Foreclosures push rents higher squeezing low income families (MPR)

by Dan Olson, Minnesota Public Radio
September 21, 2008

There's a troubling trend rippling out from the mortgage foreclosure crisis. People who lose their homes to foreclosure often become renters. The result is the demand on Twin Cities rental housing is intense. The demand is so intense, the vacancy rate is very low and rents are rising. That means low income working families who are renters face higher monthly rents even though their income is unchanged. The precarious financial situation of low income workers puts them at risk for losing their housing ...

The Twin Cities rental vacancy rate the past three years has dropped from seven to around four percent. Average monthly rents over the same period are up more than $25, rising from $825 to more than $850 ...

New information shows the number of low wage workers in the Twin Cities will swell. St. Paul-based Wilder Foundation, a social service and research organization, predicts in some areas the number could double.

Wilder recently reviewed income data for several Twin Cities counties. Researchers found the number of people in those counties paying too much for their rental or owner occupied housing will double - from about 70,000 now to 140,000 by 2010 ...

http://minnesota.publicradio.org/display/web/2008/09/18/rent_foreclosures/

Foreclosures knock people out of their homes and into the rental market.

Okay.

Why aren't those foreclosed properties subsequently on the rental market??

What is happening with the homes that are emptied by foreclosure? Surely no one is buying them in today's market.

Why aren't they being rented out?

(Please notice that this merry-go-round only serves to transfer ownership to banks. People still pay.)

They put them up for auction. With credit tight, nobody can buy them. I think it might help if they let homeowners turn them into Section 8 homes. That would help low income people and then the rest of the rental market would be available to the former homeowners.

and then rent them out to get all the money from poorer people or those who lost their homes. In fact, they can have them move back into their old home and then charge them rent thereby screwing them twice. I personally think that there should be a relocation program on a percent of the homes, taking all the people that have lost homes in flooded areas and if they have some sort of income, move them into the foreclosed homes, cutting some of them up into duplexes. Not saying that the people who got shafted should not be allowed back into their original homes but on the remainder of the homes, wouldn't it be better than living in a tent camp?

Otherwise, the rental market wouldn't be so tight.

Okay, so they sit empty and lose value to the bank now holding title?

Oftentimes, that bank is offshore.

So people who had homes now pay rent; people who rent homes pay higher rent, homes sit empty losing value, title holders lose money.......

What is the freaking point of this merry-go-round?

They aren't going to buy something that is going down in value.

I think there's lots of things that could be done, but as long as people are madder at those irresponsible borrowers than the assholes who perpetuated this scam on all of us, then they won't advocate helping regular citizens. I do not know why regular people get so tight in the ass that somebody might get some break that they didn't get.