Rent has barely trickled in across the U.S. over the last couple months as the country continues to grapple with a decimated economy as a result of the coronavirus pandemic. The only reason that many landlords have not gone belly-up alongside of their respective tenants has been due to the emergency “relief” provided by the government in the form of relentlessly printing, handing out and destroying the U.S. dollar.
Now, with further emergency funding still up in the air and eviction moratoriums about to expire, an ugly picture is starting to emerge for both renters and their landlords. In fact, Bloomberg predicts that the “worst is yet to come”.
33% of renters didn’t make their full payment in the first week of July, a recent survey showed. This means that 12 million renters could face eviction over the next four months. In places like New York and Houston, more than 20% of renters say they have “no confidence” in their ability to pay rent next month.
John Pollock, staff attorney at the Public Justice Center, commented: “You’d have to go back to the Great Depression to find the kind of numbers we’re looking at right now. There’s almost no precedent for this, which is why it’s so scary.”
If he thinks the economic numbers are scary, he should look into how the Fed is trying to paper over them – that’s even scarier.
The pandemic caused layoffs across the country beginning in March and, since then, many U.S. citizens have been relying on the government dole, credit cards or digging into their savings to survive. About 11 million renters spend at least half of their income just keeping a roof over their head, Bloomberg writes.
While stimulus measures – including $1,200 checks that went out months ago and eviction moratoriums – helped the problem, the government is still struggling to extend those measures. Unemployment benefits, which were hiked by $600 per week during the pandemic, also remain an unknown.
One analysis says that landlords could wind up losing more than $22 billion in rent over the next four months as a result of the economy. Chuck Sheldon, who manages about 1,650 apartments in New Mexico has said that the $600 unemployment boost was a “huge” part of him still being able to collect most rents on time.
Mary Cunningham, vice president of the Metropolitan Housing and Communities Policy Center at the Urban Institute, said: “If Congress doesn’t do anything, I think we are in for a dark fall and winter.”
John Pawlowski, a senior analyst at real estate research firm Green Street Advisors, has a different take. He thinks there won’t be an “immediate” crash if unemployment benefits are not extended: “People still need a place to live.”
Former bartender and 33 year old Brooke Martin disagrees. She told Bloomberg that she can’t cover her $1,800 per month apartment on unemployment, after she pays off student loans and utilities.
She concluded: “As of the end of the month, we’re screwed. There’s just no two ways about it.”
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Takes time for those 30/60/90 day notices to run their course. Take all that lost revenue, amplify and abstract out the ripples throughout the economy.
Like watching 9/11 in slow motion, only its orders of magnitude worse.
Also figure in the grounds management people having contracts canceled, and as is well known many of the workers are illegal. Saw a liberal local tv installment about evictions here in NC, and guess what nationality were shown evicted already. Also former waitresses, bartenders, coffee servers, and so forth that might live as roomates. One can’t pay and there goes that whole arrangement.
Wonder who will take in the slack to run these cities? Maybe this is a land grab through property taxes for all this affordable housing the city councils promise election after election.
Here in good ‘ol MA, the state geniuses have extended the eviction Moratorium until October 15 and are kicking around extending it until next year.
This will do zero to stop the tsunami of foreclosures that are now coming as landlords just say fuck it and walk away from thousands of multi family homes.
If you have to provide free housing for two, three, four, or 10 families for a year then why bother. Just call the bank and say “send me a deed in lieu these people can be your problem”.
Now the banks will have slowly deteriorating properties, the cities and towns will have thousands of buildings no one is paying attention too. These will have squatters, drug dealers, prostitution, and vandalism.
This winter, when the heat goes out, pipes will freeze and break. Trash will pile up on the front and back porches because there is no one there that will give a rat’s ass about it. Murder rates are already up, prepare for them to go into the triple digits and higher.
Property values will plummet like a stone.
You think evictions are the problem? Ha. You haven’t seen anything yet as we pile on the empty commercial office buildings that no one is using, the empty store fronts and restaurants that are gone. The only people that will be out on a Friday or Saturday night will be hookers, johns, and protesters. The looters will be gone because there will be nothing left to steal. The only thing left will be liquor stores, pawn shops, weed dispensaries, and lottery agents.
Once the inner cities have nothing left to steal, make no mistake, but gangs will come to the suburbs and home invasions will begin. Once the suburban flight commences to the the rural communities, that’s when stuff will get extremely violent as the highest gun owner ship, at least around my neck of the woods, is on border towns that are rural.
In Massachusetts, urban dwellers that live in either Boston proper or one town out are already heading to “bedroom” communities that are within 30 minute drive time to Boston and buying up single families like crazy. Memo to them: It’s not far enough, trust me.
