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Briefing before the
Environment and Transportation Committee
"The Effects of COVID–19 on Housing”
June 29, 2020
10 a.m.
Aseem K. NigamDirector, DHCA
Marc ElrichCounty Executive
Aggregate County Support in context of COVID-19 ($45+M)
Support for tenants and landlords:• $3.5M COVID-19 assistance with rent• $218,000 expanded support for tenants facing eviction to avoid homelessness• $5M fund for Emergency One-time payments• County deferring cash flow payments on County debt, reporting, and licensing fees
Support for small businesses and nonprofits:• $25M Public Health Emergency Grants program to small businesses• $1.5M Telework Assistance to small businesses/nonprofits• $10M Child Care Providers (especially serving low-income & special needs)
2
Federal CDBG/ESG ($9+M); other CARES Act Support
Community Development Block Grant (CDBG) and Emergency Solutions Grant (ESG): $9+M
• Support for tenants and landlords:o 1.955M CDBG: COVID-19 Rental Assistance programo Emergency Solutions Grant, for shelter, rapid
rehousing and diversiono $1.439M ESG-CV 1o $4.848M ESG-CV 2
o Support for small business:o $1M CDBG: Microenterprise Stabilization Program
Other CARES Act funds to the County: $183M
3
COVID-19 Renter Relief Act - Prohibits Rent Increases Above 2.6%
• Beginning April 24, landlords must not increase their tenants’ existing rent by more than 2.6% during the COVID-19 emergency and for a minimum of 180 days after the end of the Emergency..
• The Act limits rent increases to the County’s 2020 Voluntary Rent Guideline (VRG), which was set at 2.6% in February 2020: Under County law, the VRG is updated each year to represent the rental component of the Consumer Price Index for the Baltimore-Washington Metropolitan Area.
• The 2.6% limit applies to all licensed residential rentals in Montgomery County including rental units in multifamily buildings, houses, townhouses, individual condominium units, and accessory dwelling units.
4
County's Five Mission Areas for Recovery
Montgomery County has organized workgroups with community and industry representation to identify and recommend actions for recovery horizons of three, six and twelve months.
Five Mission Areas for Recovery:1. Housing – given expected eviction tsunami:
• Eviction and Homelessness Prevention
• Multifamily Default Prevention
• Common Ownership Community and Homeowner Distress
2. Education
3. Health and Human Services
4. Economic Revitalization
5. Government Operations and Services
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COVID-19 Rent Relief ($3.5M County funds)
• Grants for arrears and up to three months of assistance
• Eligibility:• delinquency and facing loss of housing
• those with income ≤40% AMI ($2M); and, ≤60% AMI ($1.5M)
• must have COVID-related income loss
• must be paying >50% income for rent.
• Maximum (household) relief amount: $4,000
6
COVID-19 Rent Relief ($1.955M CDBG CARES Act)
Rental Assistance for Low-Income Tenants with income loss due to COVID-19 ($1.955M Community Development Block Grant):
• Offers up to $500 per month for a maximum of $1,500 over 3 months, paid directly to landlords, offered through an open application process.
• Funds sufficient to support over 1,100 households.
• Eligibility: Household income at or below 80% AMI; demonstrated income loss/expenses due to COVID-19; etc.
• Requires documented total income; rental delinquency; ability to meet rental obligation with program assistance.
7
Emergency Assistance Relief Payments ($5M County Funds)
One-Time Payments ($5M Allocated):
• Cash grants to low-income residents:
• $1,000 for family with one child;
• $150 for each additional child, up to $1,450 per family
• Eligibility:
• Income at or below 50% of Federal Poverty Level ($26,200 for family of 4)
• Ineligible for federal assistance
8
Additional Recovery Efforts: Small Business ($26M County funds)
Public Health Emergency Grant Program: $25M County funds• Eligibility: Businesses/nonprofits (up to 100 employees) that
experienced losses of 50+% due to public health emergency
• 40% of funds dedicated to restaurants & retail business
Telework Assistance: $1M County funds• Eligibility: Businesses/nonprofits (up to 100 employees) could
receive up to $2,500
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Additional Recovery Efforts: Small Business ($1M CDBG CARES)
County Microenterprise Stabilization Program: $1M CDBG funds
• Financial assistance grants (up to $10,000 per business)
• Eligibility:
• income-eligible household
• for-profit business with five or fewer employees that experienced a reduction in revenue as a result of COVID-19
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Briefing to Environment &
Transportation Committee:
Effects of COVID-19 on
Housing
Presented by:
Natasha Mehu, Legislative Director, MACo
June 29, 2020
Questions Presented
2
What actions have been taken by
federal, state, and local governments
with regard to mortgage forbearance,
eviction and foreclosure prevention, and
the development of new programs to
assist renter’s and homeowners during
the ongoing COVID-19 pandemic?
Questions Presented
3
What actions have been taken by
federal, state, and local governments to
protect landlords and lenders facing
lost revenue?
Do any of these solutions require
landlords or lenders to agree to certain
protections for the tenants or
homeowners served by these
individuals, and what are those
protections?
4
Highlights of County
Actions to Assist
Renters, Homeowners,
Landlords for
Housing Issues Related
to COVID-19
• Baltimore City COVID-19 Renter Relief Act
– Prohibits landlords from imposing rent
increases for existing tenants during the
Governor-declared State of Emergency and for
90 days after it has been lifted.
– The prohibition includes fees for late payment
or non-payment of rent
• Temporary Rental Assistance Program
– $13 million of CDBG-CV funds committed to its
establishment
5
Baltimore City
• COVID-19 Eviction Prevention Program (EDD)
– Phase 1:
• Financial assistance of up to two months’ worth of rent to be paid
directly to landlord of eligible households on a first-come, first-
served basis
• Funded at $1M = using $500k in CARES Act (CRF) funding and
$500k in DSS Emergency Assistance for Families with Children
(EAFC) funding
• Estimated that the $1M will be able to help approximately 300
households
• Received over $6M in requests from about 1500 applications
– Phase 2:
• $2M+ in CDBG-CV funds to enter into grant agreements with
eligible organization(s) to address homelessness and expand
eviction prevention efforts
• The RFP response application deadline is 6/30/2020 at 2 pm
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Baltimore County
7
• Eviction Prevention/Short Term Rental Assistance Program
– County Health Department received an additional $173K in COVID
funding via the Emergency Solutions Grant from the State.
It is anticipated that 50% of that funding will be used for short term
rental assistance for individuals impacted by COVID-19.
– Department of Community Services through Housing and
Community Development Division has applied for a new round of
Community Development Block Grant funding directly related to
COVID including $100K for short term rental assistance (3 months)
to individuals and families impacted by COVID.
– Local Housing Counselor is exploring setting up Zoom meetings for
people with potential mortgage issues in an effort to be proactive
about managing their loans during this time.
– If a rental property owner receives CARES assistance for their
business, they will be subject to the HUD moratorium on evictions.
8
Cecil County
• Partnership with Garrett County Community Action Committee, Inc. (GCCAC)
– Homeless programs
• County allocated a portion of its COVID monies to GCCAC to open a
second homeless shelter and GCCAC raised funds from federal and state
sources to operate the shelter.
– Emergency shelter programs
• Redirected CDBG funds to greatly expand emergency shelter in the form
of motel rooms and a domestic violence facility.
– Rent Assistance
• GCCAC was able obtain some funding (FEMA, ESG HSP) for one time rent
assistance payment for a limited number of household.
• County has applied to DHCD for CDBG funds to support a three month
rental assistance program for those households who fell behind as a
result of COVID. GCCAC will administer the program.
(continues on next slide)
9
Garrett County
• County Office of Emergency Assistance
– Initiated a network of providers who are making regular telephone contact
with its identified vulnerable population to assess ongoing needs that
include housing including referrals to shelter and housing programs.
• Landlord Assistance
– GCCAC contacted landlords and obtained a list of tenants who are not able
to keep up with rent. GCCAC is initiating direct rent payment to landlords on
behalf of tenants prior to the lifting of the moratorium to help with cash
flow.
– Property owners receiving assistance are expected to provide quality
housing and with inspection prior to the assistance being provided and
when a tenant complaint is received.
• By the numbers:
– Survey of approximately one third of the low income rentals in the County,
the percentage of households not paying rent went from 6% in March to
16% in April to 19% in May.
