Goldman Sachs says 750,000 households could be evicted this year unless Congress does something

Goldman Sachs estimates that between 2.5 million and 3.5 million households are in significant rent arrears, with a total debt of $12 billion to $17 billion to landlords.

Those tenants appeared to be safe from eviction until at least October, when the Supreme Court lifted the Biden administration’s eviction ban last week, signaling further action from Congress to come. At the same time, most of the restrictions on state-level exposures will expire in the next month, as Goldman Sachs analysts noted in Sunday night’s report.

“The end of the eviction moratorium is likely to result in a sharp and rapid increase in the eviction rate in the coming months unless Emergency Rental Assistance (ERA) funding is distributed at a much faster pace or Congress addresses the issue,” the report said. .

Part of the problem seems to be problems getting government support out the door.

The process to recover delinquent rent through the emergency rental utility has been “disappointingly slow,” Goldman Sachs analysts wrote. While the US Treasury Department has divided $25 billion among state and local governments and has an additional $20 billion available, only $4.5 billion has been distributed, according to the report.

The Census Bureau estimated last week that about 1.3 million people are very likely to be evicted from their homes in 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 heard nothing or were denied.

“The strength of the housing and rental market suggests that landlords will try to evict tenants who are in arrears on rent unless they get federal assistance,” Goldman Sachs analysts wrote.

The company predicted that evictions could be “particularly pronounced in the cities hardest hit by the coronavirus” as those areas have stronger apartment rental markets.

An eviction crisis, should it arise, would not only create hardship for individual families, but could also have implications for the pandemic, economic recovery and inflation.