It doesn't seem so hard to me - for the long term, build more housing, and for the short term, put a cap on how much landlords can raise rent. Beyond a certain level, it's pure profit for the...
“RealPage data from August shows the occupancy rates for their apartments passed 97% for the first time ever,” said Airgood-Obrycki. “It’s really unprecedented, and hard to know where we go next.”
It doesn't seem so hard to me - for the long term, build more housing, and for the short term, put a cap on how much landlords can raise rent. Beyond a certain level, it's pure profit for the wealthy with no actual value created for society, and that's something the government needs to step in to fix.
If your landlord has never stepped inside the building, they don't need to be involved in the process. 2/3 of my landlords have fit that description. Everything was handed off to a mainainence...
If your landlord has never stepped inside the building, they don't need to be involved in the process.
2/3 of my landlords have fit that description. Everything was handed off to a mainainence company.
Also, the huge housing market bubble is also driving up costs across the board. Landlords wanna recoup those overinflated mortgage costs somehow.
Oh yeah, I totally agree. Landlords are, by and large, just parasites. I tend not to make that opinion my leader, though, because the internet is weirdly friendly to landlords (at least in my...
Oh yeah, I totally agree. Landlords are, by and large, just parasites. I tend not to make that opinion my leader, though, because the internet is weirdly friendly to landlords (at least in my experience).
Landlords don't provide anything. Architects design the housing, construction workers build the housing, and repair people maintain the housing. Some landlords might do some repairs, but that's...
Landlords don't provide anything. Architects design the housing, construction workers build the housing, and repair people maintain the housing. Some landlords might do some repairs, but that's distinct from their "job" as landlords. Profiting off of housing - something everyone needs to live - is unethical, no matter which way you spin it.
they assume all of the financial risk
This argument is used to defend a lot of unethical industries, but let me give you this hypothetical: would you defend someone who runs a factory using child labor because they assumed the financial risk? For me, financial risk does not excuse immoral actions.
Because buildings are expensive, financing is essential for building and maintaining them. The architects and construction workers and repair people don't (and shouldn't) work for free. Apartments...
Because buildings are expensive, financing is essential for building and maintaining them. The architects and construction workers and repair people don't (and shouldn't) work for free. Apartments don't spontaneously happen. If there is no owner, they're not going to happen.
Sometimes governments build and own housing. Or really, their contractors do it. Would you say the government did nothing? Making decent housing available for rent is an accomplishment no matter who does it, and there are different kinds of contributions.
Who do you think pays the repair people to maintain the housing? That is a completely unfair and baseless comparison. I get the impression that you think all landlords are inherently evil, and not...
repair people maintain the housing.
Who do you think pays the repair people to maintain the housing?
would you defend someone who runs a factory using child labor because they assumed the financial risk?
That is a completely unfair and baseless comparison. I get the impression that you think all landlords are inherently evil, and not just the bad ones.
To your broader point, the landlord is assuming the risk of unexpected repairs, as well as all the risk that comes with signing up for a mortgage. If you buy a home, and your life situation changes so that you can no longer afford the mortgage payments, you are screwed. Renting alleviates some of this risk as you are no longer attached to a 30 year financial commitment. A landlord assumes the same risks anybody else buying a home does.
The tenants. The reality is that a very small portion of rent actually goes towards those repairs, and the landlord pockets the rest as profit. I wouldn't mind if they just paid for the repairs...
Who do you think pays the repair people to maintain the housing?
The tenants. The reality is that a very small portion of rent actually goes towards those repairs, and the landlord pockets the rest as profit. I wouldn't mind if they just paid for the repairs and upkeep, but they don't just do that; they take many times that much money as profit, all for doing no work.
That is a completely unfair and baseless comparison. I get the impression that you think all landlords are inherently evil, and not just the bad ones.