– If elderly renters are removed from the survey the rates are 9%, 21% and
23%. 10
Garrett County
• Has applied for CDBG CARES funding
• If approved, it would provide about $500K to help
residents with rental payments
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Kent County
• Howard County has committed $1.5M in rental/mortgage payment
assistance for residents affected by COVID-19.
• Funding is made up of $300K in local Disaster Relief and Recovery
funds, $500K in Moderate Income Housing Unit (MIHU) fee-in-lieu
payment revenue from developers and $770,356 in CDBG-CV funds
received from the CARES Act.
• Beginning July 6th, residents may apply for up to 3 months of
assistance to pay past due rent and/or mortgage payments to
prevent eviction and/or foreclosure.
• The Howard County Housing Commission is working with the
County’s CoC to provide extra vouchers for those individuals or
families experiencing homelessness during COVID-19.
(continues on next slide)
12
Howard County
• The County is partnering with Making Change, Inc. to provide free
financial counseling to residents affected by a loss of income due to
COVID-19. The counseling will include budget preparation and
contacting creditors for assistance.
• The County Council signed Council Bill 33 into law on May 22, 2020.
This bill prohibits eviction of tenants that suffered a loss of income
due to COVID-19 until 90 days after the County’s State of
Emergency order is lifted.
13
Howard County
14
• Emergency Rental Assistance Program (ERA)
– Rent and utility assistance for those whose
employment incomes were impacted by the
crisis
– Applicants were eligible for a maximum of
$1,800 per month for up to 3 months of
emergency assistance
– Payments made directly to landlord or utility
– Temporarily closed due to overwhelming
response
15
Prince George’s County
• Talbot County Individual Assistance Program
– CARES Individual Assistance Program provides emergency cash
assistance for individuals who are out of work or whose income
has been reduced because of the COVID-19 public health
emergency.
– CARES assistance can help with rent, mortgage or other
housing costs, utilities, and other emergency needs, and
payments are made directly to the landlord, mortgage
company, utility company or other vendor.
• Additional assistance
– Food Pantry
– Legal Assistance Support (in development)
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Talbot County
17
Contact:
Natasha Mehu
Legislative Director, MACo
18
Thank You
House Environment and Transportation Committee Briefing - Rental Housing & COVID-19June 29, 2020HOMELESS PERSONS REPRESENTATION PROJECT
Karen Wabeke, [email protected]
The Affordable Housing Crisis Pre-COVID-19 Maryland has the 8th most expensive rental housing in the country.
In order to afford a 2 Bedroom rental home in Maryland a full time worker needs to earn $27.52/hour, or $57,238 a year.
For every 100 households in Maryland with income at or below 30% AMI, there are only 34 affordable and available units, less than the national average.
In 2016 in Maryland 825,433 households—38%--could not afford basic needs such as housing, child care, food, transportation, and technology, a 22% increase from 2010.
50% of Marylanders do not have money set aside to cover three months of expenses if faced with a job loss.
2
The Affordable Housing Crisis, cont.. Cost burdened households are those who spend more than 30% of their income on housing.
Severely cost burdened households are those who spend more that 50% of their income on housing.
Nationwide, 10.9 million renters--or one in four--were severely cost burdened.
72% of renters earning less then $15,000 were severely cost burdened. 43% of renters earning between $15,000-$29,999 were severely cost burdened.
In Baltimore City 57% of all renters are cost burdened and 33% are severely cost burdened.
Black and Brown households are disproportionately affected by housing cost burdens and housing instability. In Baltimore City:
61% of Black renters are cost burdened and 38% are severely cost burden.
55% of Hispanic renters are cost burdened and 34% are severely cost burdened. 50% of White renters are cost burdened and 26% are severely cost burdened.
3
Evictions in Maryland Pre-COVID-19 The eviction process for Failure to Pay Rent in Maryland is an inexpensive and expedited summary ejectment process. Complaints may be filed in court immediately when rent is late, no personal service is required, no
discovery is permitted, and trial occurs within 5 days (slightly longer in larger jurisdictions).
In FY 2018, over 650,000 landlord-tenant cases were filed in Maryland-more than any other case type.
Out of approximately 150,000 complaints filed each year in Baltimore City, the court issues a warrant in 45% of cases and an eviction occurs in approximately 7,000.
Evictions are extremely disruptive and harmful to households. Evictions contribute to poor mental health, job loss, financial stress for adults and poor performance at school for children.
Black households face higher rates of evictions, particularly Black women with children.
4
Federal COVID-19 Protections for RentersThe Coronavirus Aid, Relief, and Economic Security (CARES) Act
was signed into law on March 27, 2020.
Includes a federal eviction moratorium for tenants living in covered properties:Covered properties include rental units in properties that Participate in federally assisted housing programs, like Public Housing, Section 8 (HCVP), Low
Income Housing Tax Credit, etc. Are subject to a federally backed mortgage loan Are subject to a federally backed multifamily mortgage loan
Prohibits landlords from filing new eviction actions for nonpayment of rent for 120 days from the date of enactment and from charging fees, penalties, or other charges to the tenant related to such nonpayment of rent.
Also prohibits landlords from evicting a tenant in a covered property after the 120 day moratorium ends except on 30 days’ notice, which may not be given until after the moratorium period.
The 120 day moratorium ends next month – July 25, 20205
Federal COVID-19 Protections for Renters, cont.
The CARES Act also provides multifamily borrowers with certain protections and rights for forbearance of loan payments under federally backed residential mortgages. During the period of forbearance, the borrower may not (i) evict or initiate the eviction of a tenant for nonpayment of
rent or other fees or charges; (ii) charge any late fees, penalties or other charges to a tenant for a late payment of rent; or (iii) issue a notice to vacate.
Following expiration of the forbearance, a borrower that receives a forbearance may not require a tenant to vacate before the date that is 30 days after the date on which the borrower provides the tenant with a notice to vacate
Earlier this month, the Federal Housing Finance Agency (FHFA), Federal Housing Administration (FHA), the United States Department of Agriculture (USDA), and the Department of Veterans Affairs (VA) all announced an extension of the eviction moratorium through August 31, 2020.
State COVID-19 Protections for Renters Governor Hogan’s Executive Order issued March 16, 2020 and extended by Executive Order dated April 3, 2020 Prohibits Maryland courts from ordering the eviction of any tenant who can show that their failure to pay rent or breach of lease was the result
of COVID-19 because of lost or reduced employment, needing to care for a school-aged child, or because they are diagnosed with, or under investigation for, COVID-19.
Prohibitions are in effect until the State of Emergency is lifted.
Governor Hogan’s Executive Order issued March 16, 2020 and extended by Executive Orders dated April 29, 2020 and May 29, 2020 Prohibits electric, gas, water, sewage, phone, cable television, and internet service provider companies from shutting off any residential
customer’s service or charging any residential late fees.
Prohibitions were extended to July 1, 2020.
Maryland courts have been closed to the public since March 16, 2020 by Administrative Order of Chief Judge Barbera. Under the Court’s phased reopening plan, the court will begin gradually reopening and hearing certain types of landlord-tenant cases: Phase II (6/6/2020 – 7/19/2020) – court will hear emergency breach of lease actions involving threats or injury to people or property,
emergency wrongful detainer actions
Phase III (7/20/2020 – 8/30/2020) – court will hear rent escrow actions (provided local departments are able to provide inspection), tenant holding over actions, and warrants of restitution where judgment for nonpayment of rent was previously entered
Phase IV (8/31/2020 – ) – court will hear failure to pay rent actions
Tenants are still responsible for their rental payments making them subject to eviction when the moratoria end and courts reopen.7
SourcesJoint Center for Housing Studies of Harvard University, America’s Rental Housing 2020.
Maryland Judiciary, Annual Statistical Abstract FY 2018.
National Low Income Housing Coalition, The Gap: A Shortage of Affordable Homes (March 2020).
National Low income Housing Coalition, Out of Reach (2019).
Rent Court Summary Work Group Report, District Court for Baltimore City.
The Abell Report, The Double Crisis: A Statistical Report on Rental Housing Costs and Affordability in Baltimore City, 2000-2013.
United Way, Alice: A Study of Financial Hardship in Maryland (2018).
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COVID and HousingThe impact, issues, and solutions for Maryland’s tenants.
• In-depth assistance and case management for Maryland tenants, either to reach an equitable agreement between the tenant and landlord, or through code enforcement, referrals to legal service providers/outside agencies
• Monitor and map geographic trends in housing complaints• Analyze policy and data to find patterns in disparate impact/discrimination• Assist Maryland residents with Fair Housing complaints and enforcement.
