President Trump has signed an executive
order putting a hold on evictions. He is doing this to help ease the
burden on working folks who have seen their income evaporate as
businesses were shut down in a vain attempt to stop the spread of the
Chinese virus. His heart is in the right place but this is a band-aid on only half the problem.
The Deeper Problem
While it is helpful for people not to
be thrown out of their homes when their income stops, this does
little to help the property owners who still have ongoing expenses
like taxes and insurance as well as mortgage payments in many cases.
This pushes the burden on other innocent parties hurt by the economic
shutdown. The anti-capitalists in our midst may think this is the
way it should be, that the wealthy landowning class take care of the
so-called working class – as if the landowner sit around all-day
drinking scotch and eating bonbons..
But this thinking comes from a lack of
understanding of what is involved in providing housing in the
community. Unless the property has been held for many years, there
is probably a mortgage payment due every month, If rent checks stop
coming in, it is difficult to keep payments going out.
This is not an argument for the government
to write checks to the landlords. By the way, landlord is not a dirty
word, no matter what some people try to make it sound. It is just a
recognition of the economic truth: Their ain't no such thing as a free
lunch. Somebody has to pay the check. In this case, the people
providing the housing are asked to foot the bill. To Bernie Sanders
followers this is entirely appropriate, but most property owners do
not have an infinite supply of funds to support those that can't, or
won't, pay the rent.
Eviction is not the Best Answer
In normal times, when people stop
paying the rent (or mortgage payments) sooner or later the sheriff
comes knocking on their door and out they go. When this happens the
property owner is looking at several months (at least) of lost rent,
along with legal expenses, and a rental unit in need of some work.
This is even if the people being tossed out don't trash the place.
Even if it is just paint and, possibly some carpet, it still costs
money and another month of lost rent.
The Ticking Time Bomb
Unless the rent payments (and mortgage
payments) are forgiven – that is written off, never to be paid –
debt is piling up month after month. For the tenant who had been
paying $700 to $1000 a month, if they haven't paid rent in six
months, how will they pay back the $4,200 to $6,000 back rent when
this madness ends? They may still be out on the street and the
property owner will still be out the back rent, etc., etc.
A Sliver of Light
Fortunately, not everyone was put out
of work or business. Many people kept on working and paying their
rent and/or mortgage. As with every economic problem, some people
thrived while others headed toward the bottom. Many online retailers
saw their profits soar while small brick and mortar shop shut their
doors – sometimes forever. While those deemed non-essential by the
powers that be sat at home watching their bank accounts drain, those
deemed to be “essential” kept chugging along, sometimes even
enjoying a financial windfall.
Property owners with a variety of
rental units many have a had a couple of tenants with issues even
while most of the revenue continued. Smaller owners with few units
saw their income remain or fall based on the fortunes of their
renters. Even for those with sufficient cash flow to cover the missed
revenue, we still have the moral issue that begs the question: should
someone be forced to support another person who is not part of their
family who cannot pay their bills?
Helping another person in trouble
should be voluntary, not imposed from above by those with nothing at
risk. This is a question many seek to avoid, and I will not go into
all the ramifications of the various answers, but it is one that
deserves consideration when we look at people deprived of the ability
to earn their way in life.
Working Together
If the property owners and the renters
work together in good faith, there may be some sort of reduced rent
and partial payment deal to be had that benefits all concerned.
Sometimes banksters work with property owners, but whichever side of
the table one finds him or her self, talking about what is possible
can help ease the burden on both. In fact, it is the only way to come
out of this without either side being too badly damaged.
Neither side is the enemy. The
property owner is simply supplying a place to live and the renter is
paying for the value he is receiving. However, until we get back to
the point where we recognize that all jobs are essential, except
possibly that of some bureaucrats, and people can bet back to work
without hearing the “OMG, we're all gonna get killed” mantra from
the media, we will have to figure things out to get by.
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