President Joe Biden and the federal medical authorities have so far refused to let landlords dump po’ folks on the street in the middle of a pandemic.
Their kind-heartedness will be particularly appreciated in New Orleans, which was suffering a housing crisis even before the coronavirus struck. Pay in the tourism industry, on which the city is sadly dependent, is so lousy that the demand for inexpensive accommodation has always exceeded supply. Now that COVID-19 had scared the tourists off, countless tenants in allegedly “affordable” accommodation can no longer make enough to pay the rent. A moratorium on evictions became a humane imperative.
This was not just a favor for hard-up renters but for society at large. The homeless, whether they sleep rough or in crowded shelters, are more likely to contract, and spread, disease than settled citizens.
The moratorium has just been extended through the end of March, and it will presumably be extended, again unless the virus is miraculously tamed and the economy picks up. We are all hoping that comes to pass, but chances are the arrears will continue to accumulate. Tenants are not the only ones who will shudder at the prospect.
Property taxes for New Orleans homes have surged; now businesses could get a huge tax cut
Landlords may not have the first claim on our sympathies in hard times, but they do not all fit the stereotype of the unfeeling plutocrat. Furthermore, the public interest requires them to stay in the market lest an exacerbated post-pandemic housing crisis should stymie economic recovery. It is already apparent that American landlords have lost way more revenue than they can ever hope to recoup.
Millions of people are behind with their rent by an average of $6,000, and by the time the crisis is eventually over most of them will have no chance of paying off all they owe. With Democrats in control of all three branches, the federal government can probably be relied upon for some relief, but the number being kicked around is $25 billion.
According to the National Low Income Housing Coalition, $100 billion in rental subsidies is needed right now.
You’d have to put Bernie Sanders in control of the country to have any chance of shaking that much moolah loose. A lot of landlords are going to take a bath.
Well, there is no pandemic without plenty of misery, and losing a bunch of rental income is not the worst fate that can befall these days. Such a philosophical approach is admittedly easier to adopt for those of us who do not own rental property.
Those who do had quite a shock last year when New Orleans Assessor Erroll Williams completed the citywide reassessment he is legally obliged to conduct at least once every four years. Much of the city’s housing stock, owner-occupied and rental, was reassessed upward, while Williams decided to hand out $42 million in tax breaks to businesses, including car washes, funeral homes and such worthy causes as Harrah’s and the Ritz-Carlton.
It would have been a saintly rental property owner who did not wish to tell Williams where to stick his assessments, many of which were suddenly doubled or even tripled. It is a strange system that has the city taking money away from the same people the feds are proposing to reimburse, but a government with so many layers is virtually guaranteed to be at sixes and sevens.
An increased assessment, in theory, does not necessarily mean a tax increase, for state law requires the millage to be adjusted to ensure that the effect is “revenue neutral.” But there is a catch. Each recipient of property tax revenue — a city council, school board or sheriff, say — has an option to “roll forward,” meaning that the old millage is reinstated and the extra revenue gets spent.
Do not be shocked when I tell you that at the best of times, this is a popular option among politicians. Government agencies in New Orleans are really feeling the pinch right now, together with taxpayers, landlords and tenants alike. While tenants have been unable to pay rent, landlords will have lacked the money needed to keep properties in decent shape. When the eviction ban is finally lifted, we’ll find out how bad the city’s housing crisis really is.
Email James Gill at firstname.lastname@example.org.