The numbers are staggering. More than 20 percent of properties facing foreclosure nationwide are multifamily and single-family rentals, according to a new report from the Washington, D.C-based National Low Income Housing Coalition (NLIHC). Since rental properties often are home to multiple families, renters make up roughly 40 percent of the families facing eviction.
"Our No. 1 goal [in publishing the report] is to raise awareness on the impact of the foreclosure crisis," says Keith Wardrip, NLIHC's senior research analyst. "We hope that will translate into action."
Currently, that action occurs through a patchwork of local policies, which vary widely by state. "A lot of states have proposed bills but most just give renters more notice that they will be evicted?often times 30 days?and we feel that is still not enough time to uproot a family and expect them to find affordable housing and get their affairs in order," Wardrip says.
The coalition is pushing for the federal government to play a key role in mitigating the effects of the foreclosure crisis on renters, calling for the allocation of $2 billion for relocation and temporary housing assistance for tenants who live in homes that are foreclosed upon and protections for tenants in properties subject to foreclosure. These measures would include the requirement that existing leases be honored and renters be provided with at least 90 days' notice before eviction in the absence of a lease.
Federal legislation is in the works. Under the last Congress, the House and Senate both proposed bills that would have provided for tenants' protection in the form of a notice and the right to remain at home under certain circumstances. The legislation has not yet been reintroduced in the new Congress, but Danna Fischer, legislative director and council at NLIHC, anticipates the bills will resurface. Plus, the House bill for the most recent draft of the economic recovery package includes $1.5 billion for the emergency shelter grant program, which can go toward helping renters facing foreclosure.
Smart solutions are already in place, adds Sharon Price, director of policy at the Washington, D.C.-based National Housing Conference. She points to Fannie Mae's and Freddie Mac's policies to allow renters to stay in foreclosed homes and hopes that other lenders will follow suit. "We need to change the mindset of the lender to say, 'OK, we are in a new environment, and we need to try and change our practices,'" Price says.
"There are a lot of benefits to keeping renters in their units," she continues. "A lender will kick someone out and, in the end, need someone to fill the space. So instead of doing that and going backwards, why not figure out a way to keep people in their homes so you've saved a step in your process, you've helped a family, and maintained property and generated income? The fact that Fannie and Freddie are setting the stage and taking the lead on that is really positive."
For a complete copy of the NLIHC report, click here.