We have two distinct program areas: Fair Housing Enforcement, and Tenant Advocacy. We work to ensure landlords, lenders, realtors, and property managers are in compliance with the Fair Housing Act, and work to ensure tenants across Maryland are living in safe and healthy housing. In November of 2019, the Fair Housing Action Center became a program of the Maryland Consumer Rights Coalition.
• 451% increase in intake forms over the same period in 2019.
• Most people statewide were initially seeking financial assistance between March and June, numbers declined as counties initiated financial assistance programs. Baltimore City need remains strong.
• Reports of tenant harassment, threats of illegal evictions (lockouts), landlords emboldened by lack of court access by tenants.
•
• Direct financial assistance to tenants who experienced job loss/layoffs due to COVID, particularly for those who had to wait months for UI payments, or could not qualify
• Look to Prince George’s and Baltimore County for implementation of assistance, and intake/eligibility guidelines
• Mandatory payment plans for tenants whose landlords received mortgage forbearance/relief,landlords cannot ask for rent arrearage in lump sum
• Extend eviction moratorium, including filings, for 120 days after Governor Hogan lifts the emergency order
• Gives newly-employed or formerly laid-off tenants an opportunity to return to work and start to correct rent arrearage
• Increase state funding for eviction/homelessness prevention and legal services for tenants, perhaps via an additional $10 fee for each eviction filing, to pay for additional financial counseling/coaching and eviction prevention for tenants – particularly post-COVIDwhen advocacy groups are seeing exponentially higher caseloads, which will only increase once landlords start filing evictions.
House of DelegatesEnvironment and Transportation Committee
Monday, June 29, 202010:00 AM
The Effects of Covid–19 on Housing
Presenters: Erin Bradley, AOBA | Tyler Craddock, NARPM | Aaron Greenfield, MMHA
Question 1
What data exists on the impact, thus far, of COVID-19 on access to and maintenance of housing – how many people have faced difficulty paying rent or making mortgage payments? Does demographic data suggest there are groups facing a greater risk to their access to housing than others as a result of this crisis?
Demographic Info
AOBA, MMHA and NARPM members do not keep or retain demographic information of
applicants or residents.
How many people faced difficulty paying rent?MMHA: MMHA conducted a survey of its membership in March, April, May, and June to assess rent delinquencies. The survey showed rent delinquency in:
• April 2019 was 11.47%• March 2020 was 11.72%• April 2020 soared 78% to 20.95%. • May 2020's survey demonstrated that the industry experienced a 21.9% delinquency rate as of the
middle of the month. Fortunately, that delinquency dropped to 10.2% by the month’s end, suggesting people are paying throughout the month.
• The early information from June, which encompassed 93,000 units is troubling with delinquency at 19.5%• While our average delinquency rates are not devastating, delinquency for Class B and C properties is very
concerning.o Class B properties are reporting 24.49%o Class C properties are reporting 31.38%
• Also, while June delinquency went down slightly, we cannot forget that most people have already spent their stimulus checks and expanded unemployment assistance will end next month.
How many people faced difficulty paying rent?AOBA: Members report delinquency rates approaching 20-25% in April and May, however there are discrepancies based on sub-market and property type. Delinquency rates at market-rate affordable properties are exceeding 30%.
To put it in a dollars and cents perspective:
Across one member’s Prince George’s County portfolio of 11,000 units the uncollected rent balance on May 31, 2020 was $1,811,361 compared to the uncollected rent balance of $316,001 on May 31, 2019.
Another member notes, that across 10,000+ units at 29 properties in Montgomery and Prince George’s Counties, the amount of rent owed for April increased to $187,095 from $113,663.88 in March 2020. This number ballooned again from $187, 095 in April to $465,198 owed for May rent and nearly quadrupled to $1, 843,304 as of June 11, 2020. Thus far, this company has lost $2,609,260 in rent payments since March 2020.
How many people faced difficulty paying rent?NARPM: NARPM conducted member surveys for April and May and are conducting one for June.
• April 2020 – 40% indicated that 91 to 100% of tenants had paid their rent, with another 20% saying that 81 to 90% of their tenants were current with payments
• May 2020 - over 60% of property managers reported that 91 to 100% of their tenants had paid May’s rent in full and on-time. Another 22% indicated that 81 to 90% of their tenants had paid in full and on-time.
• As of May 15th, 69% said that less than 10% of their renter’s had not yet paid the rent within the grace period, virtually the same response rate recorded in April’s survey.
Asset ClassThe survey data suggests that Class C properties are facing the largest delinquency rate.
• Class A – new & amenities
• Class B – renovated & less amenities
• Class C – multifamily properties are usually more than 20
years old with less amenities and requires renovation.
Question 2
Does the data indicate the degree to which individuals are behind on their rent, and how has the nonpayment of rent and mortgages affected the industries which rely on these payments?
Impact of Nonpayment of RentBased upon data below, a residential housing provider sees a return of approximately. 9 cents on every dollar from the payment of rent. With delinquencies at or near 30%, this significantly alters the paradigm resulting in unpaid mortgages, a lack of investment and maintenance in the property and a loss of jobs.
Question 3
What actions have been taken by federal, state, and local governments with regard to mortgage forbearance, eviction and foreclosure prevention, and the development of new programs to assist renter’s and homeowners during the ongoing COVID-19 pandemic?
Federal Forbearance and Eviction Protections• On March 23, 2020, the Federal Housing Finance Agency (FHFA) issued a directive providing loan
foreclosure and eviction protections for properties with federally backed mortgages in that it restricts loan servicers for instituting foreclosure or eviction proceedings, except for cases of vacant or abandoned homes. This moratorium was extended to August 30.
• On March 27, 2020, the CARES Act was enacted into law inclusive of provisions allowing for landlords with federally backed multifamily mortgage loans to apply for forbearance relief in exchange for an agreement not to evict tenants during any forbearance periods.
• The CARES Act generally enacted a sweeping 120-day eviction moratorium protecting nonpaying tenants of properties financed with federally backed multifamily mortgage loans, regardless if the owners of such properties apply for loan forbearance.
• It also provided that after the moratorium ends, any notice to vacate must be at least 30 days. In other words, the pay or quit (or demand letter) that is given to tenants who have not paid asking them to pay or the landlord will terminate the lease and file an unlawful detainer action, must provide 30 days before that termination takes place and the eviction case is filed. The CARES Act also provides that no notice-to-vacate can be issued during the eviction moratorium.
• While the eviction does not prevent evictions for other lease violations, the manner in which the notice to vacate language is constructed does not make this same exception, and so, property owners are effectively prevented from evicting folks in “covered dwellings,” even if those folks are engaging in behaviors that present a danger to others or to the property itself.
State Government | Court Phasing Re-Opening• June 5-June 19 - Emergency breaches of leases and wrongful detainers- defined as situations involving threats or injury to persons or property and associated warrants of restitution can be filed and tried. If cases already in the "pipeline," they will receive trial dates during this time, they may also be filed during this time.
• July 20-August 30 -Rent escrow actions either in the “pipeline” or newly filed as long as local inspections can be made. Both emergency and non-emergency tenants-holding-over and breaches of lease can be filed and scheduled for trial. Previously filed cases that were non-emergencies will be scheduled for trial and warrants will be presented to a judge for a ruling, and, if granted, will be processed for execution.
• After July 25 - Warrants of restitution on failure to pay rent (FTPR) cases filed prior to closure where judgments were obtained during that time will be processed and forwarded to sheriff to schedule evictions. Note – it is likely that approximately 80% of those judgments have been satisfied during the closure period and the Court is asking landlords to file dismissals immediately to assist in reducing the backlog. This can be done by providing a list of case numbers addresses and defendant names in one document. The court is also asking landlords to dismiss those cases that are non--compliant with the CARES Act.
• August 31 – Although it appears that new FTPR cases may be filed before August 31, they will not be scheduled for trial until after August 31 (as a practical matter this would be an unproductive use of the filings and a waste of court costs because landlords will not be able to get these scheduled and served until the next phase).
Local Government | Rent Freeze Increase Measures• Anne Arundel – Bill No. 46-20 has a 3% rent ceiling permitted during the pandemic and for 120 days after the emergency order is lifted. The bill applies prospectively and a hearing will be held on July 6th.
