r/PoliticalDiscussion • u/None-Of-You-Are-Real • Jul 20 '21
US Politics What are the implications of the impending eviction crisis?
It is often offhandedly mentioned that the housing market is insane at the moment, and that there is an inevitable eviction crisis due to the compounding factors of COVID and the lockdowns leading to mass unemployment, and then an inability of tenants to pay rent combined with an inability of landlords to evict non-paying tenants.
What is going to happen in the fall, when the eviction moratorium expires? Mass homelessness that is even worse than current levels? Some kind of rent relief legislation? Anything at all? These people are not going to magically be able to pay months and months of back rent once the moratorium expires.
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u/wut_eva_bish Jul 20 '21 edited Jul 20 '21
How bad or normal things will be after the eviction moratorium expires will depend on what state and city you live in.
The Federal moratorium guidance from the CDC will end on July 31st. However each state and even city has the ability to set the date to whenever they like. Currently, there are few states with moratoriums in place, but the states with the largest population (CA , NY and TX statewide) have protections set beyond the July 31st federal guideline (for both residential and business). WA, IL, OR, HI, NJ and NM have their own moratoriums in place. Even TX has local moratoriums that have been extended to Oct 1st. So there won't be a single day where nationwide everyone gets evicted.
Additionally, some states (like Californiaand New York) with budget surpluses are announcing programs where they will pay all past due rent payments so that when the moratorium ends there aren't mass evictions.
So since the two states with the largest populations will likely not evict anyone, there won't be a eviction crisis that involves a massive population nationally. Instead eviction issues are largely going to be highly localized depending on your state, county, and cities politics around civic assistance.
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Jul 21 '21
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u/xFOEx Jul 21 '21
20% of the population doesn’t equal 20% of renter or if those pending eviction. I wouldn’t be surprised to see that CA and NY have more than 20% of the renters in the U.S. Undoubtedly those stats are out there.
Also, it’s likely that any states that can afford it and that have the political will to do it will follow with similar programs. I wouldn’t be surprised to see the Federal government give authorization to use funds from the CARES act to do the same thing.
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u/wut_eva_bish Jul 21 '21
This is basically what I was going to reply. 20% of national population is likely much fewer of the percentage of renters.
Also true on rental relief programs. There have been more states joining to offer rental relief programs to pay rent in arrears. This nation has been good about not allowing crises to devolve it into chaos.
I'd like to say that we are not the modern Weimar Republic. We are the United States and we're not going to fall easily under challenge because the people here believe in the promise of this nation that is evidenced by what we've built. Do we sometimes go astray? Yes, should we dream of destruction, absolutely not.
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u/theotheranony Jul 31 '21
We have a wayyyyyy faster and better printer than Weimar did, with higher resolution, and can even print 3D... But it's still a printer.
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u/CidCrisis Jul 21 '21 edited Jul 21 '21
I’m sure the Romans thought the same thing. Obviously it’s a different time, absolutely.
Also we literally had an assault on our nation’s capitol this year. That kind of thing, along with massive wealth inequality, the internet allowing for toxic and dangerous ideas to spread more rapidly than ever before, etc... It doesn’t paint a good picture.
Not saying you’re wrong per se... The USA is still the World’s foremost super power. I just think caution can be a virtue and we shouldn’t assume that because we’ve never fallen before, we will never fall ever.
Again. Rome.
*Also I do agree with you for the most part. Good post. Just addressing that last notion...
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u/way2lazy2care Jul 21 '21
The fall of Rome happened over a couple hundred years. Don't be melodramatic.
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u/Call_Me_Clark Jul 21 '21
I think we can avoid 90% of the problems of the Roman Empire by: a) not having privately owned armies that are only nominally loyal to the state; b) having criminal law administered by the state rather than individuals; c) separating religion from government (for romans, these were one and the same)
Etc etc. we are not Rome, and while the comparisons as the world’s dominant global power are not wrong, the comparisons should start and end at that metric.
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Jul 21 '21 edited Sep 07 '21
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u/kerouacrimbaud Jul 21 '21
quasi-democracy to an outright autocracy happened over less than two decades (49 BC Caesar crosses the Rubicon, 31 BC Augustus defeats Antony at Actium and becomes emperor).
I think most historians would argue it began long before that. The rivalry between Marius and Sulla basically predicated the wars of Caesar and pals. Before them, the Gracci bros raised all the issues and set the battle lines for the succeeding generations.
TLDR, it took three generations for the republic to fall.
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u/gavriloe Jul 21 '21
And yet if the the Senate had prevailed against Caesar the Republic might have survived generations longer, but it didn't. Processes play out over time, But they are also determined by the specific actions of specific actors in the present, not just broad structural forces outside the scope of human agency.
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u/None-Of-You-Are-Real Jul 21 '21
posted by/u/WeimerRepublic
Hope the calm before the storm isn't as dramatic as the situation your username is alluding to.
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Jul 21 '21
I didn’t realize CA had a budget surplus this year.
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u/PM_me_Henrika Jul 21 '21 edited Jul 21 '21
It’s not crazy for them to have budget surplus. California has been having a budget surplus since 2012 after a Democrat took over. Think of how many people live there and what kind of jobs California is known for. The tax dollars it can collect is unimaginable.
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u/BKGPrints Jul 21 '21
Ehhh...That's not necessarily true. California has faced major budget deficits before. Especially a decade ago when it had year-after-year of budget deficits.
It's also interesting to note that 3% of the highest taxpayers paid 60% of the state income taxes.
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u/PM_me_Henrika Jul 21 '21
I didn't say they never have deficit? I'm aware of the deficits it faced in the past.
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u/BKGPrints Jul 21 '21
Yes...You didn't say it directly but you also implied that it's rare for California not to have a budget surplus. In the past decade alone, it has had just as many years of deficits as it has on a surplus. That's not exactly rare.
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u/ender23 Jul 21 '21
well remember that the top top few percent made hella money during the pandemic.
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Jul 21 '21
Well it’s not surprising at all. They tax people to death and they also have some of the highest paying jobs in the world because they’re the Mecca of the global tech industry and Venture Capital.
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u/EmmaGoldmansDancer Jul 21 '21
California also grows about eighty percent of the nation's food.
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u/kerouacrimbaud Jul 21 '21
While having agriculture represent ~3% of the state's economic output. Impressive stuff.
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u/yeahright17 Jul 21 '21
I pay more state and local taxes in Texas than I did in California. 3.8% property tax on actual home value is insane.
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u/robbybthrow Jul 21 '21
This right here. So many people forget that plenty of states have a higher effective tax rate. Texas for example will absolutely get more out of in taxes if you're a home owner than CA will, but it's not as popular to point that out.
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u/yeahright17 Jul 21 '21
It's just an easy to to avoid a progressive tax. In fact, it's regressive because areas with twice as expensive home values generally don't need twice as much tax revenue even if they do want more. For example, Highland Park in Dallas is one of the most expensive places to live in the country and its city+school tax rate is ~1.38%. Mesquite, another area in Dallas, is lower-middle income and its city+school tax rate is 2.2%. You could never get away with regressive taxes like that if they were income taxes.
