For homeowners struggling in the first year of the pandemic, there was hope early on that these hard times would not put people with mortgages on the streets.
Thanks to swift government action, homeowners quickly learned that most of them could defer monthly payments for up to 18 months – and even have the option to catch them up to 40 years later.
The tenants were not so lucky.
Of course, there were federal and regional moratoriums on evictions, but it took Congress nearly a year to get real payment assistance, and it has only happened so far. In addition, it came with a multitude of restrictions and obstacles to overcome – piled on a population where millions of people were already in a precarious financial situation.
It must be said loud and clear: in terms of public policy, people who do not own their homes are treated as second-class citizens.
If you can’t afford to buy (or choose not to), you are missing out on a lot of tax incentives. Then, when a protracted crisis strikes, your very ability to have a roof over your head is subjected to the kind of botched politics that allowed the moratorium on evictions to expire before it was partially restored.
So how did this happen and why? And what are we going to learn from it?
Let’s start with the baseline: For decades – and for very good reasons, given the wealth creation opportunities that come with homeownership – the federal government has taken over the mortgage market in a variety of ways. Lenders have the backing of the federal government, and homeowners can get deductions for their monthly payments, as well as favorable tax treatment on any long-term home appreciation.
But whether for lack of imagination or lack of will, little national infrastructure exists to help the majority of tenants. This is a glaring shortcoming exemplified by the molasses-slow distribution of $ 47 billion in rent assistance this year. Only about $ 3 billion had been distributed by the end of June.
Many mortgage borrowers, at least in theory, have access to a one-call pause payment button through their mortgage agent. Their relative good fortune is an improvement born out of the mess of the last financial crisis. At the time, the collapse of the housing market resulted in an overwhelming wave of foreclosures, in part because those looking to modify their loans faced unfathomable complexity.
Tenants, however, are now faced with something that policy experts have come to call an “administrative burden.”
The phrase refers to a series of heartbreaking hurdles tenants – often low-income people – must face in accessing any sort of assistance, like rent assistance that has moved so glacially.
In their book on this phenomenon and other research, Georgetown University professors Pamela Herd and Donald Moynihan describe three of the leaps needed to overcome such burdens.
The first is awareness. To get help, you need to know it’s available in the first place. In May, months after the rent assistance came into effect, 57% of tenants and nearly 40% of landlords weren’t even aware of it, according to a survey by the Urban Institute.
Then there is the eligibility. The rental aid comes with rules, which are not always easy to navigate. It becomes even more difficult if you are exhausted due to unemployment, closed child and elderly care or illness.
It can be difficult to find someone who can explain everything. Homeowners have their mortgage agents to help them. The companies that received the forgivable and relatively quick loans from the Paycheck Protection Program had their bankers. Many precarious tenants do not benefit from such assistance.
“For someone facing eviction, desperately trying to figure out how to apply, what forms to fill out, where you need to go, you can quickly see how a little brutal it is,” he told me. Professor Herd this week.
Finally, there is compliance. Forms must be completed and submitted correctly. And in the case of rent assistance, landlords in many places have to cooperate in accepting the money the government offers.
There were other problems as well with the rental assistance program and the like. For example, a flawed computer system can inexplicably reject applicants.
“It either mistook them for someone else or turned them down when they were eligible for return benefits,” said Emily Benfer, visiting professor at Wake Forest University Law School, who saw such problems repeatedly over the years when representing clients. Every request that is inappropriately denied “takes months to be corrected and comes at a significant cost, not only in loss of support, but in the time and energy needed when you could use it to stabilize yourself and your family.”
There are many reasons – too many – why we impose more burdens on low-income people. There are historical, and in many cases racially motivated, assumptions about who deserves. The fear of fraud exists, which is reasonable to some extent but problematic when it delays help during an acute crisis.
Sometimes it boils down to government ignorance.
“The programs are designed by people who are not themselves poor and carried out without any consultation with those people either,” said Peter Hepburn, assistant professor at Rutgers University-Newark who also works with the Eviction Lab program at Princeton. The result can be crucial flaws, such as optimizing forms for people with computers and printers, when using a mobile phone can be easier and faster – not to mention the only possibility. realistic – for many people in need.
And finally, we have political considerations, always and forever. Low-income tenants lack power, and elected officials know it.
“Even if you realize that it won’t be a great experience when you try to access benefits, you are probably not that worried politically about it,” Professor Herd said.
So what could we learn? And what could possibly happen the next time, say, a huge hurricane ties up much of South Florida?
First, research from the Eviction Lab program shows that a relatively small number of homeowners appear to be responsible for a significant portion of eviction requests in a given community. Forward-thinking managers could focus their outreach efforts – and their enforcement efforts, if necessary – on these people.
Data is also crucial. In order to quickly reach those in need, agencies at all levels of government could share resources to concoct better tenant address directories in vulnerable areas. It would give them a good start when the time comes to provide assistance.
Then there is kindness.
Elizabeth Linos, assistant professor of public policy at the University of California at Berkeley and founder of the People Lab there, has learned the benefit in recent months by helping Denver area officials test the city’s awareness. to tenants. She and her colleague Jessica Lasky-Fink have prepared two different mailings to a group of residents who they believe may need assistance with rentals and utilities.
A note was a standard government mail piece. The other stressed that their situation was not their fault and that municipal workers would help “every eligible household get the help it deserves”.
Forty percent more people submitted a request for help in response to the note that had a touch of humanity than a control group that received no submissions, and about 10 percent more submitted a request. than those who received standard mail.
“We are treating poverty as a moral failure in the United States,” said Prof Linos. “Maybe it’s not so obvious that if you need help for the first time, it doesn’t make you a bad person.