Renters make up 40% of the people facing eviction because of foreclosure. Banks don’t care if the tenants have a lease or have been paying on time, they just want the buildings to be emptied out.
While this might have made some sense during boom years, it is a terrible deal for everyone in a bust. Vacant buildings are targets of vandals, so the buildings can lose almost all their value. Vacant properties are a blight on surrounding properties, sinking the property values and social wealth of entire neighborhoods.
Worst off are the tenants. They often receive threatening letters from banks and lenders with only days or a few weeks notice. The paltry sums offered by the banks rarely covers lost security deposits, moving expenses, or the substantial costs of moving into a new place.
The Obama housing plan skipped over the issue. Activist groups like Boston’s City Life/Vida Urbana and legal aid organizations are organizing tenants and fighting back, but it will take government action and new laws and tough enforcement to change the equation.
Check out the article Renters in the Crosshairs in the latest Dollars & Sense.