Continuation for COvid and housing crisis. Next part of the paper (see attached) is:? ?Discussion (~ 4-5pages): ?This section should reflect upon the project and discuss

2

Impact of COVID-19 on NYC Housing Crisis

Proposal

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).

Problem Statement

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.

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.

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.

Justifications for the research project

The study aims at bridging the existing gap from past scholarly literature by developing knowledge on the impact of Covid-19 on housing crisis in the New York City. 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.

Hypothesis

The hypothesis derived for the study is based on the research question which determines the effect of Covid-19 pandemic on housing crisis in New York City.

Null Hypothesis: Covid-19 Pandemic did not elevate the housing crisis in New York City.

Alternate hypothesis: Covid-19 Pandemic elevated the housing crisis in New York City.

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.

Methodology

The study will utilize quantitative research in collection and analysis of data.

Literature Review

Introduction

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.

Review

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) (Sayun, 2020).

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 (Cohen et al, 2021).

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 (Rahmaniani and Mohammadmoradi, 2021).

Summary and critique

The literature outlines the impacts of the Covi-19 pandemic on the social and economic status of people. Among the areas that are discussed in length include decline in income with a clear comparative analysis provided on hos the effect has been felt during the Covid-19 pandemic compared to other times in history where there has been pandemics such as ISIS and Ebola. 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. However, there is a wide research gap evident in the literature in that the issue of housing is not addressed at length as one of the factors that was stimulated by the development and spread of the Covid-19 pandemic.

Widespread job and wage losses during the COVID 19 pandemic increased housing precarity dramatically. COVID-19 infection, complications, and death were especially prevalent among people of color, low-income populations, and other vulnerable groups in society. More vulnerable populations have a greater chance of being infected with COVID-19 and becoming victims of homelessness, which can lead to a cycle of poor health. It is more common for low-income residents and minorities to be evicted and suffer severe health consequences during pandemics. A pandemic requires protecting those most at risk of contracting, spreading, and dying from infectious disease. Protecting those who are most susceptible to infectious disease is part of this effort. (Chernick, 2021)

Even before the coronavirus epidemic, New York City was experiencing unprecedented levels of homelessness; however, the spread of the virus has only served to exacerbate the city's preexisting social problems by having a disproportionately negative effect on the city's homeless population (Beard, 2020Since the outbreak of COVID-19 in New York City, the scarcity of private, secure spaces for the city's homeless population has exacerbated the spread of the virus, increasing hospitalizations and deaths. COVID-19 has been found to be particularly dangerous for people who live in congregate shelters (Chen, 2020)

Major concerns arose when the pandemic began in early 2020. This so-called "great equalizer" had major economic consequences that disproportionately affected the low-income population (Green, 2021). Across the country and the rest of the world, financial insecurities rose because of the loss of jobs and businesses. Millions of people were unable to pay their rent because of this, resulting in a housing crisis. The government's sanctions on moratoriums in the first months and the disparity in access to anti-eviction advocacy groups affected different areas differently.

The Emergency Rental Assistance Program and a large presence of the former in New York helped to alleviate the situation, but renters there were still in a state of emotional upheaval as a result. Renters in the lower- and middle-income brackets were more likely to report difficulties in their landlord-tenant relationships as a direct result of the eviction moratoriums. These moratoriums had an unintended effect on some demographic groups, according to the study. Even though they prevented many people from becoming homeless during the pandemic months, their relationships with their landlords were strained as a result. As a result, more research is needed to determine the causes of the outbreak (Reina, 2021).

The real estate market in New York City will be negatively affected by COVID-19 for the foreseeable future, at least until July 2020. COVID-19 infections have slashed the volume of the New York City real estate market by over 35 percent and lowered the average sale price by around 27 percent in just five months since the first cases were recorded (Gupta, 2021). After only five months, the pandemic has already reduced the value of a home by the equivalent of a seven-year expected return on an investment in residential property. Contrasting this is the predicted rise in home values prior to the COVID. In addition, these average effects aren't spread out evenly across the city's one- and two-family dwellings. Instead, they tend to cluster in low-income areas, where infection rates are higher and sales volume is lower due to the lower value of the homes (Manski, 2021).

