Remember that childhood game of dastardly Simon LaGree and the young maiden. She says, “I can’t pay the rent and he says, “You must pay the rent.” Now here we are for real as one in 10 Americans say they can’t pay their rent or mortgage this month, according to a YouGov survey of more than 8,740 US adults. If you wonder how the Covid-19 is affecting real estate, take a look at the new movement to absolve people of their obligations.
Read what one magazine said: “In the past six weeks, over 30 million people have filed for unemployment, a figure that makes this the worst joblessness crisis in U.S. history. Keeping in mind that most Americans don’t have enough emergency savings to last three months, it feels cruel to force people to pay rent month after month amid a cataclysmic crisis, when there’s no income coming in.
Here’s another: “…a burgeoning movement nationwide is calling for a more comprehensive measure: #CancelRent.
And this from Congress: “With tenants and housing rights advocates organizing across the country for state and local rent strikes, Freshman Rep. Alexandria Ocasio-Cortez has called for state and federal rent cancellations during the pandemic. “People can’t pay. You cannot coerce someone into doing something that they cannot do. There is no money in the bank,” said the New York Congresswoman. “People need to feed their kids. We cannot be evicting. We need to be making sure that we are passing policy that allows people to stay in their homes.”
The proposed bill called the Rent and Mortgage Cancellation Act will include full forgiveness of missed payments with no impact on renters’ or homeowners’ credit scores, a relief fund for landlords and mortgage holders, and efforts to increase the availability of affordable housing options.
Then the California Legislature may soon vote on SB 939, a bill that would allow small businesses — like cafes, restaurants, and bars — to renegotiate and modify lease deals if they have been impacted by shelter-in-place orders and economic shutdowns. If, after 30 days of negotiations, there is no agreement reached, the tenant can break the lease with no penalty, effectively starting a revolution in the world of credit by retroactively transforming commercial loans into non-recourse debt.
To repeat: “If the parties do not reach a “mutually satisfactory agreement” within 30 days after the landlord received the negotiation notice, then the tenant can terminate the lease without liability for future rent, fees, or costs that otherwise would have been due under the lease.”
“At its core, any property’s price is capitalized annual rent. Rents will fall if unemployed workers cannot make the payments on their homes, or if commercial businesses go delinquent due to a lack of trade. The actual and expected fall in rents, thereby leads to a decline in property values.” What if there are no rents or rents are cut in half?
This from a publication that sees itself as “a leading voice of the American left, offering socialist perspectives on politics, economics, and culture,” and has the very catchy slogan, “Reason in Revolt.”
If we don’t get businesses open soon and American workers back to work, we can expect more agitation and lower property values. The middle class and the poor will be screwed once again. Big investment funds with at least $300 Billion are waiting for real estate to crash so they can buy up the bargains vomited up by those who can no longer make their rent and mortgage payments.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. We offer the simple truth about your home and how we can help you sell it fast.