Renters Affected by Foreclosures

missmanors · #1 07-09-2008, 04:18 AM

The housing crisis we are facing is not just affecting homeowners, but renters are facing their own crisis because of foreclosures. For one thing, those foreclosures are causing more competition for low cost rentals. Then there are those renters who are faced with eviction because of the properties they rent are being forclosed on.

A spokesperson for the Joint Center for Housing Studies said that 1-4-family rental properties which are investor owned, account for almost 20% of all foreclosures at this time. The abundant capital available during the housing boom years has led to a large rise in high-risk loans to these absentee owners. This spokesperson also said that many of those loans that are now in default are in low income and minority communities, thus are hitting those same communities where the most vulnerable of renters live.

Almost one million more households are renting now than two years ago, which is a rise of more than 4 times the growth number between 2003 and 2006, with the average monthly gross rent reaching $775, higher than ever before.

Also, the credit market problems has raised the cost of financing rental housing construction, which has caused the completed construction of multi-family units to fall to 2/3 of the number that was seen in 2002.

What this means to renters is that the demand for housing in affordable, good housing is rising, while the number of these units are falling. Legislators have been called upon to not leave these renters out of the mix when the housing issues are discussed on Capitol Hill. The spokesperson for the Joint
Center for Housing Studies said that the housing policy must not leave out those more than 35 million households who rent their homes.

One authority noted that a balanced national housing policy needs to be put into place, which will preserve the stock of subsidized rental housing and limit the losses of privately owned low cost multi-family units, while eliminating land use restrictions and other barriers that raise the cost of producing housing.

flip_it_fast · #2 07-09-2008, 05:20 AM

This is another example of how badly our economy is hurting. Not only do home owners have to worry but renters have to also. I have heard many stories of landlords raising their renters fees to skyrocketing amounts since the worst of the housing crisis has begun. They can do this because so many families are seeking a place to live since they have lost their home in foreclosure. These people have no choice but to pay the landlords. It is an on going cycle of misfortune for many people and I hope the government comes up with a way to resolve the issues.

flippinout · #3 07-09-2008, 12:45 PM

Todays economy is having a ripple effect in all areas.

The fact that landlords are raising the price of rentals to such high rates is quite disturbing. I realize that everyone has it hard right now, but why make it harder on people that are put between a rock and a hard place because of the economy?

I think these days are finding more and more people living with family members just simply because they have been foreclosed on or because they just cant afford the rental payments. This makes for a bad situation for all.

JaredfromIndiana · #4 07-09-2008, 03:17 PM

I agree that landlords that jack up their rental rates dramatically are taking advantage of the situation. At the same time isn't this a simple example of supply and demand?

My step dad has a 206 apartment unit that right now only has 5 vacancies which will be filled soon. He has raised the rent each of the last 3 months. Not dramatically, but I believe $10 a month. Add that up per unit and that's a lot!

In every situation you will find people trying to take advantage of others less fortunate, but if I had rentals right now I would also be raising the price at least a little higher than it would be 2-3 years ago. I think eventually everything will balance back out the way it should be...

missmanors · #5 07-09-2008, 09:56 PM

Raising rents a few dollars a month is not a problem, in my opinion. With the higher cost of upkeep on the buildings, a renter has to expect to pay a little more. I think raising rents $10 or $20 per month, perhaps every year or every other year would be about normal. Of course we always need to keep in mind the locations of the rentals. Some cities have very high rents on small apartments that I could not imagine having to pay.

It's those landlords that are gouging the renters that I have a big problem with. Some of them are really making matters much worse for the people who have been foreclosed on and are having enough financial problems. About the last thing they need are landlords trying to get rich quick with their high rents. Also those people who are almost homeless, because of layoffs, or ill health also are having enough trouble, without being gouged with those exhorbitant rents.

I imagine the homeless population in this country is just going to go up and up with what is happening with the foreclosures, and these landlords with their greediness.

JaredfromIndiana · #6 07-09-2008, 11:04 PM

[QUOTE=missmanors;4086]

It's those landlords that are gouging the renters that I have a big problem with. Some of them are really making matters much worse for the people who have been foreclosed on and are having enough financial problems. About the last thing they need are landlords trying to get rich quick with their high rents. Also those people who are almost homeless, because of layoffs, or ill health also are having enough trouble, without being gouged with those exhorbitant rents.

QUOTE]

I'm with ya there...