• Baltimore City – Council Bill 20-526, the Renter Relief Act, prohibits a housing provider from increasing rent and charging late fees during an emergency and within 90 days after the expiration of an emergency. The bill requires a housing provider to inform a resident to disregard any notice of a rental fee if the notice was provided to the resident prior to an emergency and the increase would occur on or after the date the emergency began.
• Howard County: Howard County Council Bill No. 33-2020 prohibits a landlord or mobile park owner during the declared Emergency Order of March 5th from Governor Hogan from increasing rent or fees, decreasing utilities or services, assessing late fees, terminating tenancy, lease, or rental agreements for money defaults or altering terms of agreements to the financial detriment of the tenant. These provisions are retroactive from March 5 and would be in effect for the period during the Emergency Order and up to three months after the emergency.
•City of Salisbury: Passed Ordinance No. 2599 which freezes rent for existing tenants during the Governor’s Emergency Order and stays in effect for 90-days following lifting of the Covid-19 Governor’s State of Emergency. Late fees are not permitted .
•Other Measures Introduced: City of Annapolis, City of Frederick
Local Government | Rent Freeze Increase Measures
• Montgomery County- In April, the Council approved the COVID-19 Renter Relief Act which places a cap on rent increases during the Governor’s Emergency Order and 90 days following the order. Effective May 1, rent increases were limited to the County’s voluntary rent increase guideline limit of 2.6%. During the emergency and within 90 days after the expiration of an emergency, a housing provider must not notify a resident of a rent increase if the increase would exceed the voluntary rent guideline. If a housing provider provided notice of a rent increase to a resident prior to the emergency and the increase would exceed the voluntary rent guideline, the provider must inform the resident in writing to disregard the notice; or that the increase is amended to be less than or equal to the voluntary rent guidelines.
•Prince George’s County- Council Bill 16-20 prohibits housing providers from increasing a tenant’s rent or imposing late fees or penalties if the rent increases would take effect during the Governor’s COVID-19 emergency and within 90 days after the expiration of the order. A housing provider is also prohibited from issuing notice of a rent increase or late fees during the emergency and within 90 days after the expiration of an emergency. The law also stays FTPR evictions, not initiated prior to the emergency, until August 31, 2020. Of note, the definition of tenant under this bill states this new provision is provided for tenants that are able to provide documentation or other verifiable means, that the tenant suffered a Substantial Loss of Income and are therefore unable to make rent payments as a result COVID-19.
Local Government Rental Assistance Programs• Anne Arundel County: Effective April 20, 2020, the Eviction Prevention Program (EPP) will provide temporary rental and utility assistance for eligible renters whose employment income has been impacted by the COVID-19 public health crisis. This emergency assistance is to prevent evictions and utility turn-off, and is subject to funding availability.
• Baltimore City: Baltimore will use $16 million in federal coronavirus relief funding (Community Development Block Grant) to create a rental assistance program.
• Baltimore County: Baltimore County has funds available to begin the first phase of its COVID-19 Eviction Prevention Program, providing rental assistance to County residents who have lost income due to COVID-19 and are at risk of losing their housing.
• Montgomery County: Applications for the COVID-19 Rental Assistance Program were open from June 1-June 5. The $2.5 million fund was for County households with incomes less than 50% of the federal poverty level. The County Council also approved an additional $2 million to provide a short-term rent subsidy program to low- and moderate-income households.
• Prince George’s County: On May 11, the County announced COVID-19 Emergency Rental Assistance Program with initial funding of $3.5 million. The program reached capacity within 1 week of launch. In total the County has dedicated $8.5 million in federal relief funding (CDBG and ESG) plus an additional $6.5 million of County funds for a total of $15 million.
Question 4
What actions have been taken by federal, state, and local governments to protect landlords and lenders facing lost revenue? Do any of these solutions require landlords or lenders to agree to certain protections for the tenants or homeowners served by these individuals, and what are those protections?
Question 4
Generally: We are aware of no actions taken by the federal, state and local government to protect landlords facing a loss in revenue. In order to assist the industry, we have requested rental assistance prevention funds and property tax assessment deferral.
Federal Level: There are discussions on the federal level about whether the next COVID relief Phase 4 package should include funding for rent relief. Among those in the housing industry and legislators, there's a significant groundswell of support for allocating funding for some form of rent relief that would be paid directly to the landlord on behalf of the tenant. In fact, the HEROES Act, as approved by the House, contained $100 billion for this.
As a part of those discussions, some have suggested that rent relief programs like this be coupled with continued moratorium on evictions for failure to pay rent. Our observation would be that robust rent relief mitigates the need for expansion of any expansion of the eviction moratorium for failure to pay rent. There have also been some observations that rent relief programs should have changes to landlord-tenant law attached to them.
Question 5
What data can the rental and lending industries provide on the use of payment plans for past due rent and mortgage payments? Are there any consistent terms in the industry for the structure of these plans?
Payment Plans
• AOBA and MMHA members have noted that only 5-10% of residents have been interested in entering into signed payment plans
• Many members are taking whatever payments residents can provide at this time and favoring creative and flexible plans that conform to fair housing laws
• In the process of developing those payment plans but there are no “consistent” terms yet
Guidance on Evictions – Environment and Transportation Committee, June 22, 2020 1
Submitted by Civil Justice, Community Legal Services of Prince George’s County, Homeless Persons Representation Project, Pro Bono Resource Center of Maryland, and Public Justice Center
Evictions in Maryland are expedited proceedings that allow landlords to repossess property quickly without resort to “self-help.” The Real
Property article provides distinct procedures of eviction for landlords in 3 circumstances:
• “Failure to Pay Rent” based on the tenant’s delinquency in payment of rent (RP 8-401),
• “Tenant Holding Over” based on the tenant’s carrying over beyond lease/tenancy expiration (RP 8-402), and
• “Breach of Lease” based on the tenant’s substantial violation of lease terms (RP 8-402.1).
These procedures use “due process lite,” forgoing several hallmarks of civil litigation or drastically curtailing them, particularly in Failure to Pay
Rent (FTPR) and Tenant Holding Over (THO). For instance, defendants typically have less than 14 days’ notice of trial in FTPR actions and less
than 30 days in THO and breach of lease actions. Evidentiary rules like authentication and hearsay are not applicable, and discovery of evidence
before trial is not permitted in FTPR actions. Defendants have little time, if any, to file an answer to the complaint or a counterclaim in a FTPR
action, and these cases do not involve status conferences or Alternative Dispute Resolution before the day of trial. Despite these deficits, both
FTPR and THO procedures permit plaintiff landlords to win money judgments in addition to repossession of the property.
To accelerate the process of collections and repossession, Maryland eviction laws reduce defendants’ time to prepare a defense, eliminate any
opportunity to access to the evidence one will need to confront at trial, and hamstring defendants’ right of appeal through severe time
constraints and impracticable bond requirements. Judges also lack discretion on whether to stay or deny eviction based on the defendant’s
economic or health circumstances.
The chart below summarizes the expedited processes at work in Maryland evictions.
EVICTION PROCEDURES
Failure to Pay Rent (RP 8-401)
Tenant Holding Over (RP 8-402)
Breach of Lease (RP 8-402.1)
Pre-suit notice to tenant None 30 days 14 or 30 days
Include money damages ✓ ✓ X
Typical time summons to trial Maximum 5 days by statute 7-14 days in practice
20-30 days 20-30 days
Discovery (lease, accounting, etc.) X X Interrogatories
Judicial discretion to stay eviction “from day to day, in the event of extreme weather conditions”
X X
Judicial discretion to deny eviction X X Judge decides whether breach warrants eviction
Right to redeem possession 3 times in 12 mos. X X
Opportunity to appeal 4 days 10 days 10 days
Guidance on Evictions – Environment and Transportation Committee, June 22, 2020 2
Submitted by Civil Justice, Community Legal Services of Prince George’s County, Homeless Persons Representation Project, Pro Bono Resource Center of Maryland, and Public Justice Center
By comparison, in civil actions for judgment on affidavit (debt collection cases), defendants have roughly
double the amount of time between summons and trial (i.e. time to prepare), as well as advance receipt
of copies of key documents such as accountings and particularized descriptions of the plaintiff’s
allegations. In other words, a renter sued in collections has stronger bases for a defense than if they
were facing eviction for the same debt.
