A weekend topic starting with two articles in the Los Angeles Times. “Four months into the pandemic, never has the city seemed so upside down. Parking attendants wave flags to the empty streets. Storefronts, boarded-up from break-ins, merge with stalled construction sites. Homeless camps double as sidewalk bazaars. ‘COVID,’ says bike messenger Jimmy Lizama, ‘is a truth serum bringing it all out.’”

“For 10 years, downtown was a boom town. Then people started to get sick, and restaurants closed, residents fled and office workers kept a distance. Suddenly it was 2008 all over again, another recession tightening its grip on life, and the gains of the last decade — from blight to promise — are at risk. John Zanetos, a broker with CBRE, feels the emptiness. He occasionally drives from his Manhattan Beach home to meet prospective tenants downtown, where many office buildings stand nearly 90% empty.”

“Andrew Lowy plays second and E-flat clarinet for the Los Angeles Philharmonic, which has canceled its performances through Dec. 31. Last October, Lowy and his husband purchased a loft in the Arts District. The couple were drawn to the vitality of the neighborhood. Bon Temps was a favorite but is now closed; Nightshade is temporarily shut. The pandemic has taken its toll. ‘Tumbleweeds,’ he said, describing the bleak emptiness of the streets during the stay-at-home orders.”

“In the historic core on Main Street and Spring Street, these disparities are in sharp relief as residents try to cohabit with people on the sidewalks. ‘I couldn’t imagine this happening,’ said an apartment manager, who requested anonymity for fear of losing his job. Four years ago, he and his wife found a place to live in the neighborhood where a number of mom-and-pop businesses had gotten established. The area was not as blighted back then, he said, but when the pandemic hit, encampments began to spread out from skid row.”

“‘By March, they were at 8th Street,’ he said. ‘Then by April and May, they were at 6th.’ Going for a walk became difficult, he said. There was meth smoke in the air, and he worried that his dog would step on a needle. When prospective renters made appointments to tour a unit and never showed up, he understood why. The building he manages, which had a vacancy rate of almost 10% in 2019, now stands 30% empty.”

“California has spent billions of dollars in recent years trying to ease the state’s staggering and disgraceful homeless crisis. As Gov. Gavin Newsom declared just a few months ago: ‘This is our cause. This is our calling.’ Yet now, with the state’s COVID eviction moratorium set to expire in less than a week, state leaders appear incapable of taking bold action to prevent an eviction tsunami that will surely result in countless families being forced onto the streets during a pandemic.”

“From the beginning, California leaders have pinned their hopes on a federal rescue package that would include money for tenants and landlords. That hasn’t happened. Now leaders are hoping that after the November election, a Biden administration will bail out renters, landlords and the state budget. But that’s a risky gamble that could end very badly.”

The San Francisco Chronicle. “State lawmakers nearing a deadline for action to avert mass evictions of California tenants who can’t pay their rent because of the coronavirus pandemic are working on a measure that is likely to provide only a short-term solution, those involved in the negotiations say. A longer-term solution for tenants and landlords who are encountering economic problems of their own because of nonpayment of rent would be put on hold, in hopes the federal government would step in with relief money.”

“‘It is a stopgap,’ said Debra Carlton, a lobbyist for the California Apartment Association. ‘We’re really hoping that the federal government will provide additional aid.’”

“A measure that is still alive, AB1436 by Assemblyman David Chiu, D-San Francisco, would give tenants until 2022 to make up rent they could not pay because of a loss of income related to the coronavirus, but landlord groups oppose that lengthy timeline. ‘What we know for sure is that California is likely not going to be able to provide the ultimate solution to the problem,’ Chiu said. ‘The ultimate solution is for the federal government to step in and pay people’s rent.’”

The San Jose Spotlight. “As the county’s shelter-in-place order shuttering the local economy puts more residents at risk of losing their homes, San Jose leaders voted unanimously to extend the city’s eviction to Oct. 17. The moratorium now coincides with the local emergency declaration, also set to end Oct. 17. Still, the debate about how to balance challenges faced by tenants and landlords continues.”

“‘I don’t want to see anyone evicted during the moratorium; I think we should extend it to September 30. If we could do it longer, I’d probably agree with that as well,’ Councilmember Pam Foley said. ‘But when we are taking that pot of money that isn’t being paid to the landlord, over time it is becoming so large that it becomes untenable for a tenant to pay it back at any point.’”

“As the city keeps revisiting the moratorium, Mayor Sam Liccardo asked city officials the question on many renters’ minds: ‘Why wouldn’t you just pick a date farther out?’”

“Loss of revenue during the pandemic will affect landlords in both the short and long term, according to the city report. This can include the inability to pay mortgages, property taxes and expensive court costs. Small property owners are at greater risk of foreclosure and bankruptcy in the long run.”

“According to a survey from the National Association of Hispanic Real Estate Professionals, landlords reported their property income accounted for at least a quarter of their retirement income. One in four landlords reported borrowing funds to make ends meet. Almost two in five were concerned about making ends meet in the next 90 days.”

“Councilmember Raul Peralez suggested the city prohibit evictions due to nonpayment of rent during the pandemic after the moratorium expires. This idea will be discussed at a future City Council meeting. ‘Somebody is going to have to get paid — whether it’s the tenant getting money to pay the landlord, or the landlord getting money to pay the mortgage,’ Councilmember Lan Diep said. ‘If we in San Jose, come up with a bill or a law that essentially says there is no tension here, that we’ve wiped out all debts for tenants, that potentially would negate legally a claim that tenants or landlords might have.’”

