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Why The U.S. Faces An Eviction Crisis - YouTube
Channel: CNBC
[1]
Americans have been struggling
to pay for housing
[3]
costs. In July 2020, an
estimated 32 percent of
[6]
Americans missed a rent
or mortgage payment.
[9]
That was up from 24
percent in April, 31 percent
[12]
in May and 30
percent in June.
[14]
This trend is worrying experts
that a wave of
[16]
evictions may be coming
once local, state and
[18]
federal moratoria on
forced removals expire.
[21]
The eviction process itself
is a barrier to
[25]
maintaining personal and
public health.
[28]
Struggling to pay for
housing in America is
[30]
nothing new. In 2018,
the Census Bureau estimated
[33]
that 40.6 percent of
renters will rent burdened,
[36]
meaning they spent 35 percent
or more of their
[39]
monthly income on
rent and utilities.
[41]
A study by Harvard
University's Joint Center for
[44]
Housing Studies found that
about a quarter of
[46]
households spent more than
half their income on
[48]
housing. They're frequently
having to choose
[51]
between income, food or
paying for housing and
[54]
the rent always
eats first.
[56]
The Urban Institute found that
about a quarter of
[58]
black and Latin X renters
surveyed didn't pay or
[61]
defer the rent in May
2020, compared to 14
[64]
percent of white renters.
[65]
Rents are like
out of control.
[67]
I mean, people can't even
afford to live in these
[68]
cities anymore. And these
are people who have
[71]
good jobs.
[78]
I'm in a rent controlled
apartment and the rent
[78]
is low but I didn't pay
my rent because I had to
[78]
cover everything else and
I have been losing
[78]
sleep, thinking and thinking.
What is going to
[79]
happen when everything is open
again and all the
[83]
assistance is gone? So
what's going to happen?
[88]
Am I going to be making
the same money as I was
[91]
making before.
[92]
With the growing
uncertainty over financial
[94]
stability and the idea that
mass evictions may be
[97]
looming, how do
evictions actually work?
[99]
And could the
U.S. cancel rent?
[106]
From 2000 to 2016, there
were almost one million
[110]
evictions per year in
the United States, meaning
[112]
that about 1 in 40
renter households were evicted
[115]
per year. In 2016, we
saw 3.7 million eviction
[119]
filings, which is constant,
7 eviction filings
[123]
per minute. These are
experiences that we're
[126]
hearing about across the
country right now.
[128]
It is not just a red
or a blue state issue.
[131]
It's not just
an urban issue.
[133]
Along with systemic racism,
rising rents and home
[136]
prices, stagnant wages,
gentrification and a
[139]
decline in public and
subsidized housing are
[141]
contributing to this
very complex problem.
[144]
The Great Migration states
so in the South,
[147]
Midwest and Rust Belt,
these are often the
[151]
hot spots of evictions, and
that's very much tied
[154]
to the legacy of
slavery and racial
[157]
discrimination in
housing.
[159]
According to census data from
the 1950s to 2000,
[162]
gross rents, which includes
utilities, rose from
[165]
384 dollars to
901 dollars.
[168]
By 2010, that number
grew to 1,010 dollars.
[171]
And by 2018, that
was 1,086 dollars.
[175]
At the same time,
wages have been stagnating.
[177]
Data from the Bureau
of Labor Statistics,
[179]
analyzed by the Pew
Research Center, suggests
[182]
that from 1964 to 2018,
average hourly wages went
[185]
up from 20.27 cents to
22 dollars and 65 cents,
[190]
or just 2 dollars
and 38 cents.
[192]
Combined with the loss
of millions of affordable
[194]
housing units since the 1990s,
a crisis has been
[197]
created for low
income Americans.
[199]
For poor people and the
working poor, every day's
[202]
a rainy day. They're just
trying to figure out
[204]
who to pay and
who not to pay.
[207]
That's that's kind of like
the game that they
[208]
play every month.
Just days after.
[212]
I'm just surviving.
[214]
Just living. You know.
[220]
An addiction can be one
of the most emotionally
[223]
traumatizing experiences that a
family has ever
[225]
had, they first receive a
notice on the door that
[229]
they're going to
be evicted.
[230]
That the sheriff will be
coming in a matter of
[232]
days. And then if they
don't leave on their own
[234]
accord, the sheriff comes
in and that their
[236]
belongings are forcibly removed
from the home.
[238]
This is usually happening
while children and
[241]
family members are standing
by and watching.
[243]
The legal process to evict
a tenant can be broken
[245]
down as follows. There
are five stages in
[248]
eviction. The initiation.
[249]
Some notice to tenant.
[251]
Filing of the lawsuit.
[252]
The actual hearing.
[254]
The court order. And
then the sheriff execution
[257]
of that order. Some
landlords engage in
[259]
intimidation tactics to get
tenants to leave,
[261]
which sometimes leads to
what are known as
[263]
self-help evictions.
