Eviction Crisis Parallels The Sub-Prime Crisis Of The Great Recession

by Mac Slavo of SHTFplan

A new alarming parallel between today’s eviction crisis and the sub-prime mortgage crisis which helped spur the Great Recession has surfaced. The economy is sending warning signs to those who choose to take heed.

The eviction crisis is worsening to the point that Georgia State University authors feel that protections should be put in place to safeguard renters, such as longer eviction notices and legal protection, according to Market Watch. However, that could make the crisis much worse by homeowners simply refusing to rent their properties out at all. More government intervention (whether it’s designed to protect people or not) will only make a very bad situation worse.

Evictions have become a real visible effect of the volatility in today’s economy. Stable housing is increasingly out of reach for many Americans, as both rentals and homes to own grow more expensive, options dwindle, and wages remain stagnant. But some scholars at Georgia State University, in conjunction with a ProPublica journalist, completed a new study which shows that not all evictions are created equal.

The researchers who conducted the study examined “serial” eviction filings (those done repeatedly by a landlord against a tenant). By comparing serial evictions to ordinary ones, the researchers found patterns of landlord “behavior and intentions”, some of which are reminiscent of the worst of the housing crisis a decade ago.

As of right now, nearly half of Americans are “rent-burdened,” (0ften known as “house poor”) which means that they spend more than 30% of their income on rent, according to Market Watch‘s statistics. Homelessness is also on the rise and has been for quite some time. When it comes to children who have experienced eviction in the last decade in the United States, the numbers could be as high as one in seven.

Similarly to the foreclosure crisis that foreshadowed the Great Recession in 2009, there appears to be a race element that needs to be discussed. Evictions are currentlydisproportionately hitting African-Americans. Black women in Milwaukee, for example, were evicted at a rate three times their share of the population, and black renters in metro Seattle were evicted four times as frequently as whites there, according to earlier research. This data bears mentioning, but keep in mind, that there’s no reasoning behind the whys of these evictions.  If people aren’t paying rent, they will and should be evicted especially if a contract is signed.

“Filings can be the beginning of a forced removal process, but they are also frequently a tool used to enforce the collection of rent and fees,” the researchers noted. Which is incredibly fair, when taking emotion out of the equation. A contract is a contract, but this eviction crisis is a symptom of the larger problems with the economy rather than the media hyped narrative of “the rich are keeping the poor down” which was basically the conclusion of the Georgia State University study.

Protecting oneself and one’s family against eviction is usually as simple as having an emergency fund.  If you can, save up three to six months worth of expenses so that in the event of an emergency or decrease in income, you will not be breaking your contract (which is your word you signed off on) with a homeowner who has agreed to let you live in a home they own in exchange for a monthly fee (called rent.)

Saving can seem like a daunting task, but if you buckle down when times are good, a catastrophic emergency becomes nothing more than an inconvenience.

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