Next pandemic threat to economy: A wave of evictions

Next pandemic threat to economy: A wave of evictions

This is the feature story in the July 30th, 2020 print edition of The Smart Reader magazine

The first of the month had come and gone, and now in early July the man with the clipboard arrived at the apartments on North Hopkins Street, a plain two-story brick building where grass and weeds grow scraggly along the street and broken furniture lies abandoned around the dumpster out back.

To tenants he was a figure of doom. On the second floor, he stuck a folded eviction notice in the door of Apartment 14, two units down from where Sorea Appling lived. It wasn’t long before Apartment 14’s tenant, and the woman in Apartment 5 downstairs, had found new places to live.

“They say once you get your door knocked on by the man with the clipboard, you might as well leave,” says Ms. Appling, a public school janitor who has been out of work since March and worries that she might be next.

Her worries are increasingly shared by renters across the nation. For several months during the coronavirus pandemic a combination of tenant grit, landlord forbearance, and federal aid has helped people stay in their homes. State or local bans on evictions have in many cases offered a reprieve.

Now those eviction bans are phasing out along with key government support for unemployed workers. With the economy far from recovered, some of the steepest declines in income have been faced by low-income renters like Ms. Appling. By some estimates, the United States could see more than 11 million households evicted in the next four months.

“People are going to go over a cliff,” says Mary Cunningham, a housing expert at the nonprofit Urban Institute, and co-author of a new analysis on the problem. “We’ve seen this coming. We’ve been racing toward it with the clock running out and, so far, Congress hasn’t responded.”

Analogies like “cliff” or “tsunami” are apt. As the Senate convenes this week to consider new coronavirus relief, a key question is whether the resulting bill will include provisions to help at-risk renters. The expiring supports – from the CARES Act passed by Congress in April – include an eviction moratorium for the roughly one-quarter of rental properties that get federal backing, plus supplemental unemployment benefits that have so far buoyed up millions of households.

Although some states have moved to extend eviction bans, the potential for mass evictions on an unprecedented scale looms.

Economists say such an eviction wave could deepen poverty, widen racial inequality, and create severe new damage to the economy that will take years to repair.

“The issue of inability to pay, poverty, and unemployment – that existed pre-COVID-19,” says Raphael Ramos, a lawyer with Legal Action Wisconsin and head of its Eviction Defense Project. “The difference between now and then is that the pandemic has shifted the line of poverty. There are more people at risk than before.”

“Not in 40-hour jobs”

Indeed, the coronavirus is amplifying a problem that has long festered in Milwaukee and other cities. Housing advocates say evictions are a symptom of a combination of chronic problems like low-paying jobs, too little affordable housing, and public transportation systems that are inadequate to take people to where the work is. Renters often scrape by on margins too narrow to absorb even modest difficulties.

“A good part of our clients are not in 40-hour jobs, but in a patchwork of jobs – babysitter, bus driver, hair cutters,” says Peter Koneazny, litigation director at the Legal Aid Society of Milwaukee, where calls from renters appealing for help have skyrocketed. “You have a lot of that. It’s a kind of constant struggle for many people. Their head is barely above water, most of them.”

Evictions are sometimes the result of cascading circumstances. Iyonna Hall-Davis was working as a certified nursing assistant in a Milwaukee suburb, often for 16 hours at a time, when she started having trouble with her car, an old 2007 Cadillac. Taking public transportation to work was “not an option,” she says. “No bus came near it.”

Her transportation troubles led her employer to cut her hours, and she fell behind on her rent, Ms. Hall-Davis says. At the end of February a payroll check that would have covered what she owed arrived late, forcing her eviction. She’s been struggling ever since, moving with her 3-year-old son among family and friends and waiting for her unemployment application to be acted on. She’s been waiting 10 weeks. She hopes to use the money to rent a new apartment and buy another car that can take her to work.

“Whenever that comes, I’ll get my life back together,” she says.

