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Not a depression? Tell it to these folks
A big news story in my area: A company that owns and manages residential rentals in Sioux City, IA, is going bankrupt. Hundreds of people have been given less than a month's notice to move out of more than a dozen buildings scattered around the midtown area of the city.
These are people who were already living on the edge financially. The apartments were below standard because the landlord wasn't maintaining them properly but the tenants couldn't afford to move anywhere else. Now, there are not enough apartments available elsewhere to house them all. It's also creating headaches for the police who will have to keep an eye on all these vacant buildings in what's already a high crime area (by Iowa standards).
Added to that, the only grocery store within miles of that same neighborhood, inhabited largely by elderly, disabled and low income people, is going out of business.
Whatever the "burdens" might be for Madoff's investors and others, none of them have to worry about having food to eat and a roof over their heads. The same can't be said for my friends and neighbors.
Stock market crash? Pshaw. None of these folks had money to invest in the stock market - they were lucky to be able to scrape together enough to rent the roach infested and inadequately heated hovels they were living in. And now, even that has been taken away.
cross-posted at Debbie Does Nothing
These are people who were already living on the edge financially. The apartments were below standard because the landlord wasn't maintaining them properly but the tenants couldn't afford to move anywhere else. Now, there are not enough apartments available elsewhere to house them all. It's also creating headaches for the police who will have to keep an eye on all these vacant buildings in what's already a high crime area (by Iowa standards).
Added to that, the only grocery store within miles of that same neighborhood, inhabited largely by elderly, disabled and low income people, is going out of business.
Whatever the "burdens" might be for Madoff's investors and others, none of them have to worry about having food to eat and a roof over their heads. The same can't be said for my friends and neighbors.
Stock market crash? Pshaw. None of these folks had money to invest in the stock market - they were lucky to be able to scrape together enough to rent the roach infested and inadequately heated hovels they were living in. And now, even that has been taken away.
cross-posted at Debbie Does Nothing
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Hearing on the news that there have been a million foreclosures. That is one thing. But then you have to think that there are more than one person per foreclosure whose live has been thrown into chaos.
Children, spouses and others are now out on the street.
Neighbors lose value in their homes, immediately after the sign is posted on the block.
And there have been several stories about tenants.
And this is really chaotic because tenant's rights depend on state law.
In some county in Illinois, the sheriff refused to kick the tenants out. What courage?
Fine, they extend unemployment benefits. So you have all these people bringing home less than half of what they earned.
A lot of pain out there.
January 9, 2009 1:57 PM | Reply | Permalink
Lost mortgages only refer to people who qualified for a mortgage in the first place, which, as I write this seems to have meant, anyone having the temerity to ask for a mortgage. But lets put that aside. Are there any statistics as to how many people are going under that merely pay rent? Because that would appear to me a more genuine reflection of who is actually becoming homeless.
January 9, 2009 2:46 PM | Reply | Permalink
When the landlord is being foreclosed on, the bank gives him plenty of notice that they'll be taking over the property. And the landlord already knows he's behind on his mortgage, so it comes as no surprise to him.
Usually the tenants have no idea what's going on. The landlords are supposed to give them 30 days notice but often don't. In this particular case, some of the tenants only had 24 hours notice that they had to be out. They had already paid their rent for the month of January and the landlord took it, knowing full well the bank was going to kick them out before the end of the month.
Under Iowa law, renters are supposed to get 30 days notice - but apparently banks can get away with this. I think they should be required to contact the tenants at least 30 days in advance rather than relying on the sleazy landlords to do it.
January 9, 2009 3:00 PM | Reply | Permalink
They need that Illinois sheriff who refused to enforce foreclosure evictions without full and proper notice.
http://www.cnn.com/2008/US/10/08/chicago.evictions/index.html
But if these are apartment buildings, why would the bank(s) want to empty them? It's one thing to sell a single family dwelling without tenants, but an apartment building?
January 9, 2009 3:23 PM | Reply | Permalink
Actually, they probably have a right to 30 days notice no matter who owns the building. Or some notice, anyway.
And why do the banks want the buildings vacant? They're worth nothing vacant, unless you want to demolish, and no one is going to be redeveloping slum housing in this economy.
Confusing. You'd think someone with a bit of capital could fix this, and make a killing, too.
January 9, 2009 3:42 PM | Reply | Permalink
Banks don't want to take on the utility bills, but I think the biggest issue is insurance if a tenant or visitor gets injured on the property. These are buildings where the landlord pays the water, sewer, and heat - one central boiler for all the apartments - and the utilities are overdue and being shut off too. Also, now that the problem has come to light, city has red-tagged some of the buildings because the water is turned off or there are other serious health and safety issues.
January 9, 2009 4:11 PM | Reply | Permalink
Liability shouldn't be a problem. Create an LLC to hold the foreclosed properties and run them, adequately insure the LLC. It shouldn't be a huge issue; real landlords have to do it (Full Disclosure: in my law practice I've defended landlords on tort claims).
The utility and city problems are more serious; if the buildings are in that terrible shape they'll be hard to rehab and get tenants back into. It's hard to turn a profit rehabbing an empty building. Still cheaper than new construction though.
Do you know what the municipality(ies) are like as far as working with owners? It makes a huge difference.
January 9, 2009 5:08 PM | Reply | Permalink
The city is pretty good at working with owners. Most of these buildings are in an urban renewal district, I believe. As is the grocery store that's closing.
My understanding is that city council and staff were practically on their knees begging the grocery store owners to stay - offering loans, tax breaks, etc. No go.
January 9, 2009 5:42 PM | Reply | Permalink
Brings to mind the eviction scenes from Roger and Me:
http://www.youtube.com/watch?v=bvjdJOBhvTc
January 9, 2009 4:23 PM | Reply | Permalink
These buildings rent controlled? That would explain a lot.
January 9, 2009 5:30 PM | Reply | Permalink
No such thing as rent control in Sioux City.
January 9, 2009 5:43 PM | Reply | Permalink
The only solution is for the government to borrow all the money it possibly can against the value of our country, spend it killing the roaches, giving everyone who doesn’t own a house a free one, food stamps for everyone who applies, pay everyone’s doctor bills, and otherwise fulfill everyone’s wants and needs.
January 10, 2009 10:48 AM | Reply | Permalink
We can't agree on whether or not we're in a depression if we don't agree on one specific definition of depression to be used.
January 10, 2009 11:55 AM | Reply | Permalink