Renters Face Eviction as Relief Funds Are Held Up

Summary

WSJ Your Money Briefing — Renters Face Eviction as Relief Funds Are Held Up

Date: June 9, 2021
Host: J.R. Whalen
Guest: Will Parker, Wall Street Journal Housing Reporter

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Episode Overview

This episode focuses on the looming eviction crisis as the federal eviction moratorium approaches its June 30, 2021 expiration. Despite $47 billion in government rental assistance programs intended to help renters financially impacted by the pandemic, significant delays have kept much of the relief from reaching those in need. J.R. Whalen speaks with WSJ housing reporter Will Parker about the bureaucratic bottlenecks, resistance among landlords, and federal efforts to streamline aid distribution.

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Key Discussion Points and Insights

1. The Rental Assistance Pipeline and Delays

• Federal Programs in Place:
  • Two major actions: A nationwide moratorium on evictions and robust rental assistance payments for tenants and landlords [01:36].
  • $47 billion allocated—split between programs initiated in January and March [04:23].
• Slow Disbursement:
  • Despite the funds, distribution to eligible renters is sluggish due to overwhelmed state and local agencies [02:19].
  • Agencies initially struggled to process and allocate a high volume of money; progress has improved but remains insufficient [02:19].

2. Application Barriers

• Complicated Documentation:
  • Tenants and landlords are required to provide multiple documents to prove hardship and eviction risk, causing many to abandon or be unable to complete their applications [02:41].
  • This has been "one of the biggest problems" according to Will Parker:

    "The more documents you require, the more processing that takes and the more likely that certain tenants or landlords may not be able to provide it." – Will Parker [02:41]

• Efforts to Simplify:
  • U.S. Treasury guidance encourages agencies to loosen document requirements and prioritize sending relief directly to tenants [03:22].
  • Many agencies still prioritize landlords, but reluctance by landlords to participate hampers this approach [03:22].

3. Uncertainty Around Eviction Moratorium

• Moratorium Timeline:
  • The moratorium is set to expire June 30 but has been renewed several times; future extensions are uncertain [05:40].
  • The CDC’s involvement is on public health grounds, not financial hardship, while the Biden administration must consider the flow of rental aid before ending the ban [04:23].
  • Serious consequences are likely if aid isn't delivered before the moratorium ends:

    “…the delay in funding getting to them has serious consequences for, you know, what happens after that June 30 deadline.” – Will Parker [05:40]

4. The Tenant Experience

• Navigating the System:
  • Many tenants face significant difficulty navigating complex application systems.
  • Legal aid attorneys are helping, but many tenants still can't complete the process on their own [06:02].
• Relief Successes:
  • Some have had rental debts wiped out and found themselves on better footing, particularly if re-employed [06:02].
  • The situation is mixed; widespread frustration exists, but the aid has worked for a number of people [06:02].

5. Landlord Reluctance

• Strings Attached:
  • Landlords sometimes resist accepting relief due to requirements, like halting evictions in exchange for aid [06:47].
  • Example: In Jefferson Parish, LA, officials and landlords debated the length of eviction delays in return for accepting assistance [06:47].
  • Reaching consensus remains a challenge.

6. Treasury Guidance and Fear of Fraud

• Pushing for Direct Payments:
  • Treasury has issued non-binding guidance to streamline payments, encourage flexibility, and send funds directly to tenants [07:41].
  • Some programs have loosened requirements and started direct payments, especially for those without traditional documentation or leases (e.g., month-to-month tenants) [07:41].
• Fraud Concerns:
  • Many local programs remain reluctant to make changes due to significant fear of ineligible recipients or fraud [08:41].