Options for Congress

To stave off the potential crisis, affordable housing advocates are pushing for one or more of the following from Congress: a comprehensive federal ban on evictions to replace the diminishing patchwork of protections currently in place, rental assistance for tenants affected by the pandemic, targeted help for landlords, continuation of the supplemental unemployment benefits at some level, and help for local governments, which are expected to be swamped by eviction notices once the moratoriums end.

Many of those provisions are in the HEROES Act, a $3 trillion package passed by House Democrats in May. Republicans in the Senate, however, say the Democrats’ measure is far too costly.

Some housing groups are optimistic Congress will act. “It’s brink negotiations,” says Bob Pinnegar, president and CEO of the National Apartment Association, which represents the rental housing industry. He expects an acceptable package will emerge.

Affordable housing advocates are more optimistic about local initiatives.

The “cancel rent” movement, for example, notched a victory recently when Ithaca, New York, passed a resolution calling on the state to cancel rent for residents and small businesses for three months.

Massachusetts is the latest state to renew a pandemic-related ban on evictions. Its moratorium, which had been set to expire in August, will now stretch through the fall, due to an order Tuesday by Republican Gov. Charlie Baker.

In Wisconsin, by contrast, a two-month ban set by Democratic Gov. Tony Evers expired May 26. That month, the Republican-majority state Supreme Court threw out Governor Evers’ coronavirus order as unconstitutional and mandated that new policies go through a legislative rule-making process.

Mr. Ramos and others saw evictions in Wisconsin jump 40% over the previous year in the first week after the state eviction moratorium ended. They are now running 14% higher than last year.

“There are a lot of people in this building who are under the threat of eviction,” says Ms. Appling, a slender woman with close-cropped blond hair and a silver crucifix around her neck. “Ever since March, these people haven’t been able to go to work.”

For families, wide ripple effects

Eviction has big ramifications for families. It makes it much harder to rent from other landlords, pushes families into substandard and more crowded housing, and has been shown to have negative effects on everything from physical and mental health to education for children who have to move from school to school, says Emily Benfer, a law professor at Wake Forest University and co-creator of the COVID-19 housing policy scorecard set up by the Eviction Lab, a research project at Princeton University in New Jersey.

Pushing people into more crowded, substandard housing is problematic anytime. Doing it in the midst of rising coronavirus cases makes the potential health fallout much worse, says Ms. Cunningham of the Urban Institute. “It’s really reckless during a pandemic to have people lose their housing when we’re all trying to socially distance.”

Evictions already hit people of color disproportionately. In Boston, a report last month from City Life and the Massachusetts Institute of Technology found that in nonsubsidized housing, more than a third of evictions happened in predominantly Black neighborhoods, even though only 18% of the rental housing was in those neighborhoods. That’s partly a result of poverty and low income, the researchers said, but the most telling predictor was the neighborhood’s racial composition.

In the pandemic, people of color are more vulnerable because they’re more likely to work the low-wage jobs most at risk during the pandemic, such as hospitality and retail positions, where people can’t work from home. And it’s not clear how many of those service jobs will come back as the economic recovery shows signs of slowing.

Among Americans in general, the problem of eviction is huge, affecting about 2.3 million households in a year, according to the Eviction Lab. In the next four months, the figure could hit more than 11 million, according to a new data analysis tool by global advisory firm Stout Risius Ross LLC.

In Milwaukee, on the ninth floor of a downtown apartment building, Edward Smith was alarmed recently to get a notice that he owed more than $3,000 in rent. Mr. Smith, a disabled Army veteran and former paratrooper, says he fell so far behind because he had to pay funeral expenses for his father, who died in May at a nursing home in the Chicago suburbs. Mr. Smith says his father, who was 90, had tested positive for the coronavirus. “I had to help bury him,” he says.

Mr. Smith, a tall, friendly man who wears an American flag face mask, says he talked to the building’s management after receiving the letter. “They said they’re going to be sending out eviction notices at the first of the month,” he says. “I told them I’ll try – if I can set up a payment program.” But he’s worried. He’s applied for rental assistance.