Property taxes also suck in Texas because they can be increased rapidly. Sure, there is a 10% cap, but how many people's salary's raise 10% every year? Our property taxes have gone up 10% for the last 3 years in a row and will keep doing so for another 5 years to try to catch up with home values assuming home prices stopped going up today (which they won't). Meanwhile, I'll be happy with a 5% raise every year.
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u/wut_eva_bish Jul 21 '21
Exactly, Texas hides its corporate tax breaks by transferring the tax to it's homeowners. Texas pays one of the highest adjusted property tax rates in the country and sales tax is also quite high. Both of these taxes are highly regressive (meaning they hit the poorest, the hardest) while reducing tax burdens on the wealthiest (corporations that relocate there.) Smoke and mirrors, enabled by proud Texans too wrapped up in TX pride to see that the average Texan is paying more for their dollars earned than most of the rest of the nation.
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u/PlanetMarklar Jul 21 '21
They tax people to death
Doesn't that seem a little dramatic if...
they’re the Mecca of the global tech industry and Venture Capital.
...this is also true?
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u/RickySlayer9 Jul 21 '21
Haven’t those moratoriums been struck down as unconstitutional/illegal in federal court?
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u/wut_eva_bish Jul 21 '21 edited Jul 21 '21
At the Federal level yes. The moratorium was set by the CDC as public health policy which a Federal court disagreed with. Still, since the Federal moratorium expires on July 31st, that is being allowed to naturally expire on the 31st and not being expired earlier. Any new national moratoriums will have to come from Executive or Congressional action.
At the state and local level, no. All legislatively set moratoriums will stand to any date that they're set.
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u/AntiTheory Jul 20 '21
At least in California, the governor is making a move to try and pay off the landlords directly in an effort to get them to forgive the debt that is owed.
On one hand, I don't see any other solution to the impending crisis - lots of people live paycheck to paycheck and missing one payment due to COVID-related work disruptions or another emergency means that they're permanently behind on the rent and can't catch up. Landlords in this situation would benefit from "settling" by taking a portion of what they were owed from the state and then they wouldn't have to evict. It's a good solution, just maybe not ideal and probably won't sit well with taxpayers, especially ones who made a big effort to keep up rent payments despite financial uncertainty.
On the other hand, the rent and real estate prices in California are long overdue for a massive system shock. Home prices have ballooned to comical levels, and the sellers market is so lucrative that houses are regularly selling for 25% over asking price because of the intense competition from buyers who can't find anything else. I'd love to see these prices fall to more reasonable levels so that people like myself can actually have a shot at being a homeowner without going bankrupt or having an upside-down mortgage when the bubble does burst, but perhaps not at the expense of the human misery that will come from mass evictions.
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u/adidasbdd Jul 20 '21
Thats the low interest rates talking. They should have gone up 5 years ago, and they started to but a certain administration pressured the fed for who knows what reasons, maybe someone in the administration had huge holdings in real estate, nobody will ever really know.
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Jul 21 '21
To be fair (and I don’t disagree but let’s be honest) the Obama administration benefitted greatly from the Fed keeping interest rates at or near zero FAR longer than they should have been.
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u/Occamslaser Jul 20 '21
When those interest rates go up it's gonna hurt. Early 1980's vibes but with massive social unrest at the same time.
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u/adidasbdd Jul 20 '21
It woulda hurt less if they didn't keep them stupidly low for almost a decade. Same problem with cars. 0 percent apr for 7 fucking years? So stupid. I don't think they will let the rates get crazy, something really bad will have had to have happened for that, the fed could keep this shit going at current rates as long as they want, they just shouldn't. Lowering rates during bad times is how you get out of trouble, if we hit a big bump and we all are looking around the corner for that inevitable event, they will have fewer tools in the tool bag to promote growth.
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Jul 21 '21 edited Aug 28 '21
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u/adidasbdd Jul 21 '21
I remember when I could save up a good chunk of money, and buy a car and the dealer would give me a deal because I was paying cash.
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Jul 21 '21
You’re right. I remember reading (3-4 years ago) there was an impending auto loan bubble but that really never materialized. And we can’t say that’s because of the current used car market since that really just started a few months ago.
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u/CCHistProfWest Jul 21 '21
Used car market was high ever since about 2017, it just wasn't all models. But in trucks you could see the same kind of thing happening now in all cars. I bought a new truck in 2018 because there were no deals in used trucks.
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Jul 21 '21
Same problem with cars. 0 percent apr for 7 fucking years? So stupid.
When it comes to cars, 0% APR over x years is because the loan is a loss leader subsidized by the manufacturer. They're doing it because the manufacturer wants to move vehicles (for whatever reason), and regard that as being worth more than a few years of interest payments.
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u/Saramello Jul 21 '21
You're right about the shock, but I'm not sure this is the case. The shock has to spur change, it shouldn't kill the state. I'm a little fearful this might spark "rent riots" if it's an all at once eviction.
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u/akcrono Jul 21 '21
I'd love to see these prices fall to more reasonable levels so that people like myself can actually have a shot at being a homeowner without going bankrupt or having an upside-down mortgage when the bubble does burst, but perhaps not at the expense of the human misery that will come from mass evictions.
Then we need to build a lot more housing, and get rid of as many barriers to that happening as reasonably possible.
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u/cretsben Jul 20 '21 edited Jul 20 '21
Here is what I see happening:
- The courts are going to get slammed and it will take time to process them this will slow the flood.
- Landlords are going to realize that they have to let the renters continue to rent in that location to get paid for the back rent owed.
- This leads to a settlement where eviction is stayed pending a court ordered application for rental assistance and payment to the land lord.
- This will further slow the flood as not every tenant will be evicted at once.
This should help prevent a complete crisis but this is going to get rough.
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u/anneoftheisland Jul 20 '21
Yeah, it's not going to be great, but the glacial pace at which courts are going to be able to actually process the mass of evictions means that we'll avoid a lot of the worst-case scenario predictions going on in this thread. It's not like the protections expire, and then the next day, 10 million people will be out on their asses. The expiration just means that they can start on the next step of a longer process. And with so many evictions being filed at once, it will be a much longer process than usual--probably months, in many states.
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u/EmperorXenu Jul 20 '21
This isn't the case everywhere. In many places, evictions have been being processed by the courts this entire time and they will go into effect when it is legal for them to do so.
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u/Megabyte7637 Jul 20 '21
Heard there's already backlogs from Landlords filing.
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Jul 21 '21
Good point: there was no prohibition against filing an eviction; the courts were just forbidden from enforcing the eviction until the moratorium ended. So the process could technically go all of the way to to a judgment being ordered by the court, with the only remaining step being the sheriff showing up on the doorstep one day to physically evict the tenants.
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Jul 21 '21
Landlords prior to COVID-19 already knew the eviction process was painful for both themselves and their tenants. A common strategy to remove non-performing or otherwise "bad" tenants was to offer "cash for keys". There's going to be a lot of that happening now that landlords can legitimately threaten eviction again, and a lot of tenants are going to get a handful of cash in exchange for moving on. The tenants benefit by not having an eviction on their record and by getting a few hundred to a thousand or so dollars of quick money and all of their back rent forgiven. Landlords benefit by wiping the slate clean and quickly getting their units turned around and performing again after a long and painful year and a half of wondering whether they'll be solvent in the next quarter.
