An open letter to Kansas City.
Rent is due.
$50 BILLION. Amidst a global pandemic with over 1 Million confirmed cases of Coronavirus in the United States and millions more being furloughed, laid off, or unable to work due to necessary community restrictions each week, Americans will still owe nearly $50 Billion in rent payments in May, according to the Urban Institute. In the Kansas City metro, that translates to nearly $300 Million owed by the 292,250 households that rent, according to census data.
Many homeowners and renters were struggling to make their payments before anyone had heard of COVID-19. In our region, 1 in 3 families are considered “housing cost-burdened” (more than 30% of their income was spent on housing) with that impacting half of very low-income families. The current health crisis has only exacerbated the problem. Unfortunately, similar to the disparate health impacts being felt by COVID-19, the housing affordability challenges are being disproportionately borne by people of color and renters, particularly low-income renters.
Across the metro, an estimated 111,000 rental households will be impacted by COVID-19 job or income loss. Recent local unemployment claims data shows over 130,000 claims were filed between March 21 and April 18. Half of low-income renters work in the five industries most vulnerable to Coronavirus impacts. Even before this crisis, over 100,000 households in our region were earning $20,000 or less, but only 30,000 units are available for that income level, forcing 70% of these families to unjustly stretch their limited resources. With local rents averaging $1,000 per month, now having lost their jobs, these same households will be asked to scrape together $100 Million to pay rent this month. How realistic is that?
Prior Federal Reserve studies reveal 40% of Americans aren’t able to cover a $400 emergency, so few families are in a position to absorb this current financial shock. As tenants lose income and can’t pay their rent, a waterfall effect happens, leading owners and landlords to struggle covering operating expenses and pay their lenders, taxes, and services. With increased defaults, capital markets will tighten, lenders will stop lending, and construction projects will come to a halt.
Though Congress has taken action to address a number of the potential impacts of the Coronavirus on our economy, a looming housing “cliff” is on the horizon and must be addressed immediately and aggressively. A sizable housing investment in future stimulus legislation is needed for our local communities to prevent wide scale foreclosures.
While awaiting additional federal action, we ask our state and local elected officials in Missouri and Kansas to help support a healthy ecosystem of affordable housing for tenants, providers, and developers by: enacting and extending moratoriums on evictions and foreclosures; freezing rent and mortgage levels; prohibiting late fees on rent; providing timely rental and mortgage assistance to those most impacted; enacting grace periods for payment of property taxes and locally-imposed fees or fines; extending property tax freezes in the hardest hit zip codes; maintaining property taxes at 2019 levels; banning utility shutoffs and restoring previously shut off water, electricity, and gas; deliver funding for homeless services and housing for people experiencing homelessness or currently living in unsafe/unsanitary conditions; and providing encouragement and support for landlord-tenant negotiations.
We acknowledge and commend our elected leaders, businesses, and individuals who have already offered moratoriums and flexibility in rental and mortgage payments. In spite of this, the Coronavirus and its ripple effects will be felt for many months, if not years, to come. Swift action on the recommendations outlined above is critical for our communities and economy. The rent is due – the question is will we pay the bill?