The Covid Economy

'It's a start:' Stimulus bill includes $25 billion in emergency rental relief, extends eviction moratorium

Demonstrators hold signs during an eviction protest in Foley Square in New York, U.S., on Thursday, Oct. 1, 2020.
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The U.S. is narrowly averting a potential eviction crisis at the start of the new year, as Congress is set to pass a coronavirus relief bill that includes funding for rental assistance and the continuation of the nationwide eviction moratorium.

The bill, which is expected to be voted on on Monday, provides $25 billion in emergency rental relief and a one-month extension of the nationwide eviction moratorium, through January 31, 2021.

The provisions are "a start," Rep. Maxine Waters (D-Calif.) tells CNBC Make It. But more aid and a longer eviction ban are likely needed once President-elect Joe Biden takes office in January, she says, noting that she pushed for the inclusion of $100 billion in rental relief in the HEROES Act, the $3 trillion relief bill passed by the House in May.

"We have to do whatever it takes" to keep people housed, Waters says. Plus, more rental relief also benefits the "mom and pop landlords" who still have to pay their mortgages.

At the beginning of December, around 12.4 million adult renters reported that they are behind on their rent payments, according to the Center on Budget and Policy Priorities (CBPP), highlighting the need for aid.

How the rental relief will work

The $25 billion in rental assistance will be funded through the Coronavirus Relief Fund (CRF) and administered by the U.S. Department of the Treasury. Once the funds are dispersed to states, tenants will apply for aid through state or local relief organizations.

How quickly the assistance becomes available will be dependent on where you live, Diane Yentel, president and CEO of the National Low Income Housing Coalition (NLIHC), tells CNBC Make It. Some states, like New York and California, already have established emergency rental assistance programs. Other states, like Alabama and Missouri, will have to set them up, which takes time, she says.

That's why it will be crucial for Biden to extend the eviction moratorium when he takes office, Yentel says. It will take longer than one month for some states and localities to establish relief programs and get the assistance out to people who need it.

The funds can be used for back rent and overdue utility payments from the start of the pandemic, as well as future bills. At least 90% of the money states and territories receive must be used to provide financial assistance to households.

Renters will be eligible for relief if their household income is below 80% of the area median income (which varies by county and household size), and someone living there:

  • Has qualified for unemployment benefits, has lost part of their income or has experienced financial hardship because of Covid-19, or
  • Can show that they are at risk of losing their home

Landlords and utility companies can be paid directly by state and local governments as long as tenants have signed off on the application. If landlords refuse the aid, renters can apply and receive the funds and then pay their landlords. Households are eligible for 12 months of assistance, but may receive up to 15 months if it is "necessary" to keep them in their home.

Renters will also be able to access case management and tenant-landlord mediation services.

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