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Tanzina Vega: Yesterday was the first of the month, meaning that wrench was due for millions of people in the United States. The economic toll of the pandemic and the high rates of unemployment mean many Americans are struggling to pay that rent, and you told us about it.

Amy: Hi, this is Amy calling from Morristown, New Jersey. My mom's caregiver, she's a single mom with two kids, somebody bought her building, she has to be out of there. They gave her until December 1, and now they're giving her until the 5th. She's looking frantically. I'm also looking frantically because we both noticed that when a white lady calls you get a lot farther. It's so frustrating. It's killing me. I don't know what she's going to do.

C.J. Ave: My name is C.J. Ave, and I live in Seattle, Washington. I am a renter and I am three months behind in rent. Neither of us can work because my wife has high-risk practice for getting sick. The eviction moratorium in Washington ends at the end of this month. I am 29, and I've worked all my life and been poor all my life. It feels like my family's life are in the hands of my landlord, and I don't know what's going to happen.

Tanzina: The situation for many tenants could get worse. According to research from the Aspen Institute, some 40 million more Americans could be facing eviction in the coming months as a CDC moratoriums on evictions is set to expire at the end of December. Some landlords, however, have skirted the CDCs eviction moratorium, and have continued to evict tenants anyway. Other landlords say they're also struggling to make ends meet without being able to collect rent or fees.

Jennifer: Hi, this is Jennifer in Scottsdale, Arizona. I am a landlord. I'm also disabled, which means I can't work. That means most of the money I live off of comes from rent. However, I see renters as just fellow human beings, and we all are worthy of kindness and respect. I would not evict any of my tenants for missing a month or two if they could provide legitimate reasons for not able to pay. They're humans.

Tanzina: Over the course of the pandemic, we've been keeping tabs on the housing crisis exacerbated by COVID-19, and we're bringing you the next chapter of that conversation today on The Takeaway. I'm Tanzina Vega. Joining me now to talk through this is Jerusalem Demsas, a reporter at Vox. Jerusalem, thanks for being with us.

Jerusalem Demsas: Yes, thanks for having me.

Tanzina: I'm also joined by Jenny Schuetz, a fellow at the Metropolitan Policy Program at the Brookings Institution. Jenny, thanks for being back with us.

Jenny Schuetz: Good to be here.

Tanzina: Jerusalem, remind us again, the CDC moratorium is a federal national moratorium on evictions, and then states have had other sort of patchwork of moratoriums, but all of that is supposed to go away at the end of the month, isn't it?

Jerusalem: Yes, so the CDC's national eviction moratorium, which was implemented in September is expiring on December 31st. Other states have and localities have implemented a patchwork of moratoriums, some of them extend past the end of December. I mean, you have to check with your individual state, but a lot of them do expire. Places like Illinois every month, it has to be re-signed by the governor. It really depends on the state and locality that you live in. We are seeing that a lot of folks are going to be facing eviction at the end of the month because it's going to be a dire situation for folks when those do go away.

Tanzina: Jenny, what are the CDC protections look like so far?

Jenny: Well, in theory, the eviction moratorium is supposed to keep landlords from pushing tenants out if they have lost income due to the pandemic, they aren't getting federal benefits, and they're below some income cutoff. This is not a complete solution. It doesn't cover everybody in the first place, but the real weakness is that our rental system is very decentralized. Normally landlord and tenant law is set at the state level. It's actually administered through county courts. The danger is that you may have two different judges in neighboring counties in the same state who interpret the moratorium differently.

Since the judges are the ones who are actually litigating these claims, you can have tenants in similar situations who receive very different treatment. This was a band-aid to try to hold things together, but because of the way we've constructed the legal framework around renters, it was always going to face some real challenges on the ground.

Tanzina: Jerusalem, what are some of the ways that landlords have been able to exploit some of the loopholes in the law?

Jerusalem: Yes, so I think the fundamental thing here is that the federal government has really abdicated responsibility for making sure that renters can make rent, and so basically, landlords have been left to play the role of the social welfare state. For some landlords, they've been able to absorb the loss of income, but most folks who are experiencing financial difficulty, they tend to be in industries like retail or construction, and they're disproportionately renters. A lot of them are disproportionately lower income.

The incentive for their landlords to kick them out because they're losing money on those units it's still there. No eviction moratorium could ever take away that incentive, and like Jenny's discussed, because there are differences between courts, there's a huge incentive for every landlord to try and make sure that the court interprets it in their favor. You're seeing landlords, I mean, there are a lot of different examples of what they're doing, but the only thing the CDC eviction moratorium and most moratoriums does is it stops you from being evicted for non-payment of rent.

It doesn't stop you from being evicted for health and safety violations, or other things that could cause you to lose your home, like breaking your lease in different ways. A lot of times, there are some cases that I've talked to legal aid lawyers around the country about where there are a landlord will claim that a woman's child running through the hallway is a health and safety violation or other ways that seem to be really stretching the truth about what is actually occurring in these apartments.

The fact of the matter is, is that's going to happen until you provide a way for renters to actually make rent because I mean, these landlords are going to make a profit, they're not there to be a social welfare institution. That's really the big problem here is that the federal government hasn't provided the funding to make that happen.

