Renters Are Being Burned By Foreclosures, Too
- Apr 15, 2008
New York–As the subprime fallout causes more buildings to go into foreclosure, more renters–especially in New York–are at risk of losing their home, the New York Times reports.Renters facing foreclosure can experience a steady decline in services, such as loss of heat, or–even worse–face eviction. Lucky renters may get a small amount of money from the new owner to pay moving costs, a practice called “cash for keys.”New Yorkers are particularly at risk, according to the Times. Rental units comprised roughly 65.6 percent of New York City housing in 2006, compared with 32.7 percent nationally.During New York’s last heavy foreclosure period, in 1993, almost 6,200 residential, commercial and mixed-use buildings went into foreclosure. At least 38,000 people facing foreclosure in 2007 were renters; foreclosure was initiated last year on almost 15,000 residential or mixed-use properties, the Furman Center said. Almost all were located in outside of Manhattan in boroughs, which contain 900,000 buildings with residential space.But the issue isn’t limited to New York. “This is a growing problem nationwide,” said Mark Zandi, the chief economist at Moody’s Economy.com. “Landlords of all stripes could potentially get caught up in this very severe downturn.”High-income markets shouldn’t see as much of an impact, according to Zandi. “I suspect that it’s going to be more of a problem for lower- to middle-income markets,” he told the Times.