The housing industry is making the news this week in a variety of ways, with President Joseph R. Biden’s extension of a moratorium on foreclosures and evictions leading the way for 2021.
Originally scheduled to conclude at the end of January, the federal ban will now extend through the end of March 2021. About 19 percent of renters – 14 million Americans – are still behind on their payments in December 2020, according to the Center on Budget Policies and Priorities, as reported by CNBC. According to a Census Bureau report, almost 12 percent of homeowners with mortgages are late on their payments.
So how does this affect the various groups involved in the housing industry? According to Realtor Magazine, extending the eviction ban could come at the price of landlords, who could have difficulty taking care of their properties and those who live in them.
“The National Association of Realtors has been among housing groups advocating for rental assistance to also help the nation’s landlords. NAR and other industry groups have argued that a federal eviction moratorium without rental assistance would lead to a crisis in which housing providers couldn’t cover their costs and tenants would fall further and further behind in payments,” the magazine reports.
So far, Congress has allocated $25 billion toward rental assistance, and President Biden’s $1.9 trillion stimulus plan that was unveiled last week calls for an additional $25 billion in rental assistance, according to Realtor Magazine.
On Wednesday, the new Centers for Disease Control and Prevention director confirmed that the agency’s moratorium on certain types of evictions is being extended until March 31. In a statement responding to that order, new CDC Director Rochelle P. Walensky wrote that she would extend the moratorium as a protective public health measure.
“Despite extensive mitigation efforts, COVID-19 continues to spread in America at a concerning pace,” Walensky said in a statement. “We must act to get cases down and keep people in their homes and out of congregate settings – like shelters – where COVID-19 can take an even stronger foothold.”
Other experts in housing industries have seen issues with the moratorium since first implemented in September 2020, and continue to seek solutions. These issues include no federal enforcement and tenants not understanding how to take advantage of the ban, according to NPR.org.
“Without this action by President Joe Biden, millions of renters could have lost their homes during this surge in COVID-19,” Diane Yentel, president of the National Low Income Housing Coalition, told NPR. She adds, however, that the moratorium itself is insufficient and allows some landlords to evict tenants despite the protections. NPR says the CDC order, “in spirit, directs landlords not to put people out in the street for nonpayment of rent and into living situations where they can catch and spread the coronavirus. Already, one study has attributed thousands of deaths in the U.S. to evictions during the pandemic because displaced families have been forced into more crowded living conditions.”
In addition to extending the eviction ban through March, Realtor Magazine reported that Biden is also expected to ask Congress to keep the moratorium in place through September 2021. The magazine said the president has also proposed a down payment tax credit of up to $15,000 that first-time buyers could use at the time of purchase – saving for the down payment is often cited as the biggest obstacle for first-time buyers.
A survey by HomeLight, a real estate referral company, found that 55 percent of more than 1,000 real estate professionals recently surveyed said they were in support of such a tax credit for first-time buyers. First-time buyer tax credits are not new. Presidents George W. Bush and Barack Obama used them to help home buyers purchase their first homes during the Great Recession, Realtor Magazine reported.