For rent

This “Homes for Rent” sign is in front of a mobile home community near Ligonier. Indiana’s moratorium on the filing of eviction and foreclosure cases has many housing and social agencies worried about a “tsunami” of homelessness.

KENDALLVILLE — As COVID-19 came to life in Indiana in March, the virus sent chaotic ripples through employment, products and services, lifestyles, education and the economy. Toilet paper flew off the shelves, workers found themselves suddenly furloughed indefinitely or unemployed, schools pivoted to online learning and everyone went home — indefinitely.

“Home” is a rental property for many Hoosiers and small businesses. As unemployment soared and income shrank or stopped for many families, worry exploded about how to pay the rent, the mortgage or any bills.

Gov. Eric Holcomb declared a moratorium on evictions and foreclosures in March, extending it through the “Back on Track” stages of reopening the state. The current moratorium will expire Aug. 14 unless the governor extends it again.

Holcomb’s moratorium order prohibits the initiation of eviction or foreclosure proceedings on residential real estate until the state of emergency is ended — whenever that date is. The order does not relieve tenants of the obligation to pay rent or make mortgage payments during the period.

On Aug. 5, Holcomb announced that $15 million would be added to the original $25 million earmarked for rental assistance, upping the total to $40 million. The governor urged residents in need to reach out.

“We do have programs and funding and resources to help residents who are in need, who need to have access and who qualify to funding and payment plans,” Holcomb said. “If you are in need, we are here, as a matter of fact, we’re constantly urging Hoosiers to work with their banks, to work with their landlords to set up these payment plans as we go forward.”

Rental assistance will be distributed through the Indiana Housing & Community Development Authority. A portal for the application is on the website: in.gov/ihcda or go to indianahousingnow.org.

To be eligible for rental assistance, individuals must be affected, medically or financially, by COVID-19; plan to stay in their home as a primary residence; have a current lease; meet income standards; and provide documentation of their need. Applicants who are receiving other rental assistance are not eligible for the state assistance.

On the surface, Indiana’s moratorium looks compassionate. Workers who’ve had their livelihoods yanked out from under them by pandemic layoffs don’t need to add homelessness to their basket of fear and worry.

But underneath, the pressure of debt is building. The moratorium enables financially illiterate or irresponsible tenants or homeowners to pay nothing, knowing full well they can’t be evicted right now.

The percolating debt is growing, right alongside worries about what will happen when the moratorium is lifted.

Moratoriums aren’t new

The model for the eviction moratorium is found in Indiana’s annual moratorium on utility bills and disconnections In fact, the utility moratorium is enshrined in Indiana Code 8-1-2-121.

The law prohibits utility disconnections from Dec. 1 through March 15 for people receiving assistance through the Indiana Low Income Home Energy Assistance Program.

Agencies that provide utility assistance brace themselves every spring for the inevitable tide of applications that comes in after March 15. By then, some applicants haven’t paid a utility bill for four or five months, so amounts owed run into the thousands.

Holcomb ordered the eviction moratorium just after the annual utility moratorium expired.

Housing officials, real estate professionals and landlords have been sounding the alarm ever since Holcomb issued his order. They predict a tsunami of evictions that will come whenever the moratorium is lifted.

‘Moratorium cliff’

Executive director Angie Kidd of Common Grace Ministries, Kendallville, refers to the coming surge of new evictions and foreclosures as the “moratorium cliff.”

Common Grace provides assistance with rent, but has a rolling 12-month limit on the number of times a tenant may apply. The ministry works with landlords to accept partial payments to avoid eviction, and partners with other groups such as Brightpoint, township trustees and churches that offer housing assistance.

The ministry also uses education to help tenants to avoid repeating their financial mistakes. Tenants who receive housing assistance must also take Purdue Extension’s “Where Does Your Money Go?” program to learn better financial habits.

“We are used to seeing only a utility moratorium, but the governor issued a blanket moratorium over rent, utilities, water/waste water, telecommunications and broadband,” she said. “That means all of those bills for five months if a person didn’t pay anything.”

Kidd said the moratorium not only kicks the accountability can down the road, but opens the door for financially-pressed tenants to accumulate even more debt than they would have otherwise, another struggle to overcome. Every extension period just adds to the problem.

The wave is also likely to hit township trustees, who are the keepers of the Assistance Fund created by state law. The fund exists in every township to help any township resident in need who has exhausted all other avenues for help.