How so? I'm making the point that "financial risk" does not excuse unethical behavior. And I don't care about the state of a landlord's soul. Some of them might be good people, but that doesn't change the fact that the act of making profit off of housing is wrong. Just like I feel that the cops are bad because a protected class that enacts government-sanctioned violence on citizens is wrong. I don't care if there are some "good cops" out there, the problem is systemic, not individual.
I'm not sure how you expect the system to work without any profit motive. I can't imagine anyone would ever build apartment buildings if they weren't allowed to make money off them. Let me...
I'm not sure how you expect the system to work without any profit motive. I can't imagine anyone would ever build apartment buildings if they weren't allowed to make money off them.
Let me highlight another way renting is an essential part of the housing market, from the perspective of renters. For many people, buying a home is not an attractive or even viable option. If you move regularly (for work purposes, or just because you like moving around the country), then having to buy and sell every place you live in becomes an extremely expensive hassle, to the point where renting is considerably cheaper.
There is value in providing people a low risk or low upfront cost alternative to buying real estate, and anything that provides value isn't inherently "evil" to profit off from. At least, no more "evil" than a grocery store profiting off selling food.
I say all of this as a big fan of Singapore's housing solution, in which 81% of all housing in the country is built and subsidized by the government. Private real estate development and lease agreements still exists, and I don't think there is anything inherently unethical about that.
Our problem is our inability to provide a reasonable alternative to renting for the underprivileged. This creates a scenario where unethical landlord behavior can thrive, because these particular tenants do not have a choice.
Let's take a hypothetical position that I think most people would not find radical. What if every renter gained a small amount of equity in their home each month? This would massively alter the...
Let's take a hypothetical position that I think most people would not find radical. What if every renter gained a small amount of equity in their home each month?
This would massively alter the relationship between landlords and renters, in favor of the renters, but would still allow land investors to realize a profit. For people who don't want to own a home, they would be able to either keep a share of the profit from the property, or sell back their equity when they leave. For those who did stick around for a long time, they could resell the property when they left, or pass it on to children who could live there or rent it out themselves, eventually passing it on to their tenants.
Small change, the profit motive persists, but "landlording" as an institution would be massively altered, and its various abuses ameliorated in many cases. It would also help solve the problem people have brought up here in which some tenants damage property because they don't have a stake in it!
You're not wrong, but when those financial risks are realized (like a downturn in housing market or collapse of renter's abilities to pay), I hear an awful lot of 'Landlords need bailouts too!' If...
You're not wrong, but when those financial risks are realized (like a downturn in housing market or collapse of renter's abilities to pay), I hear an awful lot of 'Landlords need bailouts too!'
If nothing else, it is tone-deaf. Especially for owners whom have multiple properties in a hot housing market. Sell one off at over-inflated prices and survive off the assets.
Most renters haven't got nearly that flexibility, hence why they are renting.
This isn't about individual morality, it's about whether the institution of landlording is a net positive for society, and it isn't. As I said, it doesn't matter how many landlords are,...
People like to pretend like tenants are mostly saints but having done the roommate thing for about 12 years before buying my experience is that an inordinate amount of renter's are happy to ("lightly") damage property that isn't theirs.
This isn't about individual morality, it's about whether the institution of landlording is a net positive for society, and it isn't. As I said, it doesn't matter how many landlords are, individually, good people; they are part of a system that helps take wealth from the working class and concentrate it among landowners, and that is inherently bad, for all of us.
I'm not really worried about those unrealized risks [including a tenant not paying rent] [...] What if a tenant stops paying rent? The eviction process lasts months and then they are more likely to damage the unit since they are being removed anyways.
See, you clearly are worried about those unrealized risks. And, indeed, we consistently see landlords' associations and property owners' lobbies pushing laws that make it easier to reduce or socialize the financial risk that is supposedly the only reason they exist. For landlords themselves, as a class, it's clear that they are motivated by the ability to skim a profit off the top of what would otherwise need to be paid to realize the existence and maintenance of buildings.
Exactly this. "Landlords assume financial risk on behalf of tenants" is a technically correct but deeply misleading, because: Non-occupant ownership - that is, profit-seeking - is the primary...
