Yet the situation will likely do little to alleviate the housing crisis, because the more than 16 million Americans who filed for unemployment insurance in the last three weeks will still need roofs over their heads, say economists and affordable housing advocates.
More than half of the 600 concerned landlords on a conference call Wednesday with the Apartment Association of Greater Los Angeles said they have tenants who haven’t fully paid their April rent, according to Executive Director Daniel Yukelson.
“It does show you the impacts the crisis is having on both owners and renters,” he said by email.
The months ahead could bring a construction slowdown caused by a skittish luxury market, while landlords could face their own cash crunches as renters default, said Whitney Airgood-Obrycki, a research associate at Harvard University’s Joint Center for Housing Studies.
It’s also likely that many renters will move in with family and friends and that homelessness will continue to rise, she said.
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“With this pandemic, what is likely to happen is people will lose a significant portion of income, so we’re likely to see more doubling up for housing,” she said. “We’re also going to see rent discounting and a lot of rent concessions.”
“America has a two-pronged problem on its hands: a coronavirus recession that will push families out onto the streets and a weak social safety net that will fail to catch them,” Aaron Carr, founder of New York City’s Housing Rights Initiative, said in an email. “If Congress doesn’t make rental assistance universal, they will be doing an extraordinary disservice not just to countless families, but the country they claim to love.”
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California and the city of Los Angeles have placed limited moratoriums on coronavirus-related evictions, and President Donald Trump has vowed to suspend evictions and foreclosures for 60 days as part of the $2 trillion coronavirus relief package he signed March 27.
But experts say that the housing bill will come due at some point and that evictions and foreclosures will follow. In Los Angeles County, where sprawling homeless encampments shelter nearly 60,000 people, some advocates are bracing for the situation to worsen.
“Since April 1, we’ve gotten over 100 inquiries from tenants saying they’re out of work and can’t pay the rent,” said Larry Gross, executive director of the Coalition for Economic Survival in Los Angeles. “Our homeless numbers are going to jump significantly.”
In Los Angeles, apartment rents fell this year for the first time since 2010, when the country was still in the throes of a recession, according to CoStar Analytics, which provides data to landlords, developers and real estate investors.
“We’re seeing rents nationwide down,” said John Affleck, CoStar’s vice president of market analytics. “I don’t think anyone’s going to be migrating or relocating soon except to a family home.”
He expects rents to decline in areas that depend on tourism, restaurants and the service sector, like Florida, Las Vegas and Honolulu. Luxury apartment developments with units for lease will also struggle nationwide, he said.
Some experts believe the impact of the coronavirus on the economy could upend housing in the U.S., with density pressure in markets like New York, Los Angeles and San Francisco giving way to renewed migration to the suburbs.
Low interest rates could prompt higher-income city renters to consider buying in the suburbs, people who are sharing rooms and apartments could lose a taste for it after social distancing, and employers may shift permanently to using remote workers who would no longer have to live nearby, said Shulman of UCLA.
“People may rethink if they want to be urban or suburban,” he said.
He believes the housing market will get over this latest crisis, but it will take “a long time.”
Yukelson of the Los Angeles apartment association called the coronavirus economy “temporary insanity.”