An Imminent Housing Crisis Is the Latest Symptom of a City Racked by COVID-19

Record Number of Newark Families Unable to Make Rent and Landlords Unable to Make a Living

The light at the end of the coronavirus tunnel appears to be shining through. However, while vaccines are rolling out at a promising pace and social restrictions are gradually lifting, certain effects of the pandemic cannot be remedied so easily.

The labor market struggled when the world closed down early last year. Families everywhere suffered from job losses, reduced hours, and an unavailability of new work opportunities. Given these conditions, falling behind on rent became inevitable.

Newark seems to be the epicenter of this growing housing concern. There are currently more than 14,000 eviction cases pending in Essex County court. Statewide, the number is at a staggering 60,000.

Cases are left pending due to Governor Phil Murphy’s emergency order to suspend evictions during the pandemic. After the moratorium lifts, numbers could reach up to 300,000, suggests Matt Shapiro, president of the New Jersey Tenants Association.

Why Newark Is Suffering More than Other Cities

Newark is susceptible to such a housing crisis due to the lack of affordable housing available. Nearly two-thirds of renters pay more than 30% of their income on rent. Almost a third spend 50%. The burden that these costs impose on tenants make it nearly impossible to have an emergency savings, let alone one that covers a year of rent following job loss.

Landlords Are Also Hurting

Newark landlords are not immune from the financial hardships caused by the pandemic. Our own Derek Reed spoke with, sharing insight from his past service as president of the New Jersey Property Owners Association.

Attorney Reed explained that landlords are also struggling, with many going almost a year without a majority of their income. While tenants are protected by the moratorium, landlords are required to keep up with their property taxes, mortgage payments, and maintenance fees. Attorney Reed asserts that direct rental assistance is imperative for the community to restabilize.

Potential Solution

A surge in homelessness is almost guaranteed unless tenants receive desperately needed rental assistance to protect their homes and their landlords’ livelihoods.

There is hope on the horizon. Newark received $8.4 million in rental assistance from December’s stimulus package. The most recent $1.9 trillion stimulus package includes additional billions for state and local governments. Newark’s mayor is actively working with Governor Murphy and other federal legislators to direct funds – that are not yet claimed for other initiatives – to rental assistance.

State officials are also taking legislative approaches. Some have introduced bills that would pause evictions for an additional year following their current end date. A second proposal seeks to limit evictions due to rent delinquency. While neither have passed, they are indicative of a governmental recognition of the necessity to address what could be a devastating housing crisis.

Contact Ehrlich, Petriello, Gudin, Plaza & Reed, Attorneys at Law to discuss your case.