Exactly this. "Landlords assume financial risk on behalf of tenants" is a technically correct but deeply misleading, because:
Non-occupant ownership - that is, profit-seeking - is the primary reason that housing costs so much in most places in the world. If landlording wasn't allowed, there would be less financial risk involved for prospective owner occupants.
Fairly minor overhauls of the lending system, perhaps in addition to the implementation of some kind of UBI, could almost entirely eliminate the need for any middleman between those who are now renters and those who build or currently own housing.
There is a huge gulf between paying rent (which is essentially a black hole for tenant money, and almost pure profit for most landlords) and building equity. Hypothetically, a system in which all tenants slowly build equity in their homes over time and can either sell that equity back when they move or eventually own their homes outright could still provide for a significant return on investment for landlords without keeping people who cannot own a home for financial or logistical reasons locked out of the vast benefits of property ownership, which the current system does.
Property co-ops can set up efficient contracts with e.g. property management and maintenance providers just as well as landlords can, and provide a democratic, rather than autocratic, approach for governance of apartment buildings.
I disagree that it's the primary reason. There are a lot of other more important factors. The past few decades has seen migration of people from the countryside into cities at breakneck pace,...
Non-occupant ownership - that is, profit-seeking - is the primary reason that housing costs so much in most places in the world. If landlording wasn't allowed, there would be less financial risk involved for prospective owner occupants.
I disagree that it's the primary reason. There are a lot of other more important factors.
The past few decades has seen migration of people from the countryside into cities at breakneck pace, drawn by educational and employment opportunities and urban amenities. The modern economy has shifted heavily toward service and knowledge work, and cities provide agglomeration benefits to modern companies.
Renting and buying housing in rural, semi-rural, and exurban areas in the US is extremely cheap. You can rent a stately 5-bedroom, 5-bathroom house for $1.2k in Decatur, Illinois. But there's a reason why folks leaving Decatur nickname it "Decay-tur".
Cities have failed to keep up building enough housing to accommodate urban migrants. This is hampered by:
Zoning regulations. Self-explanatory. This + property tax policies drive housing un-affordability in California.
Preservation concerns. It's important to preserve culturally significant sites and areas. Existing cities have accumulated a lot of history. When I lived in Amsterdam, it seemed like every corner had once been touched by some great thinker or artist like Spinoza or Vermeer.
Fundamental land constraints. Cities can't necessarily 'make' new land. They can landfill waterfronts—like how Amsterdam, San Francisco, and Singapore are—but it's a very slow and expensive process.
Extent and quality of public transportation and road infrastructure determine how 'large' a city can viably be and what the land desirability gradient is like.
Not even to mention Elizabeth Warren's work landmark work The Two-Income Trap pointing out that household incomes nearly doubled because women entered the workforce—a good thing. But that interacts with the primacy of housing (and location) in access to educational and employment opportunities in our modern economy has led to a fierce and overheated house price bidding war—a bad thing.
If landlording wasn't allowed, then housing would be less attainable for other reasons. Even if the homes are cheaper, many people simply do not have the credit to qualify for a 30 year loan. For...
If landlording wasn't allowed, there would be less financial risk involved for prospective owner occupants.
If landlording wasn't allowed, then housing would be less attainable for other reasons. Even if the homes are cheaper, many people simply do not have the credit to qualify for a 30 year loan. For many, their lifestyle makes homeownership undesirable. Without renting as an option, where would many of these people live?
There are a lot of other ways to make that resource allocation possible which are more equitable and more efficient. I'm not a policy expert in that area, but there's a good amount of scholarship...
