'Not a rent holiday:' Trump's new eviction action leaves renters on the hook for months of backpay
Tenants taking advantage of the Trump administration's new eviction moratorium could end in January due to months of renting back.
This week, the Centers for Disease Control and Prevention used their powers to halt evictions for a wide range of American renters by December 31st to halt the spread of COVID-19.
While the moratorium covers more tenants than that under the CARES law, it is only a matter of deferring the rent until the end of the year. Tenants are responsible for repaying the late rent from 2021 plus any late fees incurred that year.
Read more: How to negotiate with your landlord if you are facing an eviction
"The eviction moratorium is not a rental vacation," a White House official told Yahoo Money. Rent repayment is subject to rental terms and state and local laws. "Tenants are expected to do their best to seek government assistance and work out installment plans with landlords to avoid defaulting on rent."
"It's not very feasible"
Detroit, Michigan, August 20, 2014: A displaced home on a suburban street with left items on the lawns near 8 Mile Street in the city of Detroit.
However, some housing advocates said the moratorium with no rent relief was not enough, given that millions of lower-income Americans are still unemployed and the number of workers claiming unemployment benefits is now over a million a week.
Read more: Coronavirus Stimulus Reviews: What Stops a Second Round Payment?
"It's not very doable," said Aisha Thomas, an Atlanta attorney and volunteer with the Fulton County Housing Court Assistance Center. "They should have included financial support for rent relief, [so] when their rents are due in January." You really don't have five months rent. "
Similarly, Rep. Maxine Waters (D-CA), chair of the House Committee on Financial Services, said in a statement that efforts are "lagging far behind" in what is needed to help Americans struggling through the pandemic Have difficulty paying rent.
Read More: Coronavirus: Do The Following If You Can't Pay Rent
She also pointed out the extra steps tenants must take to prove they need the deferral of rent, including signing an official CDC form stating they are at risk of homelessness. Tenants could still face penalties and fees if they fail to pay their rent on time.
"Most importantly, millions of families without emergency support have to pay many months of the accrued rent back in one lump sum," Waters said in the statement, "which means evictions are only delayed, not prevented."
"The spiral effects of non-payment"
Parishioners protest evictions and support the movement to "cancel" rent in the Bronx Housing Court in the Bronx, New York on August 10, 2020. (Photo by ANGELA WEISS / AFP via Getty Images)
The moratorium is only a short-term fix, said Jeff Taylor, co-founder of Digital Risk, a risk and technology consultancy for banks and GSEs, and could have an impact on landlords and the wider economy if a permanent fix is not found.
"The spiral of non-payments includes mortgage obligations, corporate payrolls, maintenance of safe and healthy homes, and state and local property taxes," said Taylor. "It is important that Congress work together to create workable solutions that will keep people in their homes while protecting the safety and soundness of the multi-family financial industry."
The next economic stimulus package remains blocked. Democrats are pushing for a $ 2.2 trillion package, while Republicans are aiming for $ 1.3 trillion. Although Treasury Secretary Steve Mnuchin and Spokeswoman Nancy Pelosi (D-CA) spoke on Tuesday, discussions between the two parties remain in a stalemate.
Yahoo Money's sister site, Cashay, has a weekly newsletter.
The White House official also told Yahoo Money that the administration was ready to work with Congress for further coronavirus aid.
"Overdue rental income will continue to be a problem and it is up to the federal government to respond to this unprecedented crisis by providing facilities for both tenants and landlords to protect and preserve the housing ecosystem," said Jason Haber, real estate agent at Warburg Realty. "The [eviction moratorium] is an important measure to prevent not only mass evictions but also mass homelessness across the country."
Dhara is a reporter for Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
Coronavirus: Trump administration tries to prevent evictions using CDC quarantine authorization
Coronavirus stimulus: No measures yet against Trump's eviction order
President Trump's promise to prevent evictions offers "false hope", experts say
Coronavirus Stimulus: Millions of Americans May be Displaced as Protection Expires and Talks stall
Read the latest financial and business news from Yahoo Finance and Yahoo Money
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube and reddit.
Click to receive the most important news as a notification!
'Bachelorette' Contestant Zach J. Will Apparently 'Polarize' Fans On Tonight's Episode
'The Bachelorette': Who Is Zach Jackson?
Blockbuster deal: Callaway announces merger with Topgolf
UK Vaccines Taskforce Chair says early COVID-19 vaccines may be imperfect: The Lancet
Oscar Pistorius: BBC removes documentary trailer after backlash
'I Don't Feel Safe': Pa. Mom Filed Protective Order Against Husband, Who's Now Accused of Murder