“Some people speak of a “tsunami of forced evictions”. Others see an “apocalypse” or a “flood” coming. The words used by American experts to describe the situation in their country’s housing market sound dramatic.
But in fact, the numbers are tricky. Hundreds of thousands of people in the US, it seems, are facing the threat of homelessness this summer.
In June, one in three U.S. citizens stayed in the house for their rent or instalment, according to a survey by the apartment portal “Apartment List” available to Die Welt. Things didn’t look any better in May and April. Younger people in the expensive metropolises, such as New York, San Francisco or Los Angeles, in particular, missed their payments.
The reason is the Corona epidemic, which hit America harder than any other country. More than two million citizens were infected with the virus, and more than 100,000 died. In mid-March, the country went into lockdown – and large parts of the economy collapsed.
Forty million citizens have lost their jobs in the past three months, something that hasn’t happened since the Great Depression of the 1930s. And most economists do not believe in a rapid recovery.
Unemployment could now be followed by homelessness. For the protection against forced evictions that many American cities introduced at the beginning of the epidemic is coming to an end. In New York, for example, it ended this weekend. In the following days, an estimated 50,000 people are threatened with ejection.
A drama for a city that already has the highest homelessness in the United States. Nearly 80,000 people here are without a place to stay. And the homeless shelters are already full, even without new evictions.
Nationwide, according to a study by the New York-based analysis firm Amherst, 28 million people may have to move out of their four walls in the coming months. This is reminiscent of the dark days of the “foreclosures” – the notorious foreclosures that cost millions of Americans their homes in the 2008 financial crisis.
“We are facing a very serious housing crisis,” said Peter Hepburn of Princeton University in New Jersey. “Many tenants have very limited savings.” Indeed, the months-long stalemate in the economy in America, a country where half of people live from paycheck to paycheck – that is, salary-to-salary and without reserves – could prove particularly dramatic.
Corona aid is also due to end next month. Until July 31, the unemployed will receive money from the 2.2 trillion dollar “Cares Act”. The U.S. government pays 600 dollars a week, in addition to regular state aid. But President Donald Trump wants the law to expire, even if the economy is not yet back on track.
No employment, no protection from being thrown out, less government support: Many American tenants and homeowners are at risk of triple a drama. Researchers at New York’s Columbia University estimate that there could be more than 250,000 new homeless people in the US this summer. That would be a 40 percent increase.
America’s courts are already preparing for litigation between tenants and landlords. The Michigan Supreme Court expects a “flood” of lawsuits, according to a statement.
African-Americans in particular are likely to be affected by the crisis. Black tenants, civil rights activists calculated, are twice as likely to be forced out of their homes in the United States as white sen.
To stop the “flood,” they recommend that state governors extend protections against evictions. This helps not only in the fight against homelessness, say the activists, but also in the fight against Corona. If fewer people live on the streets or in full homeless shelters, they argue, the virus spreads more slowly.
America’s housing markets are changing in the epidemic. In San Francisco – a city where families with less than 120,000 dollars a year are officially considered needy – apartments suddenly become vacant. Not because they are being forcibly evacuated, but because tech companies in nearby Silicon Valley are cutting jobs, such as Yelp and Lyft.
Programmers and designers, once well paid, now have to leave the area. More than six trials The apartments are currently without tenants, data from RealPage shows – twice as many as three months ago, when the coronavirus seemed remote.
Silicon Valley’s start-ups once attracted university graduates from across America. But the housing market could not absorb the influx. Most neighborhoods of San Francisco are not allowed to build buildings that are higher than 15 meters.
Large tenements are therefore hardly possible. The city wants to preserve the scenery for which it is famous all over the world, the Victorian houses with their colorful facades and small balconies.
Prices were always going up
But now, in the Corona epidemic, the situation seems to be easing somewhat. Housing prices in San Francisco have fallen since the virus broke out. For a two-bedroom apartment, the median rent in May was 3360 dollars a month– about nine percent less than a year ago.
Something similar is happening in New York. There, too, many people are moving away, and rents are falling there too, at least temporarily. Landlords currently offer discounts of an average of eight per cent. A remarkable development, after all, for years the prices in the two cities knew only one direction: upwards.