There are a lot of other ways to make that resource allocation possible which are more equitable and more efficient. I'm not a policy expert in that area, but there's a good amount of scholarship on the topic. Of the top of my head:
mandatory universal rent-to-own with progressive equitization so landlords can't easily keep extracting rent from people above and beyond their costs
laws requiring justification from increased costs for increasing rent (this one keeps landlords but helps reduce rent-seeking)
municipal investment in high density housing which is then sold to co-ops
Landlords do not provide a service. They act as middlemen between people who need housing and maintenance, and people who provide housing and maintainence, using property law to maintain a...
people don't want to refer to themselves as parasites for providing a service in which they assume all of the financial risk.
Landlords do not provide a service. They act as middlemen between people who need housing and maintenance, and people who provide housing and maintainence, using property law to maintain a position of power in which they skim money off the top. Individually, landlords might be good people, but the institution is destructive and unethical.
The people who design and build the house, and the people who maintain it. Ask yourself this: the landlord has some mortgage on the property, and thus pays some monthly amount to a bank, and some...
The people who design and build the house, and the people who maintain it.
Ask yourself this: the landlord has some mortgage on the property, and thus pays some monthly amount to a bank, and some to maintenance companies. They then take a profit on top. If the landlord did not at any point own the house or building, how would things be different for the tenant, other than their total monthly payments for housing being lower?
I don't understand what you mean. The people who designs it are architects. But a design is not a house. You need materials to make it out of. (And I'm pretty sure you can download free designs...
The people who design and build the house, and the people who maintain it.
I don't understand what you mean.
The people who designs it are architects. But a design is not a house. You need materials to make it out of. (And I'm pretty sure you can download free designs for houses off the internet. At the least, you could probably look up some designs at your local library.)
The people who construct the house are generally construction workers of some sort. They do not provide or pay for the materials, they just put them together. The people who maintain the house are paid by the owner to maintain it. They do not do it out of the goodness of their hearts and they also did not pay for or provide the materials to make it.
The owner paid for the materials and they were provided by usually a lumber yard, a brick making company, etc. But they only provided them because the owner paid for them.
All of these people contributed to the house together, but none of it would have happened if the owner hadn't compensated them all to make it happen. Who would compensate the architects, construction workers, lumber yard, and brick makers if people didn't provide money to build houses?
Providing money for other people to do a job is not a difficult or challenging action, beyond having money. When you buy a cupcake, did you work hard to buy it?
Providing money for other people to do a job is not a difficult or challenging action, beyond having money. When you buy a cupcake, did you work hard to buy it?
Exactly this. There are about a dozen different ways to allocate those resources while mitigating risks for all involved that don't create a group of people who are heavily incentivized to charge...
Exactly this. There are about a dozen different ways to allocate those resources while mitigating risks for all involved that don't create a group of people who are heavily incentivized to charge more and do less while sitting on the most important residential property in the market.
People wanting to buy cupcakes doesn't, by itself, cause bakeries to appear, and yet it's essential for the customers to be there for the bakeries to exist. In a civilization where people usually...
People wanting to buy cupcakes doesn't, by itself, cause bakeries to appear, and yet it's essential for the customers to be there for the bakeries to exist. In a civilization where people usually expect to be paid for their work, the work rarely happens without buyers. (Though of course you could make cupcakes at home.)
Buildings are big and expensive, so they need big buyers with lots of money. Some ways of this happening are simple (a landlord spends their own money and does their own maintenance) and others are really complex, with banks or investors supplying the money and the landlord hiring other people. But the role of the big buyer doesn't go away, even if it's split up and delegated N ways.
In the end it's a decision-making process. Who ultimately decides that some expensive work on a building needs to be done? How is it that they are trusted with that much spending power? I'm not going to claim that the ways this happens are always or even usually fair, but it has to happen somehow.
Yeah that's fine, I won't argue. I just wanted to counter the argument that the system would just work fine without them. It seems like it might be a better discussion if we turned this into a...
Yeah that's fine, I won't argue. I just wanted to counter the argument that the system would just work fine without them. It seems like it might be a better discussion if we turned this into a question: what do landlords do, if they're doing it right? Then maybe talk about how else it might be done.
