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Few states have established a safety net to help millions of Americans handle accumulating debt from rent and utility bills that have piled up during the pandemic.
This story was originally posted by Stateline, an initiative of the Pew Charitable Trusts.
Edward Jaros lost his job on a Los Angeles movie set during the pandemic and has been unable to find work, leaving him facing hunger and eviction.
“I owe about $21,000 and there’s no hope of me paying that,” Jaros said this week. “I’ve applied for and have [rent] relief, but it goes directly to the property management company and it doesn't seem to be paying down much of anything.”
Jaros said his landlord has pressured him to pay back rent with interest, and it was only after finding a pro bono lawyer that he learned he was temporarily protected from eviction. He has relied on food banks to get by and says he has run into bureaucratic walls when he has applied for unemployment benefits and food stamps.
“I don't expect help from my government, I truly don't,” he said. “Every time I've asked for it, it's been slapped down, or they've given it to me with a loophole where they get to cut another service from me.”
Millions of Americans who have fallen behind on their bills during the pandemic dread the end of emergency protections that have sheltered them from eviction, kept on their lights and water and provided unemployment aid. Few states have established a safety net to help them handle their accumulating debt when those temporary orders expire.
“We've heard a sense of fear from many tenants concerned about a tidal wave of evictions once the moratorium lifts,” said New Jersey state Sen. Troy Singleton, a Democrat. “We need to have a plan in place to address it.”
State lawmakers’ efforts will be bolstered by $25 billion in rental and utility assistance that Congress approved last month, but some experts say the nation’s rental debt is closer to $100 billion. And some states already are warning that the federal help comes with complex rules that will make it difficult to help renters in time.
Some legislators are looking to put millions of state dollars into relief programs. Others are working to create long-term repayment plans that allow people to work their way out of rent and utility debt without having to make a single lump-sum payment. And some lawmakers are pushing their states to extend or expand unemployment benefits.
But because many states have had to slash their budgets in response to plunging tax revenue, there is little money in state coffers for rent relief. And state lawmakers also are facing pressure from landlords who say they face foreclosure if they don’t collect rent or receive government help.
“Any further extension of eviction moratoriums is just kicking the can down the road,” said Greg Brown, vice president of government affairs at the National Apartment Association, a Virginia-based rental industry group. “The outstanding rent has to be paid by someone at some point, and that's the only way to resolve this crisis.”
Expiring Eviction Bans
Many states still have eviction moratoriums in place, and President Joe Biden extended the federal eviction ban to the end of March. But some housing advocates have said the federal ban doesn’t protect all tenants. Twelve million households are more than $5,000 behind on rent, according to Moody’s Analytics. As soon as the bans end, those bills will come due—quickly followed by eviction notices.
In California, roughly 3 million renters won’t be able to or doubt their ability to pay the next month’s rent, according to a December U.S. Census Bureau survey. For state Assemblymember David Chiu, a Democrat, that represents a public health crisis as well as a housing problem.
“The idea that hundreds of thousands of people could be forced from their homes will make COVID-19 more likely to spread and have deadly consequences,” he said.
A National Bureau of Economic Research study, which has not yet been peer-reviewed, estimated that gaps in eviction and utility protections have led to as many as 164,000 deaths during the pandemic.
California will be receiving $2.6 billion from the federal relief package to help with rental aid, but Chiu said that likely won’t be enough to solve the problem. Earlier this week, Democratic Gov. Gavin Newsom and top state lawmakers offered to use federal money to cover 80% of tenants’ debt if landlords agree to forgive the rest—a plan that was met with skepticism from both housing advocates and landlords.
Chiu is asking fellow lawmakers to extend the state’s eviction moratorium through the end of the year. He also proposed a measure that would convert overdue rent into civil debt for tenants who keep up with a reduced payment plan. That debt could not be the basis for an eviction.