There were around 650,000 eviction actions in Maryland courts last year. Roughly 30% of actions were
voluntarily dismissed. In roughly 96% of cases, the tenant did not appear at trial and eviction was
ordered by default. Many factors account for the high default rate, among them inadequate notice of
trial, conflicts with job duties, lack of childcare and transportation, obstacles related to health and
disability, and general lack of faith in the courts.
Defenses to FTPR and THO evictions
In FTPR actions, a defendant may stop eviction by showing that the amount of rent and late fees alleged
in the complaint is not owed. This may be shown through receipts and other evidence of payments, but
in many cases, the defense is more complex. Tenants may show that fees were miscalculated,
impermissible under contract, or unlawful. They may show that rent was not owed because the property
was unlicensed or because conditions were partially or totally uninhabitable. In some cases, the status
of ownership or management – and therefore, the plaintiff’s standing or the claim’s ripeness – may be in
doubt. In THO actions, generally, there are fewer, but nonetheless complex defenses, including: that
notice to terminate the tenancy did not meet statutory or lease requirements or that the termination
was retaliatory.
Under RP 8-401 (FTPR) and 8-402 (THO), a tenant’s sudden economic hardship or health problems are
not a defense. This changes in part under the CARES Act and Gov. Hogan’s Executive Order on evictions,
which create additional defenses and bring additional complexity. The CARES Act prohibits owners of
properties with federal financing or subsidies from filing eviction actions except in limited circumstances
until July 25, 2020, and from issuing notices to quit until 30 days after July 25, 2020. For owners that
utilize mortgage forbearance, this moratorium extends beyond July 25 until the end of the forbearance
period (December 31, 2020, at the latest). The Court of Appeals announced on May 22 that all eviction
actions filed since March 27 must be supplemented by a Declaration of Compliance with the CARES Act.
Yet, it remains unclear how judges will determine compliance or whether defendants will have
opportunity to contest these declarations. Additionally, Gov. Hogan’s order on April 3, 2020, sets forth a
defense to FTPR actions by which defendants must show proof of substantial loss of income related to
COVID-19. This defense is available only during the pendency of the State of Emergency.
ADR in eviction cases
The Judiciary operates an ADR (mediation and settlement conferences) program at certain landlord-
tenant dockets, and overall, while the program is helpful in some instances, it is voluntary and mostly
underutilized. The program offers a day-of-trial service to litigants as they await the start of
proceedings. If both litigants agree to participate, they attempt a mediated agreement of the dispute –
typically a payment plan – for around 30 minutes. In this process, defendants are rarely if ever
represented by counsel and are not provided advice about their rights or defenses in these actions.
Overall, ADR is hampered by lack of a mandate, lack of time, and lack of access to critical evidence.
Guidance on Evictions – Environment and Transportation Committee, June 22, 2020 3
Submitted by Civil Justice, Community Legal Services of Prince George’s County, Homeless Persons Representation Project, Pro Bono Resource Center of Maryland, and Public Justice Center
Evictions during the public health and economic crisis
There are a few certainties on the horizon as Maryland courts aim to reopen on July 20, 2020.
• The Court of Appeals’ stay on eviction proceedings ends on July 25, 2020. New THO cases may
be heard starting July 27, and new FTPR cases may be heard starting September 1. If the State
of Emergency is rescinded by then, most renters will not have any pandemic-related defense to
eviction. Their sudden economic and health hardships will not be relevant to whether eviction is
ordered.
• The court’s phasing in new THO cases (July 27) earlier than new FTPR eviction cases (Sept. 1) will
likely cause a surge in the filing of THO actions. Practitioners are aware that landlords are
leveraging non-renewals and notices to vacate against tenants who are behind on rent during
the pandemic. Under the Court’s latest order, landlords can circumvent the delay on FTPR
proceedings by moving forward with a THO eviction. In the latter process, tenants cannot “pay
and stay” (redeem possession) after the eviction judgment.
• Among the Executive Order, the Court’s Administrative Orders, and the CARES Act, there is no
legal requirement for property owners/operators to exhaust existing or forthcoming mortgage
or rental assistance before resorting to eviction. This promotes “negotiation” of payment plans
under duress of pending eviction and is likely to result in repayment terms that are incompatible
with the financial assistance processes. Counsel for renters would not change this dynamic.
• Whether eviction proceedings are conducted at court buildings or remotely, the high default
rate will continue. At-court proceedings will be impeded by restricted public transit,
unavailability of daycare and potentially continued school closures in September, and the
ongoing health concerns of renters, particularly those in communities disproportionately
impacted by both eviction and COVID-19. In proceedings conducted by phone or video, many
renters will not be able to participate meaningfully or at all due to technology barriers.
Takeaways
The Governor and/or General Assembly can and should:
• Make clear that no terminations or eviction actions should proceed before Sept. 1 unless for
cause unrelated to rent.
• Extend the affirmative defenses to eviction currently set forth in Executive Order (April 3)
through at least December 31, 2020 and temporarily eliminate limits on the tenant’s right of
redemption.
• Require plaintiffs to certify before filing, and to demonstrate in contested cases, that they took
steps to utilize mortgage/rental assistance and payment plans before resorting to eviction. Give
judges power to decide whether repayment terms were reasonable.
• Require litigants to participate in mediation, build an additional 7 days into the eviction timeline
to accommodate time for mediation, and ensure counsel for defendants in mediation and trials.
• Prioritize federal aid for rental assistance and ensure that mortgage forbearance and other
assistance to owners/operators includes obligations to avoid eviction.
COVID-19 Housing Policy Scorecard for Maryland https://evictionlab.org/covid-policy-scorecard/md/
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COVID-19 Housing Policy Scorecard for Maryland https://evictionlab.org/covid-policy-scorecard/md/
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COVID-19 Housing Policy Scorecard for Maryland https://evictionlab.org/covid-policy-scorecard/md/
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COVID-19 Housing Policy Scorecard for Maryland https://evictionlab.org/covid-policy-scorecard/md/
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Recommendations: Renter Protections in Response to COVID-19 Emergency
Before the House Environment and Transportation Committee, June 23, 2020
Zafar Shah, Public Justice Center
Data: Federal Reserve, 2013 Survey Consumer FinancesGraphics: Pro Publica, “The Color of Debt: How Collection Suits Squeeze Black Neighborhoods” (2015)
Local Efforts
• Local efforts
Baltimore City ($13M), Anne Arundel County ($3M+),
Montgomery County ($2M), Howard Count ($1M+, Prince
George’s County (closed)
• The National League of Cities, real estate industry groups and
affordable housing advocates have all joined in asking
Congress for $100 billion needed to avert a tidal wave of
evictions and foreclosures and stabilize the residential rental
market.
• NLIHC projects Maryland needs $1.843 billion for one year
of rental assistance for 141,030 ELI and VLI households
during the coming recession for 12 months of rental
assistance based on the statewide average rents.
Local Efforts
Protection from pandemic rent hikes
Montgomery Co. (2.6% cap, SOE + 90 days)
Howard Co. (SOE + at most 3 mos.)
Baltimore City (SOE + 90 days)
Anne Arundel Co. bill pending (3%, SOE + 120 days)
Protection from lease non-renewals
Howard Co. legislation
Economic problem
Does expanded Unemployment Ins. Comp. adequately cover
housing costs?
• Median rent in Maryland is $1,357/mo. (ACS 2018 5-Yr.
Estimate).
• Avg. MD UIC payment = $357/wk.
• CARES Act expanded UIC payment covers 39 weeks at an
amount up to $1,030.
• Ends July
• CARES Act UIC avg. payment in MD = $957/wk.
• Half-time minimum wage earner would receive $820/wk.
Economic Problem
In 3/4ths of Maryland counties, a half-
time minimum wage earner receiving
expanded UIC would be "housing cost
burdened" even before taking water, gas,
and electric utilities into account.
Montgomery County, Maryland
Howard County, Maryland
Charles County, Maryland
Anne Arundel County, Maryland
Calvert County, Maryland
Prince George's County, Maryland
Queen Anne's County, Maryland
Frederick County, Maryland
St. Mary's County, Maryland
Baltimore County, Maryland
Harford County, Maryland
Carroll County, Maryland
Cecil County, Maryland
Talbot County, Maryland
Wicomico County, Maryland
Baltimore city, Maryland
Worcester County, Maryland
Kent County, Maryland
Economic Solution
What can Maryland do now?