I'm sorry, I should have explained my position in more depth, because I didn't mean to imply that paying for housing to be built was unnecessary, just that it's not in and of itself a challenging...
I'm sorry, I should have explained my position in more depth, because I didn't mean to imply that paying for housing to be built was unnecessary, just that it's not in and of itself a challenging step of the process. If someone is doing the research to determine the best place and use for a building, or organizing the tradespeople or any other skilled labor, that provides value and requires skill. Paying for it does not.
Landlords, when they're doing it right, do the same sorts of things that property management firms do: payment processing and maintenance. But they get paid far in excess of the value of that work. That's the problem.
Yes, rental property can be lucrative in tight markets. If more housing were easy to build then those excess profits wouldn't be there but that's an economics 101 idealization.
Yes, rental property can be lucrative in tight markets. If more housing were easy to build then those excess profits wouldn't be there but that's an economics 101 idealization.
Are you intentionally detailing the conversation with dismissive generalizations? You asked what I thought landlords should do for their money, I offered some options, and then... what? Your trend...
Are you intentionally detailing the conversation with dismissive generalizations? You asked what I thought landlords should do for their money, I offered some options, and then... what? Your trend over the last year towards dismissiveness of others stances and unwillingness to engage in conversation beyond snark is really unwelcome. We debate fairly frequently here, and the reason I regularly walk away from those threads is because I never feel like you're talking in good faith anymore. We used to have back and forth, and while we disagreed, it wasn't so dismissive. What happened?
I'm sorry, I thought I was agreeing with you! (Specifically with "they get paid far in excess of the value of that work.") This is often true. I didn't write much, but didn't intend to be dismissive.
I'm sorry, I thought I was agreeing with you! (Specifically with "they get paid far in excess of the value of that work.") This is often true.
I didn't write much, but didn't intend to be dismissive.
How is that possible? If the market didn't value that work, why would they be paying for it? Why wouldn't someone else come along and offer the same work for less money? I imagine it's because...
But they get paid far in excess of the value of that work.
How is that possible? If the market didn't value that work, why would they be paying for it? Why wouldn't someone else come along and offer the same work for less money? I imagine it's because part of the work that you missed is the work that went into getting the capital to purchase the house in the first place.
This is like the old story of hiring a designer to make a new logo. The CEO asks the designer to make a new logo. They whip something out in 5 minutes. The CEO asks why the company paid so much for only 5 minutes of work? The designer replies that company didn't. They paid for 30 years of gaining experience plus 5 minutes of work. If they wanted to pay for only 5 minutes of work, they could have hired a struggling student.
The difference is that design skills are not really a limited resource, while land is one of the most limited resources around. Supply cannot grow with demand, so landlords can charge much more...
The difference is that design skills are not really a limited resource, while land is one of the most limited resources around. Supply cannot grow with demand, so landlords can charge much more than the inherent value of any of the services they sit in the middle of.
People do come along and offer the same work for less money: they're called property managers, and many owners pay for someone else to do all the work, and they still make money.
People do come along and offer the same work for less money: they're called property managers, and many owners pay for someone else to do all the work, and they still make money.
Nobody's claiming it's difficult or challenging. Is that a requirement for ownership? My point is that none of the people involved in "providing a house" (by the GP's definition) would provide it...
Nobody's claiming it's difficult or challenging. Is that a requirement for ownership?
My point is that none of the people involved in "providing a house" (by the GP's definition) would provide it if it weren't for the person paying, so to say that the owner of the house doesn't "provide" it is nonsensical.
That's not really the argument, and people in this thread explicitly are claiming that it's difficult and challenging. You might disagree, but I think that a quirk of history (who happens to...
Nobody's claiming it's difficult or challenging. Is that a requirement for ownership?
That's not really the argument, and people in this thread explicitly are claiming that it's difficult and challenging.
You might disagree, but I think that a quirk of history (who happens to inherit or be in position to buy a piece of land) should not dictate the ability to profit from a piece of land forever. Those profits should be limited by law, or at least seized and redistributed through taxation.
