By Callie Clark and Clark Ziegler, MHP Center for Housing Data
January 14, 2021
In Massachusetts, we are now facing two housing crises. One involves the hundreds of thousands of renters in the Commonwealth who lost their jobs due to COVID-19, have been without income and struggling to pay their rent, and face possible eviction if the situation continues. The other involves the thousands of individuals and families who lose their housing every year because they can’t afford it.
During this public health emergency, the Commonwealth has to confront both the short-term and long-term crises. Pre-pandemic, people dealt with an eviction by couch surfing, doubling up with family or friends, or moving into unsafe substandard housing. Moving into a homeless shelter was often the last resort. In the current environment, none of those options is safe or viable. Overcrowded housing is one of the well-established drivers of virus transmission. Homeless shelters have spaced out beds to reduce the spread of coronavirus and are severely short of capacity. Thanks to a state eviction moratorium that expired in October and a federal moratorium set to expire on January 31, 2021, it appears that no one in the Commonwealth has been evicted for nonpayment of rent since April 2020—but that could soon change. Meanwhile, attention must be paid to the displacement of residents not seen in the public data: informal evictions, lease non-renewals, and non-fault evictions that are happening but not being tracked.
The root cause of both crises is lack of income, either short-term or chronic, combined with rapidly rising rents and tight housing markets. The most efficient policy response is to replace or supplement that income. In addition to federal supports, proposed reforms to the state’s Earned Income Tax Credit could expand support to low- and moderate-income households for the long term. Simply slowing or stopping evictions—without ensuring that rental property owners have sufficient income to pay for basic property expenses and guaranteeing that tenants don’t fall further and further behind—is shortsighted and will ultimately destabilize the rental market and harm renters even more.
Numerous federal, state and local programs have been utilized since March to ensure housing stability and income supports for Massachusetts residents. In the past weeks, a FY21 state budget and new federal funding were enacted with landmark amounts set aside for at-risk renters. This brief analyzes the strengths and weaknesses of federal, state, and local safeguards based on the first few months of the pandemic and, with those in mind, it offers recommendations for actions that will enable the Commonwealth to effectively tackle both crises and help those hurt by the pandemic as well as those who have been struggling with housing for most of their lives.
The CARES Act enacted by Congress in late March 2020 was, in general, a very strong response to the crisis. It provided expanded unemployment benefits ($600 per week) through July, expanded eligibility to self-employed and gig workers who would otherwise be ineligible for unemployment, gave small rental property owners mortgage relief, provided funding for states and larger cities that could be used to provide emergency rental assistance, and required that tenants be given longer notice of potential evictions. The CARES Act also included a 120-day federal eviction moratorium for households living in federally insured, securitized, or funded properties, though that only provided protection for one in four rental properties in the nation.
Expanded Unemployment Insurance (UI) benefits appear to have been a very effective anti-eviction strategy while they were in effect. However, the original expanded UI period was followed by a very disjointed effort by the Trump administration to expand UI benefits by $300 per week for an additional three weeks in participating states (including Massachusetts). The vast majority of renters in Massachusetts, 93 and 96 percent between March and November 2020, continued to make rent payments while receiving these supplemental benefits. Additional federal supports, like the Paycheck Protection Program (PPP), were also designed to help businesses retain employees and provide income to those at risk of losing it.
A national eviction moratorium implemented by the Centers for Disease Control (CDC) in September and currently in place through January 31, 2021, has been fraught with problems. The moratorium was not initially accompanied by any ongoing financial assistance to tenants, does not provide any protection for back rent and/or fees accumulated, puts a heavy burden on tenants to assert their rights through the filing of a CDC-created declaration, has been ignored by courts outside of Massachusetts unless the tenants has effective legal representation, and does not slow or stop the eviction process except for the final execution of an eviction order. New guidance issued by the CDC in early October created additional burdens for renters seeking protection under the moratorium by allowing landlords to challenge tenant declarations and initiate eviction proceedings at any time.
Financial support at the federal level arrived via the COVID relief bill enacted by Congress in December 2020. Vastly more comprehensive than previous efforts, the COVID relief bill includes a $600 stimulus check per person up to a certain income threshold, an extension of regular UI benefits and addition of supplemental UI benefits of up to $300 per week running through at least March 14 (including unemployment benefits for contract and gig workers), an extension of the CDC moratorium on evictions from December through January, and the inclusion of $25 billion in emergency assistance to renters to be distributed among the states according to population. Massachusetts is estimated to receive more than $458 million in new federal emergency rental assistance funding, of which a portion will be directly allocated to the City of Boston and potentially some counties. The proposed legislation would also allow landlords and property owners to apply for rental relief on behalf of their tenant(s) with the tenant cosigning the application, and would allow tenants to receive the benefit themselves if their landlord refuses to take payment from the government entity.
The Massachusetts eviction moratorium signed into law in April 2020 was highly successful during the six months it was in effect as evictions for nonpayment of rent were reduced to zero. The moratorium prevented landlords from sending notices that threaten eviction or termination of a lease, relieved both residential and small commercial tenants from late fees and negative credit reporting, allowed landlords to use “last month’s rent” to pay for certain expenses, and provided key protections for homeowners regarding forbearance payments even if not a federally-backed property. During most of that period unemployed renters were receiving expanded UI benefits and most tenants were keeping up with rent payments. The moratorium was set to expire in August but was later extended to mid-October as federal supports began to wane and renters faced more severe financial distress.
