President Donald Trump's abrupt decision to cut off negotiations on a compromise stimulus bill until after the election has likely killed any chance that the White House and congressional Democrats will reach an agreement on federal assistance to renters and homeowners.
"Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19," tweeted Trump on Tuesday afternoon. "I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business."
The announcement comes just as a compromise between the White House and House Democrats on rent relief appeared to be in the cards.
On Thursday, House Democrats passed a $2.2 trillion HEROES Act, which includes $50 billion for emergency rental assistance, and $21 billion in funding for states and territories to spend assisting homeowners.
Of that $50 billion in rental assistance, at least 40 percent would have to go to tenants making 30 percent or less of their area's median income, and 70 percent of it would have to be spent on those making less than half their area's median income. Tenants making up to 120 percent of area median income would be eligible for assistance.
These income restrictions are identical to those found in the enlarged $3.5 trillion HEROES Act back in May, which earmarked $175 billion to renter and homeowner assistance. The $71 billion in renter and homeowner assistance proposed by Democrats now is still too rich for many congressional Republicans but is much closer to the $60 billion that Treasury Secretary Steve Mnuchin said the White House could accept.
Senate Republicans did not include any funds for rent or mortgage relief in their latest, failed "skinny" stimulus. Sen. Pat Toomey (R–Penn.) told Reason last month that he opposed additional federal assistance to renters, saying "I think we have to ask ourselves how much expansion of the welfare state, how many different layers, how many different programs are we going to do. When is it enough?"
"It's extraordinarily reckless and irresponsible for Trump to blow up negotiations now, when so many renters and small landlords are struggling," said Diane Yentel, president and CEO of the National Low Income Housing Coalition (NLIHC), in a statement to Reason. "The longer the federal government waits to act, the steeper the financial cliff that renters will be pushed off when the eviction moratorium expires this winter."
Yentel is referencing the eviction moratorium issued in early September by the Centers for Disease Control and Prevention (CDC). It bars evictions for non-payment nationwide until the end of the year.
Both versions of Democrats' HEROES Act have also included a nationwide eviction moratorium and automatic mortgage forbearance.
The CDC's moratorium, currently the subject of a lawsuit seeking to overturn it, does not forgive tenants' obligation to pay rent. It only prevents landlords from moving to evict them while it's in effect. For that reason, the NLIHC, among other housing advocacy groups, has pushed for federal rental assistance so that tenants won't be evicted for unpayable back rent come January.
Still, Trump's decision to blow up negotiations probably hits landlords the hardest, at least in the short-term. Their industry associations have also been staunch advocates of rental assistance, while generally being critical of eviction moratoriums as an overly blunt policy instrument.
"While the National Apartment Association (NAA) is pleased that the House's revised HEROES Act contains some helpful provisions, including funding for emergency rental assistance, the bill's extension of the federal eviction moratorium for an additional year would devastate the rental housing industry," said NAA CEO Bob Pinnegar last Thursday.
"Passing relief measures, like direct rental assistance, should not be a political game; emergency rental assistance is the only policy that will keep renters safely housed and ensure rental housing providers can pay their bills," said Pinnegar in a statement to Reason in response to Trump's decision to shut down negotiations Tuesday.
With those negotiations now stalled, landlords are stuck coping with the CDC's eviction moratorium without the prospects of rental assistance in the near term.
According to the National Multifamily Housing Council's (NMHC) rent payment tracker, which surveys professionally managed apartment buildings, 92 percent of tenants had paid at least some of their September rent by the week ending on September 27. By the end of August, 94.5 percent of tenants had paid at least partial rent.
Owners of lower-end rental units, which are often not professionally managed and therefore not captured by the NMHC's survey, report lower payment rates during the pandemic.
Eviction filings are below historic averages in 15 of 17 cities tracked by Princeton University's Eviction Lab. Places like Boston and Austin—both of which have local eviction moratoriums in addition to the CDC's policy—have seen evictions drop close to zero. The two exceptions are Columbus, Ohio, and Richmond, Virginia, where evictions are above historic averages by 48 and 300 percent respectively.
With eviction rates below historic averages in most cities and rental payment rates staying pretty steady throughout the pandemic, a massive new federal program to bail out tenants and rental property owners seems excessive.
That's particularly true when most of the stimulus proposals on offer include expanded unemployment benefits and another round of $1,200 stimulus payments. Renters report using those types of benefits, which were included in the March coronavirus relief bill, to cover their housing costs earlier in the pandemic.
Whether the mercurial Trump will stick to his decision to walk away from stimulus talks remains to be seen. After tweeting that he was done negotiating, the president again took to Twitter to urge the passage of a bailout for the airlines and another round of stimulus checks.
It's possible renters and homeowners will also benefit from Trump's backtracking. If they don't, they'll have to wait until 2021 for more help from the feds.