Examining COVID-19 Moratoria on Water Shutoffs

December 16, 2020

Anna Morgan

During the spring of 2020, many states and cities enacted moratoria on water shutoffs in reaction to the COVID-19 pandemic. These were aimed at protecting the growing number of suddenly unemployed people from having their water disconnected because they could not pay their bills. Communities of color are particularly vulnerable to the recent water affordability crisis—as well as the pandemic. The states, cities, and utility companies involved understood the dire nature of the situation, and acted accordingly. By the end of April, 35 states, plus Washington D.C., had state-ordered cut-off suspensions in place. An additional 11 states adopted voluntary suspension, meaning that utility companies had the choice of suspending shutoffs or not.

While the second wave of COVID-19 cases has now hit, most of the moratoria have been allowed to lapse. That means more households are now vulnerable to having their water services suspended if they don’t pay their bills. As of November, only 11 U.S. states (including D.C.) are still ordering suspensions of water shutoffs. Fourteen states have voluntary suspensions, and 25 states just let their moratoria expire. It is worth noting that of the 11 states with moratoriums, only three have Republican governors. In a recent analysis, Warner et al. (2020) found that states that imposed moratoriums are less likely to be Republican controlled, and that unified Republican control of state legislatures means that moratoria are less likely to be put in place.

The United States has now crossed the threshold into upwards of 200,000 new infections per day. As a point of reference, the peak of COVID cases during the summer months of 2020 saw a spike of 75,687 on July 16th. According to the NYT, “Hospitalizations from the virus topped 100,000 — more than double the number at the beginning of November.” In many ways, we are in far worse situation than we were in the spring. Yet, we are seeing less protection for those who have lost their jobs.

Unemployment rates have risen rapidly due to COVID-19. In 2019, the rate was 3.5%. By April 2020 it had more than quadrupled, reaching 14.7%, meaning more than 23 million people had lost their jobs. While the unemployment rate has fallen since April 2020, it is still at 6.7% as of November 2020. It is urgent that those holding elected office use their power to protect the millions of Americans who are unable to pay their water bills and could lose their homes to liens and foreclosures.

In the U.S. in 2016, an estimated 15 million people experienced a water shutoff at some point in the year. In some places in the country, shutoffs can lead to foreclosures on homes. This can happen when liens are auctioned to investors. When a homeowner misses a water bill, the city can place a lien on that property, which means that the city has a right to the property until the debt that is owed is paid. The city then is able to sell the lien to a third party, and “the pay-offs that investors demand from homeowners snowball because of high interest rates, fees, and legal costs, making it more likely the property will fall into foreclosure.” This was the case in Worcester, where an elderly woman with health challenges nearly lost her home when her water liens were sold by the city. Pauline Desrosiers, a 78 year old woman who was sick with pancreatitis, missed one $400 water bill and found herself fighting to keep her home. A private investor had bought a tax lien that had been placed on Pauline’s home, and was attempting to force Pauline into foreclosure. Ultimately, one of Pauline’s daughters got legal aid and they were able to persuade the Land Court to lower the payment for the investor from $25,000 to $10,000, which Pauline’s daughter had to pay.

This is just one story of many, as states across the U.S. use the practice of selling liens. Some states have proposed legislation that would provide “homeowners more notice when they are in danger of foreclosure because of unpaid city bills, more time to appeal, an opportunity to satisfy the loan once the property is sold to an investor, and other consumer-oriented provisions.” These states include Maryland, Arizona, Maine, Massachusetts, Montana, New York, Rhode Island, and Virginia. Yet, even this proposed legislation would not completely protect homeowners, and these states are not an exhaustive list of all those who use this practice. It is crucial for states to create and enforce moratoria to protect their residents from shutoffs, inconceivable amounts of debt, and in the worst cases, foreclosure. During such a turbulent and dangerous time, we need our representatives to protect those most vulnerable to the water affordability crisis.

The holiday season is upon us, bringing travel and gathering along with it. We will see change in the upcoming month, but whether this will be devastating deaths and overburdened hospitals, or direct state action, increased restrictions, and governmental support, remains to be seen.

Image Credit: Photo by Unitarian Universalist Service Committee CC BY-NC-ND 2.0