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Federal housing assistance falls short of meeting COVID-19 needs

Charlene Crowell | 8/25/2020, 6 a.m.
As the nation's double dose of health and economic crises continue, many consumers believe that federal assistance to make ends ...

As the nation's double dose of health and economic crises continue, many consumers believe that federal assistance to make ends meet has virtually disappeared.

While the $600 weekly federal supplement to augment state unemployment benefits expired July 31. And the Paycheck Protection Program again stopped accepting applications on August 8.

A recent policy analysis developed for the Brookings Institution suggests that the wages and earnings of economically vulnerable workers left little – if any – funds for regular household savings.

"Unemployed respondents, on average, report a household income of $33,000 which is well below the U.S. median household income of $78,500 and less than 130% of the federal poverty line for a family of four," wrote authors Jevay Grooms (Howard University), Alberto Ortega (Indiana University), and Joaquin Alfredo-Angel Rubalcaba (University of North Carolina at Chapel Hill).

"While all unemployed Americans are facing significant economic challenges, these findings suggest that unemployed Black workers are less likely to receive unemployment benefits and are disproportionately experiencing delays in receiving critical benefits designed to mitigate economic hardship," wrote the professors. "These findings indicate that our society has failed to address many of the socioeconomic inequities faced by racial and ethnic minorities that were brought to light during the Great Recession."

Additionally, a three-part consumer survey by Morning Consult, a DC-based global intelligence firm, determined that by the end of this August, 5.4 million consumers who lost $600 per week in unemployment insurance will also lose their ability to pay for daily living needs like housing, health care, food and clothing. By the end of September, the same survey found that an additional 9.2 million consumers would be in the same financial dilemma should Congress fail to enact new or extended aid.

Despite COVID-19's ongoing disruption to the economic health of many Americans, our lawmakers have not taken steps to alleviate all the resulting strain, including housing.

In late May, the U.S. House passed legislation to continue vital federal assistance as the pandemic continues. Entitled the HEROES Act, it would extend the CARES Act's previous moratorium on evictions and foreclosures. But it would also provide new housing assistance including $100 billion in emergency rental assistance, $75 billion for homeowner assistance, $11.5 billion in homeless grants and expand Section 8 vouchers with a $1 billion revenue infusion. Together, these measures could help shore up housing, a major pillar in the nation's economy.

In the ensuing three months, the Senate never considered this proposal and instead put forth a much smaller package this August that provided nearly nothing to assist homeowners and renters. This approach garnered little support and now the upper chamber is not expected to return to work until after the Labor Day holiday.

Likely as a result of one of four recent executive orders, HUD extended the moratorium on evictions and foreclosures on homes with FHA-backed mortgages. As reported by Politico, an estimated 8.1 million single-family homeowners will now be protected until 2021. Omitted in this new development are mortgages that originated with other government-sponsored mortgages like VA and USDA, as well as those backed by Fannie Mae and Freddie Mac. And no assistance in this action addresses the needs of many renters who do not live in FHA-backed housing. It is estimated that these renters already owe up to $25 billion in back rent, and could reach $70 billion by year's end and no way to pay.