What I'm saying is that landlords as they exist aren't a necessary part of making there be housing. Any individual or organization with enough capital could do it, for similar or different reasons...
What I'm saying is that landlords as they exist aren't a necessary part of making there be housing. Any individual or organization with enough capital could do it, for similar or different reasons than the profit motive that most operate under at the moment.
By this logic, grocery stores are just middlemen. People should go through the hassle of buying their produce directly from the farmers and factories that produce them. Have you ever built or...
By this logic, grocery stores are just middlemen. People should go through the hassle of buying their produce directly from the farmers and factories that produce them.
Have you ever built or owned a home?
Working with contractors and repairmen is a hassle, especially if you're trying to make sure you are getting the best deal. A landlord does this work for you, while assuming the risks and responsibilities of a 30 year financial commitment.
The other value that renting provides is short term commitment. For many people, home-ownership is not an appealing option. If you move frequently (more than once every ~3-4 years), the costs associated with buying and selling your homes will prevent you from ever building any equity, and likely end up costing you more than you would have paid in rent. A lot of people fit into this category.
What we need are strong laws to protect renters and control rent pricing, and subsidized publicly funded/subsidized alternatives for underprivileged tenants who have currently no choice. All this talk of banning landlords doesn't make any sense. Even giant wealthy corporations often choose to lease their office space rather than buy. There are obvious pros and cons to both approaches, it is not one-sided.
I have explicitly dealt with these criticisms in a bunch of places in this thread and am not going to go into them again - it seems likely to devolve into bickering. I am in favor these ideas as well.
I have explicitly dealt with these criticisms in a bunch of places in this thread and am not going to go into them again - it seems likely to devolve into bickering.
What we need are strong laws to protect renters and control rent pricing.
@Loire is right, I was a landlord for around a year, but it was almost 10 years ago at this point. My wife and I bought an old house that we were going to demolish to build a new one on the lot....
@Loire is right, I was a landlord for around a year, but it was almost 10 years ago at this point. My wife and I bought an old house that we were going to demolish to build a new one on the lot. It had existing tenants (two sets living in the upstairs and basement) when we bought it, and we continued renting to them while we did all the preparation for building (figuring out house plans, getting permits, hiring people, etc.). One of the original tenants left, and we had two or three new tenants move into that half of the house over the time we rented it.
It was an awful experience overall, and about the only redeeming part was knowing that we were going to demolish the house in the end anyway, so all the damage and terrible tenant behavior wouldn't really have any lasting impact. We tried to be nice landlords, giving the tenants extra time to pay their rent and even letting one of them pay no rent for a time when he wasn't working. They repaid it by silently disappearing with bills unpaid and stealing and pointlessly damaging things on their way out. One even broke back in after moving out just to do some extra damage. I had to report one of them to the police because he explicitly threatened me when I texted him to ask about paying his rent. I never bothered to figure it out specifically, but I'm sure we didn't make a profit while renting, and probably lost thousands. It would have been better (and a lot less stressful) to just keep the house vacant.
I think a lot of people see landlords as some kind of mustache-twirling tycoon caricature, but have no idea what their situations are, or what renting to tenants is actually like. I'm sure it can be fine in many cases, but from the people I know that do it, it's largely a string of bad experiences (and even some horrific ones), and it generally gets worse the lower the quality (and rent) of the property is. We went to look at a house for sale with some friends recently, and the real-estate agent had made it sound like a selling point that there were long-time tenants in the house. The house was absolutely disgusting. The carpets looked like they hadn't been vacuumed or cleaned in any way in a decade. Multiple of the doors on the kitchen cabinets had been punched through (I don't even know what kind of situation comes up where you punch into a cabinet). The person living in the basement was so disgusting that my wife got halfway down the stairs and had to turn around because she started throwing up from the smell. It would have been unlivable without basically gutting the entire house.
This is the third time this has come up in this thread, and it really baffles me. I just don't see this as an attitude in anyone who has seriously considered the issue. There are individual...
