Colorado’s Looming Eviction & Rental Crisis

On May 30, the eviction moratorium enacted by Governor Polis to keep Coloradans safely housed during an unprecedented global pandemic will end. Come Monday, without further action, Colorado could start to see the beginnings of an avalanche of evictions that may only become worse over the summer, fall, and winter. Either the governor or the legislature must take action to stem a growing crisis.

Unless ongoing and persistent action is taken, Colorado and the nation could experience an eviction and rental crisis larger than the Great Recession. There are some indications that Coloradans have been keeping up with rent in the previous two months, but there are dire warning signs of the looming crisis in Colorado and communities throughout the United States.

A survey released by the U.S. Census Bureau this month shows over 15 percent of Coloradans (an estimated 520,000 Coloradans) either missed their rent or mortgage payment or have slight or no confidence that their household can pay next month’s rent or mortgage on time. These trends may only continue as many Coloradans are not able to return to their pervious jobs. A recent study from the University of Chicago estimates 42 percent of coronavirus-related job losses will result in permanent job losses.

This is not just a problem for renters: Evictions and lost renters could have a dramatic financial impact on the apartment industry and community resources throughout Colorado.

COVID-19 Eviction Defense Project’s Sobering & Comprehensive Analysis

Perhaps the best analysis of what might occur in Colorado has been developed by Sam Gilman, Marco Dorado, and Zach Neumann of the COVID-19 Eviction Defense Project. Their comprehensive analysis examines a host of factors, including possibly unemployment rates, access to federal stimulus funds and unemployment insurance, the ability of renters to save or reduce non-rent expenses, and the timing of federal stimulus funds ending.

Their predictions are dire and deserve attention. Unless action is taken in Colorado or at the federal level:

  • By September, nearly 420,000 Coloradans living in 181,000 households will be at risk of evictions, having accumulated nearly $765 million in rental debt
  • Communities of color, undocumented residents, and low-income families will be especially vulnerable to evictions; and,
  • The eviction crisis is likely to see it greatest increases starting in August, as expanded unemployment insurance benefits end and cost-burdened renters (those paying more than 30 percent of their income in rent), are unable to keep up with rental payments.

Short- & Long-Term Options for Mitigating the Worst of the Crisis

As advocated by the National Apartment Association, federal intervention to provide rent relief that both assists renters and stabilizes the apartment industry is the best and most direct way to address the crisis. Nonetheless, there are still important actions Colorado can take, as outlined by COVID-19 Eviction Defense Project:

Short-Term Policies

  • Extend the statewide eviction moratorium: Either through executive order or legislation, the moratorium should last a sufficient time to allow renters to recover from the economic shutdown, pay their bills, and reconnect to employment. It should be extended by 180 days and allow for further extensions if necessary.
  • Extend foreclosure protections for landlords: Because of lost rental revenue, many landlords will need forbearance from their lenders to pay mortgage debt. An extension of the eviction moratorium should ensure lenders offer a forbearance option to landlords due to COVID-19 related hardship, including tenant hardship.
  • Promote repayment plans that meet the conditions of the crisis: Reasonable repayment plans, such as paying ten percent of income towards unpaid rental debt, would provide tenants with a means for staying housed and avoid costly evictions.
  • Extend the amount of time tenants have to cure unpaid rent: An extension would allow tenants more time to earn money, negotiate with landlords, and receive stimulus checks that are still on their way.

Long-Term Policies

  • Reduce the long-term effects of an eviction: Records of an eviction can affect both an individual’s credit rating as well as their ability to find safe and stable housing in the future. Measures can be taken to suppress records related to the COVID-19 crisis or ensure there are indications that these negative markers occurred during the COVID-19 crisis.
  • Develop rental relief funds: Either through public-private partnerships or philanthropically funded efforts, Colorado can create funding mechanisms to create bridge loans to renters with outstanding rental payments. These loans could have long repayment terms, allowing Coloradans to recover as they slowly pay back missed payments.

Colorado Can Avoid the Devastating Effects of Evictions

During non-pandemic times, we know evictions can lead to prolonged joblessness, negative health outcomes, decreased school attendance for children, and homelessness and housing insecurity. These consequences could be far greater during a global health pandemic.

The strong analysis, provided below, from the COVID-19 Eviction Defense Project demonstrates the need for the governor, state legislators, and the federal government to act before it is too late.

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