Bill to protect pandemic-stressed tenants seems stalled in state Senate

Published February 3, 2021
By Jon Hurdle

Advocates warn of mass evictions once the health emergency passes; opponents say measure could force some landlords into bankruptcy

Whatever happened to “The People’s Bill”?

The legislation (S2340/A4034) that’s designed to prevent mass evictions of renters who have been unable to pay because of the COVID-19 pandemic was resoundingly passed by the Assembly last July, then amended and sent back to the Senate where it has been since November, with no plans for a vote anytime soon.

The bill’s advocates — who call it “The People’s Bill” — say it is the only way of stopping thousands of people becoming homeless whenever Gov. Phil Murphy’s current moratorium on evictions is lifted. Its foes say that codifying the eviction ban and giving delinquent tenants a long time to pay rent arrears would unfairly shift the financial burden on to landlords, forcing some into bankruptcy.

Murphy’s Executive Order 106, issued on March 19 as the depth of the pandemic first became clear, bans evictions until two months after the declared end of the public health emergency. Murphy has since urged lawmakers to send him the pending bill, most recently in his State of the State address on Jan. 12.

Critics such as the New Jersey Apartment Association, which represents large landlords, have continued to oppose the bill, and argue that it’s based on inflated forecasts for the number of people who could become homeless without the protection of the moratorium.

But supporters predict a “tsunami” of evictions unless the bill becomes law, as landlords who have been unable to eject non-paying tenants for the last 11 months seize the opportunity to rebuild their income, perhaps with new occupants who will pay higher rents.

Concern about rent control
“If this bill is not passed, they stand to make a lot of money because there will be mass evictions of people,” said Assemblywoman Britnee Timberlake (D-Essex and Passaic), the bill’s lead sponsor in the Assembly. “And once they mass-evict, the current rent controls go away, and they can set whatever rent they want.”

The measure would give tenants who have been unable to pay rent because of pandemic-related hardship six months to repay each month of back rent, to a maximum of 2 1/2 years. For homeowners, mortgage lenders would be required to offer a forbearance period of at least 90 days as long as the homeowner’s annual income doesn’t exceed $150,000, among other conditions.

Timberlake said the bill has been held up in the Senate because of the objections of the Apartment Association. After it passed the Assembly on July 30, the sponsors and several housing-advocacy groups met with the landlords’ trade group in an attempt to iron out differences but no significant compromises were found, she said.

“They go and they cry to the Senate president, and now the bill has hardly seen the light of day,” she said.

Other protections in place for now
Richard McGrath, a spokesman for Senate President Stephen Sweeney (D-Gloucester), said the Senate leadership recognizes the need to protect renters and homeowners from losing their homes but argued that there’s no immediate need to pass a bill because of the state’s eviction ban, plus another set by the federal government that is in effect until March 31.

“The Senate believes that action should be taken to help protect residents from being evicted from their homes,” he said in a statement. “The coronavirus crisis has created more than enough hardships; even the fear of eviction adds to their burdens. The bottom line is that we are committed to getting a plan in place before any of the moratoriums end.”

Renters and homeowners have already benefited from almost $100 million in rent relief from the state, and more money is likely to come from Washington, McGrath said.

On Jan. 11, the U.S. Treasury allocated $589 million to New Jersey for rental assistance, as part of a $23.7 billion package to the states. New Jersey’s share should make a significant dent in the rent arrears of people making less than 80% of the median income for the area, said David Brogan, executive director of the Apartment Association.

Brogan argued that rental assistance from state and/or federal governments is the only true solution to the problem of rent arrears that have become unpayable.

In July, a consultant’s report for housing advocates forecast that 40% of New Jersey renters, or about 450,000 households, would be unable to pay their next month’s rent. It also predicted that there could be 304,000 evictions over the following four months — a 600% increase over pre-pandemic levels — unless protective measures were taken.

The forecast has been frequently cited by housing advocates as a guide to the scale of potential evictions and foreclosures unless they get more protection from “The People’s Bill.”

Argument ‘doesn’t hold water’
But Brogan said the report’s projections overstated the number of eviction filings in the period by more than 200,000. “To be off by 200,000 and use that as the basis for passage of a bill, it doesn’t hold water,” he said.

Courts are not allowed to issue eviction orders because of the moratorium but filings have continued during the pandemic, according to data from New Jersey’s Administrative Office of the Courts. The data show that 54,344 eviction filings were made between March and December of 2020, significantly lower than a year earlier.

Housing advocates say the annual declines are probably because many landlords are waiting for state and federal rental assistance, and they predict the filings will rise sharply as soon as the moratorium ends.

“We do expect the filings to explode when the moratorium is lifted,” said Staci Berger, president of the Housing and Community Development Network of New Jersey. She said some landlords are pressuring tenants to leave, perhaps by promising not to go after them for unpaid rent. If so, such cases would not show up in the official data.

Berger urged the Senate to pass the bill as soon as possible to prevent mass homelessness. “Without it, the COVID health crisis will become a housing crisis. We have long known that health outcomes are connected to housing stability, and the pandemic has made this connection plain,” she said.

A question of fairness
But Brogan argued that if the bill becomes law, it will encourage people not to pay rent. Some people are already taking advantage of the moratorium by withholding rent even though they don’t need to financially, and there are likely to be more of those if there is a legally mandated 30-month period for repaying arrears, he said.

Brogan said he heard from one landlord who said one of her tenants, an attorney, has not been paying rent during the pandemic even though he makes three times as much money as the landlord.

“We’ve had examples of people buying furniture, televisions, houses after not paying rent for six or eight months, and these were people who were not COVID-impacted,” he said.

He also criticized Murphy for supporting the bill in its current form, which he said would cut tax receipts from the operating income of apartment buildings, resulting in homeowners being forced to pay higher property taxes.

“I don’t understand why the governor would want to support a bill that would create the largest property tax shift onto homeowners in New Jersey’s history,” he said.

He rejected claims by some housing advocates that landlords are seeking mass evictions because it would allow them to recover financially.

“We are in the business of housing people, so tenants are our customers,” he said. “Just as Target wouldn’t refuse people to come into their store, we don’t want to get rid of people who are our tenants.”