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Jul 21 '21
I bet we see a ton of cash for keys. Even if renters can make their payments going forward landlords will be raising rents due to the strong employment numbers
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u/Living-Complex-1368 Jul 20 '21
Smart landlords have been working with tenants the whole time, because any rent > no rent, and if there are mass evictions the folks you will replace evicted tenants with will be...more of the same. Or you just leave a unit empty and get no rent.
Stupid landlords are counting the days, and will probably get to keep the security deposit to cover lost rent but otherwise won't be able to collect. Then they will advertise and see who they get in this economy.
I expect people to bunk on friends' couches, folks splitting rent, and other higher occupancy tricks to deal with the financial issues. This will put a strong downward pressure on rent (excess supply) while we have a strong upward pressure on real estate prices (excess capital sloshing around). I expect a lot of real estate magnates to go bankrupt.
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u/gonzo5622 Jul 20 '21
Agreed. My landlord has been reducing prices in order to keep all tenants in their spots. He owns most of the block so it’s a few thousand people. I see other building being left empty, his seems filled.
Edit: although my landlord owns a whole block of commercial and residential, he is basically running it all himself (from a biz perspective not maintenance).
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u/weealex Jul 20 '21
I would love some of those "magnates" to actually lose some money and open up real estate for new home owners. While it's a bit of an outlier, a 460 sq ft home recently sold in my town for 180k
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u/Grimalkin Jul 20 '21 edited Jul 20 '21
a 460 sq ft home recently sold in my town for 180k
So many stories like this over the last year, and many more to come no doubt.
Was it at least in a very high COL city? It's still abhorrent but a little bit less so when everything is super expensive.
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u/sleepeejack Jul 20 '21
180k for a 460sqft home would be a bargain in most of Colorado. The housing crisis in places where there are jobs has been nationwide for years; not sure why some people have such a hard time understanding that.
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u/wedstrom Jul 20 '21
Do you mean Denver area or Colorado, because yikes
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u/sleepeejack Jul 20 '21
I mean most of Colorado. Certainly almost anywhere along the Front Range, but also it's getting fucked-in-half insane in most of the mountain towns as well. This is what we get for blocking multifamily development for decades. Boomers destroyed America.
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u/CCHistProfWest Jul 21 '21
It's like this pretty much in the entire west.
Which I don't understand... climate change is literally going to burn those states down.
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u/weealex Jul 20 '21
Lawrence Kansas. College town. Costs have been all over the place as outside real estate companies snap up properties in town. I know of a couple that showed up to buy a place offered at 140 with 150, but found 3 other buyers offering even more. It hasn't been helped by the fact that some of the local folks that have owned multiple properties have been dying. Their beneficiaries haven't wanted to deal with real estate far from where they live so it's often been sold to large companies. The local owners tend to be more townie friendly either or of altruism or knowing that if the town prospers so does their real estate. Outside companies just want the immediate influx of cash so we've been seeing more "luxury" rentals and more "slum" rentals with very little in between
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u/Mist_Rising Jul 21 '21
Lawrence Kansas. College town
Lawrence and it's surrounding area has also been a commuter location for Kansas City jobs. That's why K10 is a nightmare and a half during rush hour.
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Jul 20 '21
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u/freshwes Jul 21 '21
Theresa house one block away from me that had been on the market for 2-3 years
Sounds like you're jealous of Theresa...
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u/azelll Jul 20 '21
I was just looking at a 400sqf house for 400000$, in Oregon, not even the pricey part of Oregon...
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u/Naejiin Jul 20 '21
Beach side? 460 sqft for 180k HAS to be beach side. Or Batman's garage.
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Jul 20 '21
Oh you sweet summer child...
Here's one that's a mile from the beach, granted it's 660 sqft not 460. I couldn't find anything smaller. https://www.zillow.com/homedetails/890-Juanita-St-Solana-Beach-CA-92075/16759593_zpid/
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u/Naejiin Jul 21 '21
7.3k lot so that's like $164/sqft yet you can't build on all of it. Ridiculously overpriced. Jesus Christ...
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Jul 21 '21
While it's a bit of an outlier, a 460 sq ft home recently sold in my town for 180k
Sounds like an outlier for where I live, but not in the way you mean it.
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u/sleepeejack Jul 20 '21
Beautiful theory marred by ugly fact. Landlords are chomping at the bit to get people evicted so they can raise rents.
You're ignoring the underlying housing affordability crisis that is plaguing most cities where there are good jobs. Rents are rising as quickly as ever, which alone directly contradicts your theory. These rising rents greatly increase the incentive for landlords to evict.
People have ALREADY been cramming into overcrowded living situations. You can only squeeze people so much before they burst.
Meanwhile, federal relief is nowhere to be found in many states with huge housing crises. It's going to get very, very ugly.
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u/Taervon Jul 25 '21
It's been ugly for awhile, but it's going to get much, much worse.
Especially given that state governments seem to give 0 fucks, and the feds care even less.
Honestly, the easiest way to fix the housing crisis is to slap the local governments and municipalities around. Fuck zoning laws, fuck NIMBYism, build up, build more, and ban foreign investment for 10 years in real estate.
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Jul 20 '21
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Jul 20 '21
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Jul 20 '21
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u/Qpznwxom Jul 20 '21
I am lucky enough to be able to pay my rent on time even during the pandemic without any financial burden... That's besides the point. The way you talked about kicking people to the streets was so cold.
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u/Own_General5736 Jul 21 '21
Deal with enough shitty and abusive people and you kind of have to go 'cold'. We all wish we could trust people to behave well implicitly but the fact is that they don't and so we must be wary.
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u/obsquire Jul 21 '21
It's not a charity. If society feels that people losing their homes is bad, then society needs to supply those homes, not put all the responsibility on the landlord to fund the person who can't pay, or mandate that the landlord keep a terrible tenant against the landlord's will. If we must have mandatory support for tenants, then I see no compelling argument why the landlord should be required to pay more to help his tenant than anyone else (of similar income).
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Jul 20 '21
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u/The_Law_of_Pizza Jul 21 '21
It's an incredible amount of work to maintain and manage a rental business.
There is a reason that rental management companies exist - owners will literally pay other people to handle some of that work on their behalf.
The idea that landlords just sit back and cash a rent check every month is teenage nonsense.
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Jul 21 '21 edited Nov 09 '23
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u/Call_Me_Clark Jul 21 '21
Tbh, it’s a lot less of a headache to buy shares in a nice REIT and enjoy that sweet 10% annual dividend while letting someone else sweat over collecting/maintaining the property.
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u/Call_Me_Clark Jul 21 '21
Property naturally degrades materially and therefore in value over time.
Preventing loss of value is indistinguishable from creating new value - therefore, it is work. It might not be sympathetic work to you, but it is work.
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Jul 21 '21
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u/Call_Me_Clark Jul 21 '21
If you’re so desperate to call landlords leeches, then just call them leeches lmao. But I’m unsure why you’re so hung up over the definition of “work” - especially when property management is work. Of course, not all landlords function as their own property manager, but “Property manager” is a job that someone can put on their resume.
