Minnesota Gov. Tim Walz on Monday ordered a statewide moratorium on evictions and foreclosures during the peacetime emergency to help curb the spread of COVID-19.
“We’re asking people to stay home as much as possible,” Walz said during a news conference. “We can’t make this work (if we) have people on the streets. It would not only be personally cruel, it would be counterproductive to what we’re trying to do.”
Landlords are also prohibited from terminating leases during the peacetime emergency, but they may evict renters who are a threat to other people.
While the order stops people from being forced out of their homes, it does not say renters and property owners may stop making their monthly payments. Failing to pay rent can still negatively affect people’s credit scores and rental histories.
The prospect of a spike in evictions raises public health and economic concerns at a time when every level of government is grappling with the fallout of the pandemic.
As of Monday, 235 Minnesotans have tested positive for COVID-19 and one person has died. The number of infected people, however, could be as much as 100 times higher because testing is not widely available, according to the state’s health department.
Suspending evictions protects more than 600,000 renter households statewide and ensures renters can shelter in place should Walz issue that order.
Minnesota follows Washington and Oregon, which both placed 30-day moratoriums on evictions. Other states and cities across the country have halted evictions by other means, including suspending court proceedings or choosing not to enforce eviction orders.
Renters are likely to be disproportionately affected by the economic fallout from measures intended to slow the spread of the coronavirus, like shuttering bars and restaurants. Renters are more likely to be low-income, people of color and are much more likely to be “cost-burdened,” meaning they spend more than one-third of their income on housing costs.
Walz’s executive order also helps homeowners and landlords by requesting financial institutions suspend foreclosures and urging banks not to impose late fees during the peacetime emergency, first declared on March 13. Banks may still foreclose on property owners, but households will not be forced to move.
Over the long-term, many renters and landlords will need financial relief, especially landlords who rely on rent to pay their mortgages. That will likely come from the federal government, which is currently weighing an emergency stimulus package at a cost surpassing $1 trillion.
Over the past week, more than 120,000 Minnesotans applied for unemployment insurance, according to the Department of Employment and Economic Development.
For Cya Shahan Foust, a line cook in the Twin Cities, the threat of eviction has weighed heavily on her since she was laid off a week ago.
“I live paycheck to paycheck in a studio apartment alone,” Foust wrote in an email. “I am worried about going homeless and losing the life I spent five years building to be here in Minnesota. I contacted my landlords on two separate occasions and I was told that they will be having us pay rent and have no payment plans.”
Minnesota Supreme Court Justice Lorie Gildea suspended all eviction hearings, except for those involving personal safety or domestic violence, from March 16 until March 30. But while no new evictions have been ordered, landlords have continued to file evictions in court.
More than 250 eviction cases have been filed over the past week, which is lower than the weekly average in 2019.
Walz’s order comes a day after the state’s trade group representing landlords issued guidance to its members — who own more than 400,000 housing units — to halt evictions, waive late fees, offer flexible payment plans and stop rent increases through May 2020.
“We hope that these guidelines ease renters’ fears, provide our government leaders guidance, and illustrate our members willingness to share in the sacrifices related to COVID-19 without further disrupting a fragile rental housing market throughout Minnesota,” Minnesota Multi Housing Association President Cecil Smith said in a statement.
Minnesota Housing has more information for renters and landlords on the executive order here.MHFA_238286