Commit $154M from CARES Act I funds to rental assistance:
Coronavirus Relief Funds (CRF), Community Development Block
Grant (CDBG-CV) and Emergency Shelter Grant (ESG-CV).
Assume that existing relief to individuals (expanded UIC, for
example) and local emergency relief can meet 50% of the
immediate need.
$154M would cover the other 50% of projected need over 4
months and provide for Extremely/Very Low Income households
and households excluded from UIC.
Eviction Tsunami
Holdover actions and Failure to Pay Rent actions are coming.
But how many?
Using averages from 2019 (54,000 evictions filed per month, 11.5% delinquency rate), we can predict:
April 2020, 20.95% delinquency → 98,374 filings
May 2020, 21.9% delinquency → 102,835 filings
June 2020, 31.7% delinquency → 148,852 filings
Sept 1st Scenarios
A. Landlords have filed an action each month (Apr-Aug), creating volume 2x (or greater) the 2019 monthly average, approximately 540,000
B. Landlords have filed a single action seeking up to 5 mos. back rent, creating a volume around 150,000, i.e. 20% of renter households face eviction and exhausted rental assistance)
https://evictionlab.org/covid-policy-scorecard
Post-emergencyEviction Prevention
Prevent eviction after COVID-19 Emergency
Consider the 12 months of economic recovery following lifting
of emergency and need for housing stability
• Remote hearings and voluntary mediation are unlikely to
solve fairness problems, may exacerbate them
• Summoning thousands of Marylanders to court amid
continuing or revived pandemic is itself substantively
unfair
Post-emergencyEviction Prevention
Prevent eviction after COVID-19 Emergency
Consider the 12 months of economic recovery following lifting of emergency and need for housing stability
• Extend the affirmative defense to eviction for non-payment set forth in Governor's E.O. to end of 2020; expressly include Tenant Holding Over actions
• Require landlords to certify in any complaint for eviction arising from non-payment of rent that landlord has cooperated with tenant to exhaust options for rental assistance and attempted to negotiate a payment plan to avoid eviction (rebuttable by tenant)
• Provide time in litigation timetable for litigants to utilize ADR/mediation and for renters to obtain legal representation
Post-emergencyEviction Prevention
• Eliminate late fees and foreclosure of tenant's right of
redemption
• Require offer of 1-year lease renewal unless good cause to
terminate (excluding non-payment of rent related to
pandemic or economic recovery as cause to terminate)
• Provide opportunity (for example, 7 days) to cure a
substantial violation of lease that would be grounds for
lease termination or a breach of lease eviction action
Post-emergencyEviction Prevention
• Ensure that tenants have legal representation in eviction
cases.
• Enable local legislatures to pass laws that fill eviction
prevention needs
• Maintain and publish ZIP-code-level data on eviction
filings and actual evictions to track housing
instability/displacement with other unemployment and
public health data.
Debt Prevention
Similar measures for civil actions to collect debt rel. to rent,
for example:
• Require collectors to certify in any complaint that the
landlord creditor cooperated with tenant to exhaust
options for rental assistance and attempted to negotiate a
payment plan (rebuttable by tenant)
• Use loss mitigation procedure to ensure opportunity in the
litigation process for parties to negotiate
June 29, 2020
The Honorable Kumar P. Barve
Chairman, Environment and Transportation Committee
House Office Building,
Annapolis, Maryland 21401
RE: Testimony on the Effects of COVID-19 on Housing
Dear Chairperson Barve and Committee Members:
Thank you for the opportunity to testify in this briefing which is
examining the effects of COVID-19 on Housing. Maryland Legal Aid,
“Legal Aid,” is a private, non-profit organization that provides free legal
services to indigent Maryland residents. In our 12 offices around the state,
we help individuals and families in every county with a wide array of civil
legal issues including housing, consumer, public benefits, and family law
matters. We also represent abused and neglected children and provide legal
assistance to senior citizens and nursing home residents. This letter serves
as notice that Gregory Countess will be testifying on behalf of Legal Aid at
the request of Chairmen Barve.
There has been no challenge to the right to housing as acute as the
existing crisis, COVID-19. With estimates of over twenty per cent of the
Maryland workforce out of work because of COVID-19 related job
closures, layoffs and terminations, the human, health and economic
devastation being visited on this state and the pending catastrophe is not
being overstated. In fact, we may be understating the devastation unfolding.
Simply because none of the institutions charged with addressing this
2
pandemic has ever experienced a situation like this before. The Governor has instituted a
moratorium on enforcement of Failure to Pay Rent actions (under Real Property Article
§8-401) and Breach of Lease actions (under Real Property Article §8-402.1) that protect
residents if they lose income or have to care for home bound children because of
COVID-19. Left out of these protections are tenants whose leases may be ending or are
month to month tenants who receive notices to terminate their tenancies and will be
subject to eviction under the current Court of Appeals order on or after July 20, 2020.
This is particularly troublesome because some Landlords are terminating tenancies
because tenants are unable to pay the rent.
The human right to housing is one of the most essential and broadly recognized
human rights. It finds strong recognition in International Law, Federal Law, State Law,
and case law at all levels. The Universal Declaration of Human Rights guarantees “the
right to a standard of living adequate for the health and well-being of [the individual] and
of his[/her] family, including food, clothing, shelter and medical care and necessary social
services.” The Universal Declaration of Human Rights, G.A. Res. 217, U.N. GAOR, 3d
Sess., pt. 1, U.N. Doc. A/810 (1948) (hereinafter “the Declaration”).
One of the basic aspects of the right to housing is that such housing should be affordable.
General Comment 4, Committee on Economic, Social and Cultural Rights, U.N. Doc.
E/1992/23, ¶6 (1991).
By any measure housing is not affordable for thousands of residents throughout
Maryland. Maryland’s housing agency, the Department of Housing and Community
Development, is required as a condition for receiving federal housing funds to examine
housing affordability and availability every five years in its Consolidated Plan.
The State describes its Consolidated Plan as “a planning tool required by the U.S.
Department of Housing and Urban Development (HUD) that guides the use of federal and
to a lesser extent state, housing and community development funds.” See Department of
3
Housing and Community Development Consolidated Plan, 2015.1 HUD has established
three basis goals for the Consolidated Plan. Id. The goals are:
1. To provide decent housing
2. To provide a suitable living environment, and
3. To expand economic opportunities
Id. The state in its plan goes on to say goal number one “includes assisting homeless
persons to obtain housing that is affordable, retaining the affordable housing stock,
increasing availability of permanent housing that is affordable to low-income Americans
without discrimination….” Id. The State determined it would seek to increase the
affordability of rental housing. The State has determined that almost 100, 000 families in
Maryland are paying more than 30% of their income for rent (the state’s study does not
include the statics of the largest jurisdictions in the state). Id. HUD guidance states that a
family which pays over thirty per cent of its income for housing is housing burdened.
Montgomery County is among five jurisdictions in the state with the highest rents.
See, Montgomery County Five-Year Consolidated Plan for Housing and Community
Development County Fiscal Years 2016-2020.2 Rents in Montgomery County for a one-
bedroom unit are nearly 25% higher than the rents for one bedrooms in the jurisdictions
with the next highest rents. Id. Montgomery County, like the State, receives federal
housing funds and must also produce a Consolidated Plan. Id. Its most recent Consolidated
Plan states that a family would have to have an income of $58,760 a year in order to afford
a two-bedroom unit in Montgomery County at rent of $1,469 per month. Id. It notes “in
contrast an extremely very-low income household earning $32,100 annually can only
afford to pay no-more than $803 in rent per month”. Id. Montgomery County’s
Consolidated Plan also states that 19,284 families in the county are paying more than 50%
of their income for rent. Id. Montgomery County has calculated that 68,041 households
1https://dhcd.maryland.gov/Documents/Consolidated%20Plan/Consolidated%20Plan%20
2015.pdf 2https://montgomerycountymd.gov/DHCA/Resources/Files/community/grants/consolidat
ed_plan/Montgomery_County_Consolidated_Plan_CFY16-20.pdf
4
or 50.6% of the renters in its County pay more than 30% of their income for rent.
Montgomery County has identified the housing cost burden as the most common housing
problem in the county. Id.
According to Harford County’s consolidated plan the most common housing
problem is lack of affordable housing. The same is true in Anne Arundel County which has
a rental housing affordability gap of 8,923 units. In an analysis it has prepared for its most
recent consolidated plan its researchers said the shortage of affordable housing units is
difficult to address as the market is not adding enough product. In Prince George’s County
the circumstances for African American households is just as bleak 78,222 households are
burdened by the cost of their rental housing.
