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Housing is regarded as a fundamental human right to which all citizens are entitled. Housing has been commercialized as a result of the world's rapidly increasing population, which has resulted in urbanization. The city's economy benefits from a rise in the number of houses for sale. There is an increasing relationship between the housing market and the country's economy, which varies based on housing demand. A variety of causes have been described as having an impact on the housing market and therefore the overall economy. Eviction, or the forced removal from one's home, is a significant cause. This research paper aims at examining the impact of eviction of the low-income families on the housing market.
In every city, income disparities exist and hence evictions are mainly based on them whereby in most cases, the low-income families remain at a higher risk of eviction. However, evictions may happen to both low- and high-income families depending mainly on the prevailing circumstances when the eviction is taking place. Eviction may occur due to the possibility that the family defaults on the mortgage loans. This is a growing issue in cities and it is costing the cities millions of dollars per year. Forced eviction occurs under a circumstance where a resident defaults on a loan, have not paid utilities, and uncollected property taxes. This draws the family into a difficult situation that forces the relevant authority to make a decision of evicting the residents of the particular house.
Evictions normally takes place throughout the cities' rental neighborhoods may be due to the shortage of housing. The evictions negatively affect the housing market because it results in the elevation of the rent prices. In some cases, eviction occurs with the intention of replacing the low-income earners with the middle-level or high-income earners. The low-income earners are very vulnerable and hence can easily be forcefully displaced. In any case, the occurrence of eviction results in creating a market for the business investors to buy and renovate the old and the abandoned apartment buildings. It becomes very unusual whenever mass eviction of so many people occurs at one. This will have price inflation on the housing market because the evicted people will be looking for new places where they can afford for accommodation.
Mass eviction will always result in the increased demand for housing. The four major cities to be examined regarding the eviction and the impact on the housing market involve New York, Los Angeles, Chicago and Houston. These four cities suffer economic problems due to the eviction of the households that experience financial shock. The evictions in the cities have both positively and negatively impacted the housing market in terms of the number and the conditions of housing and the cost. The evictions encouraged the building of more modern houses so as to suit the demands of the tenants. It fuelled the construction of high-end apartments and condos. On the other hand, eviction resulted in the hiking of rent prices due to the high number of people demanding the houses all at the same time.
With respect to the microeconomics, this paper studies the implications of evictions on the housing market and on the families that are low-income. The evictions offer opportunities for the investors to build up new houses and refurbish the old ones. It also offers a chance to increase the rental price. This results in the increased cost of housing and loss of the countryside lands which are required to build more houses to cater for the increased demand for housing.
The microeconomic theory can adequately be used to explain the current situation of evictions in the four major cities. For the effective handling of the evictions by the four cities, this theory makes it possible to have a better understanding of the impact of changes in the rental prices, income levels, and the demand of the housing offered to the market. New York, for instance, consist of majority of nearly households with little liquid savings of about less than two thousand dollars. This implies any attempt of eviction will result in the financial shock of the New Yorkers. Evictions are very costly for the city because it would cost the city a lot of money to cater for the homeless services, outstanding utilities, and uncollected property taxes. These expenses double up the cost suggesting that evictions are very costly to the city and therefore, formulation of policies must be done in New York and other cities that prevent the possibilities of evicting the residents. The policies formulated must complicate the procedures of eviction so as to discourage mass evictions that normally result in the inflation of the rental prices due to the increased demand for the house to occupy right after the eviction has been done.
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