[265]
Self-Help means a landlord
has not resorted to
[267]
starting a court case,
has not done the
[271]
preliminary notices, has not
filed the court
[273]
cases, just literally locked
out the person or
[278]
locked them out and thrown
their things out as
[279]
well. This is illegal in
almost every state in
[282]
the country. The landlord
is subject to damages
[285]
not just for the eviction
itself, but in a
[287]
separate court. The tenant can
also sue for any
[289]
damages to property.
[291]
Depending on the state, a
landlord may have to pay
[293]
fines, damages, and the
tenants court in attorney
[296]
fees. And if a tenant
wins the suit, the landlord
[298]
may be required to let
the tenant stay in the
[300]
unit. It's the reason why
is because 90 percent
[303]
of landlords have a lawyer
and 90 percent of
[306]
tenants don't. Some
universities offer law
[309]
students as representation under
the tutelage of
[311]
certified law professors like
the housing clinic
[314]
at Michigan
State University.
[315]
I would say we get
15 calls a day.
[318]
Various things. And then we
have a court program.
[321]
So we on Thursday, we're
at actually at a court
[324]
where people who are
being sued come in.
[327]
Which brings up questions
about access to counsel
[329]
in the United States.
[331]
The Gideon case came before
the Supreme Court and
[333]
it was decided at that
point that if you were
[335]
facing criminal procedures, that
you need a right
[339]
to an attorney. Like when
someone is spread their
[341]
Miranda rights when
they are arrested.
[343]
But the same right has
never been afforded to
[346]
civil matters, such as
matters of housing matters
[350]
and public health.
[351]
To fight against this,
some cities have enacted
[354]
access to
counsel initiatives.
[355]
The American Bar Association
passed a resolution
[359]
almost a decade ago in
favor of the right to
[362]
civil right to counsel.
[363]
And it's a movement that
I think is largely
[365]
growing. We don't have
any states that have
[367]
adopted it yet at the
state level, but there are
[369]
numerous cities that have
adopted a civil right
[372]
to counsel, especially in
housing, and have
[374]
demonstrated that just
that one intervention
[377]
resulted in upwards of 80
percent of cases, not
[381]
resulting in a sheriffs
enforcement of an order.
[384]
Keep in mind that most
of the programs that
[386]
provide free lawyers are
for very low income
[388]
people. It does not
include working poor.
[393]
So, you know, there
limitations on the income
[396]
levels.
[402]
Evictions can have serious
repercussions on the
[404]
tenants and the
community at large.
[406]
We call it the Scarlet
E because when you've gone
[409]
through the eviction process,
it ruins your
[411]
credit. And often it can
cause you to be
[414]
blacklisted by
other landlords.
[417]
The major credit bureaus took
action to try to
[419]
solve this. Back in
2017, the three credit
[422]
bureaus, the major ones,
Experian, Equifax and
[425]
TransUnion, and they got
together and they no
[427]
longer reported for evictions
on credit reports.
[430]
But it hasn't stopped
the label from following
[432]
tenants who have
been evicted.
[433]
Credit bureaus aren't
necessarily reporting that
[436]
you had an eviction on
your record, but there
[438]
is, you have the ability
to search the records.
[441]
And there are numerous
companies that have popped
[443]
up across the country for
the sole purpose of
[446]
calling through eviction records
to make that
[447]
available to
property owners.
[449]
So you can pay those
companies to search the
[451]
record for you to determine
if this applicant for
[454]
tenancy is on one
of those lists.
[457]
So it becomes very difficult
to find housing once
[459]
you have been evicted.
[461]
So it also increases the
rate of homelessness and
[466]
other traumatic events
and experiences.
[470]
According to a White House
report from 2019, over
[473]
500000 people are homeless
in the U.S.
[476]
on any given night. 65
percent of those are
[478]
sheltered, while the other 35
percent are on the
[480]
streets. And a recent
report by Amherst Capital
[483]
Management found that 28
million renters who
[485]
don't own their homes
or receive financial
[487]
assistance are at
risk of eviction.
[489]
But tenants aren't the only
ones to suffer when
[491]
rent isn't paid. The
rent itself has ripple
[494]
effects for the entire
community when the rent
[497]
isn't paid. The mortgages
isn't paid, property
[500]
taxes go unpaid
employees are unpaid.
[503]
Conditions that needed repairs
are delayed, and
[506]
the entire community ends
up suffering from the
[508]
school system to services
that the community
[511]
provides to residents.
[512]
It's probably a bit more
difficult for the smaller
[514]
landlord. One of the
things that we've been
[516]
working on internally and with
our peers in the
[519]
space is putting forth
a proposal to Washington,
[521]
to Treasury and HUD.
[524]
That's really a civil
program for short term
[526]
liquidity relief, designed much
like a long term
[529]
interest free loan administered
through the tax
[531]
system. So that's something
that we'll continue
[532]
to work on for the
benefit of all renters.