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Notable Quotes & Memorable Moments

• On program bottlenecks:

  “A big part of this is, you know, what these agencies that are administering the aid require tenants and landlords to show them so that they can approve that you have an emergency situation ... the more documents you require, the more processing that takes and the more likely that certain tenants or landlords may not be able to provide it.” – Will Parker [02:41]

• On the CDC's role:

  “The CDC, which put the moratorium in place, they're doing it on the basis of public health crisis ... they're looking at it purely in terms of this is a pandemic, and we think eviction activity can contribute to disease spread.” – Will Parker [04:23]

• On uncertainty for tenants:

  “Tenants looking at that deadline who now have many months of unpaid rent, you know, the delay in funding getting to them has serious consequences for, you know, what happens after that June 30 deadline.” – Will Parker [05:40]

• On landlord participation:

  “I talked to the president of Jefferson Parish in Louisiana ... one of the delays in getting the aid out was a debate with landlords over how much time they would wait before they could start evictions again if they accepted rental assistance.” – Will Parker [06:47]

• On efforts to improve aid distribution:

  “There are dozens that have started paying money to tenants directly. There are dozens of programs that have loosened the document requirements ... but many, many programs are not doing these things... a big reason is that there's a certain fear of fraud.” – Will Parker [07:41]

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Timestamps for Important Segments

• [01:36] – Recap of federal programs and aid status
• [02:41] – Challenges with applications and required documentation
• [03:22] – Efforts to simplify processes and expand direct-to-tenant aid
• [04:23] – Breakdown of relief disbursement, and CDC/Biden policy intersections
• [05:40] – Moratorium renewal uncertainty, consequences of funding delays
• [06:02] – Tenant experiences: barriers, frustrations, and success stories
• [06:47] – Landlord resistance and local administration barriers
• [07:41] – Treasury guidance, adoption by agencies, and problems with fraud prevention

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Summary Takeaway

The episode paints a picture of a critical moment for renters reliant on pandemic relief, emphasizing how the slow distribution of funds and bureaucratic barriers intersect with looming eviction protections. While federal and local efforts have increased to get aid out faster and to simplify applications, significant challenges—both procedural and political—still threaten to leave vulnerable renters at risk. The future of many hinges not just on Congressional intent, but on the capacity of local programs to expedite assistance before COVID-era protections vanish.

Transcript

[A]

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[B]

Here's your money briefing for Wednesday, June 9th. I'm J.R. whalen for the Wall Street Journal. The clock is ticking for millions of renters who are still unable to make their monthly payments. The federal eviction moratorium is set to expire at the end of the month, but billions of dollars in government relief funds for renters are still working their way to bank accounts.

[C]

Tenants looking at that deadline who now have many months of unpaid rent, you know, the delay in funding getting to serious consequences for you know what happens after that June 30 deadline.

[B]

Coming up, our housing reporter Will Parker will tell us what's slowing the flow of money to renters and what's being done about it. That's after the break.

[A]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. [e-mail] Washingtonwise.

[B]

Last year, the federal government put in place a couple of big programs to help renters who were hit financially during the pandemic stay in their homes. One was a moratorium on evictions. Another offered rental assistance payments to tenants and landlords. While the eviction moratorium is set to expire three weeks from today, and the relief funds still haven't reached many people who are eligible for them. Housing reporter Will Parker's been tracking this for us, and he's here with an update. Will, thanks for taking the time to chat.

[C]

Thanks for having me.

[B]

So, Will, this is a complicated issue with a lot of players, so I want to ask you about what's being done on a couple of fronts. This federal funding for renters, it's actually dispersed by state and local governments, and back in April, they were overwhelmed with having to allocate so much money at once. Any progress there?

[C]

There is progress there. The states and cities have started to get some of the money out for the most Part it took them a long time to get going, but now they're starting to put out there. It's just there are still a lot of barriers that are making things slower than I think most people had hoped.

[B]

Yeah, let's talk about some of those barriers. It seems like there are some kinks in the pipeline, starting with the applications that begin the whole process. Can you explain that?

[C]

Yeah. A big part of this is, you know, what? These agencies that are administering the aid require tenants and landlords to show them so that they can approve that you have an emergency situation where a tenant is at risk of eviction and they have a financial difficulty that makes them, you know, eligible for this money. But, you know, the more documents you require, the more processing that takes and the more likely that certain tenants or landlords may not be able to provide it. And that seems to be one of the biggest problems, that tenants simply are not able to complete their applications because of some of these document requirements.

[B]

Have there been any efforts to simplify that process?