Demand for emergency rental assistance ramped up early in the pandemic. The Commonwealth was able to handle the increased demand by expanding funding for the Rental Assistance for Families in Transition (RAFT) program before any of the regional administering agencies ran out of funds. Funding for the program increased to $40 million in two waves: $20 million from a combination of MassHousing and state supplementary budget funds earlier in the year followed by $20 million for the newly created Emergency Rental and Mortgage Assistance (ERMA) program, designed to serve households earning between 50 and 80 percent of the area median income (AMI), in July.
In early October, the state created the Eviction Diversion Initiative (EDI) as an ambitious effort to expand RAFT and other emergency supports, expand the capacity of administering agencies, require that new summary process (eviction) cases be handled in a two-tier process, provide mediation and legal representation for tenants facing eviction in all courts, and coordinate those efforts with the trial courts handling a new wave of eviction filings. EDI includes $171 million in FY21 funds with $100 million dedicated to RAFT and $6.5 million dedicated to the nine Housing Consumer Education Centers (HCECs) focused on helping at-risk tenants navigate the emergency rental assistance application process. The RAFT program also incorporated three important changes: 1) the ability to allow landlords owning under 20 units to apply on behalf of their tenants, 2) an increase in benefits up to $10,000 if the renting household was financially impacted by COVID-19, 3) and the ability to verify applicant eligibility with information collected through other state agencies. In mid-December, the state launched a dashboard to highlight summary statistics for each of the programs that make up the EDI. A new statewide Housing Mediation Program, administered by the Office of Public Collaboration and DHCD, began to offer free pre-court mediation between landlords and tenants in November. And in December, the Commonwealth tapped the Massachusetts Legal Assistance Corporation (MLAC) to administer a statewide coordinated legal services delivery system to ensure free assistance to income-eligible tenants and owner-occupants of two- and three-family homes facing eviction through the COVID Eviction Legal Help Project (CELHP).
While it would have been preferable for those state supports to have been put in place earlier, or for the eviction moratorium to have been extended beyond mid-October until those supports were fully in place, state agencies have done an extraordinary job responding to the need in a very short time frame.
In November the Baker-Polito administration, MassHousing, Citizens’ Housing & Planning Association, and Massachusetts Association of Community Development Organizations announced an Eviction Diversion Pledge in which private owners of rental housing agreed to work with their tenants to take advantage of emergency rental assistance and avoid evictions. As of early January, 67 owners of a combined 141,000 rental units have signed the pledge.
In late December, new state legislation was enacted and signed by the governor that: (1) requires that notices to quit (the first step in the eviction process) include information for tenants about their legal rights and the availability of legal and financial assistance; (2) requires copies of those notices be provided electronically to the state Executive Office of Housing and Economic Development; (3) requires the trial courts to delay eviction proceedings whenever a tenant has a pending application for emergency rental assistance; (4) expands reporting requirements for the courts and the state’s Eviction Diversion Initiative; and, (5) establishes a task force to recommend improvements to EDI.
In response to the COVID-19 crisis, locally administered emergency rental assistance programs have been established in over 80 cities and towns with more than $30 million in assistance. These programs are administered directly by cities and towns and also by local and regional housing nonprofits. They are funded by a variety of sources including Community Preservation Act (CPA) funds, local housing trust funds, federal block grants, CARES Act funds, and private donations.
Many municipalities intentionally developed programs to fill gaps between state and federal funds, and typically do not restrict applicants based on their immigration status. Municipalities have been able to respond to specific needs for their residents with these programs. For example, the City of Chelsea established a mortgage program for small owner-occupant rental buildings while the City of Newton committed funds toward a rental housing assistance program.
It appears clear that through the fall of 2020 enhanced federal UI benefits had a greater impact on sustaining rent payments and preventing evictions than state and local emergency rental assistance programs, including RAFT. “Retail” programs like RAFT, which tailor assistance to each household’s ability to pay, require a time-intensive application process, significant administrative hours to process the application, proof of income, and a signed agreement from the landlord. RAFT has been streamlined in significant ways to respond to the pandemic’s emergency timeline, but is often not as efficient and/or scalable as direct payments in the first line of defense against severe job losses and a widespread loss of wage income. That may change with the new federal rental assistance funding, which is structured more like an income support than conventional rental assistance. Federal funds may now be used to pay the entire rent of households that have lost their jobs or otherwise suffered financial hardship as a result of COVID-19. The outstanding question, addressed further below, is how quickly and how effectively eligible households can be reached with this new federal assistance.
While events are changing day to day, there are several major policy considerations of topmost priority:
Keeping people stably housed during a time of crisis is not only a housing issue—it is a public health issue. The cost of not acting is a high probability of overwhelming the family shelter network, further straining a system that is already at capacity. While households utilizing shelters still remain below last year’s numbers, the CDC moratorium’s upcoming expiration and the slow delivery rate of emergency rental assistance could lead to an overwhelming need for support in the spring.
The pandemic has impacted different parts of our state and communities, especially communities made up of Black and Latinx households, in disparate ways. The legacy of segregation, income inequality, and extremely high housing costs has put the Commonwealth on the path to an unequal recovery. With 422,474 confirmed cases and 12,996 confirmed deaths in the 10 months since March 2020, and numbers continuing to rise, every step must be taken to ensure safe, stable housing for those who need it the most in this crisis and beyond. Federal and state interventions have had differing levels of success but overall have positively contributed to housing stability for the time being. But more must be done.
The only way to come out of this housing crisis stronger and more resilient than before is through a combination of ongoing income supports, emergency rental assistance funding, and a new long-term strategy around affordable housing production and preservation.