WASHINGTON, DC - Homeowners aren't the only ones feeling the pain of foreclosures. Nearly half of households losing their housing to the foreclosure crisis are renters, according to a new study of four New England states, including Massachusetts. The National Low Income Housing Coalition in Washington, D.C., estimates renters account for 45 percent of households in properties going through the final stages of foreclosure in the four states.
The coalition studied foreclosures in Massachusetts, Connecticut, New Hemisphere and Rhode Island for 2007 and the first three months of 2008. In New Bedford, city officials, housing advocates and legal experts agree the local spike in foreclosures is hurting renters. "It's just as bad for tenants as it is for homeowners," said Tina Leahy, a paralegal who works in the New Bedford office of the New Center for Legal Advocacy Inc.
The number of foreclosures has been skyrocketing in New Bedford, and multifamily houses represented a significant share of the distressed homes. During the first three months of 2008, the overall number of properties lost to foreclosure in the city jumped 73 percent compared to the same period last year, from 45 to 78, according to The Warren Group, publisher of Banker & Tradesman.
At the same time, the number of three-family houses foreclosed in the first three months of this year more than doubled over the same period last year, going from nine to 19, according to the data. Two-family forclosures increased from 11 to 13. "Unfortunately, it's not only the owners of the property but all the people inside who are affected by the foreclosures," said Patrick Sullivan, the city's director of housing and community development.
The city is reaching out to affected tenants, letting them know their rights and trying to find alternative housing if necessary, Mr. Sullivan said. The national coalition calculated 14,993 properties in foreclosure in the four states translated into 23,440 units, when the units of multifamily properties are counted individually. The majority of the overall units, 56 percent, were foreclosed as part of a multi-unit building. Researchers believe most of those are renter-occupied. The figure excluded condominiums, which are foreclosed individually, according to the study.
"The rentals are a big part of the foreclosure crisis, and renters are a big part of those affected," said Danilo Pelletiere, the coalition's research director, who led the study. The soaring number of foreclosures has a broader impact on the housing market. While rental properties are subject to foreclosures, homeowners who lost their houses are often trying to rent a place in a tight market, said Dr. Pelletiere.
According to the study, if the local, state and national responses to the foreclosure crisis limits assistance to single-family homeowners, they would exclude many families hurt by the problem. Fall River/New Bedford Housing Partnership, a group of area banks and nonprofit organizations formed to address the problem, has been holding regular workshops for distressed homeowners.
For its next workshop in June, the partnership will expand the focus to include the needs of tenants hurt by foreclosures. The date and location have not been set. The city of New Bedford has a task force to help affected tenants, and it is working with the partnership on the upcoming event, said Mrs. Leahy, who belongs to both the regional partnership and the city task force.
When a house is foreclosed, the renter becomes a tenant-at-will and has a right to due process for evictions. The lender has to go through the eviction process either in a housing court or district court. However, tenants are not always aware of the procedures, Mrs. Leahy said. "Some people who get a letter don't know their rights, and they just up and leave," she said. &q
Source: South Coast Today