“There will be a large increase in people applying for assistance for utilities and rent, and maybe emergency shelter if they are evicted,” said Donna Schwartz, trustee for Elkhart Township in Noble County.

Schwartz said the Assistance Fund meets basic necessities as defined by Indiana Code 2.10.01, as including “those services or items to meet the minimum standards of health, safety, and decency (medical care, clothing, food, shelter, transportation for specific reasons, household essentials, utility services, and other services or items determined per case).”

The fund is not an unlimited drink at the well.

“There are limits set per occurrence that were determined and made into policy by each township board,” Schwartz said. “There is a lengthy application and there are many criteria to meet to be approved.”

Kidd empathizes with landlords, too, as they have to pay their own mortgage, repairs and utility bills for the buildings they own. She said the moratorium takes away any recourse landlords have against tenants who don’t pay.

“I spoke with one mobile home park manager who has eight households that have not paid a dime and they are not people who were impacted by COVID.” Kidd said. “She was planning the evictions for Aug. 1, but the moratorium was extended yet again. While a two-week extension doesn’t sound like much, it equates to another month of late rent to a landlord who collects on the first.

Imagine the loss of revenue: If rent is $600 per month, times five months, equals $3,000, times eight households, that equals $24,000 that this business has not been paid and they have no recourse. On top of that, they will have the cost of collections and re-renting the dwelling.”

The $600 and what didn’t happen

Workers who qualified for unemployment also qualified for $600 per week in federal unemployment benefits. The benefit expired July 31, even as state unemployment benefits continue.

Critics claim the temporary add-on, federal benefit to state unemployment allowed furloughed workers to make more money on unemployment than at work. They say the federal benefit is an incentive to not return to work.

Supporters say the federal $600 allowed many workers to stay afloat because state unemployment benefits were sometimes less than $100 per week. The maximum state unemployment benefit is $390 per week.

The federal $600 benefit helped bridge the gap created by lost work income, supporters say, and that it’s only fair that individual taxpayers get relief when corporations and businesses are getting relief.

As Indiana shut down in mid-March, agencies who work with those in need expected a rush of new clients needing assistance. To their surprise, the rush didn’t happen. In fact, requests plummeted.

The $600 federal benefit, coupled with state unemployment benefits and stimulus checks that went out about the same time, helped unemployed workers cover their expenses without visiting food pantries, township trustees or other agencies.

Kidd said one factor was the high employment rate before COVID-10 arrived. Most people had a job and stable income before the pandemic, and while furloughs and layoffs were abrupt, they didn’t cause an immediate crisis.

Common Grace paid out $3,009.20 in rent assistance from January to March 2019, but that decreased to $2,739.29 during the January-March 2020, according to Kidd.

Common Grace paid out $2,909 for rent in the April-July 2019 period, which decreased to $810 for the same period in 2020. In June, only one person received rent assistance.

Schwartz said she only had one request for housing assistance during all of 2019, but when the moratorium is lifted, she expects “a large increase in people applying for assistance for utilities and rent and maybe emergency shelter if they are evicted.”

“We have applied to send qualifying applications to the Indiana Housing & Community Development Authority who have set up a special fund through the end of the year to assist with these rent and mortgage situations,” she said.

Sheltering the homeless

Evicted tenants will be faced with where to live when the moratorium is lifted. Some will move in with relatives or friends or find a less expensive place. Some will be homeless or find their way to shelters.

Turning Point is a non-profit organization in Angola that accepts homeless families as well as individuals. Other shelters may accept only men, only women, or only women with children.

Turning Point operates mostly on donations from churches, individuals, businesses and other service organizations, with remaining funding from the city of Angola and Steuben County United Way. The shelter receives no federal or state funding.

Turning Point’s executive director, Shannon Thomas, said the Angola shelter stays near capacity most of the time, both before and during the pandemic. The shelter has 40 beds, but usually 26 to 30 people in residence, because living quarters are configured for families.

Thomas agrees that the lifting of the eviction moratorium will open a floodgate of homelessness.

“People will get evicted,” she said. “Some stopped paying rent even though they are working, because they don’t have to.

“We plan to take as many as we can as long as we can get donations,” Thomas said, noting that donations have decreased during COVID-19 and annual fundraisers have been canceled.

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