Why Covid-19 Is a Housing Crisis, Too: A Q&A with Urbanist Alex Schwartz

A professor of Urban Policy at the New School’s Milano School of Policy, Management, and Environment, Alex Schwartz is a leading scholar of housing and community development. He has just completed 10 years as a managing editor of the international journal Housing Studies. The 4th edition of his book Housing Policy in the United States (Routledge) will be published in 2021.
 
Urban Matters: Because of Covid-19, on Sept. 1st the Centers for Disease Control ordered a nationwide moratorium through Dec. 31st on virtually all evictions involving non-payment of rent. Has there ever been anything similar to this in the U.S.? 
 
Schwartz: As far as I know the CDC’s eviction moratorium is unprecedented. I’m not aware of the United States government ever before prohibiting evictions. It’s particularly unusual for the CDC to initiate the moratorium, although there is a good public health case that can be made for it. The moratorium speaks to the fact that millions of families who have lost jobs and income during the pandemic are at high risk of losing their homes now that enhanced unemployment benefits have expired and many households have exhausted their savings. 
 
It must be stressed that the moratorium is at best a stop-gap measure.  It merely delays evictions. Since the government is not providing emergency rental assistance, renters will fall further behind on their rent during the moratorium. When the moratorium ends, renters will owe thousands more to their landlord in back rent and late fees and be unable to avoid eviction. Even if they find new jobs and their incomes go up, it’s unlikely that they will have sufficient funds to cover the accumulated back rent due.  
 
UM: New York State also has had an eviction moratorium since March 16th. Is it having the desired effect of keeping people out of Housing Court and homeless shelters? What’s likely to happen when it ends?
 
Schwartz: New Yorkers are subject to the State, not the national, moratorium – and it’s currently set to expire Jan. 1, too. I don’t have direct data, but I can’t imagine that it’s not having a positive effect. The number of people staying in the city’s homeless system has actually trended down in recent months – from around 63,000 in January 2020 to about 54,000 on Oct. 12. This is obviously still a huge number, and it’s possible that homeless people are avoiding the shelters for health concerns – and there does seem to be an increase in street homelessness. However, at this point we aren’t seeing a surge in homelessness, most likely because of the eviction moratorium. However, should it end before renters have the means to pay their current and back rent – i.e., without emergency rental assistance – the city is likely to experience a rise in homelessness the likes of which we’ve never seen before.
 
UM: No one wants evictions, but if tenants don’t pay rent doesn’t that put a financial squeeze on landlords too?
 
Schwartz: This is a huge problem. Eviction moratoria may be necessary, but they are certainly not sufficient. If tenants are unable to pay rent, landlords become hard-pressed to meet their mortgage payments, insurance, property taxes, payrolls, and other expenses. It becomes more difficult to pay for essential repairs and equipment replacement. Small landlords with few financial reserves are especially vulnerable. The accumulation of rent arrears puts building owners at risk of foreclosure, and may tempt them to sell their buildings to hedge funds and other speculative investors – and nationally there are reports of this happening. Rental arrears also exacerbate the city’s unemployment and fiscal crises, cutting jobs and property tax payments.
 
UM: Some City officials have proposed essentially socializing such distressed properties in public “land trusts.” What’s your opinion of that idea?
 
Schwartz: Community land trusts are an important way to expand and preserve the supply of affordable housing. The underlying land is held by a nonprofit entity, which insulates properties from increases in land prices. Community land trusts can also regulate rent increases and home sales. However, it costs a lot of money to acquire apartment buildings and other properties for a community land trust, and being in one does not ensure that housing will be affordable, especially to low-income households. Acquiring distressed buildings for a community land trust makes sense as a strategy for expanding the stock of housing protected to some degree from market pressures. It does not reduce the need for direct housing subsidies.
 
UM: Because of the pandemic-induced recession, City government projects a $9 billion shortfall in revenue through mid-2021. What does that mean for Mayor de Blasio’s affordable housing program?  It’s already taken big budget hits; is it still viable?
 
Schwartz: Although the City is ahead of schedule on meeting its affordable housing preservation and production goals, it has already cut back its capital budget commitments for affordable housing. That will likely slow this progress. One concern is that reduced capital spending may prompt the City to modify the income composition of the new housing it produces so that it will require less subsidy – in other words, providing fewer units for the lowest-income people. I don’t think this has happened, but it’s something to watch out for. It’s also possible, as happened during the Bloomberg administration in the aftermath of the mortgage crisis of 2007, that the City will put more emphasis on less costly preservation projects and less on more expensive new construction.
 
UM: Two final questions about the future, one long-term and one near-term. Long-term: With more remote working likely in the future, can or should commercial office space be repurposed for housing?
 
Schwartz: A lot of office space in the Wall Street area has already been converted to housing. There is no reason to think office space in other parts of the city can’t also be repurposed for residential use. Whether such housing becomes affordable is another question.
 
UM: Now, short-term: Election Day is less than two weeks away. What could the outcome mean for meeting the nation’s, and New York City’s, housing needs?
 
Schwartz: The outcome couldn’t be more important. If Biden wins, and if the Democrats take the majority in the Senate, we are likely to see urgently needed emergency rental assistance. Longer term, the Biden platform calls for a massive increase in rent subsidies. If it is adopted, rental vouchers would become far more available. It’s also likely that the federal government would increase funding to preserve public housing in New York City and elsewhere.