What’s happened so far? Who’s left out? What else is needed?
April is here, bringing new rent and mortgage bills. DC residents who have lost their jobs in the coronavirus crisis or suffered reductions in income, as well as small business owners, are wondering how they will be able to stay in their homes or keep their businesses afloat.
Our community should pull together to make sure our neighbors’ worst fears are not realized. It would be a disaster for thousands of residents and businesses, and for our entire economy, to see residents evicted, homes foreclosed on, and businesses shuttered.
Instead, we should work to make sure no one loses their home or business, so that we can maintain the strong foundations of our families and neighborhoods. This is critical not only now, but also to recovering when the pandemic is over.
To do that, we need policies to replace lost income, so that as many people as possible can pay for rent or mortgage, utilities, food and other essentials. Second, we need to put in place protections against eviction, foreclosure or shutoffs.
Federal and DC relief efforts enacted to date can make a huge difference, but much more assistance is needed.
- The federal government is offering substantial funds to unemployed workers and closed businesses, but we need to make sure DC residents and businesses have the information they need to access these funds quickly.
- The DC Council just adopted legislation that will protect residents or businesses from being evicted now, but it offers no protection when the pandemic is over. DC’s leaders should adopt policies to ensure that no resident or business has to face eviction or foreclosure once the pandemic is over if they fell behind during the pandemic.
- The federal rescue package excludes many residents, particularly immigrants and those who work for cash. Unfortunately, the just-passed DC relief package removed provisions to help them. The Mayor and Council should restore this provision to ensure all DC residents get the help they need, including our immigrant neighbors.
Protecting Resident Incomes
Many residents are eligible for substantial help, between the federal CARES Act and efforts by Mayor Bowser and the DC Council. But getting the word out to them and getting the money out will be important. Plus, some groups have been left out and need more help, including immigrants and people who worked for cash.
What’s happened so far?
- Many unemployed workers qualify for up to $1,050 in weekly unemployment insurance.
- Eligibility for unemployment benefits has been extended to people who are self-employed, gig workers, and contractors.
- Residents with incomes below $75,000 ($150,000 as a family) are eligible for payments from the federal government of $1,200 per adult and $500 for children under 18.
Who is Left Out?
- Workers left out of unemployment: People who don’t have a work authorization/Social Security number, including many immigrants, or people who worked for cash, such as hairdressers or sex workers, are not eligible for unemployment. The DC Council initially drafted legislation to help these workers, but that provision was dropped.
- Residents left out of federal payments: While everyone is eligible, people who are not on Social Security and others who did not file a tax return in 2018 or 2019 (perhaps because they did not earn enough) have to fill out a new form with the IRS to get it. Immigrants without a SSN are left out. (Unfortunately, recent news suggests these payments may take months to arrive, even for those who apply now.)
- Mayor Bowser should lead an effort to to educate residents on their eligibility for unemployment insurance. The Mayor also should expand staffing and other resources to process applications for unemployment insurance.
- Mayor Bowser should lead an effort to educate residents on how to apply for the federal $1,200/$500 payments
- Mayor Bowser and the Council should extend cash aid to workers excluded from the federal relief package.
Protecting Income for Small Businesses
What’s happened so far?
Both the federal and DC rescue packages include immediate support for small businesses.
- The federal Paycheck Protection Program provides loans to cover salaries, mortgages, and utilities for businesses with fewer than 500 employees, including non-profits. The loan will be forgiven if the business retains all of its workers for 8 weeks.
- The District already has provided $25,000 grants to small businesses affected by the slowdown.
- The legislation being considered this week by the DC Council expands a small business tax credit from $2,500 to $10,000.
- Landlords with federally-backed mortgages qualify for a deferment on payments.
- Mayor Bowser should lead an effort to educate business owners on how to apply for the Paycheck Protection Program and landlord mortgage deferment.
Protecting Renters and Homeowners
Even with the federal and DC help, some people will be unable to pay their rent or mortgage or utilities, especially in April. The Dc relief package prevents people from being evicted or foreclosed on, or having their cell phone or utilities shut off during the pandemic. But they do nothing to stop a wave of evictions and foreclosures when the pandemic is over. That is shortsighted and unacceptable.
What’s happened so far?
- The DC Council put a moratorium on evictions and foreclosures.
- Council legislation this week extended the moratorium to utilities, cell phones, and debt collection.
- The Council legislation prevents rent increases.
- The Council legislation allows mortgage holders, for residential or commercial properties, to withhold payments for 90 days.
What’s Left Out?
- The Council package does nothing to stop evictions, foreclosures, or cellphone or utility shut offs after the pandemic is over. There could be a huge wave of such actions as soon as the pandemic ends, turning a public health crisis into a housing crisis.
- The Council legislation doesn’t stop mortgage companies from continuing to charge interest during the deferment period, adding to what mortgage holders will owe in the end.
- Landlords should not be able to evict tenants at any time in the future if a renter fell behind in the pandemic due to a loss of income. This will be essential to maintaining family and community stability once the public health crisis is over. It would enable tenants to negotiate with landlords to forgive some or all of their rent, or develop a payment plan.
- Similarly, utilities and cell phone companies should not be able to cut off residents, now or ever, if they can show they were unable to pay fully during the pandemic. The companies and utilities should be forced to negotiate reductions in payments and payment plans.
- Homeowners and landlords should not only have their mortgage delayed, but banks should not be able to charge interest — even if that interest is deferred — so that a mortgage holder’s debt does not grow in the crisis. Any missed payments should be added on at the end of the mortgage period. Financial companies should bear the loss, knowing that they can seek funds from the $500 billion corporate bailout fund in the CARES Act.
- The District should greatly expand funding for the Emergency Rental Assistance Program (ERAP) and create a special fund for small landlords facing financial hardship.
Protecting Small Businesses From Eviction
Just like renters and homeowners, many small businesses will be unable to pay their rent or mortgage or utilities, especially in April. Federal and DC relief packages include no protection against businesses being evicted.
What’s happened so far?
- Council legislation passed on April 7 requires commercial landlords who get mortgage deferments to pass that on to their business tenants.
- Landlords should not be able to evict small business tenants, once the crisis ends, if the business can show a loss of income during the pandemic. This would enable tenants to negotiate with landlords to forgive some or all of their rent, or develop a payment plan.