If the COVID-19 pandemic has accomplished nothing else, it has destabilized normal, everyday life for millions of Americans, and although housing hasn’t yet attracted high-profile media attention, no single pocketbook issue will impact so many people for as many years to come.
Swift bipartisan action to pass the CARES Act at the beginning of the pandemic bridged employment gaps caused by layoffs, business closings and illness. Additional unemployment compensation helped many families remain solvent, and a federal moratorium on many mortgage foreclosures gave people some breathing room. Additionally, Pennsylvania placed a hold on evictions, allowing renters time to get back on their feet. All these policies worked as intended, providing stability to both the economy and individual families at a critical moment.
When Congress passed the CARES Act there was a built-in assumption — a desire, really — that everything would return to normal within a few months. With that foreshortened outlook, the CARES Act provided only short-term relief. Those measures have all now expired (or are about to) and will ultimately prove to have been insufficient to forestall an economic emergency that will be measured in future years, not past months. The coronavirus has also exacerbated the long-term trend of stagnant wages colliding with rapidly increasing housing costs. That trend, felt nationwide, has made it harder and harder for families to secure a decent place to live on a working paycheck. Put simply, it will continue to get more expensive to keep a roof over your head and harder to earn a living to pay for it.
Congress has multiple opportunities to address these housing challenges. The U.S. House of Representatives has already passed an additional stimulus bill, the Heroes Act, that awaits consideration in the Senate. The bill addresses many of the immediate challenges. The act will provide an additional $100 billion in direct emergency rental and utility assistance for families. Almost 80% of rental households in America receive no federal or local subsidy and are primarily supported by wage earners. The bill would help pay the rent for a finite period to stabilize impacted families and allow landlords to remain solvent.
The general public is rightfully unsympathetic to the caricature of a greedy-eyed landlord twirling his handlebar mustache as he threatens to evict some down-on-their-luck family, but consider that collected rent pays the mortgage on the building, contributes to local municipal and school taxes, and even provides a livelihood for the kid paid to mow the lawn. The ripples of a wave of multifamily foreclosures would extend far beyond the landlord’s interest, with economic damage potentially comparable to the mortgage crisis a decade ago. No one wants to relive that mess.
The separate Helping HOMES Act (H.R. 8003) would provide $75 billion to help COVID-affected homeowners cover their mortgages, local taxes and utilities in the short and medium terms, up to two years. It would also expand mortgage forbearance options for eligible homeowners who were not protected by the original CARES Act and it would require lenders to notify borrowers that they are eligible and how to get help.
Looking forward, H.R. 2 — which also awaits action in the Senate — would also expand the inventory of quality rental housing, building a more attainable American housing market. The core of the bill is an improvement to the Low-Income Housing Tax Credit (LIHTC) that has helped create millions of multifamily homes nationwide. The concept enjoys bipartisan support at both the federal and state level: A private company takes some of the money they would otherwise pay to the tax collector and invests it into local housing. H.R. 2 would make permanent a recent expansion of credit availability and make the vehicle more attractive to investors. The investor gets an alternative to simply making a tax payment and the community gets a valuable new housing asset.
The bill would also fund the National Housing Trust Fund to provide states with a sustainable vehicle to develop new housing. This is a federal version of a law Pennsylvania passed with broad bipartisan support, signed by then Gov. Tom Corbett to invest in housing without increasing taxes. H.R. 2 would also support a variety of smaller vehicles that create, rehabilitate or preserve housing for seniors, people with disabilities and other special populations.
Like it or not, the economic effects of the pandemic on housing are still in their early stages, and those effects will be severe. Congress has an opportunity to make a bipartisan declaration that decent housing is a cornerstone of an equitable society. A wave of destabilizing evictions and foreclosures can be avoided, preserving the core financial asset of every community in America. Longer-term policies to use private investment to create new high-quality housing opportunities for working families is a powerful tool that supports the aspirations of millions of people. These are the opportunities at hand, and Congress should embrace them.
Larry Swanson is the executive director of ACTION Housing Inc., a mission-driven nonprofit housing agency that builds, improves and preserves affordable housing throughout southwestern Pennsylvania.