There is a quiet storm brewing across the nation, a crisis on steroids. The Federal Moratorium on housing is pleasing none, not the tenants and not the landlords who are drowning in debt.
THE FEDERAL MORATORIUM ON HOUSING
The fallout is nearing and it will arrive fast and hard by way of the astronomical real estate market and its inevitable crash. The feds will hike rates. People will continue to be without work. Anti-vaxxers will keep up their stubbornness insisting on not masking or vaxxing and the virus will continue to spread.
Now I’m not playing Debbie Downer here. I’m more of a realist. I just cannot idly pretend the world is perfect and cannot pretend there is not a looming catastrophe and we all in some way are going to feel its impact. After all the journalist in me is compelled to share.
If nothing else to at least get people thinking about what this means for all of us. How will this impact us? What will it mean for the real estate market? What other industries will be impacted?
For those of us who comply and do what we need to do, find work, keep working, get vaccines, keep masking, we too will begin to feel the trickling effects. It will bleed into most industries and a few of us will be left unphased.
Even if you are wealthy and not in the thick of a housing crisis – you will feel the effects because you will see the growth of homelessness.
We are seeing it already here in the bay area. In the East Bay in upscale communities like Walnut Creek and Pleasant Hill little makeshift tent cities are beginning to pop up on the side of Highway 680.
EMERGENCY BANS ON EVICTIONS STATE BY STATE
Jus this week the Supreme Court hammered down on Biden’s Eviction moratorium.
The fallout that is to come will be devastating. Thousands of tenants are now facing eviction amid a public safety health crisis.
Figures show that 1 in 6 is behind on their rent.
Just this week the CDC issued a targeted moratorium for areas hardest hit by Covid 19.
The bans vary state by state, but many have outlived their second and third extensions. So what can be done? What will happen as a result of this fallout? How many industries are going to be hard hit? Just about every industry will feel the impact of the bans ending.
Here in California the emergency ban on evictions has been repealed.
We can all assume the worst.
FEDERAL ASSISTANCE REMAINS UNSPENT
Although President Biden is urging states and cities to grab the funds that were approved by congress for Covid 19 eviction relief a majority of that money remains unspent. Some sources suggest upto 89% of the federal funding remains unspent even though the crisis is looming large and nearing at rapid speed.
Earlier this week the Treasury Department shared detailed reports about the $1.7 Billion that was distributed by cities to landlords and renters as of July.
However that number is a drop in the bucket when looking at the $46.5 Billion in rental relief that was authorized by two separate Covid 19 rescue packages. Of that cities have only paid out $5.2 Billion. Essentially only 11% of the total has been paid out.
The Emergency Rental Assistance program in February shelled out $25 Billion in federal funds to cities to help renters. That was followed by another $21.55 Billion in March.
Part of the slow up is that several states have contracted out third party vendors to deal with it all.
WHAT WE CAN EXPECT NEXT AS THE MORATORIUM MONEY RUNS OUT
Irrespective the crisis is looming. That money will cover mostly back rent, but what about the months to come and those who are still without work, strapped for cash and the feds have little left to hand out.
Will we see another spike in homelessness? Absolutely. This first surge was a direct result of the pandemic.
The next way is set to spiral downwards at record speed.
We can anticipate feds hiking rates exponentially to make up for the billions that has been poured out for relief. And landlords with buildings and second and third properties, vacation homes along with waterfront bungalows to hit the market.