The U.S. economy has effectively come to a screeching halt, as if caught in a sci-fi scene where an alien force freezes everything in place, including the incomes of millions of American workers and business owners. Except in this sci-fi twist, the aliens forgot to stop the rent and mortgage bills. Who cares if you're frozen in place? Pay up or get out.
Calls are growing for a nationwide moratorium on rent and mortgage payments during this pandemic interim when 90% of the country has been obligated to observe stay-at-home orders. Those calls are a warning sign for lawmakers at all levels to sit up and take notice. A major nationwide housing problem looms unless something happens soon to address the rent and mortgage crunch.
As 17 million newly unemployed Americans are learning, it's nearly impossible to stay at home and go hunting for work at the same time. Unemployment offices are so overwhelmed, their websites are crashing, and telephone wait times are measured in hours. The promised help from that $2.2 trillion federal rescue package still could be weeks away from showing up in people's bank accounts.
But for most, those rent and mortgage payments are still due. Pay up or get out.
In St. Louis just before April 1, posters started popping in support of a rent strike. But a strike is not a solution. Refusal to pay rent constitutes a contractual breach that authorizes landlords to initiate eviction proceedings. Besides, renters might stick landlords with the bill, but those landlords still must pay their mortgages. And a rent strike doesn't address the fix that millions of homeowners could face when they can no longer meet their mortgage obligations.
Unless President Donald Trump and congressional leaders envision a revival of the Hooverville shantytowns that filled American urban centers during the Great Depression, a coordinated approach from Washington and state governments will be essential to avert a major new crisis.
The Coalition to Protect Missouri Tenants, which held a virtual rally on Thursday, is among the groups calling for comprehensive legislative action to declare a rent and mortgage moratorium and impose a ban on evictions and utility shut-offs. But how could such measures be imposed without collapsing the national financial system?
The entities most capable of absorbing the shock, and most deserving of the burden, are the nation's major banks and lending institutions. They were the primary beneficiaries of the $700 billion bailout in 2008 when the financial system imploded because of their irresponsible lending and investment practices. Millions of Americans faced foreclosure in that crisis, yet mortgage holders received only a fraction of the bailout.
Most Americans just had to suck it up. Now is the time to ask the nation's banks to endure the same kinds of discomfort they inflicted on the nation more than a decade ago.
REPRINTED FROM THE ST. LOUIS POST-DISPATCH
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