Although much is being written by renters impacted by COVID19, there hasn’t been much attention paid to the “mom and pop” owners of the overwhelming majority of rental properties in California that are being hard-hit by COVID19 – the same property owners who will be adversely affected by Proposition 21, the November ballot measure that affordable housing experts say will result in a “housing freeze.”
The National Association of Hispanic Real Estate Professionals (NAHREP) and UC Berkeley’s Terner Center for Housing Innovation released a survey this week that shows these property owners are suffering from the impact of the pandemic. Growing numbers of renters are not paying their rent, while property owners still are being required to pay taxes, maintenance costs, and mortgages. That’s resulting in a lose-lose situation for small property owners who are staring at the increasing likelihood of foreclosure and the wiping out of a lifetime of savings.
Of interest in the survey is that most of the surveyed landlords (67%) expect to derive at least one-fourth of their retirement income from their rental properties. More than one-third expect to get the majority of their retirement income from these properties. And those managing 5 to 19 units were most likely to see their properties as a source of retirement income. Of those landlords, 87% expect to get at least one-fourth of their retirement income from their rental properties and most (52%) expect to get more than half.
Proposition 21 would result in more economic pain for small property owners as well as millions of owners of single-family homes. According to the nonpartisan LAO, the ballot measure would reduce property values. That, in turn, would result in “high tens of millions” of cuts at the local level for community services – including those that would benefit renters.
This survey shows how fragile California’s housing market is, and reinforces why Proposition 21 is bad for small property owners, single-family homeowners, and renters alike.