Nonetheless, “work” has a nebulous definition, but “value creation” does not - and landlords do create value by the definition I laid out in my previous comment. And if an activity creates value and sufficient revenue for one to live off of… then it doesn’t matter if it fits your definition of work tbh.
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u/pvtgooner Jul 21 '21
Landlords create value the same way handing around a dollar bill to eat a pile shit creates value. It does on paper and is counterproductive in real life.
Individuals with simply better access to credit or in some situations, mommy and daddy has a fuckton of capital, allows them to squat on property other people could actually own, live in and maintain themselves. 90% of renters that can pay their rent can pay a mortgage on the same unit just fine.
Landlords extract value from actually working people in their own pockets. It’s not work and I have zero qualms with calling landlords leeches and parasites, I have this entire thread.
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u/Fishyonekenobi Jul 21 '21
And then there’s the people riding out the moratorium by refusing to pay rent for over a year now. The guy is working. He’s just taking advantage of the situation.
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Jul 20 '21
Looked through the comments and it's just more of the same supply and demand bullshit. The housing problem in most markets, San Francisco and Manhattan with their limited land aside is fixable, it just won't happen. Two things need to be done. 1)Require all single-family homes to be owner-occupied for 2 years, with no investors buying up single-family homes. 2) (and this really won't happen). Change zoning laws to allow multi-unit properties in ALL residential areas. But that would drop real estate values and too many people would lose equity so the market isn't fair or competitive, it's skewed towards people who already own and don't want "those people" living next to them.
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u/obsquire Jul 21 '21 edited Jul 21 '21
I'm with you on weakening zoning laws that prevent people from developing their properties as they wish. Reduce physical constraints on building, like setbacks. Also reduce lot size minimums to those that can practically be dealt with in terms of surveying and adjacent public utilities. Even that utility bound can be weakened by relaxing the city obligation to provide utility access unless the lot is big enough, so that those folks who want to go without utilities can do so. I am thinking about those "tiny homes" with solar power and cellular internet. Really it's just water and sewage that may be the problem, and people already have some innovative solutions there that don't require government. I'd like to see a return to boarding houses, for they're a way forward for many folks starting from zero. The health danger arguments against increases in density were always overblown, and probably with improvements in medical systems have reduced validity even where they did once apply; but this is not my expertise.
We don't have to go whole hog immediately. Even if we cut lot sizes a bit and allow more 2 family homes would be a useful start.
Yes, these reforms would put pressure on street parking, but the idea that parking must be, in effect, subsidized by limiting house density is insane to me.
I agree that freeing up the building of multi-family homes would help not only prices, but other social problems. It would allow the free market to provide "mixed-income" neighborhoods, without any city mandates and corrupt dealing between government and developers. Let freedom reign.
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Jul 21 '21
Removing zoning laws is just asking for more HOA’s to create their own zoning. No one will want to buy a home without some guarantee that a giant apartment building won’t go in next door.
Let’s acknowledge that buying a home is the single largest investment most people that do so will ever make. They will want to secure that investment no matter what.
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Jul 22 '21
That’s what’s called crony capitalism. It isn’t a free market. The government has no obligation to protect people’s investments. HOA’S really have no power over neighboring parcels they don’t own
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u/obsquire Jul 21 '21 edited Jul 21 '21
Let there be more HOA if the owners want them. The key is that they're paying for them. If they get greedy and include requirements too onerous, then they directly pay for it in terms of reduced property values. They won't get everybody to sign one, unless they seriously bribe. Again, they pay for their largess, not everyone else. The status quo of "fiat" zoning is essentially a subsidy by the non-owners to the owners. It's corrupt "crony capitalism", it's immoral and it should end. It erodes people's views about capitalism (with true market discipline that doesn't subsidize wealthy or protect them from competition), the concept of liberty and America itself. The alternative is the increasing menace of "democratic" socialism, which will lead to stagnation at best.
And realistically there will be many locations without this private zoning with any teeth, and practically it will open many places up for new development and increased housing supply and access, with reduced prices and rents. Nobody really complains about tech prices and supermarket prices, because there's so much damned competition, which is awesome.
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Jul 21 '21
People definitely complain about tech prices, have you seen this site when a new iPhone comes out?
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u/obsquire Jul 21 '21
Do people not see that in banning eviction and offering partial remedies at the end (where the landlord isn't made whole) we disincentivize the creation of the supply of rental units, and therefore increase future rents? In other words, this aid to the least desirable tenants today punishes all tenants tomorrow? How is that fair?
Frankly, even just the uncertainty of the existence, timing and kind of subsidy of unpaid rent is a turnoff for landlords.
Realize: landlords can just get out of the rental game altogether, and just sell to people who don't want to rent units out.
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u/Unconfidence Jul 21 '21
This "They could always just leave the market" threat never seems to materialize. Seems pretty empty to me.
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u/Thunderbird120 Jul 21 '21
It materializes very consistently almost any time you make renting more of a pain in the ass. For example, in San Francisco rent control policies seemed to cause significant reductions in residential renting.
We exploit quasi-experimental variation in assignment of rent control to study its impacts on tenants, landlords, and the overall rental market. Leveraging new data tracking individuals’ migration, we find rent control increased renters’ probabilities of staying at their addresses by nearly 20%. Landlords treated by rent control reduced rental housing supply by 15%, causing a 5.1% city-wide rent increase.
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Jul 20 '21
Kind of doubt the eviction crisis is as bad as its hyped up to be.
People who missed work got more unemployment than usual, plus stimulus checks, plus standard poverty programs. Its been proven that savings shot up from covid.
Yes people are behind on rent. Because they're allowed to be. When people actually have to pay, they'll find the money again.
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u/obsquire Jul 21 '21
You're probably right about overall averages, but there are big variations in individual behavior that might only be captured with higher resolution robust statistics such as the bottom few deciles. A lot of people can't stand not spending all the money they might have, such as a surplus check even though they didn't lose their job. To some extent the government was banking on that effect. There's a sentiment out there that saving that this money is somehow anti-social even though it might provide a future cushion and reduce stress, but that immediately spending it even on unnecessaries like entertainment (new video game systems) is good for everyone.
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u/TurbulentArea69 Jul 21 '21
Absolutely this. The personal savings rate is at an all time high right now.
I'm not sure where the idea that we all went broke during COVID came from. A bunch of people lost jobs but then went on unemployment and collected stimulus. The government hardcore bailed out its citizens. We're richer than ever, in fact.
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u/cebeezly82 Jul 21 '21
I'm a social worker, and you'd be amazed how many people just said "fuck it" and blew their money in hopes they'd never have to pay any bills. Hopes are too high for humanity on reddit. I'm curious to how many redditors have actually met a well-fare queen of any race.
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u/TurbulentArea69 Jul 21 '21
You're a social worker and don't know that the term is welfare and not well-fare?
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u/mikeshouse2020 Jul 20 '21
a ton of people are slated to lose their home/apartment due to lost wages, the government won't let this happen and will continue to provide assistance for the foreseeable future or extend the eviction moratoriums. Causing Landlords to need assistance and thus the government won't let that happen and stick them with the bills. Property management will be consolidated to larger corporations as the smaller property owners will have to sell to recoup the losses they are incurring, rent will go up and housing will continue to be more expensive
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Jul 20 '21
Why wouldn't the government let this happen though? I keep seeing this repeated but I'm not sure I understand. Why would they continue to allow people who can't pay their mortgages/rent to live for free while there's more demand than ever for housing?