Lifelines in a storm

Wisconsin is spending $25 million of federal COVID-19 relief money to help tenants avoid evictions. The problem is that many renters don’t know about the assistance. And housing advocates wonder what happens when the money runs out.

In the meantime, many small landlords, too, are on the financial brink, unable to withstand a long-term dive in rental income. Yet some have shown leniency because of COVID-19.

“The mom and pop landlords are doing what they can to keep good tenants,” says Lisa Owens, executive director of City Life/Vida Urbana, a tenant advocacy group in Boston.

Ms. Appling, the school janitor, was astonished to hear from a friend that another landlord had forgiven tenants a month’s rent. Moreover, many landlords know that tenants can apply for rental assistance. They are willing to wait. But not all landlords are so lenient, and as Ms. Appling has observed, evictions can happen suddenly and ruthlessly. She’s been spared, but only for now. Furloughed from her job on May 4, she’s been able to borrow enough from relatives to pay her $525-a-month rent. And yet there’s a limit to what she can borrow. She’s applied for unemployment benefits but has received nothing, even after months of waiting. She doesn’t know when she’ll be called back to work.

“I’m good for this month,” she says hopefully.

By Richard Mertens &Laurent Belsie


Closer to home: Evictions in Kenosha

Evictions are such an unfortunate situation that happens to many people who are living in poverty with no other financial resources and/or support systems to assist them during a tough time. 

The majority of low-income families barely have enough money to take care of their basic needs and cannot withstand any type of financial crisis that occurs when they do not have enough money to sustain their basic needs with inflated rent. 

The majority of low-income people do not have a strong support system that can assist them with paying rent when a crisis occurs and more than likely they are behind on the utility bill that prevents them from being able to catch up. For people who do not have great rental history and low income, it makes it very difficult for them to obtain safe and affordable housing once they have an eviction on their record.

Now with the impact of COVID-19, it is difficult for low-income working-class Americans who have been furloughed to obtain the CARES unemployment benefits that would have assisted them with maintaining housing.  The low-income working class is unaware of what resources are available to them because they haven’t needed to access eviction prevention assistance nor understand the court system eviction process. 

With the CARES act resources going away and people not going back to work the question is how are the working class going to continue to maintain affordable housing moving forward.

By Veronica Judon, Homeless Assistance Supervisor
and Elizabeth Stancato, Housing Assistance Supervisor
Kenosha Human Development Services, Inc


Q&A with Marie Lewis, Auxillary Captain at the Salvation Army of Kenosha

Covid-19 has dealt us a one-two punch, resulting in both a health and an economic crisis. On the financial side, we are seeing a monetary vulnerability that includes almost one third of homeowners missing their July mortgage payment as well as a wave of evictions coming our way.

Fortunately, here in Kenosha, we have the Salvation Army, an organization that has a storied legacy of helping people in need. Recently, the Salvation Army has been tasked with disbursing grant funds in an effort to stave off evictions.

Marie Lewis, Auxillary Captain of the Salvation Army of Kenosha, kindly answered our questions.

Given that we are in the midst of a pandemic, do you foresee an impending wave or tsunami of evictions here in Kenosha County? What is the current situation?

Yes I think there will be a huge amount of evictions in Kenosha given all the events of the COVID-19 pandemic.  We have people that are requesting rent assistance daily and many have received their 5 day notices or eviction.

Would you say most of these evictions could be directly attributed to COVID-19? 

I don’t know if most of them are attributed directly but there certainly are a significant amount of them that are.  Like most of the US people in Kenosha often live paycheck to paycheck therefore, for those that had business or jobs close for a period of time with no income was enough to make them fall behind on rent and utilities.  Fortunately, we were able to step in and help with pantry to help with the food needs.  Kenosha has been wonderful with donations both practical and monetarily to keep our pantry stocked.  God has been good in taking care of the increased need.