From KPC News. “Rents are falling in San Francisco. Keep that in mind as this column wanders along. An economist named Nathaniel Baum-Snow, writing in the Quarterly Journal of Economics in 2007, looked at the effect of highways on U.S. cities from 1950 and 1990. City populations dropped by 17 percent even as the population in metropolitan areas grew 72 percent. Population dispersed, and one reason was the new roads. Baum-Snow estimated that one new highway built through a city reduced its population by 18 percent.”

“All roads lead to Rome, but all roads lead out of Rome, too. We’re all dealing with the immediate consequences of the coronavirus pandemic. Life is very different as students return to campus, with masks, social distancing, restricted gatherings and no football. My classroom is now equipped with a plexiglass shield on wheels, so I can roll it with me as I pace during lectures.”

“Rents are high and commutes are long in that city, but people endure it because of the high-paying tech jobs. Now, in an Aug. 14 article, the Wall Street Journal reports an exodus from San Francisco as businesses offer employees the chance to telecommute. Lower demand for city apartments has reduced rents 11 percent from last year.”

The Wall Street Journal. “New York is facing a crime wave and Rep. Alexandria Ocasio-Cortez has found the culprit: rent. People can’t afford it and need money, ‘so they feel like they either need to shoplift some bread or go hungry,’ she said earlier this summer.”

“New Yorkers who can’t pay rent due to the hardships of Covid-19 already can’t legally be evicted right now, but Ms. Ocasio-Cortez has co-sponsored a bill that would do more for them: cancel rent and mortgage payments nationwide for the duration of the pandemic. Even Joe Biden is on board: ‘Not paid later, forgiveness,’ he stressed in May. New York Reps. Grace Meng and Jerrold Nadler have signed on as co-sponsors of the rent-cancellation bill.”

“New York has been here before. After the stock market crash in October 1929, unemployment soared to nearly 25%. Voices in the tenements cried ‘Rent strike!’ Middle-class families with mortgages were a different matter. They faced impersonal financial institutions, not greedy landlords. Resistance would seem futile. Once, however, New York homeowners banded together in a mortgage strike.”

“Sunnyside Gardens in Queens is a planned community of 563 homes built between 1924 and 1928. The City Housing Corp. raised capital from the likes of John D. Rockefeller and Herbert Hoover, and the reform-minded founders sought to build a community, not only houses. Their experiment attracted many left-wing buyers, including radicals. Nowhere else could a communist and a Rockefeller find common cause.”

“All was well until the crash. By 1932 the situation was grim. The primary breadwinner in 4 in 10 Sunnyside families had been unemployed for 14 months or longer; three-quarters were down to 5 cents on the dollar of their 1928 net worth. Their home equity had vanished and their bank accounts drained.”

“Homeowners demanded from the City Housing Corp. ‘(a) interest reduction, (b) three-year waiver of amortization, and (c) writing-down of the mortgage principal.’ The company did what it could, but in 1934 it declared bankruptcy. Sunnysiders launched a strike; more than half of them, Lewis Mumford included, withheld mortgage payments. Reluctantly, the company commenced foreclosure proceedings.”

“Militants thought it was ‘a gigantic bluff.’ ‘They cannot afford to go through with the foreclosures,’ they claimed. ‘All we need to do to beat them is not to pay City Housing a nickel. Let us keep our lines fast.’ They mastered the theater of protest, carrying signs proclaiming, ‘Rockefeller puts families out of homes.’ A siren at one home brought dozens of neighbors running to confront the sheriff; housewives pelted deputies with flour. One eviction featured a mock funeral, with a coffin for the family home.”

“Defiant acts of solidarity only delayed the inevitable. Communist fervor couldn’t resist a capitalist legal system. Strikers sued in federal court for redress, but Judge John C. Knox expressed no sympathy for those trying to ‘put the squeeze’ on others to get out of their own obligations.”

“A final appeal to Gov. Herbert Lehman was rebuffed. ‘While I have much sympathy with all those in financial straits,’ responded the great liberal Democrat, ‘I do not consider it to be the proper function of the Governor to conduct negotiations for the modification of private contracts between private individuals.’”

“Mayor Fiorello La Guardia finally brokered a compromise. Recognizing the radicals as ‘an increasing peril to all other home owners,’ bondholders dropped interest rates and reduced second mortgages by 25%, so the total owed didn’t exceed a home’s value. Dozens of Sunnysiders accepted the deal, but in the end, more than half lost their homes.”

“New York’s leaders today offer a starkly different response. Gov. Andrew Cuomo signed executive orders declaring a moratorium on evictions and foreclosures and a 90-day suspension of mortgage payments. Reps. Ocasio-Cortez, Meng and Nadler are pushing for outright rent and mortgage forgiveness at the federal level.”

“We are left with irreconcilable models of state power. The liberal government of the 1930s provided what relief and regulatory reform it could, but rents and mortgages were a private matter. Today’s progressives recognize no economic arrangement as being in any way sacrosanct. They seek to direct the economy to serve social justice, and see no constitutional impediments ahead.”