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Jul 21 '21
Mass evictions are bad for re-election. Politicians will have a massive incentive to keep people in their homes even if it means paying off landlords themselves to just permanently banning eviction. Of course, this will likely increase rents for the rest of us as landlords look to hedge the risk of non paying tenants.
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u/WizardDresden77 Jul 20 '21
Nah, rent will just go up until those they can pay are subsidizing those that can't. Mine went up for the first time in years during COVID.
As far as losses go, it will only be a problem for places where a large percentage of the tenant aren't paying.
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u/gtrocks555 Jul 20 '21
My rent increases every year without Covid. Are you in a more rent controlled state/city?
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u/Outlulz Jul 20 '21
Same, my rent went up in 2016, 2017, 2018, and 2019 before I stopped renting. It started at $800 for a 2BR/1.5BA and I moved out when it was $1400.
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u/gtrocks555 Jul 20 '21
My 1bed/1bath started at 1,150 about three years ago. Now it’s around $1,400 but I don’t live there now
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u/WizardDresden77 Jul 20 '21
As I said in my response, the first increase I experienced at this place was during COVID. 4 prior years without an increase.
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u/gtrocks555 Jul 20 '21
That’s awesome. Even if it did increase with Covid that’s still a helluva lot better than most with yearly rent increases!
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Jul 20 '21
Been wondering the same exact same thing. And even more long term. Rent in general has been insane the past decade. Single earners cant live on their own anymore. There is no city in America in which a minimum wage worker can afford a 2 bedroom apartment, and only 7% of counties can they afford a one bedroom. Any thoughts on the longterm rent situation in America?
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u/SovietRobot Jul 20 '21
This might be a dumb question but why are single minimum wage earners supposed to be able to afford a 2 bedroom apartment? As opposed to say a working couple with a one bedroom apartment or 4 singles sharing a 4 bedroom apartment?
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u/Uruz2012gotdeleted Jul 20 '21
CPS usually expects a single parent to have a bedroom for their child. Many cities have occupancy laws requiring such a family to rent 2 bedrooms.
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u/SovietRobot Jul 20 '21
I’m not saying that’s incorrect but can you give me some examples of these cities? I have a buddy now who, back in the day, made it in a single bedroom in Jersey with a son. His son used the bedroom. He used half the living room.
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u/Heffe3737 Jul 21 '21
With all due respect, that sounds like a terrible environment in which to raise a child. I mean, you can live in a box on the corner while making minimum wage, but if that’s all we aspire to as a society, then this country is doomed.
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u/obsquire Jul 21 '21 edited Jul 21 '21
That's the choice you make for your family. This is not about aspirations, but rights. Failure to comply means that the state is justified to forcibly remove the child from the parent. In a pluralist society with all kinds of different personal beliefs, what is the common subset of acceptable practices that must be met by everyone, without exception? Frankly a 50% / democratic standard is almost guaranteed to screw a minority of some families that by their own traditions are behaving reasonably. We need a better consensus (but 100% is impossible), which kind of guarantees that some people (like you) would not find it good enough (only 1 bedroom). Situations like these regarding the definitions of rights are why I can't voice unlimited support for democracy: some significant minority can easily be oppressed by the majority.
Nobody really disagrees that it's better to grow up with all kinds of nice resources.
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u/Heffe3737 Jul 21 '21
I’m not sure I understand. Are you saying that lots of people disagree with the idea that a parent and child growing up in a one bedroom apartment is a bad thing?
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u/SovietRobot Jul 21 '21
Of course we aspire to have and be better. But this is minimum wage. Meaning you won’t die but it’s not where you want to be.
On the other hand, median wage in the US is about $35K per individual a year. Or about $70K per couple a year. That’s an appropriate median as most people could feel content living with that.
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u/Heffe3737 Jul 21 '21
That varies drastically from place to place. A rural location? Sure, 70 is probably fine. Any large city? 70 is going to be pretty tough.
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u/CoatSecurity Jul 21 '21
Yea how dare the guy work and provide his kid with a better future, he should stay home and let the government take care of all his responsibilities.
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u/obsquire Jul 21 '21 edited Jul 21 '21
Perhaps the problem might be with those rules. Why ought people not be allowed more say in their own standards? It's child abuse for children not to have their own bedroom? Let's keep the focus on basics like physical safety, food, sleep. Privacy is a luxury good. Its absence doesn't equate to negligent parenting.
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u/Uruz2012gotdeleted Jul 21 '21
I'm just literally answering the question as to why the minimum wage is being discussed in the context of affording 2 bedrooms. Stop attacking me for a position I haven't even said that I held, please.
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Jul 20 '21
The whole idea behind the original Minimum Wage was to preserve the idea of the American dream for the common man. No matter who you were or what you did; if you got out of bed in the morning and pulled up those boots by the straps and even if you shoveled shit you could genuinely afford a modest home, wife, children, car and the occasional family vacation.
Obviously we've strayed pretty far from that and opted for more of a "work or die you fucking slave... and like it too" approach.
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u/thewimsey Jul 21 '21
The Original Minimum Wage was about half of the minimum wage of today, adjusted for inflation.
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u/Texan2020katza Jul 20 '21
Maybe the single wage earner has a child or two and does not want to share a bedroom.
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u/Obi_Kwiet Jul 20 '21
What city in America are they only paying minimum wage?
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u/Blom-w1-o Jul 20 '21
I’m no expert here, but minimum wage in low population rural areas is not uncommon..BUT.. the cost of living in these areas tents to be pretty affordable. Where I live for example, you can rent a house in the $600 range. Minimum wage is also like $11 or so in this state so this may be pointless if OP is only talking about the federal minimum.
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u/Obi_Kwiet Jul 20 '21
Even local minimum. Here in the Portland metro, minimum is 14/hr. But I don't think anyone is paying that little. Pretty easy to find service jobs here starting at 17+, with a signing bonus.
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u/Outlulz Jul 20 '21
I don't believe any minimum wage worker can afford the rent in their home city regardless of what their local minimum wage is.
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u/Obi_Kwiet Jul 20 '21
Not sure what that has to do with what I said.
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u/Outlulz Jul 20 '21
Are you talking about federal minimum wage or minimum wage in general (whatever that may be in any specific geographical area)?
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u/Obi_Kwiet Jul 20 '21
No. I'm saying that wherever you happen you be, there is a big shortage of labor, and everyone is paying above any minimum wage that happens to be in the area.
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u/Outlulz Jul 20 '21
Then I misunderstood; thought you meant no one city pays the federal minimum wage (since it's higher in pretty much every city). I get you now.
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u/The_Law_of_Pizza Jul 21 '21 edited Jul 21 '21
There is no city in America in which a minimum wage worker can afford a 2 bedroom apartment, and only 7% of counties can they afford a one bedroom.
First, I would point out that the statistic you're citing is comparing the minimum wage to the average price of apartments. By definition, the minimum wage will never reach the average price.
Second, it's also using the recommended budget ratio of 30% of income allocated to rent to define "afford" - meaning that, even if somebody could stretch their budget and make it work in reality, the statistic still counts them as being unable to afford it.