How did the Salvation Army get involved in assisting tenets who have fallen behind with rent payments? 

The Salvation Army has always helped with rent assistance when funds are available.  We ran out of funds quickly when this all started.  We unfortunately had to tell many we could not help.  Gratefully, we were recently awarded grants from both CDBG and ESFP.  Some of these funds are very restrictive as to who qualifies for them and we need a lot of information and have to be very careful when we process these funds.  If we are not cautious we could have to repay the grant money if we do not have the appropriate information or if they don’t meet all the requirements for the funds.  One of the restrictions is that these funds must be used only for COVID related hardship.

Is rent assistance on a one time basis?  What other options due renters have if in the arrears with their rent?

Yes, these are one time assistance available and they are not allowed to have received from any other agency for rental assistance for COVID.  There are very limited number of places to go for rent assistance.  We are also limited to only paying for one month and the Landlord must state the tenant will not be evicted for at least 30 days.  The problem with that is if the person is several months behind with rent and we can only help with one month then it will not assure housing security.  The only other thing is if they reach out to their own personal church to see if they can help or family.

Could you please tell us the source of these funds?

The funds are from a City Development Block Grant/ HUD are for COVID related assistance for City of Kenosha residents that qualify. We also have funds from Emergency Food and Shelter Program/ FEMA.  We also get some private donations for the specific purpose of assisting with rent.

Has there been any communication or dialogue with landlords? 

Yes, part of the process is to have the Landlord come in and pick up the check and sign the agreement to not evict for 30 days.  Sometimes, there are calls to the Landlord to work out an agreement on behalf of the client.

What are they saying? 

Most of them have mortgages and bills to pay on the unit as well and cannot always let things go for a long term.  Some are management companies and do not have any say in the situation.

How serious is the current homeless situation and will it only get worse? 

Kenosha has always had a homeless problem.  Some of it is that the rental rates in this area are high.  The other problem is that once someone has been evicted it is very difficult to get into another rental unit.  Landlords do not want the risk.  It is hard because sometimes the situation is not the fault of the individual but sometimes things that could not be controlled.  It makes the homeless situation harder to come out of once evicted and in that demographic.

What options do families have if evicted?

That is a very difficult question.  We do have Shalom Center but they are usually full because of the great need.  There are a couple other options for special groups with other agencies.  We do not have a shelter nor do we hunt for apartments for individuals.  That is outside the area we have staffing for.  Some will move into family or friends homes, or live in their cars or get a motel for a short time.  We had requested grant money to be used specifically for motel stays for desperate times or the bitter cold.  But we were denied.   It is heart wrenching when you have a family or single mom with a new baby or young kids and no place to go.

How is the Salvation Army holding up during  this COVID-19 crisis?

God has been very good to us during this crisis.  It was certainly a challenge especially in the beginning.  I have only 2 employees so we rely on volunteers heavily. All of our program volunteer helpers were told to stay home.  It was getting new volunteers to help make pantry boxes and pick up food and generally keep things running.  We have had significant increased numbers of people coming to receive food. However, we have also had a wonderful increase in food donations from all aspects of life, corporate, churches, private and government food.  We had a great crew of volunteers when everything was shut down but now that people are back to work we are a little short as our program volunteers are still not back to work. We still have some great volunteers but need more. We have many changes like most establishments with checking health, wearing masks, social distancing and closing the building to outside people and doing pantry out the door.  We did resume our Sunday morning Adult Sunday School and Church services and Monday night Bible Study.  Now, we are open by appointments for the rent assistance.   We will be participating in a “Stuff the Bus” event at Walmart on August 7-9.  Individuals can purchase school items at Walmart and place them in the donation bins at the front of the store.  This year more then others there will be need for help.  I would personally thank all of Kenosha county for all the help and support.  We at The Salvation Army would not be able to do what we do or help the people we do without you.

Interview by Frank Carmichael