Renters and the Housing Crisis via the NY Times

Although foreclosures, the most dramatic and frightening aspect of the housing crisis, have not yet become a significant trend in Manhattan real estate, it is possible that we are simply lagging a year or so behind the rest of the nation in terms of how the housing crisis unfolds. First come the price decreases, then the expanding inventory that turns into a glut and an increase in unemployment may lead to foreclosures becoming more common in our city. I certainly hope that this is not the case and that people will be able to hang on to their property and get help remaining in their homes.

How would a wave of foreclosures affect Manhattan renters? In the past, when a bank takes possession of a property, any renters would be out of luck. Today’s NY Times published an article stating that government-backed Fannie Mae is stepping in to stop renters being evicted from foreclosed properties around the country. Perhaps private sector lenders will follow suit. It would be in their best interest with distressed property being so difficult to sell right now, at least by collecting rent they see some return on their investment. Read the full article here.

A New Kind of SRO

“Single Room Occupancy” and “Rooming House” are NY code for the down and out, the unhousable. Although it is fairly common in Europe to share kitchens and bathrooms with strangers in rental accommodations, the practice has fallen out of fashion in New York City since the second half of the twentieth century. According to this NY Times article, shared kitchens and baths are more common among the city’s young and creative than you might have thought.

Often easier than dealing with strangers as actual roommates–with all the financial pitfalls that entails, people are more than willing to share public areas with people they don’t really know in order to save several hundred dollars a month. The article is quick to point out that some of these arrangements may be operating in a gray area of the law. I was reminded of this Times article from 2006, “Out of College but Now Living in Urban Dorms” about a woman who opened an urban dormitory for post-college young professional adults in Harlem, also an interesting read.

Renting Good for your Health? Homeowners Less Happy than Renters

In this article in Portfolio, Felix Salmon writes about the downsides to home ownership. According to Felix, homeowners are less happy than renters because they are subject to stresses that renters simply do not have–including large mortgage payments, home repairs and (we’ve been hearing a lot about this one in the news) foreclosure. The advantages of being a renter are numerous, including the freedom to move at any moment, having a super that takes care of everything and Felix claims that home-ownership can be a drain on your emotional and financial resources and the insistence on home-ownership is a culturally-determined American ideal. Felix says:

“if Americans could be persuaded that rent payments aren’t “wasted money” and that owning often makes less financial sense than renting, I think the rate of homeownership might, happily, drop substantially. But it’s not going to happen. The ideal of homeownership is deeply embedded in the American psyche, and any datapoints which don’t fit into that ideal are automatically discarded.”

via Brownstoner