COVID-19 may be responsible for eliminated a large portion of affordable housing in the United States.
The vast majority of housing that is considered affordable in our country comes from individuals who rent a property or two. Not large property management companies.
And these individuals who rent only a few properties or less are impacted the most by a tenant not paying rent. Many of them are now in danger of losing their propertie(s).
Some may have been able to apply for forbearance on their mortgage, but that just deffers the money owed further down the road. And only those with federally backed mortgages which is only around 70% of all total mortgages.
Nearly
70 percent of homeowners with mortgages have loans somehow supported by the federal government.
If the properties mortgage is paid off or among the 30% not federally backed they are out of luck on the forbearance.
There are countless stories of the property owner losing their job in the pandemic and their renter not paying rent for more than a year now.
The lost income of the rent combined with losing their job during the pandemic has resulted in them at not just risk of losing their rental property but their own home as well.
The stimulus bill from last December does provide some help, but it contains some catches that hurt small property renters financially if they don't abide by the rules and has hoops to jump through.
First, both the renter and the property owner have to agree to rent assistance funding. Property owns are finding it difficult to get their renters to sign the paperwork for rent assistance. Especially if they haven't paid rent in a year or more now.
Second, the assistance requires that the property owner not evict the tenant. So if the property owner evicts the tenant they get no funding from the assistance. If they evict the tenant after receiving the assistance they have to pay back that assistance if they can't prove a valid reason for eviction that is not related to missing rent during the pandemic.
In most states housing courts have opened back up. But there is a catch. The CDC gave a mandate that evictions can not be carried out through September 2021.
In a interview I watched, when houses courts opened back up a women sought to evict her tenant who has not paid rent in over a year now and for whatever reason has not agreed to sign the paperwork for federal rent assistance. This property owner also lost her job during the pandemic and couldn't afford the mortgage on her house. She had to sell it and move back in with her parents.
The judge sided with her, ordered back rent to be paid and the tenant to move out within 7 days with a caveat. The caveat being marshals could not show up to force the renter to move out until after the CDC mandate ends. The locks could also not be changed.
This was back in the beginning of April. As of today the tenant still has not moved out, paid rent or any back rent. And likely will continue to live in the rental property for several more months without paying rent. And all these additional months of rent not paid are not part of the order that the renter has to pay back to the landlord.
This whole situation has now resulted in a reality group to challenge the CDC authority to issue such a mandate in couts. It's unclear if the legal action will be resolved before September as this lawsuit is likely to find its way to the supreme court.
Many individuals who rent a property or two may end up losing a property or saying enough is enough and selling their rental property after all is said and done.
The result being less affordable housing available on the market.
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