[535]
The 47 million households in
the US that rent
[537]
today. A May survey
by the American Apartment
[539]
Owners Association found that
nearly 60 percent
[542]
of landlords said their tenants
are unable to pay
[544]
rent because of the
coronavirus, and 80 percent
[547]
said they're willing to
work with their tenants.
[549]
We made it pretty clear
to our landlords that
[552]
people aren't just suddenly going
to be able to
[554]
afford to pay back everything
they owe on one
[556]
day, right. So it doesn't
make sense to create a
[560]
plan that
isn't realistic.
[562]
Landlords can use their
insurance for things like
[564]
natural disasters, but Covid-19
has not been
[566]
deemed one. In a
Martian McLennan report showed
[569]
that insurance rates are
going up amid the
[570]
pandemic because companies are
seeing it as a
[572]
higher risk. The
American Apartment Owners
[574]
Association said there
was something that
[576]
landlords can do to ease
some of that burden.
[578]
They can get something
called lease guarantee so
[581]
that if later the tenants
can't pay their rent
[584]
or, you know, there's
excessive damages or
[587]
something like that, they
have some coverage for
[589]
that. And we call
it a security deposit
[592]
alternative. So it allows people
to not have to
[596]
pay a full
security deposit.
[598]
And then, you know, the
landlord is protected for
[601]
thousands of dollars just
in case something
[603]
happens down the road.
[604]
It is a small fee that
the tenant has to pay to
[608]
get it, but it is
definitely less than a security
[611]
deposit would be.
[618]
I am also announcing
that the Department of
[620]
Housing and Urban
Development is providing
[622]
immediate relief to renters
and homeowners by
[625]
suspending all foreclosures
and evictions until
[628]
the end of April. The
president was referring to
[630]
an amendment of the
CARES Act, which provides
[633]
eviction relief for tenants
in federally backed
[635]
housing for 120days.
[637]
And the notice must give
tenants 30 days to leave
[639]
the property. You can look
on the Fannie Mae and
[642]
Freddie Mac Web sites to
see if your apartment
[644]
buildings, mortgages is federally
backed and even
[646]
if they're not, the eviction
lab has a policy
[648]
scorecard which is
constantly updating
[650]
information on states housing
policy during the
[652]
pandemic. The most important
thing to know is
[655]
that there are
lots of holes.
[657]
The eviction moratoria
are probably best
[660]
described as a patchwork.
[662]
So there are some places
around the country where
[665]
there are little to no
protections in place from
[668]
eviction. On June 29,
Hud's Federal Housing
[671]
Finance Agency extended
the ability for
[673]
multi-family property owners
that already had
[676]
forbearance agreements, an extra
three months of
[678]
forbearance with the
requirement that landlords
[680]
give the tenant at least
a 30 day notice to
[682]
vacate, not charge the
tenant late fees or
[685]
penalties for nonpayment of
rent and allowed
[687]
tenant flexibility to repay
back rent over time
[690]
and not in a lump sum.
[691]
Because of this patchwork,
the House of
[693]
Representatives passed the
Emergency Housing
[695]
Protections and Relief Act
of 2020, which would
[698]
appropriate 100 billion dollars
for direct rental
[701]
assistance. Something that
was not expressly
[703]
written into the 2.2
trillion dollar Carers Act.
[706]
The bill passed by the
House House, a companion
[708]
bill in the Senate. But
both bills are not
[710]
expected to pass in
the upper chamber.
[712]
Even though President Trump
says he supports
[714]
larger payments to Americans
than Democrats in
[716]
the next coronavirus relief
bill, a movement also
[720]
developed to hashtag
cancel rent.
[723]
All across the country,
from Los Angeles,
[725]
Philadelphia to New York.
[727]
Tens of thousands of
tenants banded together in
[730]
the largest coordinated rent
strike in decades.
[733]
Workers are staging protests
nationwide and as
[736]
International Workers Day, also
known as May
[739]
Day. In Congress,
Representative Ellen Omar
[742]
introduced the Rent and
Mortgage Cancelation Act
[744]
of 2020 to cancel rent
until 30 days after the
[747]
pandemic is over. Today,
I'm excited to introduce
[750]
a bill to cancel all
rent and hold mortgage
[754]
payments through the duration
of this spending.
[757]
The bill has 30 co-sponsors
in the House, but is
[759]
still waiting for a vote
in the House Financial
[761]
Services Committee. No matter where
I was or what
[764]
I was doing. I
could always come here.
[766]
This was home. But let's
wait and see what
[768]
happens. As Americans wait
for a possible next
[771]
step from Washington, experts
suggest people who
[773]
are concerned about their
rent speak with their
[775]
landlords. You know, this
is difficult for
[777]
everyone involved.
[779]
And we're really trying
to encourage as much
[781]
cooperation, and that
goes both ways.
[784]
So I think it's
really important that tenants
[786]
talk to their landlords
if they're having a
[788]
problem. To be
honest with them.
[791]
And for landlords at the
same time to not think
[793]
the worst. And to also have
an open mind and work
[797]
with their tenants
as well.
[798]
If they can.
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