Congress is in its summer recess while the American economy faces further devastation. Covid-19 has devastated the American economy with the closure of businesses resulting in the worst unemployment rates since the Great Depression. Without workers churning out products and services the American economy falters in place. The problem – in its simplest terms – is that there is little money circulating across the economy. This lack of money trickles down through the economy affecting the entire system.

The CARES Act put a moratorium on evictions, but the moratorium expired on July 25, 2020. According to the Federal Reserve of Atlanta, somewhere between 28 and 45% of rental units (apartments and houses) benefited from the rental moratoriums across America.

The Atlanta Federal Reserves states that there are a little over 43 million rental units. Of those, about 5 million, or 11.6% are federally subsidized. Almost every state has some type of program in place to forestall evictions for now. However, rental debt is rising as the moratoriums did not forgive rent payments as many stopped evictions from happening but did not erase the debt.

In addition, the unemployment benefit of $600 a week, which also expired, allowed most renters to make rent payments even though they were unemployed. Thus, the evictions and rent debt is only the beginning as Covid-19 economic disruption remain.

Workers remain unemployed and businesses remain underperforming or closed.


According to the New York Times there are over 100 million renters who must now make rent payments to keep their homes, even if they have no jobs from which to make the payments from. Without Congressional action, the moratorium on rent payments has ended. Millions are now facing evictions.

But the eviction problem is not just an issue for the tenants but also for the landlords. Without rent payments, the landlords cannot afford to make mortgage payments and pay their employees. Not making their mortgage payments trickles down through the banking industry where the economy is further destabilized as banks cut costs like payroll to weather the storms. As commercial mortgage delinquencies rise, the lender money to resume business when the economy starts to recover makes it even harder for small businesses to reopen the economy further exasperating the unemployment rates and the downward pressure on the economy.

Rental assistance isn’t only for the renters but also for the landlords and the banks who finance housing in America.


Unemployment is above the ten percent mark. One out of ten Americans who need a job cannot get one. The service industry, which accounts for about 30% of the jobs in America was the hardest hit sector of the economy. Many service industry jobs may not be coming back this year. Many may never come back.

That means that the unemployment rate in America will remain high for the foreseeable future.

High unemployment translates into a bad economy across the board.

As America’s economy tries to recover, the pressures of homeless families and high unemployment will make it more difficult. Disposable income is necessary for America’s economy to work.

But Congress’ inaction is exacerbating the economic situation. The last thing America’s economy needs is a homelessness crisis. Stimulus payments to families is not about political necessity, but rather it is about stabilizing the American economy until the economy can be reopened.

Martin Paredes

Martín Paredes is a Mexican immigrant who built his business on the U.S.-Mexican border. As an immigrant, Martín brings the perspective of someone who sees México as a native through the experience...