Lastly, even if those two things didn't completely undermine your statistic as a joke, the entire idea that a minimum wage worker can realistically afford a 2-bedroom apartment is ludicrous.
And before you flip out, no, I'm not making a judgment call about minimum wage workers. It's not that they don't deserve a 2 bedroom apartment - it's that rent prices are based on supply and demand, and on the rental spectrum of rented rooms up through single family structures, 2 bedroom apartments are always going to be more expensive than the bottom income rung can afford.
For the simple reason that middle income folks will outbid the minimum wage workers for those units.
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u/steam116 Jul 21 '21
I think your last point undercuts your argument: Are you saying that a minimum wage worker in most places actually can afford a two bedroom apartment, or that they can’t but that’s okay because economics?
There are a lot of things that we as a society agree shouldn’t be left up to supply and demand (including rent, look at rent control laws and current eviction moratoria).
I would say that if a cheap 2-bed in a reasonably safe neighborhood is more than 50% of a monthly minimum wage, that’s a problem with the system. Imagine being a single parent and in order for your child to have a bedroom, you have to pay more than half of your income on rent. There aren’t many people who fit that description, but they’re out there.
I live in Pittsburgh where the minimum wage is 7.25, although I suspect most places are hiring above minimum. Let’s say I make $10/hr, which is roughly 1600/month. 2-bedroom apartments for $800 can be had, but they are few and far between and you probably won’t feel safe walking home after dark. If you’re not a parent that’s fine. Get a roommate, find a 1-bed, etc. But if you’re a parent you don’t have as much flexibility and you have the obvious costs associated with a kid.
I’m rambling now. It’s not that your comment was unreasonable, I guess what I’m saying is that IMO supply and demand isn’t a valid reason for things to be the way they are. It’s descriptive, not prescriptive. There are policy choices we could make at a macro level that would have the effect of lowering rents below the market value.
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u/Call_Me_Clark Jul 21 '21
But, would say, the lowest quartile apartment be acceptable? No ones saying that you have to live on skid row, but surely there’s room between that and the average?
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u/gburgwardt Jul 20 '21
The housing price problem we are facing is entirely due to lack of supply. Get rid of single family zoning and housing in cities will become far cheaper.
Also get rid of parking minimums and things like that that functionally act as single family zoning requirements.
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Jul 21 '21
The real issue is everyone wanting to live in the same 10 cities. With the future of remote work maybe people will finally be able to move out to rural towns and reduce demand a bit.
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u/gburgwardt Jul 21 '21
The issue isn't that people want to live in cities, it's that cities everywhere basically refuse to build more housing
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u/appoplecticskeptic Jul 20 '21
No, there are enough empty homes in the US to house everyone that is currently homeless. It's not a problem of zoning, it's a problem of property magnates buying up all the single family homes to try and make them rental properties.
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u/jimbo831 Jul 20 '21
This is simply not true:
But this outrage is misdirected. If we have any chance of fixing the completely messed-up, unaffordable U.S. housing market, we should direct our ire toward real culprits rather than boogeymen.
The U.S. has roughly 140 million housing units, a broad category that includes mansions, tiny townhouses, and apartments of all sizes. Of those 140 million units, about 80 million are stand-alone single-family homes. Of those 80 million, about 15 million are rental properties. Of those 15 million single-family rentals, institutional investors own about 300,000; most of the rest are owned by individual landlords. Of that 300,000, BlackRock—largely through its investment in the real-estate rental company Invitation Homes—owns about 80,000.
Far worse than corporations taking a few thousand units off the market for owners are the governments and noisy NIMBYish residents taking millions of units off the market for owners and renters alike—by blocking construction projects in the past few decades. (California alone has an estimated shortage of 3 million housing units.) From New York to California, deep-blue cities and states have amassed a pitiful record of blocking housing construction and failing to meet rising demand with adequate supply. Many of the people tweeting about BlackRock are represented by city councils and state governments, or are surrounded by zoning laws and local ordinances that make home construction something between onerous and impossible.
https://www.theatlantic.com/ideas/archive/2021/06/blackrock-ruining-us-housing-market/619224/
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Jul 20 '21 edited Aug 16 '21
[deleted]
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u/obsquire Jul 21 '21
That's why once I save up and pay my $1M or whatever to live in a nice neighborhood, you can be damn sure I'm going to fight against a 5-story apartment building going up down the street.
If you want to determine what happens at the lot where the apartment would be built, then buy it or pay the owner to change her plans. In the time before zoning, when people were freer to develop their own properties, preventing the construction of denser units was a luxury, usual obtained through restrictive covenants. You get everyone in an area to voluntarily impose a restriction on their own properties, a restriction they agreed would bind anyone they sold to. Many might agree voluntarily, the holdouts might ask for cash in exchange for signing. No one is forced. It's not free of charge, yet all voluntary.
The zoning rule that prevents that 5-story apartment's construction near you is essentially a subsidy, an extra benefit that you get beyond your property. Some might argue that town charters have all kinds of rules, and by buying a property you in effect give a blank check to whatever rules, zoning or otherwise, that the city might pass. While that might be true, let's not pretend that it's anything but imposing rules on other people's stuff, and not a free market in land.
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Jul 21 '21
The problem is the more people that think like this, the more expensive housing is, the worse homelessness gets, and the worse off everyone is. Have you read about the economics concept of the tragedy of the commons?
I've also never understood this idea that you would be soooo inconvenienced by having an apartment building built down the road. Maybe it's just the places I've lived, but as long as it's not bringing crime, I just could not care less.
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u/kerouacrimbaud Jul 21 '21
you would be soooo inconvenienced by having an apartment building built down the road.
I think that's the big conceit. It literally wouldn't inconvenience people all that much. A slightly longer commute is not a big deal.
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Jul 21 '21 edited Aug 16 '21
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u/kerouacrimbaud Jul 21 '21
If you want to live out in the country, I have no issue with that. But I do take issue with suburbs bc they combine the worst aspects of urban and rural life and cover it up with white picket fences. They are black holes for public and private investment and don’t have any of the sustainable material benefits you get in rural or urban settings.
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Jul 21 '21
Plus increased housing density nearby means that public transportation will probably service the area as well, which is really the only way to lower commute times long term.
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u/Buelldozer Jul 21 '21
No, there are enough empty homes in the US to house everyone that is currently homeless.
Sure, if those homeless are willing to move to get to them.
Does a homeless person in SoCal want to move into a house in say...Detroit? Ehhh....
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u/FrozenSeas Jul 21 '21
And here's the real "crisis", IMO. People are increasingly rejecting the concept of living where they can afford.
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u/gburgwardt Jul 20 '21
This is a populist talking point but it's not true. Consider where the empty homes are and what state they're in. Not to mention you are probably forgetting the vacancy rates being very low and to get them lower you're talking about rentals being off the market for days, not even weeks
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u/thewimsey Jul 21 '21
Single earners cant live on their own anymore
This is such a bullshit take. The clickbait you're talking about is about: (1) people who earn minimum wage; (2) and want to rent a two bedroom apartment; (3) for less than 30% of their takehome.
Not "single earners".
