Sunday, July 26, 2020

The Housing Crisis that Covid-19 is creating now

Of all the continuing pain and horror that Covid-19 (the coronavirus or simply Corona or commonly pandemic) is inflicting on the wold economy, add to it the housing market namely the renters and mortgage paying lot like me. The renters are so much up in arms because they have lost their jobs that the U.S. Congress had to pass a law that during Pandemic, no renter can be evicted solely on the basis on their inability to pay their rent on time. Although a great initiative and a great help to millions of renters who are unable to pay their rent due to loss of job and/or have their work hours reduced due to low demand, it has created a movement of rent strikes aimed at forcing the landlords to stop collecting rent and stop their eviction process until this pandemic ends. There is a great deal of resentment against landlords right now but it must be emphasized that the majority of the landlords are mom and pop operations with three or less houses to rent and all these houses are mostly under a mortgage. These mom and pop landlords depend upon the rental income to pay their mortgages, utilities and other upgrades of the houses and also of their daily expenses.

I have been a Landlord and I know how it feels to be under pressure financially. Not all Landlords own their houses and most of them are under mortgage and if for one month their rents are not being paid, it cascades into a financial crisis since the Mortgage and property taxes and utility bills and maintenance does not stop. I can understand that people who have lost their jobs are increasingly under financial stress and juggling to pay their pays and how to prioritize them. Will they want to pay their mortgage first and keep roof under their heads or will they pay their car payments in order to drive to groceries and job interviews if any. Will they keep their health insurance or buy groceries with their unemployment insurance and government assistance. These are hard questions and most of the people who have little to none financial cushion are having sleepless nights and get their dignity kicked to the ground by going to food banks for the first times in their lives. These same questions are being addressed by the same small time landlords whose rents are being put on hold.  Although it is a commendable idea that rents should be frozen until this pandemic ends (God knows when it will end) but the rush to stop their rent payments will also affect the small mom and pop landlords who will have no choice but to stop Mortgage payments and in turn will get notices from the banks for foreclosure which will also hurt the renters. The best thing now is to provide direct assistance to renters who have lost their jobs by giving them at least 50 percent of their rent payments and persuade the landlords to lower their rents by the same percentage for at least a year until the economy starts to recover somewhat.


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