Tanzina: Jenny, I want to break that down a little bit. Because there are different kinds of landlords also, as there are many different kinds of tenants. There are landlords, I'm sure some of us in New York are familiar with these, I'm sure throughout the country, that are bigger companies, their management companies, they're really there to make a profit. They're almost like these entities rather than people. Then you have the smaller landlords, the folks maybe that we heard at the top of the show who might have a one-bedroom or renting a private home. How are they struggling differently during this pandemic, if at all?

Jenny: Yes, that's a really great point. One way to think about this isn't the rent tiers or price tiers. The pressures are really hardest on low-income renters. As Jerusalem said, most of the job losses have been concentrated in areas like food service, and retail. Lower-income workers are more likely to have lost their job and low income, they're more likely to live in what we call classy apartment buildings, so usually older buildings, somewhat lower rent. Those are also buildings that generally don't have as much of a margin, they're more likely to be owned by these small mom-and-pop landlords.

Particularly, in a small building, you can see how it would be problematic if you have a four-unit building or a duplex and you rent out, if only one or two of the renters in the building lose their income, the operating income for the entire building takes a really big hit. In a 200 unit building, a few people can't pay their monthly rent, it's less of an issue for the landlord, and they can keep the building running.

What we're really worried about are these older, smaller buildings owned by small landlords, many of whom have mortgages, and they still have to pay the mortgage, they still have to pay property taxes to the local government, which is really important at the moment. Many of these landlords don't actually have a lot of resources themselves, and they're going to be put in a financially difficult position. Potentially, some of these smaller buildings are going to wind up having to sell their property because they can't cover expenses. That could have really dire repercussions for the renters who live in those buildings, if the building winds up being sold.

Tanzina: That feels like there's that's just the beginning of a bigger spiral too, Jenny, just in terms of the loss of wealth in these communities. If you are a small landlord, and you're forced to sell your property that was an income-generating property, and now not only are the tenants forced to find a new place to live, but the small landlord also loses a source of income. I mean, it just feels like this could really become a much bigger issue than we're potentially aware of at this point, no?

Jenny: Absolutely. I mean, the rental housing crisis is going to have ripple effects throughout local economies. landlords who can't make their payments means they're not for instance, able to keep their staff on, pay the building superintendent or the plumbers who come in to fix problems, the buildings may wind up becoming less habitable. One of the really important implications if landlords can't pay property taxes, local governments aren't collecting revenue.

We know that they're also taking a hit on property taxes from commercial properties. They're losing taxes from sales taxes and hospitality. and local governments are really on the front line of providing support, both in terms of public health, and things like providing rent relief to renters, who can't make payment. When you sort of freeze the cash flow, everybody who's downstream of the rent payment is going to wind up not getting money,

Tanzina: Jerusalem, are there certain states that are attempting to mitigate what we're talking about here at the state level, at least by providing relief to landlords or to renters?

Jerusalem: Sure, yes. I mean, there are a lot of innovative solutions that are being attempted right now. I mean, one that Catherine McKay at the Aspen Institute pointed out to me was that Michigan is currently attempting to negotiate on behalf of renters directly with landlords, to negotiate down, back rent, and make that payment through existing funds that they're getting from the federal government.

There are a lot of other ways, there are a lot of other programs that could be repurposed this way, things like Temporary Assistance for Needy Families, TANF, which is a government program or other community development grants. But it really requires the federal government to provide technical assistance to states, to really outline how they could repurpose that funding, and ways that they could use existing funds to help people and to make sure they stay in their homes.

Just to add onto something that Jenny said, I mean, we've seen this before with our affordable housing stock. After 2008 financial crisis, we saw a lot of America's affordable housing stock get bought up by larger corporations and private equity, and when that happens, it doesn't serve the same population anymore. A lot of times these apartment buildings get flipped and they get turned to serve higher-income populations.

We're already in a crisis before COVID-19 hit, where there was not enough affordable housing for the amount of people that were demanding it. This is a really big problem that if we're not able to get money into the hands of renters that are living in these affordable housing units, we're going to lose a large source of our affordable housing stock when we can least afford it.

Tanzina: Jenny, there was talk on the Hill yesterday in Congress about another relief bill, was any of that potential relief going to be aimed at tenants or landlords?

Jenny: Indirectly, yes. One of the important components would be just extending the unemployment insurance programs so that households continue to get checks. What they're, what they were talking about yesterday is less generous than the program that existed through the summer, but it's certainly better than nothing. The other piece of the package they're talking about is providing aid to state and local governments, and that's really essential because state and local governments could step in, they can't cover the entire rent debt, but they can make a part of this.

We've seen actually that most of the large cities and a number of large counties have developed rent relief programs, where they help tenants who are behind on their rent, cover a couple of months to stay in place or for those who will have to move, they provide first month's rent and security deposit for a new apartment. That's a good way to help some number of tenants, there isn't nearly enough money for that and actually many of the local programs have already exhausted their funds. Another round of funding to state and local governments would help provide that as well as the household financial support.

Tanzina: Let's hope something happens for so many Americans. Jerusalem Demsas is the reporter at Vox, and Jenny Schuetz is a fellow at the Metropolitan Policy Program at the Brookings Institution. Jerusalem and Jenny, thanks so much for joining us.

Jenny: Thanks for having me.

Jerusalem: Thank you.

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