My apologies in advance if it sounds like this post was written by the love child of Debbie Downer and The Prince of Darkness. I’m normally a glass-half-full kind of guy, but there’s not enough lipstick to put on this pig. The New Orleans rental market is about to take a big hit for everybody involved.
The bottom dropped out of our economy about 5 months ago, but federal stimulus programs have put off most of the pain. It’s like we’ve been living off of our credit cards. Well, we’ve just about maxed out our credit, and the you-know-what is about to hit the fan.
The real estate market has been resilient through this pandemic, to say the least. All that has shown is the people who are bearing the economic brunt of COVID-19 are those without the means or down payment to purchase a home. Most restaurant workers, hotel employees, musicians and other New Orleanians whose livelihoods depend on tourists typically rent. Thanks to expanded unemployment benefits and the eviction freeze, they’ve been able to limp through this mess, but that support is getting wobbly.
The final eviction protections ended July 24th. (The recent executive order encouraged governmental agencies to pursue funding and solutions, but did not actually extend the moratorium.) Landlords have to provide 30-days notice prior to eviction, which means we could start seeing the wave begin in 11 days.
Not coincidentally, the number of new rental listings in New Orleans is up 67% in the last two weeks. That trend is bound to continue, so we’ll have more places to rent and fewer people who can afford them until conventions, festivals and football games start happening again.
This situation is dire for thousands of tenants in New Orleans. The humanitarian toll of this issue is undeniable and providing shelter to those who get evicted is the highest priority. At the same time, landlords are also taking a hit. It’s easy to think of landlords as a bunch of balding guys in suits lighting stogies with twenty dollar bills, but that’s not the reality in most cases. There are plenty of retired folks who live on rental property income. When tenants can’t pay the rent, landlords can’t pay the mortgage.
Eventually, there could be some silver linings for a city with an affordable housing problem. Rents will have to come down until the economy recovers. Landlords could end up selling their properties rather than letting them sit vacant. That additional inventory could bring prices down in the city. But in the meantime, a whole lot of people are going to need a whole lot of help to weather this impending storm.