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Notes from the Field

Help for Those Facing Eviction Increases to Meet the Challenge of COVID-19

With businesses closed and orders to shelter in place, many tenants—especially those with low- to moderate-incomes—are finding themselves unemployed, unable to pay their rents, and subject to eviction. There are resources to help.

The views expressed in this report are those of the author(s) and are not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System.

Affordable housing is a vital component of the social safety net. But what is considered “affordable” when it comes to housing? According to the US Department of Housing and Urban Development (HUD), housing should cost no more than 30 percent of a family’s income. Anything more than 30 percent is considered a cost burden because when a significant portion of a person’s income goes to pay for housing, there is little left for essentials such as transportation, child care, food, and medicine. Those with higher cost burdens are at greater risk for delinquency, a situation especially troubling for renters—if rent is delinquent, the renter is subject to eviction. Once someone has an eviction on their record, it becomes more difficult to find housing, a situation that can spiral to homelessness.

In Hamilton County, Ohio, the lack of affordable housing is a source of housing instability for low- and moderate-income renters especially. Because of the limited number of affordable units, many people are spending more than they can afford on housing: 47.9 percent of renters are paying more than 30 percent of their income on housing according to the American Community Survey 2017 5-year estimate. With such stretched budgets, evictions are elevated. A report on evictions in Hamilton County found that in the four years from 2014 through 2017, there were 12,439 evictions filed. Hamilton County’s eviction rate (8.7 percent) is higher than both the national average (6.3 percent) and more than double the state’s rate (3.49 percent), according to Princeton University’s The Eviction Lab.

For low- to moderate-income renters facing eviction in Hamilton County, there are resources to help.  One such resource is Strategies to End Homelessness, a nonprofit organization that partners with 30 other nonprofits to prevent homelessness, help those who are homeless, and provide solutions to those facing a housing crisis. The agency uses HUD-funded supportive housing program and emergency solutions grants (ESGs) to rapidly rehouse those who have been evicted, offer short-term rental assistance to prevent evictions, and fund security deposits or hotel vouchers for temporary housing for those in need.

The number of those in need has grown exponentially since the COVID-19 pandemic spread throughout the country. With businesses closed and orders to shelter in place, many tenants—especially those with low- to moderate-incomes—are finding themselves unemployed, unable to pay their rents, and subject to eviction. Housing organizations and municipalities have proposed moratoriums on evictions to give those who are unable to pay rent because of the pandemic a chance to recover. While, at this time, there is no statewide moratorium on evictions for residential renters in Ohio, cities within the state have pursued such suspensions and are actively trying to help their residents: Cleveland sought a 60-day moratorium on evictions caused by COVID-19 hardships and Dayton’s Eviction Task Force has posted resources for those facing eviction due to the coronavirus crisis. “We’re in an unprecedented situation where many people are simultaneously in dire economic straits while needing stable housing more than ever,” said Dayton Mayor Nan Whaley. “I’m proud of Dayton’s quick response to this difficult situation, but remain concerned about making sure people are able to stay in their homes when this crisis is over.”

At the federal level, HUD announced that it is suspending all evictions and foreclosures for 60 days. The Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to do the same for a minimum of 60 days. Lawmakers have also passed the CARES Act—a stimulus package that includes the following housing-related provisions to assist those impacted by the economic fallout of COVID-19.

  • Anyone living in a single-family home with a federally backed mortgage can request a forbearance on mortgage payments for up to six months. Owners of apartment buildings can also seek forbearance on federally backed mortgages provided they do not evict tenants or charge late fees on rent during the forbearance period.
  • States and localities will get $5 billion in additional Community Development Block Grant funds. The bill also includes $1.25 billion in tenant-based rental assistance, $685 million for public housing, $300 million for tribal housing grants, and $130 million earmarked for housing for the elderly, people with disabilities, and people with AIDS.
  • The bill includes $4 billion in Emergency Solutions Grants for homeless shelters and outreach workers.

Housing is a key component to a healthy economy, and access to affordable housing is essential for lower-income individuals. Through ongoing outreach efforts in our region, the Cleveland Fed continues to engage with stakeholders and follow how relief efforts for COVID-19 are addressing the needs of lower-income renters. These new regulations will be monitored over the next few months as these moratoriums expire.