The Brookings Institute says in a recent report that the housing crisis has many cost
to families. Households who are cost burdened by rent may skimp on other necessities,
such as food, health care and transportation. Unexpected expenses or declines in income
increase the likelihood of eviction and the stress caused by financial constraints and
housing instability reduces people’s ability to make good decisions and can harm children’s
and adults’ physical and emotional health.3
And this pandemic makes these disparities even more acute. The state in
conversations with the Legal Aid and other housing advocates has stated that it believes
that the Unemployment Insurance enhancements flowing to the unemployed from the
CARES act legislation will provide needed support to families to take them through this
crisis. However, the Maryland Department of Labor has admitted in a report given to the
legislature in May of this year that the U.I. system was not prepared for this
unprecedented out pouring of need, not seen on this scale since the great depression. It
has taken far too long to address the problems caused by so many people having to apply
for benefits. The nature of the system, which is adversarial, complicates the issue.
Workers have to apply. Employers pay into a fund and the employers contribution is
3 https://www.brookings.edu/blog/the-avenue/2017/12/19/is-the-rent-too-damn-high-or-
are-incomes-too-low/
5
calculated at least in part on the company’s past unemployment history. Employers can
object to an application and often do. The Department of Labor must then consider a
number of factors to determine eligibility. Workers may gain benefits as some 448,897
have in the latest state report or workers may be denied benefits as have some 98,026 as
is indicated in that same report. Which means 17% of workers have been denied benefits
and have no income to pay for rent, food, utilities and other life necessities. The state still
has a backlog of 34,663 claims pending. Some of these folks were denied and given a
penalty. They will not become re-eligible for unemployment benefits until they find new
employment and earn enough wages to remove the penalty on their record. Of course, it’s
not easy to find a job right now so until the economy recovers, they are out of options. It
is no wonder that rental delinquency rates are approaching astounding levels of over 20%
of the inventory.
The average fair market rent for a two- bedroom apartment in Maryland is $ 1,237.
https://www.rentdata.org/states/maryland/2019 A rough estimate of rental assistance need for
one month for 98, 026 families who have not received unemployment at the average fair
market rent for a two bed-room unit is $121, 258,162. The Governor has announced he
will make available 30 million dollars for rental assistance which is less than a quarter of
the need for one month.
Depending upon unemployment benefits to solve the coming massive eviction
problem will put many of our clients at risk of being evicted. We have a large number of
clients who cannot access the system. Though the Department of Labor has laudably
worked with us to design a work around the system so that we can give them a number of
cases each week to review and resolve, there are an unknown number of workers who
cannot access the system. These workers rely on phones. They don’t have access to the
internet, or devices to access the internet and the Department of Labor’s online portal.
These people can no longer apply for benefits in the exclusively web-based system,
because access to the Agency by telephone is very difficult to near impossible. People
can no longer apply by public access to computers in the public library system because
the libraries are closed.
6
LEP claimants speaking languages other than Spanish or English are completely
blocked out of the new web-based system. A large number of claimants cannot access
their benefits because the debit card loaded benefit has not been supplied by the Bank of
America. Unemployment benefits cannot be a panacea for the pending eviction crisis
because too many people are owed money that are caught in a dispute or communication
barrier with the Agency, that can take months to resolve, even with an attorney. African
American families suffer not only proportionally greater burdens in rental housing cost,
they were and are also employed in jobs that have suffered the brunt of the losses as a
result of COVID-19. They also suffered disproportionally in their ability to access the
internet.
In short COVID-19 is a health crisis, which has caused an economic crisis. Unless
the Governor’s moratorium is extended (and expanded to include Tenant Holding Over
actions) until the economy has recovered or unless there is a rental assistance and rehousing
program funded and designed to meet the need than low-income tenants will be evicted.
The homelessness and resulting public health catastrophe will dwarf the tragedy
experienced by citizens of this state to date and will exceed in pain, misery and death of
poor people to a degree which we have never seen our clients experience in our one hundred
years of existence as legal advocates of the poor.
Respectfully submitted
/s/ Gregory Countess
Gregory Countess, Esq
Director of Advocacy for Housing
and Community Economic Development
The Effects of Covid–19 on Housing
June 29, 2020
House Environment and Transportation Committee Briefing
Maryland Bankers Association
2
Mindy LehmanSenior Vice President of
Government Relations and Communications
Maryland Bankers Association
Kathleen MurphyPresident & CEO
Maryland Bankers Association
D. Robert Enten, Esq.General Counsel
Maryland Bankers Association
Overview
• Role of MBA/Industry
• Mortgage Relief – Role of the Banking Industry
• Mortgage Relief – Role of Federal and State government
• Maryland Courts – Foreclosures and Evictions
• Data• Impact of COVID-19 nationally and on Maryland mortgage borrowers
• Demographic data
• Mortgage payment deferrals – impact on banks
3
Role of MBA/Industry
Since mid-March, 2020:
Outreach/Media – very proactive – “Call your banker"
Weekly calls with members
Daily calls with other state/national banking Associations
Regular contact with banking regulators – nothing done in a vacuum
Ongoing contact with state and federal policy-makers
MBA online resource for banks and consumers
4
The success of a bank is Inherently linked to the success of its clients and community
MBA’s Online Resource
Visit MBA’s COVID-19 web page for links to a variety of resources and our member banks:
https://www.mdbankers.com/coronavirus-related-resources.html
5
Mortgage Relief – Role of the Banking IndustryContact Your Bank/Your Lenders/Creditors
Maryland banks stand by their borrowers/clients. Maryland banks are hard at work helping Maryland homeowners who are experiencing financial hardship. Banks routinely provide customized help to fit specific financial situations, through:
• Loan payment deferrals• Forbearance – modifications• Interest rate reduction requests• Fee waivers• Increases in lines of credit• Consumer loans• Consultation• And more
Source - Maryland Bankers Association Survey 6/18/2020
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Mortgage Relief – Federal Options, Federal Housing Finance Agency/FHA/HUD Guidance, Etc.
• For federally-backed mortgage loans (Fannie Mae, Freddie Mac, FHA, VA), the CARES Act allows a borrower to request an initial forbearance period of up to 180 days (and up to another 180 days after the first 180 days).
• A forbearance is a pause or reduction in their monthly mortgage.
• 4/27/20 – FHFA Statement - “NO LUMP SUM REQUIRED AT THE END OF FORBEARANCE”
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Online Resource:CFPB, FHFA, HUD launch a new mortgage and housing assistance website https://www.cfpb.gov/housing.
Mortgage Relief: Foreclosure and Eviction Protections
• Federal Protections Against Foreclosure and Evictions – FHFA Extends Foreclosure, Eviction Moratorium through August 31
• On June 17, 2020, the Federal Housing Finance Agency announced that it would extend—through August 31, 2020 at a minimum—a moratorium on foreclosures and evictions for single-family mortgages backed by Fannie Mae or Freddie Mac.
• The current moratorium was expected to expire on June 30, 2020.
8
Online Resource: Read FHFA's announcement. Read FHA's announcement.
Mortgage Relief – FederalResources for mortgage borrowers
• The Consumer Financial Protection Bureau (CFPB) has taken numerous steps to protect and assist consumers during the COVID-19 national emergency including: • making it easier for consumers to receive pandemic-relief payments;• informing consumers about their options as it relates to mortgage forbearance;• releasing a policy statement outlining the responsibility of credit reporting
companies and furnishers; and• providing needed flexibility to enable financial companies to work with customers in
need.
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Online Resource: CFPB program websites student loan payment suspension; mortgage forbearance; stimulus payments; and the paycheck protection program. Additionally, the Bureau has a centralized webpage with information on how consumers can protect their finances during the pandemic
Mortgage Relief: Foreclosure and Eviction –Governor’s Orders
• On March 16, Governor Hogan issued an executive order and announced a financial relief package.
• The March 16 executive order builds on an order that prohibits residential evictions arising from a tenant's substantial loss of income due to COVID-19.
• The latest order is now extended to commercial and industrial evictions. The executive order remains in place until, “the state of emergency is terminated and the catastrophic health emergency is rescinded.”