A few states passed relief packages last year. Oregon, for example, approved $50 million for struggling renters and $150 million for landlords whose tenants have not paid rent, along with a requirement that some tenant debt be forgiven. A package in Colorado included $54 million targeted for rent and mortgage aid.
Lawmakers in Washington state say their residents need about $2 billion in rent relief, far more than the $500 million in federal aid the state has received. An estimated 150,000 households in the state are behind on rent, according to Democratic state Sen. Patty Kuderer, with many more paying the bills with a credit card.
Currently, landlords in Washington can evict tenants without cause if they provide 20 days of notice. Kuderer introduced a bill that would stop no-cause evictions for two years. It also would send eviction cases based on nonpayment to Dispute Resolution Centers, which serve as state-authorized alternatives to the court system for civil conflicts.
“The scope of the problem is enormous,” she said. “This is why government exists—to help people recover from this kind of situation. When you do help people in these situations, the economy recovers faster.”
A bipartisan group of lawmakers in Washington state recently agreed to $365 million in state money for rent and utility assistance. State Sen. Lynda Wilson, the Republican ranking member on the Ways and Means Committee, said the funding was an “educated guess at best” about the scope of the problem. Asked about the state’s eviction ban, she said her position was irrelevant because Gov. Jay Inslee, a Democrat, has the power to act unilaterally under emergency powers—authority she is seeking to remove.
Meanwhile, Wilson said that Republicans would oppose Kuderer’s bill to create a mediation process.
“If it becomes almost impossible for a landlord to evict a tenant, you’re going to see more landlords getting out of the landlord business,” she said. “Clearly, you can’t solve the housing issues by pursuing anti-housing policies.”
In some states, the federal relief money may be enough to cover renters’ debts, but lawmakers could struggle to distribute the money before moratoriums end. The $850 million marked for Pennsylvania is close to estimates of residents’ relief needs, but the state’s eviction ban expires Feb. 23. While the federal moratorium is still on the books, Pennsylvania’s ban offers more protections and fewer loopholes.
“The General Assembly needs to approve the spending no later than the first week of February so that money will get out to individuals quickly,” said state Sen. Art Haywood, a Democrat. “We're really running out of time.”
State Sen. Pat Browne, the Republican chair of the Senate Appropriations Committee, did not respond to questions about Haywood’s call to disburse the funding.
Republicans hold a majority in the Pennsylvania legislature, and advocates for state-funded aid haven’t gained traction in many states under GOP control. Some Republicans, such as Iowa Gov. Kim Reynolds, have said it’s the responsibility of the federal government to provide relief.
"Unfortunately, there's just not enough state funding to make everybody whole, and that's just a reality of what we're dealing with,” she said last month at a news conference.
Many GOP-controlled states have provided rental aid through federal CARES Act funding. Texas Gov. Greg Abbott, a Republican, allocated $171 million of Texas’s share toward rental assistance. And in Missouri, Republican Gov. Mike Parson and the GOP-dominated legislature have put distributing federal dollars at the top of the legislative agenda.
Montana received $200 million for rental assistance in the latest federal relief package, but lawmakers voted earlier this month to distribute only $17 million, holding the rest in reserve.
Republicans said the move would give legislators more say in how the money is spent, allowing them to allocate the remaining money as they see fit.
Last summer, Democratic lawmakers in Ohio proposed using the state’s rainy-day fund to provide rent relief, but the measure has not been brought up for a vote. State leaders in Ohio have targeted $55 million in federal CARES Act money for eviction, foreclosure and utility aid.
GOP leaders in Ohio did not respond to a request for comment.
Most states, including Republican strongholds such as Florida, Indiana and Mississippi, set up rent relief programs last year using federal funds, with some adding state money as well. But housing advocates say they haven’t come close to matching the need.
Singleton, the New Jersey lawmaker, said his state needs nearly $3 billion in rent relief. It expects to get about $600 million from the most recent federal stimulus. His proposal would establish longer-term repayment plans for tenants and give tax credits to landlords who have offered rent forgiveness.
