When we talk about the foreclosure problem, we usually focus on the effect on the borrower-owner who had a a loan they could not afford. But where the borrower was a landlord, foreclosure causes a raft of problems for tenants, as well.
A Star Tribune story on a mass eviction in North Minneapolis illustrates this well.
The tenants had advance notice that they would eventually have to move, but also hope that someone else would buy the building and continue renting to them. But that did not happen, and all the tenants were forced out.
If the property was a problem before, now it will be an eyesore and a problem as it sits vacant and attracts squatters, copper thieves, and more drug dealing. And the tenants, who had little to begin with, have even less, now that some of their things are locked inside the vacant building. Most will find new housing. Some will not.
In the end, everyone loses. The property owners bad investment leaves tenants in the lurch, and neighbors with a problem property likely to get worse. It is time to drop the “bailout” rhetoric and start finding solutions to the problem.
[photo: Star Tribune]