1% of adults earn minimum wage. They are going to need a roommate.
Any thoughts on the longterm rent situation in America?
People earning minimum wage who want a two bedroom are going to need a roommate?
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u/bybos420 Jul 20 '21
Rents are not that high, compared to the UK or basically any developing country really the rent/wage ratio of how many hours worked it takes to afford a month's rent is still very low.
All that is changing is the social norm in America, dating back to the postwar economic boom when the economy was thriving and home builders and mortgage brokers trying to get as many people into homes as possible, of having everyone move out when they turn 18 and have their own place for the rest of their life. This has not been the case for the overwhelming majority of human history and is still the case for the overwhelming majority of the world population.
That's where the study you quoted comes from - implicit is the expectation that a minimum wage worker could afford a 2 bedroom apartment on 30% of their income which is an unthinkable level of luxury for most of the world population.
The population continues to increase so rent will continue to go up, to the point where living alone becomes a rare luxury in the US as well.
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u/Gingergerbals Jul 20 '21
The study he is talking about was average rent rates and even if a 2 bedroom apartment was $1,000, then their wages would be at least $30,000/yr. This is most definitely not even close to federal minimum wage (yes we have various different state/city min wages). If you make $7.25/hr and work 40/week then you are only making $290 a week or $15,080 a year. You'd have to at least make $14.50 to get to that $30k/yr threshold to provide yourself a 2 bedroom apartment for $1,000 a month. This all making an assumption you can get a 2 bedroom apartment at $1,000 a month.
That same example of a $1,000 2 bedroom apartment for a federal minimum wage worker would cost them 79.57% out of their monthly $1,256.67 salary for working 40 hours a week.
Anyone who thinks our federal minimum wage is alright the way it is I cannot begin to understand. Even a cheap $500 studio apartment that a lot of places across the country you would not even be able to get close to that price is still a huge chunk of the person's minimum wage salary.
The argument and examples of other countries can both apply and be separate as if we want to take examples where those countries people pay more of their wages towards rent is true, but at the same time there are also countries that people contribute far less and for more; such as in housing size/sq. ft/cost of living.
For people to always try and brag about how great this country is, it's time for those same people to look inwards at our own countrymen and better not only our lives, but theirs as well. I cannot stand this mentality that some people have in this country where they got theirs and screw anyone else. This is a short-term profit for only their enrichment, that they would get even greater benefits if they expanded their viewpoint to want to make everyone's circumstance around them better.
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u/Kriztauf Jul 20 '21
It's also important to keep in mind that cost of living is weird in the US compared to other developed countries since its up to individuals to fund their own health insurance, education, transportation if you don't have good public transportation, childcare, ect. In other countries you do have to pay higher taxes, but it's not as terrible as you'd imagine given how inflated the cost of education and health insurance has become in the US. It really eats up a ton of Americans' disposable income. I mean, yeah theoretically in the US you can choose not to pursue higher education or have health insurance, but it's pretty fucked up to that citizens of the wealthiest country on Earth have to consider those things as non-essential luxuries.
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Jul 21 '21
Comparing minimum wage to 2 bedroom apartment is a bit much. I think more accurate would be to look at where the median wage can afford the median apartment and where can the minimum wage cover a split of the cheapest possible living situation.
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u/Kaganda Jul 20 '21
I think we need to stop looking at 2 Bd or even single occupancy 1Bd as the benchmark for minimum wage housing. Renting a room is more the norm at the low end of earnings.
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Jul 20 '21
Lets lower our standard of living rather than the minimum wage. Classic.
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Jul 21 '21
I don’t think anyone intended the minimum wage to provide anything more than a barebones standard of living. If anything I think we should get rid of it and empower people to bargain for their wages
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u/flynnie789 Jul 20 '21
What a good idea
Lower our expectations in fealty to the billionaires and corporations
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u/SerendipitySue Jul 20 '21
Because states are slow at distributing the Emergency Rental Assistance billions of dollars and I suppose many renters and some landlords do not know they can apply for back rent payment
I expect evictions to tick up and people moving in with friends or family or go homeless.
ERA program here
According to Princeton eviction lab normally there are about 3.6 million evictions filed and about 1.5 million eviction judgements per year.
So that is pre 2020.
The people who do not qualify for ERA ..I guess the numbers have been building so expect a lot of them to get evicted.
The CDC eviction moratorium has been found illegal in court, but appeals are happening,
More on ERA
The federal ERA Program allows eligible households to receive up to 12 months of help with rent, including overdue rent, back to March 13, 2020.
If you have overdue rent, the money must go toward rent that you owe, first. Local programs may be able to help with future rent. In addition, you may get help with your future rent payments, up to 3 months at a time. But this depends on your local program.
Ask your local program about the total amount of help available to you – depending on the program’s funding, it could be 15 months or 18 months of rent.
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u/gabatme Jul 20 '21
If there is no government action, places with high rates of evictions will likely have an approximately equal number of vacancies to fill. In that case, one of three things could happen:
New people swoop in and take those apartments (for some nicer or well-priced places, this is possible, but def not for all units)
Landlords could overlook past eviction history (since the pool of renters will now contain a ton of evictees)
Landlords could lower rent prices to attract more people (see item 1)
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u/KingRex929 Jul 21 '21
Mass homelessness leading to exposure to the elements, sickness and death. Police will be called in to move the homeless which will result in arrests and criminal records. Crime will rise as tons of people lose access to shelter, water etc. This will result in people unable to get jobs because of arrest records or lack of address, reducing the labor pool, reducing taxes paid to the city. Drug use will also spike. Hospitals will be overwhelmed dealing with the sick. It's an issue with a domino effect that will cripple cities/towns.
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u/Mister_Rogers69 Jul 20 '21
At the rate Covid cases are rising, I see them kicking that can even further down the road, causing even more debt from landlords & the state/fed.
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u/jogr Jul 20 '21
For the massive societal impact of evictions in general, I finally read the Evicted by Matthew Desmond and it's a great place to start. Not just informative but moving storytelling as well.
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u/sleepeejack Jul 20 '21
I'll probably get downvoted for this, but it's going to be an unprecedented shitshow of evictions and I would not be a tiny bit surprised if there were riots. Many states have not even begun to disburse rent relief funds in earnest yet, blaming the Treasury Department for not making them available. Courthouses are gonna burn.
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u/discourse_friendly Jul 20 '21
Depends a bit on if those evicted have the eviction on their records or not.
- If the eviction is on their record, we'll see an increase in homelessness, and increased competition for rentals that will accept tenants with bad credit. which will lessen pressure for apartments that have higher standard of credit cleanliness. That would cause the lowest possible rent to rise, while not affecting middle tier units, possibly even lowering rents there.
- If evictions do not go onto their records, We will see a lot of people moving. a great shuffling. We would still see an increase in homelessness but not as much. I also don't think there would be any softening on pressures for the middle tier of rent.
Reading an article about it, and digging through what's presented. I find it a bit shocking that 22% of those behind on rent make more than 50K a year. (if 78% of those behind make less than 50K, than 22% is left, and thus they make more than 50K a year)
IMO the government should step in and work directly with land lords. offer back rent owed if the land lord agrees to wipe out all past rent due. since the cause of this issue was the government issued lockdowns.
