The pandemic put America in the middle of simultaneous housing crises, with renters, landlords and homeowners needing financial help all at once.
While Congress reacted quickly, providing billions in relief, forbidding evictions and allowing forbearance, housing experts say there are better long-term solutions.
“When families face that those kinds of economic setbacks, they apply for housing assistance and they often have to wait for years to receive it, and so we do a poor job at getting housing assistance to people during their moment of need in this country,” said Ingrid Ellen, a professor at New York University.
Ellen is one of the authors of a paper commissioned by The Hamilton Project. It supports economic improvement initiatives.
The idea and title of the paper is Bolstering the Housing Safety Net. It proposes three automatic stabilizers to kick-in during times of financial crisis.
One idea is creating emergency rental assistance accounts.
“And they wouldn't have to provide a lot of documentation or justification for why they need it at that moment, because that's precisely the kind of administrative burden that can slow the flow of funds to people and not get the dollars to people in their moment of need,” said Ellen.
The second is forbearance automatically kicking in instead of Americans having to reach out and ask their lender.
The third has to do with keeping money flowing to affordable housing projects during times of economic downturn when money tends to get pulled back.
“We propose basically allowing states and localities to convert their normal tax credits into just cash subsidies that they can provide directly to people to develop and preserve affordable housing,” said Ellen.
The affordable housing subsidies and automatic forbearance ideas wouldn't require any additional tax dollars.
Ellen estimates emergency rental assistance accounts would cost about $3 billion a year.