If Landlords Get Wiped Out, Wall Street Wins, Not Renters

Nobody’s bailing out Connecticut landlord Maribeth Shields,

More than half of the tenants in the 27 low-income apartments she owns in the city of West Haven and its vicinity aren’t paying and there’s nothing she can do about it. The state banned evictions until July and allowed tenants hurt by the pandemic to defer with no penalty.

But Shields can’t pay, either. Her profit last year came to only $24,000, and now she’s behind on $1.2 million in mortgages. Like millions of other U.S. landlords, who owe lenders more than $1 trillion combined, her fate is tied to renters now urgently focused on their own self-preservation.

“My tenants think I’m rich,” Shields says. “They have better cars than me, better nails, and better tax refunds.”
The next housing crisis is here, and this time, it’s about rentals. Across the U.S., landlords and tenants are wrangling over next month’s rent while an approaching avalanche of evictions threatens to bury them both.
To avert a damaging wave of foreclosures like the one that swept the country more than a decade ago, Congress included a provision in the $2.2 trillion rescue package it approved in March that allows homeowners with government-backed mortgages to defer payments for up to a year. But Washington stopped short of offering renters comparable relief on the assumption that those in distress would likely qualify for the $1,200 checks the Treasury began mailing out in April, as well as beefed-up unemployment benefits.

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