Your neighbors may be worried, but the hedge funds aren’t!
When the Covid lockdown crushed the entire planetary economy, it affected everyone from the people who depended on their income and savings to keep them alive to the immortal ultra-rich corporate ‘people’ who depended on their income and savings to keep them wealthy. Guess we all suffered. With no income, residents couldn’t pay the landlords and banks who also had their own bills, so the rental/housing market was essentially frozen by eviction and foreclosure moratoriums. Now Covid’s lifting and people (human and corporate) are looking at 14 months of unpaid rent and mortgage and moratoriums about to end. Human renters, homeowners, and small landlords face a bleak future, but the corporate people are smiling all the way to the bank.
Let’s start with help for the Humans…
Foreclosure and eviction are interesting and serious issues for everyone, even people not facing homelessness themselves, but many people will read this article because it’s an imminent worry. If you are facing eviction or foreclosure, here’s a few links that might help (and we’re sorry we can’t offer more)…
Oregon eviction prevention and homeless assistance programs, NeedHelpPayingBills.com
Get assistance from Eviction Prevention Programs, NeedHelpPayingBills.com
COVID-19 Eviction Moratorium Information, Multnomah County, 2021
Homeowner Help– US Department of Housing and Urban Development
Mortgage Payment Help, Oregon.gov
National Federal Eviction Moratorium- Learn About Protections and Steps Renters Must Take! National Low Income Housing Coalition- “The Biden administration announced on June 24 an extension of the federal eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) through July 31, 2021, and that it will implement a whole-of-government approach to prevent an historic wave of evictions this summer.
Here’s the problem…
Just in case you aren’t aware of the general eviction/foreclosure problem, here’s a brief outline…
Oregon’s eviction moratorium will expire next week. Here’s what that means for Oregon tenants and landlords., Rebecca Ellis on OPB, Jun 2021
Here are three common questions about what to expect June 30 with answers from Oregon advocates, attorneys and housing officials…
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- I’m a tenant who hasn’t been able to pay full rent since the pandemic started. How much will I owe when the moratorium ends on June 30?
- I keep hearing about a tidal wave of evictions looming when the moratorium ends. Is that what’s coming on July 1?
- How much rental assistance has been dispensed to people so far?
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Lawmakers vote to extend Oregon’s eviction moratorium, but assistance backlog leaves thousands in limbo, Maggie Vespa for KGW8, Jun 2021
“Even if they qualify for that assistance, there’s no guarantee renters will get the money in time. The state’s backlog on doling out rent assistance is that bad.”
‘The eviction moratorium is killing small landlords,’ says one, as ban is extended another month, Diana Olick on CNBC, Jun 2021
But there’s a bright side!
But it’s not all bad news. Individuals and families are facing homelessness and small landlords are facing bankruptcy, but rest easy! Our Corporate Brothers and Sisters will apparently do just fine…
Investment Firms Aren’t Buying All the Houses. But They Are Buying the Most Important Ones. Elena Botella in Slate, Jun 2021
It’s not exactly accurate that investors are “buying every single-family house they can find,” as some have suggested. If that were true, their market share in the United States wouldn’t be a piddling 15 percent. They’re really buying up the stock of relatively inexpensive single-family homes built since the 1970s in growing metro areas. They mostly ignore bigger and more expensive houses, especially ones that are move-in ready: Wealthy boomers and the nation’s finance and tech bros nab those properties. And they’re also ignoring cities with stable or shrinking populations, like Providence and Pittsburgh. But investors are depleting the inventory of the precise houses that might otherwise be obtainable for younger, working- and middle-class households, in the cities where those workers can easily find good-paying jobs, like Atlanta (22 percent of home purchases according to Redfin data), Charlotte (22 percent), and Phoenix (20 percent). More importantly, they’re able to scour those markets scientifically and systematically to make cash offers on the most attractively priced properties. While normal people buy houses when they actually need to move somewhere, (savvy) investors buy houses several years before a bunch of people need to move to an area. Whether they’re tracking where major employers are building new offices or looking at public school enrollment data, being ahead of the market gives big firms a big leg up.
Bank of America and Chase could restart mortgage foreclosures as early as July, but Wells Fargo is waiting until 2022, Megan Leonhardt on CNBC.com, May 2021
“About 2.1 million homeowners are still in forbearance plans that suspend their mortgage payments, according to Mortgage Bankers Association’s latest data. And about 1.8 million families are not in forbearance, but are already at least 90 days delinquent on paying their mortgages as of April, according to the latest data from Black Knight, which monitors mortgage data. For now, many are protected from eviction through a foreclosure moratorium on federally backed loans. But those protections are running short on time. President Joe Biden extended the federal foreclosure moratorium earlier this year, but that will expire on June 30, 2021. Many of the forbearance programs on federally backed loans are set to lapse this fall. In a hearing Wednesday, Senators asked the CEOs of several major banks about what they plan to do to help Americans caught in this situation. Here’s what the heads of Bank of America, Chase and Wells Fargo said…”
If You Sell a House These Days, the Buyer Might Be a Pension Fund, Ryan Dezember in the Wall Street Journal, Apr 2021
D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals. The country’s most prolific home builder booked roughly twice what it typically makes selling houses to the middle class—an encouraging debut in the business of selling entire neighborhoods to investors.
What Happens When Hedge Funds Buy Up Neighborhoods, Joy Pullmann in TheFederalist, Jun 2021
“You now have permanent capital competing with a young couple trying to buy a house,” real estate consultant John Burns told the Wall Street Journal. “That’s going to make U.S. housing permanently more expensive.” His firm estimates “that in many of the nation’s top markets, roughly one in every five houses sold is bought by someone who never moves in.”
When Wall Street Is Your Landlord, Alana Semuels in The Atlantic, Feb 2019
“Between 2011 and 2017, some of the world’s largest private-equity groups and hedge funds, as well as other large investors, spent a combined $36 billion on more than 200,000 homes in ailing markets across the country. In one Atlanta zip code, they bought almost 90 percent of the 7,500 homes sold between January 2011 and June 2012; today, institutional investors own at least one in five single-family rentals in some parts of the metro area, according to Dan Immergluck, a professor at the Urban Studies Institute at Georgia State University. Some of the nation’s hardest-hit housing markets were finally stabilized.”
When Investors Buy Up the Neighborhood Preventing Investor Ownership from Causing Neighborhood Decline, Treuhaft, Rose, and Black, Federal Reserve Bank of San Francisco Community Development, Spring 2011
“Yet, even as these neighborhood stabilization strategies begin to take hold, communities face an additional threat to recuperation: unscrupulous absentee investors. Nationwide, would-be homebuyers and community developers are facing stiff competition from private investors who have seen a business opportunity in the foreclosure crisis and are rapidly buying up foreclosed properties to sell or rent out for a profit. Unlike homebuyers and municipalities, investors can buy properties in cash and in bulk- sometimes ‘sight unseen’- purchasing them before homebuyers, nonprofits, or cities even have a chance to bid. In some communities, efforts to improve the neighborhood are being thwarted by investors who are either mothballing their properties or buying severely distressed homes and renting them out to vulnerable tenants with little to no rehabilitation or maintenance of the property.”
