San Francisco’s emergency rental assistance program, which can provide up to six months of rental assistance, including three months of future rent, to tenants at risk of becoming homeless due to a pandemic-related loss of employment or income, will begin accepting applications today, May 28.
In order to qualify for assistance, tenants must (1) have qualified for unemployment benefits or experienced a documented reduction in household income due to the pandemic, demonstrate a risk of experiencing homelessness or housing instability and (2) have a household income at or below 80% of the area median income (AMI), the limits for which currently range from $102,450 for an individual to $146,350 for a family of four. Priority will be given to applicants with very low (50% of AMI) and extremely low incomes (30% AMI).
Keep in mind that assistance will not be allocated on “a first-come, first-served” basis but rather based on the risk of becoming homeless, or experiencing housing instability, with eviction protections for non-payment of rent slated to expire on June 30, 2021.
Comments from Plugged-In Readers
So basically an indirect bailout for landlords? It would seem that extending moratoriums would be more financially prudent for the city and benefit a larger portion of those in hardship.
On first look it definitely looks like a backdoor bailout for over-leveraged landlords, of just the type that San Francisco has quite a surplus of.
However it’s not clear how The City is paying for this. The size of the fund is $90 million and as the post above indicates, it’s going to be targeting tenants at risk of becoming homeless or experiencing housing insecurity because of the pandemic. If a bunch of qualifying applicants come in right away and exhaust the fund, then that will tell us a great deal about the true market price of housing for S.F.’s working class (i.e., it’s too high for the fundamentals — local household incomes — to support).
Re: how The City is paying for this…from San Francisco to distribute $90 million in rent relief, third ‘graph:
So it appears that San Francisco is just putting a local dollop of city dressing on a salad of the Federal Government’s making here. This is exactly what I had in mind when I mentioned a Biden bailout earlier this month.
When “free” is not “free”.
Sorry, I didn’t see anything in this assistance package where a tenant must be seeking employment to qualify for both unemployment benefits and rent assistance. The longer these handouts continue for those not seeking employment the longer small business owners are put at risk for closing their establishments. It may be well intended but it’s really poor policy to keep the work force fat and happy sitting on their couch playing computer games day in and day out. Free handouts are killing small business.
From earlier this month, Employers, governors push myth that unemployment checks keep lazy workers home, Los Angeles Times columnist Michael Hiltzik wrote:
Go read the whole column. He relates that Federal Reserve Chair Jerome Powell was asked about the effect of unemployment benefits on recruitment and Powell said the effect is not clear.
So I guess if we use the twisted logic of Heidi Shierholz it makes perfect sense to make small business owners compete with the unlimited resources of the government.
Let’s see how long small business owners are able to compete with our government paymasters.
They don’t have to compete. If small business owners (let’s be honest, we’re mostly talking about restaurant owners here) don’t want to “compete” with unemployment supplements they can always embrace the teachings of their chosen Saint (that would be Ayn Rand) and go on a John Galtian “strike” and refuse to provide services to the public (and jobs to the ungrateful).
Such owners can simply shut down their businesses in S.F, sell their real estate holdings and move their businesses to states such as Texas, Montana, South Carolina or the twenty-two other states who are going to opt out of enhanced unemployment programs at the end of June.
The longer those Fed handouts to Wall St and real estate layabouts in the form of historic low interest rates and massive mortgage security purchases continue for those deadbeats who own most of the assets, the longer all Americans are put at risk for massive housing inflation completely disconnected from organic demand.
I concur. Artificially low rates are effectively a welfare handout to the wealthy, who all seem they feel entitled to the free money handouts of which makes them feel “smart”
They’re a handout to debtors at the expense of creditors (or “borrowers” and “savers”). Over time this has meant different things – wealthy vs. poor, old vs. young, etc. – but in the context of a real estate forum, something that (1) diminishes the returns from saving, while (2) increasing the cost of that which you’re saving for has an obvious effect on affordability. Gee: imagine that !!
I don’t necessarily agree with Notcom’s point #1.
Real estate is just one asset class that benefits from low rates. You might be saving for purchasing the real estate by investing in the stock market, and equities are also an asset class which benefits (albeit more indirectly) from historic low interest rates. So if you’re benefiting much more from the run up in the values of equities than being hurt by the run up in real estate values, the reduction in real estate affordability might not be a net negative for you.
I agree with Astrosfan that the moyenne bourgeoisie seem to feel entitled to the free money handouts, but when working class people get the benefit of any public policy, they are the first people to decry “handouts”.
Uhm…yes you can “save” by investing in the stock market, but by that measure you can also “save” by spending a weekend at Golden Gate Fields. In either case you run a substantial risk of timing issues; but regardless – and more to the point – I don’t think that’s how most people actually operate.
Well, I HOPE they don’t operate that way (but like the SS Editorship, I’m often proven overly optimistic)
If an asset is appreciating faster than the risk-free rate, you should assume the asset is not risk-free.
Low interest rates can manifest as low rents due to lots of building or high prices due to low rental yields. Which one we have is a policy choice made locally, not by the macroeconomic determinants of interest rates.
This is a fallacy. Developers and landlords charge what the market will bear; lower costs mean higher profits, not lower rents.
Low interest rates fuel asset speculation and bubbles. Lower interest rates make monthly payments more affordable but increase total price. Higher interest rates increase monthly payments but lower total price.
Wrong. Landlords will charge what the market will bear, and low interest rates let developments pencil out at lower market prices for rents.
Low interest rates do not fuel bubbles. Japan has had low interest rates for 30 years, and their last real estate bubble was before the low interest regime.
Japan’s interest rates have been so low for so long because they are still recovering from their last bubble. Japanese asset prices are still well below where they were in the late 1980s. Their economy hasn’t recovered to a level at which bubbles can form. May I suggest some Minsky for your after-dinner reading pleasure?
Who are these anti-capitalist developers you speak of who sell for less than the market will bear?
And why the quick recourse to the implicitly self-negating ad hominem attack? I comment far less than you, but, thanks to the apparently scarce super-power of critical thinking, I sure seem to understand more. Do all real estate industry operatives have such thin skin?
(Insert maxims by Sinclair and Santayana here ;p)
Let’s start with the easily invalidated facts: a Google site search for “Posted by two beers” and “Posted by Jake T” shows that you post at least two orders of magnitudes more often.
Next, the arguments: first you claim that low interest rates, unqualified, fuel bubbles, implying that somehow there is a “bubble” in market rents (which is price of living). When I point out that low interest rates have many causes, including low predicted demand growth, you walk back your claim about bubbles and instead come up with a straw man about slow growth. In this retraction, you don’t update your original claim about low interest rates invariably leading to asset price inflation.
You still haven’t outlined the mechanism by which low interest rates drive higher rents. Bubbles in assets aren’t correlated with rents. In fact, if real estate prices were high because rents were high, that would be the market correctly pricing future cash flows, and not a bubble.
It’s not an ad hominem to correctly point out that you don’t know what you’re talking about. It would be an ad hominem to say your outfit was ugly. Which I did not say.
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