigating the economic fallout of unprecedented job loss and economic hardship. Before the crisis, housing markets were already under-supplied — Up for Growth’s research estimates that the nation fell 7.3 million homes short from 2000-2015 relative to demand. This shortage means that nearly half of the nation’s 44 million renter households are cost-burdened — paying more than 30% of their income on rent— which leaves millions of families and individuals unable to save for emergencies, and now as the COVID-19 crisis continues, they face a true emergency situation.
Expanded Unemployment Insurance benefits and a $1,200 per person stimulus payment included in the CARES Act will offer small relief to financially burdened renters, but that money will not go far enough to keep people housed and to ward off a looming housing crisis. Eviction moratoriums and mortgage forbearance programs are critical for short-term triage, but without large scale financial assistance, these provisions are only shifting the financial burden to a later time. Federally funded emergency rental assistance is critical for keeping people in their homes and for preventing a housing market crisis.
Rental payments are the cornerstone of the housing ecosystem. Many landlords and property owners operate under very tight margins, and a major loss of monthly rental income would be disastrous to cash flows. 74% of multifamily properties are owned by individuals who will face significant economic hardship as rental income dries up. Furthermore, without cash flow from rental income, many landlords may be forced to defer property maintenance, lay off property management staff and default on their mortgage obligations, which would have dire economic consequences for employees, renters and the real estate market, and other sectors of the economy. Largescale rental assistance is the most efficient and effective way to mitigate the severe economic consequences of COVID-19 on the housing market.
Up for Growth has prepared a legislative analysis of H.R. 6314, the Emergency Rental Assistance Act of 2020, a bill which proposes $100 billion in aid to renters impacted by COVID-19 and sponsored by Rep. Denny Heck (D-WA). The analysis considers the bill’s plan for emergency rental assistance in the context of the coronavirus crisis and in relation to other legislative and policy proposals currently being considered. In crafting this response, we have engaged our Federal Pro-Housing Policy Task Force, comprised of housing experts, practitioners, and advocates in order to gain comprehensive, rigorous analysis of the policy proposal. We hope you find the analysis useful as we all work towards solutions that help us recover from COVID-19.