People’s lives and health have been devastated by the COVID-19 pandemic. The economic downturn has been caused by the efforts taken to contain the virus. Uncertainty surrounds its severity and duration at this point. An increase in the severity of the financial crisis might have an impact on global financial stability according to the most recent Global Financial Stability Report. Risk assets’ prices have plummeted since the pandemic’s onset. Risk assets have fallen by 50% or more during 2008 and 2009, which was the height of the recent selloff. For example, many equities markets have experienced losses of 30% or more at the bottom of the market. Credit spreads have risen sharply, particularly for companies with weaker ratings. Short-term funding markets, particularly the global market for US dollars, have also shown signs of stress.
This has left many residents on the verge of being forcefully evicted from their houses into the streets. The federal government 2-year eviction moratorium has already expired, and landlords are coming forward to file eviction cases. Reports identify that the judiciary is receiving more than 2000 eviction cases every week, revealing the seriousness of the issue. Statistics further reveal the devastating impact of the pandemic on the housing crisis in NYC by highlighting that over 596,000 families are remaining behind on rent. There were more than 110,000 cases of eviction filed during the pandemic (Cohen, 2021). Consequently, the risk of eviction and rent debt continues to threaten people of color residing in NYC. Further evidence reveals that the mission to bail out the indebted residents is experiencing revenue gaps which is threatening the ability of the real estate market to accommodate the low-income earners around the city and also those who have been suspended from their current place of work (Rahmaniani and Mohammadmoradi, 2021).
a. What is the problem -Description of the problem?
As the pandemic continued to worsen towards the middle of the year, many residents were willing to leave the city to embrace suburb life as they found it more affordable and could acquire spacious spaces (Suyin Haynes, 2020) With many vacant houses, the landlords came up with the initiative to lower rental prices to attract more residents to mitigate the increasing number of empty homes.
b. Why is it a problem?-the basis of the problem
Current literature reveals that although this motive encouraged many people to take advantage of the reduced prices, many suffered from the risk of eviction as the rental prices soon increased (Cohen et al., 2021). Many renters were yet to receive their jobs back after being suspended from mitigating the pandemic.
c. What is the magnitude of the problem:
Research shows that although the housing crisis and rent unaffordability were still present before the pandemic, as the city had recorded a 59% increase in the number of occupants in the city’s shelter between 2009 and 2019, the pandemic has played an integral part role in exacerbating the issue. In connection to this, the pandemic is blamed for intensifying economic inequality margins and housing prices.
Preliminary Literature Review
This evidence reveals the challenge that is lying ahead for the real estate market to overcome. It also shows the dilemma that the residents are currently facing, where they are left with the option of remaining on the property illegally or ending up on the streets with their families. The residential real estate market in New York City is still being transformed by the new Coronavirus. There was a significant difference in the number of deaths and cases in New York City during the early 2020 pandemic outbreak compared to other areas of the United States because it is a densely-populated area. Domestic revenue levels and trends, as well as foreign flows to developing economies, were already deemed insufficient to meet the Sustainable Development Goals prior to the COVID-19 crisis occurring (SDG). Low- and intermediate countries may find it difficult to fund their public health, social, and economic responses to COVID-19 because of their high levels of public debt and the added strains caused by the pandemic on all key sources of development finance. Observations so far point to large-scale loan and equity flows from developing nations, which are occurring in tandem with a decline in remittances and are having a ripple impact on domestic finance. Increased likelihood of catastrophic setbacks, which in turn increases our vulnerability to pandemics and climate change and other international public calamities such as Ebola and ISIS. While tax revenues remain the only long-term feasible source of funding for many government services, no single source of project financing can take on this problem alone. Official development finance is a key countercyclical driver. The study will use literature analysis as the methodology to analyze other researchers’ opinions on the issue and the recommended strategies that can be followed to navigate the problem comprehensively. The literature analysis will also provide insights into the extremity of the housing crisis and the pandemic in NYC. The study aims at analyzing the issue of increasing housing crisis in New York City during the pandemic and the impacts the situation is having on tenants, landlords and the real estate market in general.
2. Goal Statement
The goal of the paper is to establish the impact of Covid-19 pandemic. This will assist in enhancing a deeper understanding on the financial implications of the pandemic particularly after the government shifted more focus on the containment of the pandemic.
The study will utilize quantitative research in collection and analysis of data.
Cohen, J., Friedt, F., & Lautier, J. (2021). The Impact of the Coronavirus Pandemic on New York City Real Estate: First Evidence. University of Connecticut School of Business Research Paper No. Forthcoming.
Rahmaniani, Y., & Mohammadmoradi, A. (2021). Evaluative model of effective and influential factors on the quality of small-scale apartment units in metropolitan areas. Journal of Sustainable Architecture and Urban Design, 9(1), 149-131.
Suyin Haynes (2020). COVID-19 is prompting wealthy people to move out of cities. the plague had the same effect hundreds of years ago. The New York Times.