WASHINGTON (NEXSTAR) — Economists fear that federal coronavirus aid is simply postponing a housing crisis to rival that of 2008.
“Eventually, the rent will be due,” said Solomon Greene of the Urban Institute research group. “We need to be planning now for that cliff.”
Greene said millions of Americans could face losing their homes if their jobs don’t survive the pandemic.
“Renters are most likely to be most hard hit by the crisis. They tend to have lower incomes. They also work in the industries that we’re seeing are losing jobs,” Greene explained.
The $2.2 trillion federal coronavirus relief package approved last month gives temporary protection from eviction and foreclosure for some, but Greene said Congress must create long-term solutions for many more.
Sen. Sherrod Brown, D-Ohio, agreed, saying building more affordable housing is key.
“We just need to put incentives out there for homebuilders and others,” Brown said.
Democrats in Congress say they will not allow a flood of foreclosure and evictions like those caused by the 2008 financial crisis. Rep. Cheri Bustos, D-Ill., said families, not banks, must come first.
“At this point, I think it’s just fair to say we’re willing to look at anything to make sure we’re helping our families,” she said.
But Rep. Ron Estes, R-Kan., said Congress should wait to see what happens before moving.
“Businesses would be able to come back to work and employees would be ready and at a place to get back to work, as well,” he said.
He added that the money already in the pipeline may be enough to prevent a housing crisis.
Hilary Shelton, NAACP president of policy and advocacy, says the crisis is disproportionately impacting communities of color and is hoping Congress doesn’t repeat mistakes of the 2008 financial crisis where African-American home ownership was slashed by nearly half.
“At that time, only 40% of African Americans owned their homes. By the time the economic downturn was over, that number was cut in half. (For) white Americans, it was cut by about 10%. The impact was astounding, it was outrageous to see what happened then,” Shelton said.
“What happens when we’re finished going through this? What happens when we solve this problem? Are people going to find themselves in deep debt?”
The National Apartment Association says it’s urging Congress to “create an emergency rental assistance program for those residents who are impacted by the COVID-19 crisis and struggle to cover housing expenses.”
We also ask that financial assistance and protections be expanded to other property-level financial obligations such as property taxes, insurance payments, utility service and similar expenses,” the association said in a statement.