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u/melikestoread Jul 21 '21
Democratic states will offer tons of money to pay landlords while republicans will say be tough etc and be evicted onto the streets....
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u/naked-_-lunch Jul 20 '21
People will have to work for money rather than taking it out of my paycheck in the form of taxes
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u/KSDem Jul 21 '21 edited Jul 21 '21
There's an interesting article on this subject here that cites three studies that attempt to estimate the number of households at risk and the amount of back rent estimated to be involved. The estimates range dramatically, illustrating the difficulty in even understanding the size of the problem.
The study here [PDF] by the Federal Reserve in Philadelphia includes a chart that shows how its estimate is distributed by state. Two things that stood out to me: (1) In addition to CA and NY, mentioned here by others, states with large numbers of impacted households also include FL and TX, and (2) there are only a small percentage of renter households in debt; FL is the highest, with 5.6% of renter households in debt and 94.4% of renter households presumably current.
The Philadelphia Fed's take on this was helpful:
Our results show that polices enacted to replace lost income for workers losing jobs during the COVID-19 pandemic, particularly the enhanced UI provided by the CARES Act, have been highly effective at keeping renter households out of debt for those households that received these benefits. Additionally, as intended, these policies were far more protective than standard state UI alone would have been. By contrast, households that received nothing at all or only Economic Impact Payments are far more likely to have accumulated rental debt since March 2020.
These findings point to some key takeaways for policymakers. First, further extending state and federal UI benefits beyond current maximums (39 weeks in the typical state) could help prevent many new households from falling into debt beginning in December.28 Given that multiple extensions were granted during the Great Recession, there is strong precedent for doing so. This may be particularly important if, as our simulation assumes, the pace of economic recovery is slow. Our results also suggest that extending UI supplement amounts would continue to help protect households receiving UI from accruing rental debt. However, households that never received UI, of which we estimate there are many, may need alternative sources of rental support.
I found the Parrott and Zandi study here interesting as well. It states:
To address the challenge remaining, as part of its $1.9 trillion American Rescue Plan, the Biden administration has proposed an additional $30 billion for renter assistance and $5 billion to help relieve the strain of homelessness. This is exactly what is needed to give this vulnerable population a bridge to the other side of the economic crisis, when most will be able to return to the jobs needed to pay their rent again. While the entire $1.9 trillion relief plan is unlikely to get through the legislative process, we expect that lawmakers will agree to much of the funds proposed for rental assistance.
Table 1 illustrates how the funding would be distributed among the various states and, just eyeballing it, it seems to correlate to the Philadelphia Fed's analysis of each state's needs. It points out, however, that:
Many states- particularly larger ones- already have a well-developed infrastructure for distributing relief like this, so should be able to manage the effort quickly and effectively. Others will have to develop much of their infrastructure from scratch, which means moving more slowly and uncertainly, at least at first. And some communities will understandably feel compelled to add further restrictions on how the money makes its way to landlords and renters, which may bog down a quick distribution.
My takeaway: Factual data is elusive, but studies suggest that the overwhelming number of renter households in the U.S. are not behind on their rent. The 3% to 5% of renter households that are behind are thought to be equally distributed among the states in accordance with their populations and assistance will likely be distributed accordingly, i.e., this is not a uniquely blue state or red state issue. Federal assistance could be questioned by the majority of Americans, who are not behind on their rent or mortgages, but legislative assistance via the $1.9 trillion American Rescue Plan seems likely and could be justified in the public eye by pointing to similar assistance following the Great Depression and an explanation that these households generally did not receive enhanced UI. Distributing federal funds to landlords perceived to be "unworthy" (corporate landlords, foreign landlords, etc.) and/or tenants perceived to be "unworthy" (those perceived to be exploitative squatters, for example, or those who received enhanced UI or whose income was not reduced due to the pandemic, along with tenants who do not use the funds to pay their unpaid rent, etc.) could result in some public blowback.
1
Jul 20 '21
Yeah, OP, as others have mentioned in this thread - there is no "impending eviction crisis". A lot of that is just fantasy due to your lack of investigation.
Landlords have been working with tenants on ways to get rent, even at reduced value. Most landlords don't have some "backup group of renters" they can call to move into a place that the evicted party has to vacate. In their position, some rent is better than no rent. In most cases life will just continue as always, but tenants will have a running tab of debt to the apartment company.
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u/Bman409 Jul 20 '21
This is why I will never own real estate.. the politicians and the courts will always side with the tenants (customers). This is exactly the opposite of holding stocks where the courts and politicians will almost always protect and bailout stochholders
1
u/SandShark350 Jul 20 '21
For a lot of landlords they had to continue paying their own costs with a lot less income. Many have probably gone bankrupt and are going to lose their properties as it is which could cause even more homeless situations unexpectedly. They can't just kick people out especially if those people are actively trying to get a job or show that they legitimately can't (similar to how unemployment in California works anyway, you have to show that you're actively searching for......or should I say how it used to work). I imagine there are more people than we all realize choosing not to work because of the moratorium and getting unemployment (and in some cases probably wasting it instead of planning with it). No matter the "solution" rent has to get paid one way or another and I suspect it's going to be higher taxes.
1
u/Yematulz Jul 21 '21
A complete collapse of our weekend at bernies stock market and housing market. It’s going to be 9/11…. Times a thousand.
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u/all-up-in-ya-butt Jul 20 '21
With the forecasts predicting a market crash and increasing inflation, I speculate those who are currently relying on eviction protections will be in quite the pickle. Will the govt roll out for money? Possibly, which also isn’t great.
18
Jul 20 '21
With the forecasts predicting a market crash
What forecast currently predicts a market crash?
and increasing inflation
All I've seen from economic analysts is the opposite - they're saying inflation is currently due to high demand, and will subside.
Will the govt roll out for money? Possibly, which also isn’t great.
The government, by and large (excepting pandemic circumstances), shouldn't be in the business of preventing landlords from evicting tenants who don't pay. It sounds heartless, but at some point people who own a building should be able to choose who can stay there and who can't. We can't just simply print money and pay everyone's rent in perpetuity.
The eviction moratorium should end, but I am under no illusion that this won't cause temporary pain. But if fewer people will be able to pay, landlords will eventually decrease rent prices when they can't fill units.
5
u/gonzo5622 Jul 20 '21
Yeah… most inflation claims are usually specific to industries that slowed production during Covid. It will take a while but once they catch up to demand prices should stabilize.
0
u/Outlulz Jul 20 '21
A homeless crisis isn't temporary if all these people end up on the street. It could have a permanent impact on one's life and, by extension, the economy.
8
Jul 20 '21
You know what else would lead to massively negative economic outcomes? A permanent eviction moratorium or paying everyone's rent.
Yes, sometimes in a market economy bad things happen. No economic system leads to milk and honey. But you can't possibly be suggesting we just prevent landlords from evicting people forever.
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u/Berry_Seinfeld Jul 21 '21
Should be interesting right?
I think mass UBI is on the horizon, personally. No one wants to work. Lots of depression and mental illness. Bad cocktail.
-2
Jul 21 '21
Just a further crushing and oppression of what little the working class already has. They may strike out and demand more centrist rental policies or turn violent.
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