What happens to real estate when COVID-19 busts state and local budgets?

As COVID-19 starts to loosen its grip on some of the nation’s coastal cities and begins a relentless march across the parts of the nation it hasn’t walloped yet, the rest of America is set to find out what happens to neighborhoods when the full force of the pandemic comes to town.

When the virus sickens large numbers in a community, costly services from first responders spike as residents call for help, much like a natural disaster. But unlike a hurricane or an earthquake, a pandemic isn’t over in a few hours or a few days. The economic disruptions go on for longer, reducing revenue sources like sales and income taxes that fund those services.

So far, the impact has mainly been felt in so-called Blue States that tend to support Democrats.

There have been some geographical exceptions, like Ohio, a Red State where COVID-19 cases started spiking in early March. Republican Governor Mike DeWine earned an 83% approval rating for his daily briefings at 2 p.m. that residents began calling “wine with DeWine” – an excuse to pour a glass of Chardonnay as they listened to the mounting death toll.

The city of Dayton, Ohio, has already furloughed almost a quarter of its workforce because of COVID-19 costs and is planning to cut more.

In Michigan, a midwest state devastated by more than 5,100 COVID-19 deaths, Detroit Mayor Mike Duggan last week announced layoffs and a reduction in hours and salaries for city workers.

“We’re going to see some cuts to services,” he said.

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Source: HousingWire Magazine