The FT’s US managing editor Peter Spiegel travels to Philadelphia to ask if the housing crisis caused by the coronavirus pandemic risks derailing Donald Trump’s re-election hopes
Americans heading to the polls on november 3rd are facing a political landscape that is more complicated than any time in modern u.s history a pandemic racial division supreme court breakmanship but looming over all that is an economy that is struggling to recover from the sharpest collapse since the great depression and there’s no clear sign of that economic
Hardship than in the housing market an estimated 30 to 40 million american renters are at risk of losing their homes after tens of millions lost their job during the pandemic the data is bleak 32 percent of u.s households are facing the prospect of being evicted or having their homes foreclosed on and more than 30 of adults are struggling to meet their household
Expenditures with 10 facing food scarcity in the last 7 days when donald trump launched his re-election bid most of the campaign thought his closing argument would be about the economy it remains the one place where he consistently polls strongly amongst the american people however over the last six months since the start of the pandemic support for his economic
Policies have begun to wane as a matter of fact in the latest ft peterson poll the number of people who said that they think economic policies coming from the white house is hurting the economy overtook the number of people who think it is helping the economy we’ve come here to philadelphia the biggest city and one of the swingiest of swing states in the heart
Of south philadelphia 9th and pasayunk where gino’s steaks and pat stakes sit at each other’s corner a lot of people here are renters and a lot of people in the low and medium income the working-class neighborhoods no longer pay their rent which means their landlords are going to be unable to pay their mortgages it’s beginning to have that knock-on effect that
Many analysts have worried about for some time and a lot of people on wall street are worried about could it infect the financial system lower to middle income landlords are the backbone of the domestic real estate sector of the more than 47 million rental homes in the u.s more than 22 million are owned by so-called mom-and-pop landlords for these small landlords
Even a month without rental income can be catastrophic greg wortman is vice president of hapco the homeowners association of philadelphia they represent low to middle income landlords across the city as of july august it’s sort of when the stimulus really started to run out what did you start seeing in that in that segment of the population so the problem with
A running low to moderate income obviously is there more people that default with the rent so that’s when it’s good when it’s bad like it is now it exacerbates the situation we have a huge spectrum of men and women working together husbands and wives they’re all getting hurt and at this point it’s it’s almost to the point when people call up they’re they’re
Just confused because they don’t understand why they are the ones providing housing they’re trying to keep the people in there they’re trying to work with them why are we being painted the way we are the people that do have people that are paying are going to start to sell they’re all talking about it because the restrictions that they’ve seen put on the
Market they the government of every level has taken a piece of paper which is called a lease and that’s that is a legal tender piece they have taken that and said across the u.s states have enacted moratoriums on evictions they have been imposed in accordance with cdc guidelines in order to protect tenants during a pandemic but landlord groups say this is frozen
Rental incomes forcing many to face the prospect of repossession or selling up the largest banks in the u.s have already started making provisions for the worst case scenario and already loan loss charges across citigroup jp morgan and wells fargo exceed those of the 2009 financial crisis this is nowhere near the extent of mortgage defaults that occurred in the
Great recession so we’re not likely to see that kind of financial collapse however it is a far worse problem for low-income renters than the great financial crisis particularly vulnerable are people of color underrepresented minorities who we know are disproportionately hit by the loss of jobs we do not yet have a solution for it it is uh temporarily band-aid
Moratorium that’s a good thing but there is no one speaking of who’s going to pay the rent when the rent comes due federal assistance in form of the cares act has run out and the stalemate in washington over a new stimulus is not helping working-class americans we spoke to congressman brennan boyle of pennsylvania second district in northeast philadelphia this
Is the most unique economic downturn i think in american history because for some it’s not a recession it’s not a depression and yet for others it’s not a recession it’s not a depression it’s a total stop i agree with federal reserve chair jay powell we cannot go big enough i believe that we need to go even bigger than we have before i voted for the heroes act
Which was 3.4 trillion dollars i think we need a another coveted relief bill as soon as possible and i don’t think that will be the end of it either to the housing crisis we’re not just renters but also property owners and also the banks we do need to figure out a systemic way to prevent defaults and prevent affections just doing the short term you know that
Right now there’s a freeze on evictions in philadelphia there’s been a freeze on on sheriff’s sales but all of that is getting backlogged in in the system so suddenly months from now we have a tremendous amount of defaults on mortgages we’re going to have a tremendous problem on our hands i think there needs to be a systemic fix on on the housing issue what
We’ve seen here in philadelphia is being repeated in working class neighborhoods across the country it is even as wall street and equity markets continue to rise the real economy in the us is suffering people who have jobs are losing them and people who thought they could pay their rent or have been paying the rent using savings or federal aid or state aid are
Now running out of that aid donald trump needs those working class white voters in cities like philadelphia pittsburgh and elsewhere here in pennsylvania that took him over the line in 2016 to return to 2020 to get him back to the white house but the reason is not likely to happen here in pennsylvania in many other states is because those very voters are turning
Against them particularly women women we show in polls are much more concerned about those pocket bush issues those issues that come around around the kitchen table uh they’re concerned about the inability to pay rent the concern about the inability pay their bills and if those voters do not return for donald trump here in pennsylvania and other states like it
Donald trump is unlikely to win re-election on november 3rd
Transcribed from video
Why America's next housing crisis threatens Trump's re-election | FT By Financial Times
