In a recent webinar that took the format of a town hall, we were thrown a curveball. The last question posed was what we thought would happen to the housing industry and the overall economy if a new president were elected or if Trump were to stay in office. We can’t see that far – November is an eternity.
Our role at Bornstein Law is not to get mired into politics, choose sides, or predict a future that is becoming stranger and stranger, but to assist owners in a time when they have been deluged with new laws and rules to follow. We are taking this one day at a time, and our goals are not all that lofty. We want property owners and tenants to come out successfully on the other side of COVID and not wake up to a blue sky turning orange.
Some encouraging signs that a rust-colored sky will pass.
The real estate market has been surprisingly robust, and this isn’t intuitive – you might have guessed at first that the pandemic would decimate our community. The strength of the market is probably owed to a confluence of factors.
Skittish investors are shifting their money from the stock market to real property, low-interest rates have inspired new homeownership, and residents are migrating away from high-rent areas. The federal government has injected a massive amount of liquidity into the economy, at least at the outset of the pandemic.
While the feds pumped out a lot of money, exactly how tenants could pay the rents and how landlords could survive without rental income was a peripheral concern for Washington – the survival of landlords seemed to be an afterthought. This has left many cash-strapped California renters forced to accumulate a mountain of debt as mom and pop landlords teeter on the edge of losing their properties and retirement income.
Daniel Bornstein told the San Francisco Chronicle that rather than landlords shouldering the societal burden of unpaid rents, interest-free loans should be made available to keep property owners solvent while giving some leeway to tenants who risk eviction. Since then, the COVID-19 Tenant Protection Act of 2020 has passed, which will inevitably and tragically lead to the eviction of distressed tenants who will not have a bucket of cash to pay the 25% of total rent that becomes due in January of 2021. We cover the new law here.
Like everyone else, Bornstein Law wishes this pandemic will end, job-shedding will stop, and we all return to some semblance of normalcy. We like boring.
It’s rare that landlord and tenant groups see eye to eye, but everyone has called upon the federal government to do more. Whoever occupies office, we trust that they will think coherently on the economics of housing and not put landlords at risk. Until then, property owners have been asked to shoulder an inordinate amount of responsibility for the societal costs of the crisis.=
Our landlord clients feel as though the heavy lifting has been borne by one class of individuals at the expense of others.
~ Daniel Bornstein quoted in the ABA Journal
Putting politics aside
Bornstein Law dodges the question of who we want as elected officials. Our primary wish is for everyone to stay healthy, maintain a positive orientation, and have a rust-colored sky replaced by blue. Literally and figuratively.
We want boring again.