A rise in the unemployment rate has a considerable impact on home sale prices due to the income effect. This is especially evident in the second pandemic wave. Unemployment in New York City surged by more than 8 percentage points in comparison to pre-pandemic levels, indicating an average loss of $50,000 in housing values in the city (Cohen, 2021). Homes in densely populated areas with high rental rates are less vulnerable to rising infection rates, but their income effect on value is significantly greater. The pandemic's first wave of cases had a large impact on the market price of homes in the bottom quartile of the pre-COVID local price distribution, but there was no major impact on prices during the second half of 2020.

Due to increased COVID instances, the top quartile of the pre-COVID price distribution saw a sharper price drop. ' When it comes to homeownership, lower-priced properties in New York City indicate a lower level of wealth than higher-priced properties. At a period when the suburban property market was booming, this may have hampered the mobility of lower-priced homeowners in the suburbs, with cash 6 offers among the victors and several bids above asking prices. Due to these market frictions in both NYC and the suburbs, lower-priced NYC homes had a minor price decrease during the second wave of home sales. Consequently, higher-priced NYC homeowners were better able to transfer from their NYC home to a suburban property with greater agility (Yang, 2020).

This pandemic's impact on housing wealth is frightening when you consider how it will benefit owners of higher-valued homes in an unjust manner. We notice that COVID cases have a negative impact on home prices since houses with lower values have a greater propensity to suffer more COVID incidents. However, despite the fact that the first wave of COVID in NYC had a major impact on the values of lower-valued properties, the second wave of COVID in NYC has an effect on lower-valued homes that is minimal. Inhabitants of low-value properties may have learned to consider the fear of pandemic as a new constant in the neighborhood, similar to way residents of high-crime areas regard the threat of violent crime. Because the initial wave had such a substantial impact on properties with lower prices, the locals concluded that the trend was permanent. As a result, future increases in the number of cases were already factored into the pricing of second wave market transactions.

It was an unprecedented year for the housing market in the United States. The median price of a home sold in the United States in June was $386,000, an increase of 24% over the same period last year and the highest on record. Homes throughout the country sold at the fastest pace ever recorded this summer, a median of 15 days on the market, thanks to remote workers seeking larger spaces and lower mortgage rates. Only 1.38 million homes were on the market in June, a 23 percent decrease from a year earlier due to the narrowest supply ever recorded. However, the pace has slowed. Mortgage rates are expected to rise from 3 percent to roughly 3.6 percent by the end of 2022, which means prices could be only 3% higher than they are currently, compared to the double-digit surge we saw over the summer (Baker, 2020).

As a result, New York City lags six to nine months behind the rest of the country in terms of the spread of the virus. This year had a record 4,523 apartment sales in the third quarter of 2021, which is the most in more than three decades and the median sale price approximately 9% higher than the same quarter of 2019, before the pandemic. Affluent tenants and buyers who had the means to leave New York at the beginning of the pandemic fueled the city's swift reversal. A 106 percent rise above the pre-pandemic baseline was seen in the exodus of 254,500 homes from March 2020 to June 2021. After the city's slow reopening in July, several of the rich neighborhoods that led the exits have seen an improvement in net migration.

Due to tenants' incapacity to fulfill their contractual obligations, Boshoff (2020) claims that the pandemic has a detrimental influence on housing availability. Since property owners were forced to remove their properties from the market to reduce the risk of a loss on their investment, the supply of residential housing units declined sharply, and some buyers delayed making a purchase until after the pandemic's uncertainties were resolved. The retail and hotel industries in the United States were most severely affected, while the office sector in Asia was most severely affected (Milkeva, 2021). Investors and landlords experience challenges in maintaining their mortgage return due to the pandemic effect, which was proved (Avakyan, 2020) Similarly, the pandemic had a detrimental effect on Turkish home mortgages (Christie, 2020).