No Federal Rule on Utilities
While every state is subject to the federal government’s eviction ban, there is no such national moratorium for shutoffs of water, electricity and gas. More than 600 environmental, racial justice, labor and faith groups have called on Biden to issue a ban, but his administration has yet to take a position.
Eleven states currently block such shutoffs, while 22 states that had bans during the pandemic have let them expire. While some utilities have voluntarily stopped disconnections, many have begun halting service for customers who are behind on their bills.
New Jersey has a shutoff moratorium in place until March, but residents with months’ worth of debt will need help when it expires.
Some advocates say lawmakers nationwide need to do more than just delay disconnection notices.
“Even if we have a shutoff moratorium, if there’s no debt relief attached to it, it doesn’t really do anything,” said Rianna Eckel, an organizer with the environmental nonprofit Food & Water Watch.
New Jersey state Sen. Joe Cryan, a Democrat, has proposed using $5 million in CARES Act funding for utility relief, but acknowledged the mounting debt will still represent a crisis when shutoff moratoriums end.
In Virginia, state Sen. Jennifer McClellan, a Democrat, pushed for utility protections last year, many of which were enacted as part of the state budget. When the state’s shutoff moratorium ends, utilities will have to give customers up to 24 months to pay off their debts and cannot charge late fees or interest. The utilities also are required to collect data on uncollected debt, allowing the state to direct its $100 million in CARES Act funding to those furthest behind.
“These people who lost their jobs weren't all of a sudden going to have the money to pay these bills,” McClellan said. “We needed to work with them to stretch the debt out so they could actually pay it.”
Four states—Alaska, California, New York and Virginia—already have taken legislative action to block shutoffs and provide repayment options. Colorado allocated $5 million at the end of last year to help people pay their utility bills.
In other states, it appears less likely that lawmakers will step in. Nearly 30,000 households in North Carolina lost their water, electricity or gas in November after the state’s shutoff moratorium expired. With more than 600,000 customers in the state still behind on utility payments, activists in the state are urging lawmakers to act.
“I don't see any real effort in the legislature to provide people direct assistance using state funds,” said Rory McIlmoil, senior energy analyst for Appalachian Voices, a regional environmental nonprofit.
Top Republican lawmakers say they’re focused on distributing the $700 million in federal funds that North Carolina will receive for rent and utility relief.
Extending Unemployment Benefits
Leaders in some states also want to extend or expand unemployment benefits. Unemployed workers have gotten extra money and additional weeks of support from federal relief packages, but with those benefits set to expire in March, many lawmakers and justice advocates think it’s imperative to bolster state programs.
“Part of being able to go back to work is staying afloat in this interim time,” said Michigan House Minority Leader Donna Lasinski, a Democrat. “If we let folks fall under the water line, there's a much higher cost to the families, the state and our future economic growth.”
Lasinski said Michigan’s unemployment benefits, currently capped at 20 weeks of coverage and $362 per week, are long overdue for an adjustment. Her proposal would permanently extend unemployment to 26 weeks, while bringing maximum weekly payments up to $581, with future increases based on inflation. Lawmakers passed an extension of the 26-week unemployment coverage late last year, but it was vetoed by Democratic Gov. Gretchen Whitmer after it was tied to another proposal she opposed.
Other states, including Nevada, Alaska, Maryland and Minnesota, have already passed bills to expand unemployment access or extend benefits. North Carolina Gov. Roy Cooper, a Democrat, has urged lawmakers in the state to provide more unemployment relief.
Even as state lawmakers scramble to address these crises, their work is complicated by the lack of clarity on whether more federal aid will be forthcoming. Biden has called for another $25 billion in rent relief and $5 billion in utility aid, as well as extending and expanding federal unemployment benefits.
That kind of federal investment would take much of the burden off of the states, but the plan faces an uncertain path forward in the Senate.
Alex Brown is a staff writer at Stateline.