“Landlords may start to feel the fallout, too, specifically those who rely on that rental income to pay mortgages or utility bills. Landlords may have more resources — they own a valuable asset in real estate, after all. And the CARES Act, the $2 trillion coronavirus stimulus package passed by Congress late last month, offers landlords forbearance on federally backed mortgages during the crisis.
But forbearance is also just a postponement of payment, and many can’t kick the can down the road too far, Cunningham said. “So with landlords being unable to pay their mortgages, then you have lenders essentially not being able to pay out their investors in mortgage-backed securities, so the whole entire housing system is connected.”
That could have broader implications for the economy, as anyone who lived through the 2008 financial crisis might remember. And while many advocates say this shows exactly why the US for-profit housing system is so broken, that system also likely isn’t going to change before the next rent payment is due.
Which is why, at least for the short term, policy experts say governments need to provide more robust assistance to keep people economically stable and in their homes in the first place. Some experts suggested that housing subsidies or really just more cash would ease the financial burden, so renters don’t have to choose between paying rent and buying food.
The $2 trillion stimulus package helps, including by increasing unemployment benefits and by offering many American households one-time cash assistance, which for households making $75,000 or less per year comes out to $1,200, with additional money for kids.
But that might not be enough now, and definitely not enough a few months from now, given the unprecedented economic crisis. Cunningham said she thought Congress missed an opportunity to fully give people what they need to get through the crisis. “A $1,200 stimulus check, particularly in high-cost areas where the pandemic is most concentrated like New York City, San Francisco, Seattle, is not enough to pay the rent,” she said.”