As a result of the declaration of a national emergency, construction projects have been severely delayed, the supply of materials has decreased, productivity has fallen, the price of materials has risen, and there have been delays in the grant of a permit. In addition, lumbering cannot be done remotely because of the COVID-19 restrictions, and the small amount of lumber produced is insufficient for construction purposes, delaying the repair and construction of housing (Watson 2020). A shift in planning and construction decisions will occur because of the COVID-19 outbreak. Because of this, the novel coronavirus has significantly reduced rental income for properties in retail, hospitality, and even some office buildings. Because of the measures taken to limit the virus's spread, such as lockdowns and social segregation, the pandemic's negative externalities, such as a sharp decline in the number of completed housing units, are most obvious and felt most keenly.

References

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Baker, S. R., Bloom, N., Davis, S. J., Kost, K., Sammon, M., & Viratyosin, T. (2020). The unprecedented stock market reaction to COVID-19. The review of asset pricing studies, 10(4), 742-758.x

Beard, V. (2020). COVID-19: Poverty, housing, homelessness–A broad view and a picture from West Michigan. Housing, Homelessness–A Broad View and a Picture from West Michigan (May 28, 2020).

Boshoff, D. (2020, June 1). The impact of COVID-19 on the property sector – How does it influence property values and possible litigation? De Rebus, 14-16. Retrieved from https://www.derebus.org.za/the-impact-of-covid-19-on-the-property-sector-how-does-it-influence-property-values-and-possible-litigation/

Chen, J. A., Zhang, E., & Liu, C. H. (2020). Potential impact of COVID-19–related racial discrimination on the health of Asian Americans. American Journal of Public Health, 110(11), 1624-1627.

Chernick, H., Copeland, D., & Reschovsky, A. (2020). The fiscal effects of the COVID-19 pandemic on cities: An initial assessment. National Tax Journal, 73(3), 699-732.

Christie, A., Neatherlin, J. C., Nichol, S. T., Beach, M., & Redfield, R. R. (2020). Ebola response priorities in the time of Covid-19. The New England Journal of Medicine, 383(13), 1202-1204

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.

Green, H., Fernandez, R., & MacPhail, C. (2021). The social determinants of health and health outcomes among adults during the COVID‐19 pandemic: A systematic review. Public Health Nursing, 38(6), 942-952.

Gupta, T., Nazif, T. M., Vahl, T. P., Ahmad, H., Bortnick, A. E., Feit, F., … & Kodali, S. (2021). Impact of the COVID‐19 pandemic on interventional cardiology fellowship training in the New York metropolitan area: a perspective from the United States epicenter. Catheterization and Cardiovascular Interventions, 97(2), 201-205.

Manski, C. F., & Molinari, F. (2021). Estimating the COVID-19 infection rate: Anatomy of an inference problem. Journal of Econometrics, 220(1), 181-192.

Milcheva, S. (2021). Volatility and the cross-section of real estate equity returns during Covid-19. The Journal of Real Estate Finance and Economics. Advance onlinepublication. doi:10.1007/s11146-021-09840-6

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.

Reina, V., Aiken, C., Verbrugge, J., Ellen, I. G., Haupert, T., Aurand, A., & Yae, R. (2021). COVID-19 Emergency Rental Assistance: Analysis of a National Survey of Programs. Philadelphia: The Housing Initiative at Penn.

Stanturf, J. A. (2020). Initial assessment of the impact of COVID-19 on sustainable forest management in Canada and the USA [Background Paper]. NewYork, NY: UNFF.

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.

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Watson, A., & Lupton, D. (2022). Remote fieldwork in homes during the COVID-19 pandemic: Video-call ethnography and map drawing methods. International Journal of Qualitative Methods, 21, 16094069221078376.

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