By Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems Real Estate.
Tomorrow, July 31st, is the deadline for the Federal Pandemic Unemployment Compensation (FPUC) program to end, unless congress decides to do something to extend or re-structure it. If not, upwards of about 30 million unemployed Americans who are receiving benefits will lose $600 per week. What does this mean?
For one, a lot more people renting a place to live will be screwed.
The percentage of renter households facing a severe housing burden will increase from about 3 percent of renter households to 41 percent. (Severely housing burdened means they are paying more than 50 percent of their income toward rent.)
Add to this the fact that the federally mandated evictions moratorium on is also set to expire soon. The combination of these two events bodes ill for millions of Americans who are already under significant stress. Expect a sharp spike in evictions in the next few months, putting many Americans out on the street. Milwaukee, in a state in which the moratorium on evictions ended in late May, has already seen a spike in evictions.
Data from the National Multifamily Housing Council (NMHC), shows rental payments have dropped only slightly during the Coronavirus crisis. 91.3 percent of apartment households were making a full or partial rent payment by July 20, down just 2.1 percentage points from the same time last year. However, that figure will obviously change drastically with the expiration of unemployment benefits.
Let’s hope our legislators realize this is not a normal situation that normal legislation can solve. This is when we must bite the bullet and get serious help for troubled Americans.