Today we’re going to talk about the real estate housing crisis and the newly enacted eviction protections – Enjoy! Sign up to Morning Brew for free today: Add me on Instagram: GPStephan

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Under the new eviction freeze, this encompasses ALL rental units until December 31st, and applies to all tenants who earn under $99,000 per year as a single person, or $198,000 as a married couple annually.

After reading through the entire memorandum, it’s become apparent that the REASONING behind this is that – as people move from their house into closer quarters, they risk getting the “the illness,” and then giving it to others – so, the motivation is for the health and safety of all of us, as a society.

The tenant must also self certify that they’re making timely partial payments that are as close to the monthly rental amount, within their means…so, if rent is $1000 per month and the most the tenant can pay is $200 per month – this memorandum says you should be paying whatever you can. This is rather subjective as to what’s reasonable to pay given the circumstances, but they leave that to you to decide.

The big glaring problem with this, however…is that – when this is over – rent is still due, at which point, we’re right back to square one, and even though this is a fix RIGHT NOW – it’s more like kicking the can a little further down the line, at which point – we’ll still have to deal with the exact same problem, but in the future.

From a numbers standpoint, a Harvard Study found that there are 43 million renters in the United States…and the National Multifamily Housing Council found that, overall, most tenants ARE still paying their rent, even after the unemployment benefit ended.

They collect data from 11 MILLION apartments every month, and as we can see…last year, about 96% to 97% of tenants have paid their rent in full by the end of the month. THIS YEAR, that’s hovered about 95% to almost 96%. Even as recent as August 27th, 92.1% of tenants have paid their rent in full…that’s only slightly below the 94% that paid rent in full by the same time, last month.

Now, keep in mind – this doesn’t count partial payments or payment plans – but, overall, as we can see – missed rent hasn’t dropped THAT much from the last year, BUT – the big change is that those non-paying tenants can no longer be evicted. That means, if we have 43 million renters – and 6% of them are not paying in full – that’s about 2.5 million renters who are behind on their payments and protected by non eviction, and that’s about 400,000 MORE than we had at this same time, LAST YEAR, pre-illness.

The GOOD news…or the silver lining here…is that we’re unlikely to see a “Wave of foreclosures,” because the vast majority of home owners have plenty of equity in their home if they decided to sell. This study found that, overall, only 6.2% of loans were under water.

If we calculate this into real numbers, there are 128 million households in the United States…and 60% of those have a mortgage. That means, 76.8 million mortgages…6.2% are underwater…and that gives us 4.7 million homes at risk of foreclosure, or 3% of all homes in the United States.

That’s why I believe this is UNLIKELY to lead to any type of catastrophic real estate collapse on a large scale, but it DOES mean that SOME people – both landlords AND tenants – would likely get hit VERY hard, and here’s what you can do about that:

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at

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