In well-meaning but poorly-reasoned move, Representative Ilhan Omar has proposed new legislation (co-sponsored by the rest of the “squad”) that would cancel residential rent and mortgage payment for a year, starting retroactively on March 13, 2020:
I would love to not pay rent as much as the next person, but such a broad cancellation as that of the Rent and Mortgage Cancellation Act is not the answer for struggling Americans.
This bill seems to give fuel to a rising rent strike movement in large cities across the country as people struggle to make their rent while the economy is shut down. As The Federalist describes the movement:
The idea is that instead of just not paying your rent because you got laid off, you organize with other tenants in your building or neighborhood and collectively refuse to pay rent, forcing your landlord to negotiate a rent freeze or some other form of relief.
Omar’s bill does just that. If passed, no one would have to pay their rent for a year, starting back in March. But what about the landlords, you ask? She has an answer for that too.
Forbes describes Omar’s proposition:
The federal government (through the Department of Housing and Urban Development) would create a relief fund for landlords and a relief fund for lenders by which they can be reimbursed for the lost rent and mortgage payments.
And as Reason highlights:
In order to be eligible for relief funds, landlords couldn’t raise rents for five years. They would also not be allowed to discriminate against tenants based on their credit score or criminal history during that same five year period. According to a summary of the bill put out by Omar’s office, landlords making use of these relief funds would also have to give tenants a 10 percent equity stake in their properties.
Omar’s bill mistakenly proposes cancelling the rent of ALL Americans, not just those who are struggling. Instead proposing targeted and temporary housing assistance, Omar proposes nation-wide free rent for a year. Considering the change in situation from a mere month ago, proposing sweeping aid for an entire year is an irresponsible and unnecessary move.
Omar’s bill appears to be somewhat based on legislation that she introduced last November. That public housing legislation would have included a $1 trillion price tag, I can only imagine how much this bill would cost, at a time during unprecedented spending from a federal government that’s currently facing a quadrupled $3.8 trillion budget deficit for this year.
Many Americans clearly need help. As our economy sinks lower into a self-imposed recession, millions are suffering from lost or furloughed jobs and are struggling to keep food on the table, much less meet costly rent payments. But any governmental assistance should be targeted to help those who actually need the funds.
We need to figure out targeted ways to help Americans while responsibly reopening portions of our economy so people can begin to get back to work. Providing temporary support will buy some time to get our economy back up and running in a responsible manner.
The coronavirus pandemic is both a health and economic crisis. We need to find innovative ways to address both parts of the issue–helping to get Americans back to work while protecting their health and well-being.