Good luck you’ll need it, because I have seen you and your very soft target families moving into your 700,000+ house with your BMWs and your Mercedes. I also know you have zero guns, think BLM is a good cause, and will be completely, utterly unprepared when a large, armed force of people come to your house, push open the door, and decide they like where you live with your very well stocked subzero fridge, pretty wife, and 15 year old daughter.
Of course, nothing will be done until those very same gangs decide Fauxchahontas’ house looks nice too. It may very well be too late.
Watch NYC carefully dear readers, it is the canary in the coal mine.
Realestate,I agree with your analysis of Mass.While I now reside most time in a state further north still have builders license and do some work in Mass. and me mum still @ moment lives on the Vineyard.
On the Vineyard thought prices would be dropping in these times,the opposite is the case as folks buying out there with intentions of making it a permanent home as times get more interesting.A woman who helps out me mum bought a home there for 450,000 5 years ago.A friend of hers who is a realotor said she could get her close to 900,000 for home in todays market,freaking insanity but hopefully good for me mums home when she moves.
I do not understand how folks who are getting more on unemployment then when working at least till now cannot afford to pay the rent!
As for the woman Brooke who was quoted,pay your rent before you pay off student loans,homeless you will not be paying anyone and you will be,well……homeless
Auntie sure hopes BLM, Antifa, Maoists, Trotskyites, anarchists and jihadis decide that Matha’s Vinyidd would be a splendid venue for some burning, looting, and murder among other vibrant enhancements to the summer social scene.
Might not help real estate values there but still well worth it for the virtue signalling score alone.
They can pay, they choose not to. In all my years of rental management, the worst history of payment was on Section 8 tenants that only had to pay their very small portion, which was generally under a 100 per month. They just wouldn’t do it. I had landlords that were owed thousands in back rent based on these small payments that were never made.
And these are the biggest complainers. They also do not comply with quiet times, trash in the yard, their family members wreck the place, and on and on it goes.
When you give someone everything for free, they value it not one tying bit. They don’t care about you, your property, the other tenants. It’s all about them and their lifestyle.
Please understand, at least here in MA, the eviction process is so skewed in favor of the tenant your head spins. It can take 6, 7, 8 months or more to get rid of someone who doesn’t pay or is destructive. All the while they cause more damage and make other tenants lives a living hell so the good ones leave. And even doing back ground checks can come back to bite a landlord in the ass:
https://www.southcoasttoday.com/news/20200303/landlords-group-concerned-about-tenant-background-checks
Eviction prohibitions will wreak exactly the havoc you predict. If states left landlords the legal right to evict, it would leave them some leverage, but they’re not itching to evict renters. Where would they get new, paying ones? Landlords might be willing to negotiate reduced rents, although it’d be damn hard to tell which renters are truly unable to pay. Any renter who could pay but doesn’t should understand that their ability to rent another place in the future will drop to almost zero, since prior rental references are necessary. Smart landlords will use screening criteria with a safe harbor against claims of discrimination. You do know that’s why credit scoring was invented, right? To protect banks against claims of discrimination. Same thing with criminal convictions. As with minimum credit scores, the key for a landlord is to have unbending criteria. If you have a 680 minimum, you can’t rent to someone with a 679 – even if he’s your buddy’s kid. If you allow one minor drug paraphernalia offense, but not two, you can’t make any exceptions. You can discriminate based on amount of income, but not the source of income. So you can set the minimum income at $10/month more than a tenant could legally get from public assistance (based upon family size that doesn’t exceed the maximum legal occupancy for the unit).
All of that sounds like the formula to run with. But let me explain how it works in real life: If you’ve been on “section 8” for more than 4 years you are entitled to go over your rental voucher amount. You just have to have “approval” form your case worker. The case worker who doesn’t answer the phone, never has checked your apartment, and is blissfully unaware you have 3 other adult people living with you illegally and contributing to “rent”. Some of them might deal drugs. Some of them might also be on the dole and lying about where they live. Some of them have falsified leases so they can pile on.
Section 8 tenants are some of the hardest to evict. You have to jump through major hoops to get them out.
We also have in MA the inability to verify someone’s status. I cannot ask if they are here legally or illegally. And it is very easy to get a driver’s license and a SS card, just pay enough money to a forger in Queens NY and you have one. So if these people are lying about who they are, how can you tell if they have criminal convictions under another name? Generally speaking, they do not have any credit score or one so low that is the number one disqualifying criteria I use.
