Yesterday, I talked about employees fortunate enough
to retain their jobs by working from home. At the other end of the spectrum are
those living in rented houses, who have lost their jobs. Low-income, daily wage
workers are the worst affected. They risk being kicked out of their homes.
USA, England and Wales (not UK), were quick to
announce a ban on evictions (landlords removing tenants) and foreclosures (banks
confiscating the house for non-payment of a mortgage). In August, the
moratoriums will come to an end.
In India, informal requests were made to landlords to
be compassionate and delay or waive rent. No ordinance has been passed. This
was one reason why daily-wage migrants desperately tried to return to their
villages. Reserve Bank of India allowed delay of mortgage payment, though
warning that interest for delayed payment will be charged.
*****
Evictions have now started in the USA. In the middle
of May, the Texas Supreme Court ordered resumption of evictions and debt
collection. The Sheriff of Oklahoma County tweeted: “This is difficult…
Deputies will start serving judicial eviction notices this week and enforcing
evictions on May 26. Once the order is served, tenants have 48 hours to leave.
We will be compassionate & respectful during evictions.”
One institute estimates 28 million renters risk evictions (22.5% of American households). Undocumented and illegal migrants
prefer to be evicted, rather than deported, by letting the authorities know
about them. The dreaded scenario of an eviction notice on the door, a knock
from the sheriff’s deputies, and family possessions landing on the street is
already happening. Evicted people are worried about being taken to homeless
shelters. These crowded shelters are infamous for being Covid-19 hotspots.
UK has 8 million tenants, of whom 4.5 million have
private landlords. Others rent from councils and housing associations. England
moved the moratorium from 25 June to 31 August. (The expression kicking the can down the road was made
famous by Brexit).
Rent is not waived in any country, only eviction delayed.
*****
It is generally assumed that the landlord is wealthier
than the renter. That is not always the case. For some widows, property rent is
their only income for survival. Many house owners have hefty mortgages to pay.
In England buy-to-let is quite common. Reportedly, these mortgages are not
covered under the moratorium.
This is one of the pandemic’s irresolvable issues. To
be fair to renters is to be unfair to landlords. And those two have a
contractual relationship. In a domino chain, the tenant pays rent to the house
owner, who may be paying mortgage to the bank. The bank has lent that money
from the depositors’ savings. In similar crises, banks may end up with lots of foreclosed
(confiscated) properties which are not sellable. Liquidity is affected, and
depositors may not be able to withdraw their own money.
*****
With campuses and hostels shut, students have moved
back to their parents’ houses where possible. With no government support, evicted
Indians will need to move to the houses of their relatives/friends or be
homeless.
For renters without jobs and savings, eviction is only
a matter of time. USA and UK will have to stop issuing stimulus checks at some
point. The moratorium on evictions and foreclosures ends in August.
From September, we may see a flood of evictions and an
epidemic of homelessness.
Ravi