WASHINGTON, D.C. -- After weeks of social distancing and stay-at-home orders, some states are starting to reopen and looking to help businesses and employees recover.
This first phase of reopening comes after tens of millions of Americans have had to file for unemployment since March. As a result, an Apartment List survey found one in four renters and homeowners was unable to pay their rent or mortgage in April. The National Multifamily Housing Council (NMHC) found that number was as high as one in three, just for renters.
“We expect May to be a potentially slower start than April,” said Doug Bibby with NMHC. “I think everyone is more nervous, because it is possible people had reasonable financial resources coming through March and into April.”
However, after 26 million people have filed for unemployment and most small businesses have shutdown, NMHC expects there to be more stress on the system in May.
To help with the number of people who will struggle to pay their rent or mortgage in May, some municipalities and states have created new assistance programs. For example, in Dallas and Los Angeles, those who make 80% below the area median income could have up to half their rent or mortgage paid in May. Around two dozen other municipalities and states have similar programs.
However, the NMHC and the National Apartment Association (NAA) believe it’s not enough.
“We are asking Congress for more help and that is in one of the bills we are working on with Chairwoman Waters,” said Bibby.
The bill Rep. Maxine Waters (D) is working on a bill that would set aside $100 billion in assistance for renters, and $75 billion for homeowners, including landlords.
“The perception is that this is a very high-margin, very profitable business,” said Bob Penniger with NAA. “If you really and truly look at the numbers, the profit margin that you have from a dollar of rent is about nine cents.”
The NAA believes it is critical that a federal housing assistance package is holistic in including renters, homeowners, and landlords.
“It is very critical that Congress take action to address this,” said Penniger. “If they don’t help us, and helping us is really helping the residents to be able to pay the rent and bridge this gap, you are going to end up with a housing stock that is going to be of lower quality on the other side of this and you could have a wave of foreclosures that could affect residential housing.”