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Congresswoman Ilhan Omar proposes bill to cancel rent, mortgage payments during coronavirus pandemic

Ilhan Omar proposed on Friday a bill to cancel payments of rent and mortgages [Getty]

Date of publication: 18 April, 2020

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The bill would provide help to million of Americans struggling with housing insecurity.
US congresswoman Ilhan Omar proposed on Friday a bill to cancel payments of rent and mortgages for millions of Americans struggling to meet costs amid the coronavirus pandemic.

The Minnesota Democratic representative's proposed legislation would include full payment forgiveness, with no accumulation of debt for renters or homeowners and no negative impact on people's credit rating or rental history, while landlords and mortgage holders would have their losses covered by the federal government.

The bill, called the "The Rent and Mortgage Cancellation Act", seeks to "institute a nationwide cancellation of rents and home mortgage payments through the duration of the coronavirus pandemic".

"The coronavirus crisis is more than just a public health crisis- it's an economic crisis," Omar, who was born in Somalia, said in a statement on her website.

"Minnesotans are losing jobs, getting their hours reduced, and struggling just to put food on the table," she said. "We must take major action to protect the health and economic security of the most vulnerable, including the millions of Americans currently at risk of housing instability and homelessness. 

"Congress has a responsibility to step in to stabilize both local communities and the housing market during this time of uncertainty and crisis. In 2008, we bailed out Wall Street. This time, it's time to bail out the American people who are suffering," her statement added.

Friday's proposed bill comes as an unprecedented housing crisis grips the US, where 31 percent of renters were unable to pay rent at the beginning of April.

Over the past month, a staggering 22 million Americans have lost their jobs as stores, restaurants and other businesses deemed non-essential were forced to close, shedding legions of workers.  

The shutdown of all this non-essential activity, an attempt to slow the spread of Covid-19, has had serious consequences in a country where many people struggle with debt and lack a financial safety net.

In 2018, 40 percent of Americans said they had less than $400 saved for emergencies, without selling belongings or borrowing, according to a report by the Federal Reserve.

Some small-scale landlords have proposed repaying rent via instalments. Several cities and states, including California, have passed executive orders prohibiting eviction of tenants affected by the coronavirus crisis.

But when the lockdown lifts, the moratorium will end. And tenants will have to pay their back-rent or move out.

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