As pandemic lifelines expire, Americans in housing free fall
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[December 08, 2020] By
Michelle Conlin
NEW YORK (Reuters) - Clarence Hamer doesn’t
expect to hang on to his house much longer.
His downstairs tenant owes him nearly $50,000 in back rent on the
four-bedroom duplex he owns in Brownsville, Brooklyn. Without those
rental payments, Hamer has been unable to pay the thousands he owes in
heat, hot water and property taxes. In September, after exhausting his
life savings, he stopped paying the mortgage, too.
“I don’t have any corporate backing or any other type of insurance,”
said Hamer, a 46-year-old landlord who works for the city of New York.
“All I have is my home, and it seems apparent that I’m going to lose
it."
America’s mom-and-pop landlords, along with their tenants, have been
dangling by a thread for nine months. Now, with Congress still
deadlocked over the contours of a second pandemic stimulus package, they
are entering a new housing abyss, a perilous period of pandemic limbo as
the last of the safety nets are set to expire.
The day after Christmas, the extended unemployment benefits that have
kept 12 million people and their families afloat are scheduled to
expire. Then, mere days after that cliff, on New Year’s Day, a national
ban on renter evictions from the Centers for Disease Control and
Prevention is also set to lapse.
Overnight, an unprecedented bill of $70 billion in unpaid back rent and
utilities will come due, according to estimates by Moody’s Analytics
Chief Economist Mark Zandi. In all, up to 40 million people could be
threatened with eviction over the coming months, research from the Aspen
Institute says.
Much of the focus has been on tenants. But Stacey Johnson-Cosby,
president of the Kansas City Regional Housing Alliance, says more than
40% of the landlords surveyed in her coalition said that they expected
to have to sell their units in the coming months due to rental income
losses.
“They are sheltering our citizens free of charge and there’s nothing we
can do about it,” said Johnson-Cosby. “This is their retirement income.”
She added that small landlords are also terrified of speaking out for
fear of drawing the ire of tenant rights groups who promote “Cancel
Rent” and have bombarded landlords with publicity campaigns featuring
their pictures and barricades at apartment buildings and local
courthouses.
“What they don’t realize is that if they run us out and we fail, it will
be private equity and Wall Street firms that buy up all our properties,
just like they did with houses after the last foreclosure crash.”
PANDEMIC DEADLOCK
A $908 billion second stimulus relief package proposed by a bipartisan
group of senators is gaining traction in Washington but it is unclear if
President Donald Trump will support the plan, and it only includes $25
billion for rent relief—far from the $70 billion needed in January.
President-elect Joe Biden has indicated he will sign executive orders
the day he takes office extending moratoriums on evictions and
foreclosures as well as other relief measures.
[to top of second column] |
Jennifer Maldonado joins demonstrators at a protest against an
upcoming wave of evictions that shutdown the LA Superior Court, amid
the global outbreak of coronavirus disease (COVID-19), in Los
Angeles, California, U.S., August 21, 2020. REUTERS/Lucy
Nicholson/File Photo
But that will not address a brutal 20 days in January, between the safety net
expirations and Biden’s inauguration, when the free fall will begin. And
economists say this period of uncertainty has already contributed to economic
scarring that could threaten the U.S. economic recovery, which is showing signs
of slowing and veering back into recession.
Though Biden will likely be telegraphing his administration’s solutions in the
coming weeks, “the reality on the ground is going to be very dark, with people
losing homes in the dead of winter during a pandemic, said Moody’s Zandi. "It’s
going to be very painful and devastating. There’s going to be a lot of people
who fall through the cracks.”
Underscoring the urgency of the situation is the fact that new research shows
that evictions have led to increases in COVID-19 cases and deaths.
A report released Nov. 30 by a consortium of university researchers found that
there were 433,700 excess cases of COVID and 10,700 excess deaths associated
with the lifting of eviction moratoriums during the summer, before the blanket
CDC ban began. States that let moratoriums expire had a 2.1-times higher
incidence of cases and 5.4-times higher mortality, according to the researchers
from Johns Hopkins University and other four other universities. (Report:
https://bit.ly/3qB3NFo)
The cost of this housing instability is not spread evenly, as Blacks, whose
employment has been hit the hardest during the pandemic, comprise 80% of those
facing eviction in major cities and are also more than twice as likely to die of
COVID than whites.
ZOMBIE PROPERTIES
At first, it all seemed easy. In May 2019, Clarence Hamer’s new tenant had
passed a background check and said she would live a quiet life with her elderly
father and boyfriend in the $3,250-a-month duplex.
Two months after moving in, she stopped paying the full rent. Hamer tried
everything: calling her, texting her, knocking on her door—but to no avail. In
August 2019, he filed an eviction notice. But the court date kept getting
delayed until March 2020, when COVID-19 hit and the courts ground to a halt.
Then, his tenant sublet the unit to other people --Hamer is hamstrung from
getting them out, too. He says they have trashed the once tidy unit, and that
there is a constant odor of marijuana, and foot traffic in and out of the home
at all hours of the day. He watches it all and feels powerless, his net worth
now turned into a zombie property.
“They are going to foreclose. It’s only going to be a matter of time,” said
Hamer. “And rightfully so, I can’t blame them. Apparently we are all in this
together—unless you are a landlord.”
(Reporting by Michelle Conlin; Editing by Tom Lasseter and Lisa Shumaker)
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