July 13, 2024

California Rental Real Estate

Hundreds of thousands of renters may miss rent payments for May as the coronavirus crisis enters its third month in the U.S. For smaller landlords, that means facing their own financial crisis. WSJ’s Jason Bellini reports.

This lady leveraged too much. She should’ve only bought what she can afford and not borrowed so much from the bank. Sounds like she put all her eggs in one basket.

Even if banks defer home loan repayments, but what about water, trash pick-up, real estate tax, house maintenance…etc? Governments are still sending bills to landlords. California unemployed renters are getting up to a $1,0000 a week now, why can’t they pay rent?

California Rental Real Estate

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We are still working and paying tax to support those lost jobs. And the eviction moratorium is even forcing landlords to provide free public housing now. It’s pitiful that some renters lost jobs due to the epidemic, but at the same time, it’s not landlords’ fault either. Why do the landlords have to be the victims?

As currently implemented, many of these eviction bans prohibit landlords from evicting tenants for any reason, including non-payment of rent. This was done in order to relieve the stress of the current crisis on struggling tenants who may have lost their jobs or may be temporarily out of work due to business shutdowns.

While the eviction bans do not mean that tenants don’t have to pay rent, they do mean that if they fail to pay rent, the landlords have no legal recourse. Also, because most tenants will never be able to pay back the shortfall in the rents even after the situation improves, the bans essentially mean that the landlords will experience a permanent loss.

The question that arises from these government actions is are these bans fair to everyone affected? Certainly, it is fair from the perspective of the tenants who are dealing with difficult times. But, what about the landlords? Many landlords are in the same boat as the tenants — many have been laid off or are on temporary work shut down with their job incomes severely limited.

Some landlords rely exclusively on rental income, which will now likely be disrupted. In order for this ban to be fair, the government should provide similar moratoriums on payments of taxes, utilities, and mortgages to landlords. Without that, the cost of the crisis as it relates to housing is pushed entirely on landlords.

Here is the hyperlink to my prior post on this topic:  California Armageddon for Landlords

Here is the hyperlink to another of my prior posts: Coronavirus & San Diego Real Estate

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California Rental Real Estate