A lot of people are rightly complaining in this thread about how unfair this is to those who sacrificed to make good their obligation to pay rent. However the fair option, where everyone is paid would have an even greater distorting economic effect: because a huge amount of this money will just go into paying mortgages, little will go into circulation; and ends up being really a bail out for banks (while also probably saving the really poor from another pointless bankruptcy). If $20k was just given to everyone, it’d have a massive inflationary effect.

I personally don’t like either solution: landlords should have taken a haircut. But it’s really hard to force landlords to take haircuts because the housing market is so incredibly illiquid; selling a house is a difficult transaction, once you’ve found a buyer you then need surveyors, who can delay the process long enough to cause the deal to fall through and the cycle to start over (and in LA the whole grandfathered housing tax creates even more perverse incentives). This way housing ends up being a bit of a unique asset class because selling up when faced with cash flow issues almost never makes economic sense. This ends up being a bit of a viscous cycle because it makes individual housing transactions extremely volatile.

It’s somewhat perverse that there aren’t real market makers in the domestic housing market.

It would be fantastic if there was some state market maker providing a buyer of last resort, that would have the economies of scale to make it work. It would allow the housing market to actually function as a market. In this case, if a landlord was having cash flow problems, they would be able to immediately liquidate. They’d take their haircut at a fair price that way. Right now, distressed property is a microeconomic quagmire.