Goldman Sachs estimates that between 2.5 million and 3.5 million households are significantly behind on rent, owing a total of $ 12 billion to $ 17 billion to homeowners.
These tenants appeared to be immune from eviction until at least October until the Supreme Court last week overturned the Biden administration’s ban on eviction, indicating that further action must come from the Congress. At the same time, most state-level restrictions on evictions are expected to expire within the next month, which Goldman Sachs analysts noted in Sunday night’s report.
“The end of the moratorium on evictions is likely to lead to a sharp and rapid increase in eviction rates in the coming months, unless emergency rental assistance (ERA) funding is distributed at a much faster rate. faster or Congress resolves the problem, ”the report said.
Without faster help or new legislation, Goldman Sachs estimates that 750,000 households will face eviction this fall and winter. The Bank of Wall Street noted that about half of all deportation requests in the United States resulted in deportation between 2006 and 2016.
The process of recovering rent through the Emergency Rental Assistance Program has been “disappointingly slow,” Goldman Sachs analysts wrote. Even though the U.S. Treasury Department distributed $ 25 billion to state and local governments – and has an additional $ 20 billion – only $ 4.5 billion was distributed, according to the report.
The Census Bureau estimated last week that about 1.3 million people are very likely to be deported over the next two months. That same report estimated that more than 2.2 million people applied for rental assistance through state or local governments and either had no response or were turned down.
“The strength of the housing and rental market suggests that landlords will try to evict late renters unless they get federal help,” Goldman Sachs analysts wrote.
The company predicted that the evictions could be “particularly pronounced in cities hardest hit by the coronavirus,” as those areas have stronger apartment rental markets.
A deportation crisis, if it did occur, would not only cause hardship for individual families, but could also impact the pandemic and economic recovery – as well as inflation.
Goldman Sachs (estimates a “small drag” to spending and employment growth due to the 750,000 planned evictions and a slowdown in housing inflation in 2022. “The implications for Covid infections and public health are probably more serious, ”the report says. )