Homeowners aren't the only ones who suffer greatly from foreclosure actions on residential properties. Renters often experience pain as well.

About 20 percent of all foreclosures are on investor-owned rental properties, which means many tenants face sudden eviction from their rented residence.

More attention by all levels of government should be focused on those rental households currently being harmed by the mortgage market turmoil, according to Harvard University's Joint Center for Housing Studies. They recently concluded a study on this aspect of the market.

"Because many of the high-risk home purchases and home refinance loans now in default are concentrated in low-income and minority communities, the fallout from foreclosures is hitting the same neighborhoods where many of the nation's most economically vulnerable renters live," said Nicolas Retsinas, director of the Joint Center.

The report examined recent mortgage market events in the context of long-standing affordability problems that plague millions of renters. Fueled by record foreclosures and sluggish home sales, the share of households owning their homes is declining, while the number of renter households jumped by nearly 1 million last year. That's more than four times the pace of renter growth over the 2003 to 2006 period, according to the Joint Center report.

Despite the current signs of economic weakness, monthly rents last year reached a record high. Also, the rising number of foreclosures and the resulting turmoil in credit markets raises the cost of financing rental housing construction and preservation.

Last year, completions of multifamily units for rent fell to 169,000 units, just two-thirds of the 2002 figure and only a third of the 1986 record high. The blighting influence of vacant and foreclosed properties also accelerates the abandonment of low-cost rental properties in distressed neighborhoods, further limiting the supply of affordable housing.

However, it should be noted that in recent weeks there has been a significant increase in construction starts of multi-unit structures, many planned as rental units.

"For the past decade, broader access to homeownership has been the centerpiece of federal, state and local housing programs," said William Apgar with the Joint Center. "The rapid rise in mortgage delinquencies and home foreclosures unfortunately exposes the tragic flaw in this imbalanced approach."

Center director Retsinas added that "A balanced housing policy should focus renewed energy on preserving the stock of subsidized rental housing, limiting losses of privately owned low-cost units, and eliminating land-use restrictions - barriers that needlessly increase the cost of producing homes for sale as well as for rent."

Q: What can be done about rising property taxes?

A: Many local governments are raising their property tax rate as a means of relieving their revenue shortfalls. That couldn't come at a worse time for most homeowners who now struggle with higher gas and food costs - higher prices for almost everything.

Facing higher taxes is particularly difficult for owners having trouble meeting their mortgage payments and worrying about a possible foreclosure of their home. However, property taxes are a key source of funds for municipal governments. They account for about 40 percent of general revenue, according to the Census Bureau.

The lowering of home values, including its assessed value, means lower taxes, if appraisals are up to date. If you feel your tax bill does not properly reflect its lower value, contact your local tax assessor and request a reassessment. Procedures are in place to address those requests.

Q: When are homes expected to be more affordable for first-time buyers?

A: Historically, California often leads the nation in starting new real estate trends. Hopefully, that will be the case with the state's recently announced increased number of home buyers who can afford an entry-level home.

About 44 percent of households in the state could afford an entry-level home during the first quarter of this year, according to a report from the California Association of Realtors. That's up from 26 percent during the same quarter last year.

The minimum household income needed to purchase an entry-level home in California during the first quarter was $67,830, based on an adjustable mortgage interest rate of 5.65 percent and assuming a 10 percent down payment. First-time buyers typically buy a home equal to 85 percent of the prevailing median price in the area.

The minimum qualifying income of $67,830 was 30 percent lower than a year earlier, when households needed $96,500 to qualify for a loan on an entry-level home. Recent decreases in home prices and low mortgage rates have brought affordability into better alignment with income levels of the typical household, the association report stated.

Send inquiries to Jim Woodard, Copley News Service, P.O. Box 120190, San Diego, CA 92112-0190. Questions may be used in future columns; personal responses should not be expected.

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