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More Than 38 Percent of Foreclosed Units in California are Rentals:
Over 200,000 Tenants Directly Affected

by Tenants Together
January 26th, 2011

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Earlier today, Tenants Together, California's statewide organization for renters' rights, released its third annual report, California Renters in the Foreclosure Crisis. The report highlights recent foreclosure-related developments affecting tenants, quantifies the impact of home foreclosures on tenants in 2010, and makes recommendations to strengthen protections for tenants in foreclosure situations.

Tenants Together conservatively estimates that in 2010, at least 38 percent of residential units in foreclosure in California were rentals, directly affecting over 200,000 tenants, most of whom were displaced from their homes. The report quantifies the impact of the foreclosure crisis at the state and county level.

According to Gabe Treves, Program Coordinator at Tenants Together and author of the report, "Tenants remain innocent victims of a foreclosure crisis they did nothing to create. Year after year, banks needlessly displace hundreds of thousands of rent-paying tenants from their homes, often in violation of tenant-protection laws."

Foreclosure-related developments highlighted in the report include:

  • The clarification and extension of the 2009 Protecting Tenants at Foreclosure Act.
  • The enactment of laws to protect tenants against utility shutoffs (SB 120) and from negative credit impacts of post-foreclosure evictions (SB 1149). 
  • The expansion of just cause for eviction laws in the cities of Los Angeles, San Francisco, and Santa Monica. 
  • The revelation that banks improperly foreclosed on many of properties as part of the "robo-signing" scandal. 
  • The launching of an investigation by the California Attorney General into the treatment of tenants after foreclosure by banks, private investors, and their agents.

Key 2010 research findings highlighted in the report include:

  • At least 38 percent of homes in foreclosure were rentals.
  • More than 200,000 California renters were directly affected by home foreclosures in 2010 alone, most of whom have been displaced from their homes. 
  • From 2009 to 2010, the foreclosure rate for single family-homes decreased almost 10 percent while the foreclosure rate for apartment buildings with 5 or more units increased almost 30 percent. 
  • The massive displacement of tenants across California remains, first and foremost, a problem caused by banks, with an estimated 79 percent of foreclosed properties acquired by financial institutions.

Tenants Together is in a unique position to report on the human impact of the foreclosure crisis on renters. The organization operates California's only hotline exclusively for tenants in foreclosure situations. California tenants can reach the Tenant Foreclosure Hotline by submitting an online intake form at www.tenantstogether.org/hotlineintake to get a call back from a counselor.

Once again, Tenants Together concludes its annual report with checklist of recommended action to mitigate the impact of the foreclosure crisis on tenants. Among the various proposals, the report notes that 'just cause for eviction' laws are a particularly effective and cost-free way to stop the unjust displacement of innocent renters after foreclosure and provide stability to the community at large.

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