In Massachusetts we are blessed with one of the strongest housing ecosystems in the country, but the ongoing coronavirus crisis will test its powers to head off the possibility of a housing market collapse.
Our system quickly realized the potential economic impact of COVID-19 on our most vulnerable households, landlords and homeowners. It has been impressive, beginning in March, to see how quickly we all came together to address this housing emergency. The public, private and nonprofit housing sectors joined forces to create solutions that would build a housing bridge beyond the economic impact of this health crisis.
The governor and the legislature acted quickly in March to enact an eviction moratorium and also to transform existing state–funded tenant, landlord and homeowner assistance programs to support COVID-19–impacted households. MassHousing provided an additional $5 million to support these efforts. After the passage of the CARES Act, the state through the Department of Housing and Community Development committed $20 million in additional federal funding to support a growing number of households and income ranges. The legislature recently passed and the governor signed a supplemental budget with another $20 million in COVID related assistance, with increases to grant funding caps per household.
Local city and town governments created gap-filling programs and resources with local housing trust funds and federally funded housing programs to support tenants, landlords and homeowners in their hardest–hit neighborhoods. The Coronavirus Relief Fund, The United Way, the Boston Foundation and many other private foundations and donors also created special funds to assist the unemployed or underemployed homeowners and tenants with rent and mortgage payments and utilities.
Banks, armed with newly relaxed rules, began providing qualified landlords and homeowners with three to six months of forbearance, or deferment of payments. Many large property owners extended their own in-house eviction moratorium before the state extended theirs to October. And our partners and advocates at MHP, CHAPA, MACDC, MAPC and RHN collected data and conducted countless virtual forums and emergency meetings to provide tenants, landlords and program leaders and policymakers with the information needed to better understand this rapidly changing situation and the resources available.
Panic Must Be Prevented
This unprecedented response from so many has funneled nearly $100 million into bridging the COVID housing gap and providing additional time for a recovery. Initially, many thought the worst would be over in three to six months. But it’s clear now that we will be lucky if our “new normal” is only an additional six to 12 months away. Therefore, in the vernacular: “We’re gonna need a bigger bridge!”
As the reality of where we are slowly sinks into our housing market, it’s difficult not to have some sense of alarm. The early estimates for the number of evictions that could occur when the moratorium is lifted in October, despite all of our prevention efforts, range from 30,000 to as high as 60,000.
As the Housing Court begins to prepare for this surge, we are also seeing a tenfold increase in rental assistance requests from our most vulnerable households. The timing and effects of reduced federal unemployment support, combined with the end of the moratorium and deferments/forbearance for homeowners and landlords, could dramatically increase those estimates.
The ensuing panic, like a run on toilet paper, could create a housing market collapse and downward spiral to rival the crisis of 2007. We well remember from that experience that a housing crisis may start by impacting the vulnerable few but can quickly escalate to impact the entire system. Should that occur, it could be decades for some communities to recover, if they do at all. We must immediately do everything possible to prevent this from happening, especially when we can clearly see this coming storm on the horizon.
We Have the Tools
In Massachusetts we have the public, private and nonprofit housing infrastructure and leadership to marshal the resources and creativity that will allow us to double our efforts in supporting landlords, homeowners and tenants and thus save our housing market from collapse. We also need to understand that an eviction from one’s home during this crisis could literally imperil a child’s ability to attend school remotely.
This is not just a moral imperative or a suspension of the inevitable losses, but an effort to bend the curve of impact and prevent a huge demand all at once on our housing system.
This cannot be left to government to solve alone. All of our sectors and their leaders need to proactively step up and provide more grant funding support and ideas to provide our housing system more time. The millions invested now in building a bridge to our economic comeback will help cut down the inevitable headwinds and save our communities and economy billions of dollars as we begin to recover.
This is a call for all to come together with the same sense of urgency and creativity that we demonstrated early on in this crisis. This COVID-19 health emergency is far from over. However, the end is in sight; we just need more time and resources to build a longer bridge to get there.
Robert Corley is CEO of NeighborWorks Housing Solutions.