The other is debt to income ratio. Section 8 tenants love to use their voucher for $1800 for a four bedroom house in the burbs. They generally have no verifiable income, so now I ask “how are you going to pay for your oil in your tank? (they almost always were gas before, once again subsidized and free), your trash pick up (paid for by their former landlord in their triple decker in the city), who is going to mow the lawn or shovel the driveway/walkway?” They have zero clue that renting a house is much more responsibility and cost, and they cannot afford 450 per month for oil and another 200 per month for trash, so I can disqualify them on DTI.
Then they start with “Oh well my mother and my sister and my……all will live with me and they get Social Security so I can use that”. So then I ask “Oh, this is approved by your caseworker for them to live with you and contribute?”
They hang up and I never hear from them again.
Know a guy in the local rural drug task force. Was at a training of LEOs from across the nation, and he was getting crap from all the big city cops. Until he told them — “every time I make an arrest at a house, that house will have multiple firearms, and the residents know how to use them.”
I said it in the very beginning. There should have been a mortgage moratorium so this shit wouldn’t happen. Placing a moratorium on rent and not mortgage is like putting a band-aid over a gaping wound. Freeze it in place, no interest accrued. It’s not like the Fed wouldn’t bail out the banks anyways.
There is a mortgage moratorium. ONLY ON owner occupied buildings. Commercial owners are SOL.
And trust me, even with owner occupied buildings, do you think the owners want to pay the water, sewer, taxes, trash, and maintenance, all the while having one or two other families paying zero? No they do not. And if they are also out of work and a hot water heater shits the bed on one of the tenants, how are they going to replace it if they are out of work and not collecting rent? They can’t. So then comes the calls to the board of health, who now fine the owners for not providing a hot water source to their tenant. If it continues, the board of health moves the tenant into a hotel, where the owner is now required by law to pay for, PLUS a $50 per day per person meal allowance.
So yes, this should all work out really really great.
There is always adoption.
I heard 54% of renters in WV haven’t paid or are up for eviction in August.
Try this on:
?w=960&ssl=1
I wonder how many of the landlords are wanna-be real estate moguls who bought homes at low interest rates and used the rental income to cover the mortgage on the overpriced home?
“I wonder how many of the landlords are wanna-be real estate moguls who bought homes at low interest rates and used the rental income to cover the mortgage on the overpriced home?”
You wonder what? Perhaps a small percentage will turn their overpriced house into rental property and they will be horrified at what tenants do to property. We used to own several rental properties and once upon a time tenants were generally decent and honest. Today those kind of tenants are as scarce as hen’s teeth. It takes forever to evict them, they destroy the house and the legal fees add up. Getting a judgement is all fine and dandy until they leave the state. We sold most of our properties a few years back and are ever so glad we got out when we did.
There’s going to be a massive cascade effect when the landlords can’t pay the taxes, insurance, repairs, utilities and other costs. No rent money, no property tax money. Wonder what the cities and counties are going to do when that happens? Realestate pup’s comment pretty much covers it.
Here are some example of what ‘tenants’ leave landlords with….
Vibrant diversity looks a lot like other natural disasters.Do YOU have vibrancy insurance???????
AirBNB moguls are going belly up. Especially those that bought multiple homes or units in NYC, San Fran, Seattle.
The commercial real estate arena is going to be even more “fun” than the residential bust as the CoVid-19(84) aftershocks from bankrupt and closing businesses destroy many a jurisdiction’s tax base and revenue streams. Then add in the crashing of revenue and investment income from REITs and other collateralized debt obligations. Pension funds are going to be eviscerated and a whole lot of mega-malls, strip malls, and other free standing retail buildings will become squatter camps and the home of feral creatures as the flood of foreclosures becomes a tsunami.
Then a second” wave of CoVid-19(84) hits in September or October to drain the real estate market’s corpse of any remaining blood and replace it with embalming fluid.
The Globalist economic vampires and vultures are rubbing their hands and salivating mightily over the prospects of a Halloween-time trick or treat to remember.
Things were bad before the virus showed up. I think they shouldn’t have shut down the country considering how some Scandinavian countries have done ok or have similar results without going insane and shutting everything down. Trump really has to come up with some good BS to explain stuff and win again. Or just tell the truth about Biden.
Will HUD and Section 8 Housing benefits be granted to Whites after we have been paying for them about 80 years for Blacks?
Fuck no! What are ye smokin there rhs ?
Had to sell our rental units. No choice. Need to sell our bug out place too. Fucked we are. Business cant pick up fast enuf to save what we’ve built. It just cant.
What kind of business do you have?
Invest in an army poncho and good boots.It will be your home away from home.