Millions of Americans have been behind on their rent since last year, when the pandemic spurred a huge wave of unemployment and income loss. Normally, tenants who don't make their housing payments can be evicted on that basis alone. However, the CDC put a ban on evictions into place last year to prevent a wave of homelessness.
That ban was allowed to expire at the end of July. However, a new eviction ban was then instituted in early August that protects the overwhelming majority of the country's renters through early October.
That last-minute eviction ban was a lifeline for tenants who otherwise faced dire consequences. But it left landlords in the lurch once again.
It's easy to think of landlords as the bad guys in the context of evictions, but it's also important to remember that many of our country's landlords rely on rental income to cover their own mortgages and living costs. And so landlords that have been unable to collect rent for months on end are struggling themselves.
What makes the whole situation even more frustrating for all parties involved is that there's a $45 billion pool of rental assistance funds available for tenants who are behind on their housing payments. That money was allocated as part of the two most recently signed stimulus bills that passed in December and March, respectively.
The problem, however, is that most of that $45 billion has not yet been given out. And that's hurting renters and landlords alike.
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States have been slow to disburse aid
A big reason why the bulk of that $45 billion pot hasn't been distributed is that the federal government gave rental assistance funds to states to dish out on an individual basis. And many states have lagged in getting that money out.
As of Aug. 9, only $4.2 billion in rental assistance had been given out to eligible households, reports the National Low Income Housing Coalition. But given that many states have had their portals for rental assistance applications open since the spring, that's hardly acceptable.
Some states have done a better job of distributing that aid than others. Texas, for example, has disbursed half of its first round of federal rental assistance funds. South Carolina, meanwhile, has given out under 2%.
Compounding the issue is the fact that many renters who are behind on their housing payments don't know that they're eligible for aid. The Urban Institute recently found that under 50% of renters are aware that a rental assistance program exists.
But even among renters who do know they can apply for aid, the process can be cumbersome. The National Low Income Housing Coalition has seen some rental assistance applications reach 45 pages in length. That alone is a barrier to accessing that money.
At this point, many renters are protected through Oct. 3 as per the latest eviction ban. Those who haven't yet received aid but qualify for it should apply for rental assistance right away. With any luck, states will get better about giving out that money in the coming months so that tenants get the protection they need while landlords get the income they need to stay afloat.
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August 15, 2021 at 10:16PM
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Less Than 10% of $45 Billion Rental Assistance Pot Has Reached Renters in Need - Motley Fool
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