As brouhaha descends into Washington anarchy — with Congressional leaders again at impasse over economic stimulus measures — experts warn the economic crisis brought on by the novel coronavirus outbreak could continue and worsen.
Of particular concern is a widely predicted eviction crisis, which when compounded by the preexisting shortage of affordable housing in the Phoenix metro, could push conditions for many moderate- and low-income residents from crisis to collapse.
Citing analysis by global investment consultant Stout Risius and Ross, a report from the Associated Press published Thursday quantified the emergency’s scope.
According to the Sept. 10 report, 43% of rentals are at risk of eviction in the coming months — accounting for 17 million U.S. households.
With additional unemployment boosts gone — and either returning significantly reduced or failing to materialize — renters remain protected only by a patchwork of federal and local protections set to expire between now and Christmas week.
The gravity of the situation is evident to Mark Stapp — a 30-year industry expert and Arizona State University professor at the W. P. Carey School of Business, where he runs the school’s Master’s of Real Estate Development program.
“We’re already in a situation where we’ve got one of the highest levels of foreclosure and eviction, so it’s not going to take a lot to tip this thing beyond crisis,” Mr. Stapp said. “We’re actually probably on the edge of crisis. Without significant, continued support, it could go into catastrophe.”
He explained those most vulnerable at this moment aren’t just the poor; but it’s first responders and other essential workers in public and service-industry positions who also face consequences.
“We have this problem of never having enough housing for those in the lower wage-earning jobs; and I’m talking about medical paraprofessionals, respiratory therapists, anesthesiology techs, phlebotomists, dental assistants … plus firefighters, police and teachers,” Mr. Stapp said. “It’s the litany of people who are service providers that get really stressed by this and it pushes down on them.”
What will happen to them, should eviction and foreclosure protections expire while unemployment remains at historically high levels, may be difficult to predict. But it could be bad, Mr. Stapp suggested.
“It’s hard to make categorical statements about this because some of the people will just leave the region. Some of them will find alternatives, like going back and living with family members or friends, and some of them just wind up with nothing and they’re on the streets,” he said.
Regardless of the toll taken on those vulnerable individuals, everyone may pay a price eventually should the crisis continue and worsen.
“All of those scenarios are a cost. There are costs to society, there are costs to the marketplace. And the question is, who’s going to bear that cost? If we don’t have stimulus, I think we are going to have a significant problem — and that problem is going to be a cost on all of us. I don’t know what the number is; it could be large,” Mr. Stapp warned.
Meanwhile, the fifth economic stimulus proposed yesterday by Senate Republicans was immediately downed by Democratic leaders.
The $500 million package set for a test vote by Senate leader Mitch McConnell would include measures to shield businesses looking to reopen from lawsuits, with more money for schools, small businesses, the postal service, child care workers and farmers, along with funding for COVID-19 testing and vaccine research, according to multiple reports.
But the GOP plan provides only half the supplemental unemployment benefit — down from $600 to $300 weekly, while in Arizona, the $240 per week base benefit ranks second lowest among the states. And the Republican’s package contains no additional one-time payment, like the $1,200 personal stimulus doled out under the $2.2 trillion CARES Act passed in late March.
Senate Democratic Minority Leader Chuck Schumer balked at the pared-down proposal, calling Republican leaders “so out of touch,” according to reporting from the AP.
Professor Stapp said while he grasps the political implications faced by both sides of the stalled stimulus debate, it’s incumbent on legislative leaders to act decisively if disaster can be averted.
“I am not a socialist, though that’s a term most people don’t really understand,” he said. “But while we don’t want socialism, we do require social support, because we have an economy that is run by a lot of different types of people earning a lot of different wages, and we’ve got to able to support everybody.”
While Mr. Schumer said he anticipates his Conservative colleagues inevitably will return to negotiations, citizens at greatest risk for eviction and foreclosure can only solider on uneasily as they wait to see which comes first — the help or the boot.