For troubled homeowners in the first year of the pandemic, there was early hope that these tough times would not get people with mortgages on the streets.
With swift government action, homeowners quickly learned that most of them could postpone monthly payments for up to 18 months – and even have the option to make them up to 40 years later.
Tenants weren’t so lucky.
Sure, there have been state and regional eviction moratoriums, but it took Congress almost a year to get away with actual payment help, and that has only leaked so far. It also came with a multitude of limitations and hurdles, piled on a population where millions were already in a precarious financial position.
We should say it out loud: when it comes to public order, people who do not own a home are treated like second-class citizens.
If you cannot afford to buy (or choose not to buy), you are missing out on numerous tax incentives. Then, when an extended crisis strikes, your ability to have a roof over your head is subject to some kind of sloppy political brinkmanship that let the eviction moratorium expire before it was partially restored.
How did that happen and why? And what will we learn from it?
Let’s start with the baseline: For decades – and for pretty good reasons given the wealth-building opportunities that home ownership offers – the federal government has boosted the mortgage market in a variety of ways. Lenders are supported by the federal government, and homeowners can get discounts on their monthly payments as well as favorable tax treatment on long-term home appreciation.
But be it for lack of imagination or lack of will, there is little national infrastructure to help most tenants. This is a blatant shortcoming, exemplified by this year’s slow distribution of $ 47 billion in rental aid. Only about $ 3 billion had been paid out by the end of June.
Many mortgage borrowers have, at least in theory, access to a pause button with a phone call through their mortgage service provider. Your relative happiness is an improvement that arose from the chaos of the last financial crisis. Back then, the collapse of the housing market led to a devastating wave of foreclosures, also because people seeking loan adjustments faced an incredible complexity.
However, tenants are now facing what is known by policy experts as the “administrative burden”.
The phrase refers to a harrowing set of hurdles tenants – often low-income people – face in accessing any kind of assistance, such as the rental subsidy that moved so Ice Age.
In their book on this phenomenon and other scientific findings, Professors Pamela Herd and Donald Moynihan from Georgetown University outline three of the leaps that are necessary to overcome such stresses.
First and foremost is awareness. To get help, you need to know that it is available at all. According to a survey by the Urban Institute in May, months after the rental subsidy came into effect, 57 percent of tenants and almost 40 percent of landlords were unaware of it.
Then the authorization exists. The rental support comes with rules that are not always easy to navigate. It becomes even more difficult when you are exhausted from unemployment, child and elderly care, or illness.
It can be difficult to find someone who can explain everything. Homeowners have their mortgage servicers to assist. Firms that got the forgivable and relatively convenient loans from the paycheck protection program had their bankers. Many precarious tenants do not have such help.
“For someone about to be evicted and desperately trying to figure out how to apply, what forms to fill out, where to go, you can quickly see how brutal it is,” Professor Herd told me this week.
Finally, there is compliance. The forms must be submitted completely and correctly. And when it comes to rent subsidies, landlords in many places have to cooperate by agreeing to accept government money.
There were also other problems with the rental assistance program and the like. For example, an inexplicable computer system can inexplicably reject applicants.
“They mistook them for someone else or refused them to be eligible for back benefits,” said Emily Benfer, visiting professor at Wake Forest University School of Law who has seen such client representation issues over the years . Any unfairly rejected application “takes months to correct and incurs significant costs, not only in lost support, but also in the time and energy it would take if you could use that to stabilize yourself and your family “.
There are many reasons – too many – for us to put higher burdens on people on lower incomes. There are the historical and, in many cases, racially motivated assumptions about who deserves it. There is a fear of fraud, which is well-founded but problematic if it delays help in an acute crisis.
Sometimes it’s because of government ignorance.
“The programs are developed by people who are not poor themselves and run without consulting them,” said Peter Hepburn, assistant professor at Rutgers University-Newark who also works with Princeton’s Eviction Lab program. The result can be critical shortcomings, such as optimizing forms for people with computers and printers, when using a cell phone could be easier and faster – not to mention the only realistic option – for many in need.
Finally, we always have political considerations. Low-income tenants lack power, and elected officials know it.
“Even if you realize that trying to get benefits is not going to be a great experience, you probably don’t worry that much politically,” said Professor Herd.
So what could we learn? And what could actually go well next time if, for example, a massive hurricane brings much of South Florida to a standstill?
First, research by the Eviction Lab program shows that a relatively small number of landlords appear to be responsible for an oversized proportion of eviction requests in a given community. Forward-thinking officials could focus their reach – and, if necessary – enforcement efforts on these people.
Data is also crucial. To reach those in need quickly, agencies at all levels of government could share resources to compile better directories of tenant addresses in vulnerable areas. That would give them a go at when the time comes to help.
Then there is kindness.
Elizabeth Linos, assistant professor of public order at the University of California, Berkeley and founder of the People Lab there, has seen the benefits over the past few months while helping officials in the Denver area test the city’s reach for renters . She and her colleague Jessica Lasky-Fink prepared two separate mailings to a group of residents who they believed might need rental and utility assistance.
A note was normal government mail. The other stressed that their predicament was not their fault and that urban workers “get every eligible household the help it deserves.”
Forty percent more people applied for assistance in response to the hint that had a touch of humanity than a control group who received no mail at all, and about 10 percent more applied than those who received the standard mail.
“We treat poverty in the United States as a moral failure,” said Professor Linos. “Maybe it’s not so obvious that the first time you need help doesn’t make you a bad person.”