Calls for the government to bail out the rental housing market are getting louder, and they’re not just coming from tenants.
As financial hardship rises and scattered rent strikes crop up across the country, small landlords warn that the consequences of not being able to pay their bills will result in large corporations taking over their properties, according to Bloomberg.
About half of the country’s 43 million rental units are owned by small businesses, which often own smaller buildings, according to data from Harvard University and the U.S. Census Bureau.
Though groups that represent landlords are lobbying Congress for a bailout to the tune of $100 billion to compensate for missed rent payments, there are numerous proposals and no clear industry consensus, according to the report.
Experts and many landlords believe that unless a proposal for rent relief is hammered out soon, small property owners and renters will “slide down the socioeconomic scale together,” as Columbia University professor Emily Benfer put it.
When it comes to mortgage payments, the National Apartment Association estimates that only a third of multifamily apartments have mortgages backed by a federal agency that has agreed to some form of forbearance. Though some landlords say lenders have agreed to payment deferrals, that just postpones foreclosure unless relief arrives.
Other landlords also point to no forbearance for property taxes as another pitfall that could lead to fees, penalties and liens that could devastate their credit history.
“I’ll owe lots of money. My entire family’s work over three generations will be gone,” Jan Lee, a New York landlord who owns two buildings, told Bloomberg.
Landlords contend a likely result would be selling or abandoning their properties, with major private equity firms as the likely buyers. Wall Street players including JPMorgan Chase have amassed large rental properties in the past decade. [Bloomberg] — Erin Hudson