As we all know, COVID-19 isn’t just a horrifying and deadly disease, it is also causing profound disruptions to our local economy. Just this week, unemployment claims jumped to 16 million nationally, and about one-third of renters were unable to pay rent in April. Those numbers will continue to get worse. Restaurants, retailers and other small businesses are facing permanent closures and/or bankruptcy.
This spells instability throughout the housing and real estate markets--and in the case of mixed use buildings, these issues are often connected, in order for small and medium sized property owners to pay their mortgages and loans.
The eviction moratorium is a step in the right direction, but it is still confusing to people and it doesn’t go nearly far enough. We need to work with other Oregon cities and counties, the State of Oregon, and our congressional delegation to fight for a holistic solution that leaves everyone stable.
The best solution would be federal vouchers that go to low-income COVID-19 impacted renters, homeowners and small businesses, that they can give to the owners of their buildings. Those owners can in turn submit the vouchers to their lenders, and their lenders can pass them on to Wall St and the other bondholders holding the securities that contain the loans they issued.
This puts us in a position for the Federal Reserve to provide real relief to real people by acquiring any troubled assets that emerge from this harrowing time in our history, rather than just subsidizing hedge funds and other major players owned by billionaires.
But that process will take time that we don’t have. We need more direct help now to the people who are most economically unstable. These people also happen to be the workers and small business owners who actually keep our country running, as this quarantine so clearly demonstrates to anyone who didn’t already know the roles played by grocery store workers, restaurant workers, bus drivers, nurses, teachers and so many others.
To achieve this, I would look to tap the roughly $1 billion in city, regional and state housing funds that are already on the table. Much of that is targeted to new construction. We need to call an audible right now to evaluate where that money might deliver better public results if used as a resource to stabilize multifamily housing that is on the verge of going into foreclosure. We should evaluate, on a case-by-case basis with professional underwriters, quickly, proposals from nonprofits and for profit owners to use affordable housing funds to buy long term affordability in exchange for short term solvency.
If we can get 10 units in an 50 unit upscale apartment complex locked down as affordable for thirty or sixty years for less cost than new affordable construction, we should absolutely do it.