Wednesday, July 23, 2008

The Unnoticed Foreclosure Victims: Renters

MarketWatch reports that homeowners aren't the only people affected by foreclosures. If the foreclosed property is a rental, the renter can often be forced to move on little notice. For low-income renters, this can result in homelessness.
Jeremy Rosen, executive director of the National Policy and Advocacy Council on Homelessness, thinks the effect of foreclosures on low-income renters has been underreported.

"The foreclosure crisis is hitting two groups," Rosen said. "The owners of houses and buildings, and the renters that are occupying them."

The main issue for Rosen pertains to time: Renters can be forced to leave a foreclosed property at a faster pace than a homeowner, who typically gets earlier notice that a crisis is looming. If the renter has limited income, that compounds the problem.

Each state has its own rules concerning tenants' legal rights. This means that some states say tenants have to vacate a foreclosed property within weeks and in some instances, even days. The lack of notice often doesn't give occupants enough time to find an affordable place to live, according to Rosen. For people on a tight budget, this can be devastating, Rosen said.

"There are moving expenses and first month's rent," Rosen said. "Sometimes people just don't have the money for it." ...

The doomsday scenario for low-income renters is homelessness and homeless advocacy groups believe it's a problem that will soon have to be dealt with.

"Foreclosures are driving rental prices up, supply is not keeping up with demand," said Greg White, a policy analyst for the National Low Income Housing Coalition. "You are going to start to see a flood into homeless shelters."
Any thoughts from readers?

10 comments:

  1. prince of belairJuly 23, 2008 9:41 AM

    Well, first thought is that BUSH IS GOING TO SIGN THE HOUSING BAILOUT BILL! So this should be a big help.

    -Fresh

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  2. "Foreclosures are driving rental prices up, supply is not keeping up with demand," said Greg White, a policy analyst for the National Low Income Housing Coalition"

    Im seeing the same thing which concerns me. Suddenly, these ridiculous prices that some homeowners are asking may suddenly jive with the fundamentals. Whole damn thing is a conspiracy to keep prices up!!!

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  3. Prices may be rising on the extreme low end, but at the upper end, I am seeing a glut in inventory of "luxury condos" turned "luxury apartments". I just moved into a new place and got a sweet deal over my old place.

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  4. Funny Fresh,
    If you really think the bailout will do anything to prop up house prices, I feel sorry for you.

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  5. Actually its two things. Marcus & Millchap are reporting that rents are rising in core areas. The rationale is simple, gas prices are affecting those at the margins (read renters) who are moving out of far flung rentals and seeking similar accomodations closer in. This is driving rents UP closer to the core of cities and driving rents DOWN in the exurban markets of the cities.

    DC rents are expected to rise about 5.4% this year

    http://www.forbes.com/realestate/2008/01/07/rentals-US-expensive-forbeslife-cx_mw_0107realestate1_slide_8.html?thisSpeed=30000

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  6. That's the other side of the coin. On the other side, homeowners loosing their homes due to foreclosures find taht it is almost impossible to become tenants. It is such a terrible situation.
    Interesting post, keep it up!
    C. James

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  7. Rents are falling, in some cases significantly, in Baltimore City. There is a large glut of rental property.

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  8. What I can't believe is why people just don't Stop Foreclosure before it starts. What amazes me is so many people just give up on their home when they could save it. The problem is people dont know about places like Loan Resuce Programs and just figure they are in a hole. I know until I ran into them I didnt have a clue services like this existed either.

    Renters wouldnt have to be paying more for rent if the people that should be keeping their homes just gave it a shot.

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    ReplyDelete