Gov. Gretchen Whitmer on Friday extended the state's ban on evictions until July 15 and announced a program to give $50 million in rental aid.
Landlords will be able to get lump sum payments of up to 90% of rental debt through a new Eviction Diversion Program if they allow tenants to stay in their homes, forgive late fees and up to 10% of the back rent, according to the order.
Rental assistance under the program will be available beginning July 16.
“No Michigander should have to worry about losing their home during a global health pandemic and, at the same time, landlords and management companies need rent from their tenants to sustain their businesses,” Whitmer said in a release.
“This innovative new program will save lives, save money, and save businesses by keeping families in their homes and providing immediate financial relief to landlords for back rent they’re due.”
Renters will qualify based on their current income and their family size, according to the order. Those who earn up to 100% of the area median income, or AMI, are eligible. That number differs by region and family size.
The plan is to dedicate half of the funding to households earning less than half of AMI, according to the order.
Tenants' remaining debt not covered by the diversion program can be paid back through a 12-month payment plan. Only back rent accumulated during the COVID-19 pandemic is eligible.
COVID-related evictions were expected to be a problem for Michigan. Nearly 17,000 cases are filed a month normally and state officials estimated that more than 75,000 cases could be filed once the ban is lifted.
Landlords say they have been hit hard by the pandemic and predict that, unless more is done to help, the coming mortgage foreclosure crisis could be worse than 2008's.
"They do not want to evict people in the middle of a health crisis," said landlord attorney Matthew Paletz, whose office is in Troy. "A lot of them are holding on by their fingertips. They are trying to figure it out."
Advocates for renters have pushed for Whitmer to outline more specifics to help.
Angela Tripp, director of the Michigan Legal Help Program, said the organization supports the ban's extension, saying many details still have to be worked out on how the diversion program with be run and how courts will handle eviction cases once they start up again.
"There are a lot of unknowns," Tripp said. "It's hard to kind of predict how far the $50 million will go."
Paletz said the $50 million aid is helpful but worries it won't get to landlords quick enough. The ban has been extended several times, after Whitmer first froze evictions March 20.
"They are not getting the same benefits to pay their mortgages," Paletz said. "They very well could go under and lose those properties before they get those monies."
The federal CARES Act allows owners of multi-family properties with federally backed mortgages to apply for loan forbearance.
Paletz fears local courts will not be able to handle the influx of eviction cases, particularly with new rules from the Michigan Supreme Court. Tenant advocates say the changes are designed to make sure renters are aware of their rights and of available aid.
The changes include that each landlord tenant case has to be scheduled for a specific time. Many courts previously just set one time for many cases. Also in every case that a renter appears, they have to be advised they have a right to have a lawyer and the case will be adjourned for a week to give them a chance to get one.
Tenants in one out of every six rentals in Michigan faced eviction in 2018, according to new research by the University of Michigan and a legal aid group that warns the pandemic likely will worsen the problem.
The $50 million comes from a supplemental funding bill unanimously adopted June 17 by Michigan Legislature that gave state departments an additional $880 million, using federal Coronavirus Relief Fund dollars.