• The order also:• Stops lenders from initiating the mortgage foreclosure process;• Authorizes the Maryland Commissioner of Financial Regulation to suspend certain lending limits for Maryland
banks and credit unions, on a case-by-case basis, in an effort to make more credit available to businesses;• Prohibits repossession of cars and trucks; and• Prohibits repossession of homes that are not considered "real property,” such as mobile homes, trailers, and
live-aboard boats.
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Online Resource: Read the amended March 16 executive order.
Mortgage Relief: Governor’s Financial Relief Announcement
• The Governor’s April 3rd Financial Relief announcement stated that “consistent with applicable guidelines, Marylanders may be eligible for the following opportunities upon contacting their financial service providers:
• 90 Days of Payment Forbearance or Deferral. Mortgage lenders and servicers will provide up to a 90-day forbearance or deferral period for mortgage payments.
• Waiving Late Fees. Mortgage lenders and servicers will not charge late fees during the forbearance or deferral period.
• Credit Reporting. Mortgage lenders and servicers will not report negative information to the credit bureaus during the forbearance or deferral period.
• 90 Days Forbearance from Foreclosure Initiation. All mortgage lenders and servicers will follow the forbearance and reduced payment programs established by federal authorities.
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Online Resource: https://www.dllr.state.md.us/whatsnews/frcovidrelief.shtml
Maryland Court Orders - Foreclosure and Eviction –
• The Maryland Court System order issued on March 25, 2020 built on an earlier court issued order and further suspended foreclosures and evictions in Maryland until further notice by the court.
• The Court System updated this order on May 22, announcing plans to fully resume court proceedings by October 5; eviction and foreclosure proceedings to resume July 25.
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Online Resource: https://mdcourts.gov/sites/default/files/admin-orders/20200522progressiveresumptionoffullfunctionofjudiciaryoperations.pdf
Data: Mortgage Bankers Association's latest Forbearance and Call Volume Survey
How many people have faced difficulty making mortgage payments?• As of June 14th, the total number of loans nationally now in forbearance decreased -
for the first time since the survey's inception in March - from 8.55% of servicers' portfolio volume in the prior week to 8.48% as of June 14, 2020.
• An estimated 4.2 million homeowners are now in forbearance plans.
• By investor type: • the share of Ginnie Mae loans in forbearance remained flat relative to the prior two
weeks at 11.83%.• The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to
the prior week: from 6.38% to 6.31%.• The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased
relative to the prior week: from 10.18% to 9.99%.
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Online Resource: https://newslink.mba.org/mba-newslinks/2020/june/mba-share-of-mortgage-loans-in-forbearance-levels-out-at-8-55/ and https://www.mba.org/2020-press-releases/june/share-of-mortgage-loans-in-forbearance-decreases-for-first-time-in-series-to-848
Data: Mortgage Bankers Association's latest Forbearance and Call Volume Survey
• "The lower share of loans in forbearance was led by declines in GSE and portfolio and PLS loans, as more of those borrowers exited than entered a new forbearance plan," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "Fewer homeowners in forbearance underscores the continued improvements in the job market, and provides another sign of the fundamental health of the housing market, which has rebounded considerably over the past several weeks."
• Added Fratantoni, "The big unknown with respect to this positive development is the extent to which it relies upon policy measures put in place to help families through this crisis, particularly the stimulus payments and enhanced unemployment insurance benefits that were key parts of the CARES Act. We expect to see further improvements in the weeks ahead given the drop in forbearance requests this week."
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Online Resource: https://www.mba.org/2020-press-releases/june/share-of-mortgage-loans-in-forbearance-decreases-for-first-time-in-series-to-848
Environment and Transportation Committee Data Request: Maryland Bankers Association Survey
How many people have faced difficulty making mortgage payments?
• MBA survey data indicates an average of 6% of mortgage borrowers are receiving payment deferrals.*
• Of the 937,162 mortgages outstanding in Maryland, 94% are making regular payments.
*Source – Maryland Bankers Association Member Survey 6/18/2020
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Environment and Transportation Committee Data Request: Maryland Bankers Association Survey
Does demographic data suggest some groups are more impacted than others?
• While no specific data exists, members indicate a wide range of borrowers suffering from loss of income have been impacted.
How has the nonpayment of mortgages affected the banking industry?
• Significant mobilization of internal resources/time to meet client needs
• Banks are heavily regulated for safety and soundness. Strong capital and reserves enable the unprecedented industry response.
Source - Maryland Bankers Association Member Survey 6/18/2020
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Thank you!
Reach out to your banker with specific questions.
www.mdbankers.com17
“The FDIC was born out of a crisis, and we now find ourselves in the midst of another unprecedented period.
..the banking industry has proven to be a source of strength for the economy.”
FDIC Chairman Jelena McWilliams, June 16, 2020
Testimony for Briefing: The Effects of COVID-19 on Housing House Environment and Transportation Committee
CASA de Maryland, Inc.
June 29, 2020
Dear Chair Barve, Vice Chair Stein and Members of the Environment and Transportation Committee, I am writing on behalf of CASA de Maryland, Inc to express the main concerns and solutions regarding housing during this public health crisis needed for our members across the state. CASA is the largest membership based immigrant advocacy and services organization in the mid-atlantic region with a membership of over 100,000 immigrant and working class people - the majority of which are renters in the state. We thank you for hosting this briefing and for the support that you have provided each of your constituents across the state during the ongoing coronavirus pandemic. Over the past several months, our organization-run COVID response call line has been flooded with questions and concerns about healthcare options, unemployment benefits, and immigration needs. But in the most recent months, the top concern that our members have expressed is their ability to pay rent. The devastation that the effects of the coronavirus pandemic has had on immigrant communities, and all communities of color, have left renters looking at a future of homelessness. As the legislature was forced to adjourn early, CASA and over has advocated tirelessly to Governor Hogan to implement a variety of different policy solutions to support renters in Maryland including cancellation of rent during the State of Emergency by providing financial relief to rental property owners who demonstrate financial hardship, prohibiting late fees and debt collection on rental payment during the State of Emergency and through the full recovery period and extending the moratorium on eviction protection for every tenant - along with enforcement of the moratorium. As the Environment and Transportation committee is briefed today and begins working toward solutions, please consider the following: The recently announced state funding to prevent evictions is not nearly enough. We are pleased to see Governor Hogan’s announcement that he is committing to allocating $30 million in funding to prevent evictions. However, with an estimated 145,000 homes (according to the 1
1 https://governor.maryland.gov/2020/06/26/governor-hogan-announces-30-million-in-funding-for-eviction-prevention-assistance/
20% cited in the Governor’s announcement) likely to face eviction, $30 million is far below the amount needed to adequately bring renters current on their rent - likely providing around $145 to each household that is currently delinquent. An estimated minimum of $150 million is needed to bring all of the delinquent units current on their rent payments. Considering that nearly half of the US population doesn’t have just $300 to cover an unanticipated expense , 2
The recently announced funding likely will NOT include undocumented immigrants. As stated in the Governor's recent announcement, the funding will become available through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. Undocumented immigrants and their families have not been included in the CARES act, most notably not receiving any cash assistance (even those who pay taxes). Without money directly from the state, this means that there are over 275,000 undocumented immigrants in the state that will 3
not get any relief. Though some counties have allocated monies in their budgets to support immigrant families, the need is too great to manage without assistance from the state as well. Undocumented immigrants and their families are at a higher risk of exploitation and abuse. At CASA, we have seen countless examples of undocumented immigrants that have reported that their landlords have exploited their fear or deportation by ignoring maintenance requests and over charging them. Since March, stories have piled up of undocumented immigrants who have been threatened with eviction even during the moratorium, have had their rent increase within the past few months, and have been harassed by their landlords to pay rent despite trying to negotiate with them due to COVID-related unemployment. While we work to more data and information for your committee regarding some of the other housing challenges faced by the close to the 275 thousand undocumented immigrants in the state (overcrowding, difficulting quarantining, substandard housing resulting in safety risk, etc), we urge you to consider the severe need for housing relief to all renters, especially immigrant renters during this time. Thank you for your work and your consideration. CASA is ready to support you in any way possible to create and implement relief for renters as soon as possible. Cathryn Paul Research and Policy Analyst, CASA
2 https://prosperitynow.org/resources/analyzing-landscape-saving-solutions-low-income-families-part-1-savings-crisis-and-need 3 https://www.pewresearch.org/hispanic/interactives/u-s-unauthorized-immigrants-by-state/