[C]

So this has been a major point of emphasis for the US Treasury Department, which is overseeing the administration of the aid. Now, the local agencies have a lot of leeway in deciding how exactly people qualify and how. How people apply for it. But the treasury has put out guidance, and a big part of what they're asking local agencies to do is to loosen some of those documentation requirements. The other thing that they've done is they. They're really encouraging local governments to give money directly to tenants. That has not been the case for most of this program. The priority has been to put the money in the hands of landlords because the debt is owed to them. And that's the most efficient method. But oftentimes, landlords are either slow to participate or don't want to participate. So there's been an emphasis to try to encourage more money to go directly to the tenants.

[B]

So $47 billion has been allocated by the government to stave off evictions. How much of that money has actually gotten into the hands of tenants and landlords?

[C]

So, across two emergency rental assistance programs that were created by Congress, we have about $47 billion, and about half of that comes from January and about half of it comes from March. My understanding is that, you know, most programs are still working through spending the first half that they received back in January, and the Treasury Department is yet to actually say how much of that total has found its way to tenants and landlords. And whatever that number is, it's going to have serious implications for something like the eviction moratorium. The cdc, which put the moratorium in place, they're doing it on the basis of public health crisis. So they're not making this decision thinking about rental debt and housing instability. They're looking at it purely in terms of this is a pandemic, and we think eviction activity can contribute to disease spread. But the Biden administration has to be thinking about the rental assistance aspect of this, too, and whether or not it makes sense to let the ban expire before the majority of this rental aid can get to tenants and prevent evictions from happening.

[B]

Yeah, and the June 30 eviction moratorium deadline is just a few weeks away now.

[C]

It's been renewed several times before. That could very well happen again, although it's not clear. So for, you know, tenants looking at that deadline who now have many months of unpaid rent, you know, the delay in funding getting to them has serious consequences for, you know, what happens after that June 30 deadline.

[B]

And what's the situation like for these tenants? What are you hearing from them?

[C]

A lot of tenants have. Have difficulties navigating the ins and outs of these rental assistance programs and how to qualify. And, you know, there are a lot of legal aid attorneys that. That are helping them do it. But sometimes tenants on their own are not always able to figure out how to put those applications in and make sure they have all the right documents. So there's a lot of frustration there. But there are also a lot of people that have received the money that have been helped by it and that have had their rental debts that they've accumulated during the pandemic reduced to zero and are now on a better footing, perhaps have found employment again and it's working for them.

[B]

So, Will, you mentioned before that some landlords were reluctant to accept relief funds because those funds came with strings attached to. Is that still going on?

[C]

That is still going on. You know, a lot of the programs that are administering these funds, what they want to see is that, you know, if they're giving this aid to landlords, they want something in return. They want to make sure that people are not being evicted and that this money is going to stop this problem that they're worried about, which is an increase in evictions. I talked to the president of Jefferson Parish in Louisiana, which is near New Orleans, and one of the delays in getting the aid out was a debate with the landlords over how much time they would wait before they could start evictions again if they accepted rental assistance. So getting everyone on the same page and agreeing to the terms of how these programs will work continues to be a barrier as well.

[B]

Now, you also said that the treasury has been trying to get the money into the hands of tenants directly and in an efficient fashion. How's that been going?

[C]

So they can put out guidance which is. It's not legally binding. It's what they recommend that these state and metropolitan agencies do in order to streamline their process. There are some programs that have made changes based on the Treasury's recommendation. The National Low Income Housing Coalition, which is a Washington based kind of tenant advocacy group, has been tracking, you know, that there are dozens that have, you know, started paying money to tenants directly. There are dozens of programs that have, you know, loosened the document requirements, you know, not required you to have some sort of documentation for, you know, cash income, which can be difficult, or, or have a lease if you've been living month to month, for example. But many, many programs are not doing these things, are not making these changes. And a big reason is that there's a certain fear of fraud that programs want to avoid. They don't want to be sending out money in error to those individuals who may not actually be the ones who need it.

[B]

All right, that's Wall Street Journal reporter Will Parker. Will, thanks for coming on the show.

[C]

Thanks for having me.

[B]

And that's your Money briefing. I'm J.R. whalen for the Wall Street Journal.

[A]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity, they want your innovation. ReliaQuest fortifies your business with agentic defense AI that detects, contains and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest. Com. That's R E L I A Q U E S T Com.