OhioNews Bureau

COLUMBUS, OHIO: Collateral damage from the housing foreclosure crisis that continues to rampage across Ohio is increasingly affecting landlords who give renters, many of whom are families, little or no notice of the pending loss of their shelter, according to results of a study of filings that revealed that rental foreclosure filings in 2007 now represent nearly 30 percent of all residential property foreclosures. Meanwhile, a recent study of economic trends shows incomes of Ohioans are spiraling downward.

Renters Silent Victims of Foreclosure Crisis

The number of foreclosure filings in Cuyahoga County and across Ohio continues to rise, according to a new report from Policy Matters Ohio. PMO, a non-profit, non-partisan economic research group, showed that not only was there an eight percent increase from the previous year in residential foreclosure filings but that rental foreclosure filings grew at a higher rate than owner-occupied foreclosure filings, representing nearly 30 percent of all residential property filings in 2007. Renters, which make up more than a third of Cuyahoga County’s population, are impacted to equal degrees as individual owners forced into foreclosure but because they are renters are often not considered in the foreclosure process. PMO’s research shows that renting families are often given little, if any, notice about the house going into foreclosure and may face significant costs when they leave. Its study, specific to Cuyahoga County, Ohio’s most populace, investigates how renter families are affected by the foreclosure process. On the statistical side, PMO’s report said that more than 35 percent of foreclosure filings in Cleveland (2,586) and East Cleveland (175) affected rental units and that the majority of inner-ring suburbs experienced increases in rental foreclosure filings.

Tenants receive little to no notice about their rental property being in foreclosure, the report said, noting that the purchaser often evicts tenants immediately, which hurts families financially and can dramatically disrupt their lives. The Cleveland Housing Court, the report cites, notes a near doubling in eviction filings against renters because of foreclosure filings.

It said that families displaced by a rental foreclosure can face high costs including lost and new security deposits, increased new rent, moving and storage costs and property costs, which could amount to $2,500 for the for average family. Furthermore, based on the estimated number of rental units, the report said it is possible that renter families experienced $10 million in losses because of foreclosure filings.

The report recommends enacting state and federal laws that allow a renters’ tenancy to survive the foreclosure process, mandating a proper notice of foreclosure to renters of 90 days or more, establishing a revolving, no- or low-interest loan fund to help renters with the new costs associated with moving and encouraging banks to offer financial incentives rather than evictions.

Incomes Rising as Jobs Vanish

Growth in the income of an average taxpayer has been very uneven across Ohio, according to a report on economic indicators authored by economic research analyst George Zeller called Income Trends in Ohio Communities. Zeller says that during the last two decades, incomes rose briskly among taxpayers in already affluent communities but at the same time, incomes fell on a widespread basis within Ohio’s low income communities. In addition, he says, incomes fell sharply in Ohio’s cities while they rose sharply in suburban areas surrounding those cities, creating a gap between incomes received by average taxpayers in high income communities and incomes received by average taxpayers in low income communities has continually grown.

But during the 2000s recession, the degree of income inequality between high income communities and low income communities weakened within Ohio. He reports that Incomes fell for the typical Ohio taxpayer during much of that recession in both high income communities and in low income communities.

The damage to incomes of Ohio taxpayers during the 2000s recession was very widespread, he said, and that mean incomes fell for the average taxpayer by 4.4 percent in Ohio between 2000 and 2005. The median income of a taxpayer simultaneously fell by 7.2 percent during the first five years of the 2000s recession in Ohio through 2005. He says the growing inequality was fed by imbalances caused by the lengthy impact of the 2000s recession in Ohio, which lost 4.6 percent of its jobs but only 1.9 percent of its aggregate real paycheck earnings during the 2000s recession. Thus, he said, the real paycheck earnings of surviving jobs actually increased during the recession, particularly after 2004. Increasing aggregate earnings at the same time as employment totals fell caused income inequality to begin rising once again in 2005 within the state.