Most pandemic orders will end, ban on evictions remains

As lawmakers vote to end Murphy’s emergency health executive orders, they work to forestall what’s expected to be a massive wave of evictions
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New Jersey lawmakers are pressing to prevent an expected flood of evictions and foreclosures for nonpayment of rent or mortgages during the COVID-19 pandemic.

Evictions have been legally on hold under an executive order from Gov. Phil Murphy. But that protection expires two months after the end of the public health emergency he declared to deal with the pandemic. That health emergency will end soon after Murphy and top Democrats in the Legislatures passed a bill Thursday to end nearly all of the executive orders he issued during the pandemic.

The legislation passed both houses in a vote divided along party lines after spirited debate. In the Senate, lawmakers at times had trouble hearing each other over the full-volume chants of protesters and police sirens outside the State House. In a statement after the vote, Murphy said he planned to sign the bill Friday as well as issue an executive order rescinding the order declaring a public health emergency.

Meanwhile, an Assembly committee this week approved a bill to provide mortgage relief to residential property owners. An earlier similar bill stalled in the Senate, but another measure to deal with the eviction issue has been introduced by Sen. Brian Stack (D-Union).

The Housing Committee on Wednesday unanimously approved a bill (A-5684) that would grant a mortgage forbearance of at least six months to any homeowner who suffered financial hardship during the pandemic, has a gross household income of not more than 150% of the area median income, and has less than six months of cash reserves in his or her bank account.

Preventing eviction for nonpayment

Another bill (A-5685) would prevent tenants in low- to middle-income households being evicted for nonpayment, or habitual late payment, of rent between March 1, 2020 and July 31, 2021. Rent arrears during that time would be treated as a civil debt that could be pursued by a landlord in court.

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The new measures effectively replace an earlier bill, also known as the People’s Bill, which would have codified Murphy’s ban, and given tenants as much as 2 1/2 years to repay rent arrears accumulated during the pandemic. The measure was fiercely opposed by landlords, who said their finances had already been sorely tested by being unable to evict nonpaying tenants during COVID-19, and that they should not be expected to finance an extended repayment period.

The new bills contain provisions that recognize the needs of both tenants and landlords. One notes that thousands of tenants have been unable to pay all or part of their rent during the pandemic, and will find it “extremely difficult” to make future payments once rent demands resume.

Black and brown communities have been especially hard-hit by the economic downturn resulting from the pandemic, the bill says, and are at risk of eviction for nonpayment or partial payment of rent when the moratorium ends.

It warns that a flood of evictions, and the overcrowding of accommodation that would accompany it, could lead to a resurgence of COVID-19 infections.

Help for landlords

But the bill also recognizes that landlords have absorbed the burden of sheltering more than 1 million tenants during the pandemic while receiving “little or no” financial help from state or federal governments.

“It is unfair to require private-sector landlords to provide such housing without compensation or assistance, while at the same time requiring them to continue to maintain those properties and pay their financial obligations, including State and local taxes,” says the bill, sponsored in the Senate by Sens. Brian Stack (D-Hudson), Ronald Rice (D-Essex), and M. Theresa Ruiz (D-Essex).

David Brogan, executive director of the New Jersey Apartment Association, which represents mostly large landlords, said the bill would help landlords recover from an estimated 15%-30% drop in rental income during the pandemic, although it’s unlikely to make them whole.

He welcomed the bill but said it won’t help to repair landlords’ finances until Murphy’s moratorium is lifted — an event that would be deferred until the end of the year under the bill on executive orders that the Legislature voted on Thursday.

“If we are going to extend the eviction moratorium until January 1, and not provide meaningful assistance to landlords, you are going to see tenants accumulate more and more debt, and small landlords going bankrupt by the hundreds if not thousands,” he said.

Where’s the money that was sent to NJ?

Brogan said almost $600 million in federal rental assistance was sent to New Jersey’s state, county and municipal agencies in December but very little of that money has been disbursed to landlords. At the state level, the Department of Community Affairs is responsible for distributing the funds.

Housing advocates said they are broadly satisfied with the provisions of the new bills and hope they will soon be given the force of law, in contrast to the People’s Bill.

The overall goal of the new bills is “to stop people getting put out on the street,” said Adam Tucker, a spokesman for New Jersey Citizen Action, a grassroots group that works for social, racial and economic justice. Although the group would have liked to see more protections passed in the People’s Bill, that measure appears to have no future in the Legislature, and so the new bills address many of the group’s concerns, Tucker said.

“It’s a practical consideration — these have a chance of passing, versus the People’s Bill, and they cover a lot but not everything,” he said.

Tucker’s group is calling for amendments to the new bills that would include measures to prevent the assignment of debt to third parties; to protect renters’ credit from being negatively impacted by an eviction filing, and to extend mortgage forbearance for two years.

Courts have logged thousands of eviction filings

Housing advocates previously predicted a “tsunami” of evictions when the governor’s moratorium ends two months after the declared end of the public health emergency, a point that seems to be drawing closer as COVID-19 infections drop and vaccination rates increase in the state.

Although the evictions order has prevented the courts from acting on eviction filings by landlords during the pandemic, they have continued to submit the cases to the courts, and housing advocates have predicted there will be a flood of court-ordered evictions for nonpayment of rent as soon as the order is lifted. The court system reports 58,135 eviction filings were made between May 2020 and the end of April 2021.

At the Housing Committee hearing, housing advocates spoke in support of A-5684. “It will do a lot to help homeowners in our state move forward, particularly our lower-income homeowners,” said Drew Curtis of the Ironbound Community Corporation in Newark.

But he called for amendments including applying the bill to all banks; extending protections for homeowners to at least two years, and making sure that small landlords would also be covered.

Assemblywoman Britnee Timberlake (D-Essex) said she will be pressing for those amendments plus protections for people who experienced a property-tax lien sale during the pandemic.

Timberlake, the lead sponsor of the “People’s Bill,” said she wants bill A-5684 to prevent an increase in foreclosures. “We need to make sure we are not exacerbating the issue of wealth being lost,” she said.

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