I think a lot of people see landlords as some kind of mustache-twirling tycoon caricature, but have no idea what their situations are, or what renting to tenants is actually like.
This is the third time this has come up in this thread, and it really baffles me. I just don't see this as an attitude in anyone who has seriously considered the issue.
There are individual landlords who are bad people and individual landlords who are good people, but it doesn't matter, because having a moderately large class of people in society who, as a class, own a lot of property and, as a class, stand to gain from charging as much as possible to people who live there while doing as little maintenance as possible, is a net negative for society.
I agree somewhat. But I think there's a lack of examination of individuals, networks, and trust in renting. Also, the landlord class has multiple subclasses. Maybe it is even two classes. Trust...
I agree somewhat.
But I think there's a lack of examination of individuals, networks, and trust in renting. Also, the landlord class has multiple subclasses. Maybe it is even two classes.
Trust and reputation are big variables in renting. Airbnb was revolutionary in that it convinced people to rent out private property to strangers, a previously inconceivable proposition. It managed to do so by primarily creating a reputation marketplace.
There are two and a half markets:
The free market
The informal trust-based market
The "off-market"
On #2 — It's an open not-secret that having a good tenant reputation and renting from people in your network can net significant discounts. I've gotten (and keep getting) good discounts because my past landlords provide referrals and I have a network.
I'll also get requests from people I know looking for in-network tenants by word of mouth, offering excellent rates on nice places that they don't want to put on the free market because of the risk of getting a bad tenant who will cause damage or squat and drag out an eviction process.
On #3 — There's housing capacity that is off market because people don't trust strangers. My mom has a spacious home with empty bedrooms with attached bathrooms.
She refuses to rent them on the free market for extra income — but she'd consider renting them out cheaply to someone she or her church network knows and trusts.
My best friend once rented an entire floor—with a kitchen, bedroom, bathroom, living, etc.—for cheap (relative to local market) from a senior colleague he knew. The colleague had a very large house, and that floor was a (renovated) half-basement floor on a slope and looked out onto an outdoor pool.
It's interesting to think how this might affect measured inflation. I believe for the CPI they survey people on what they're actually paying, which may be far below market rates. This isn't going...
It's interesting to think how this might affect measured inflation. I believe for the CPI they survey people on what they're actually paying, which may be far below market rates. This isn't going to reflect prices seen by people who don't have connections.
And of course "having connections" is going to be biased.
I'm not going to deny your landlord-ing experience but is this really representative of so many people? Like, surely a great majority of people wouldn't do more than occasionally miss a monthly...
We tried to be nice landlords, giving the tenants extra time to pay their rent and even letting one of them pay no rent for a time when he wasn't working. They repaid it by silently disappearing with bills unpaid and stealing and pointlessly damaging things on their way out. One even broke back in after moving out just to do some extra damage. I had to report one of them to the police because he explicitly threatened me when I texted him to ask about paying his rent. I never bothered to figure it out specifically, but I'm sure we didn't make a profit while renting, and probably lost thousands. It would have been better (and a lot less stressful) to just keep the house vacant.
I'm not going to deny your landlord-ing experience but is this really representative of so many people? Like, surely a great majority of people wouldn't do more than occasionally miss a monthly bill if you behave like a normal person toward your tenants as a landlord?
All accounts will be anecdotal, and therefore someone will dismiss them as not indicative of the whole, but of those I know that are/have been landlords (three people with five properties between...
All accounts will be anecdotal, and therefore someone will dismiss them as not indicative of the whole, but of those I know that are/have been landlords (three people with five properties between them), Deimos' experience is more common than not.
My mother-in-law is one of them, at her peak she had a duplex and a triplex (two properties, four total rentals as she lived in one). Good tenants come and go, but she's had those that ranged from an artist that paid rent twice a year (when she'd get fed up with him not paying and give him an ultimatum, he'd magically show up with all of the back rent in cash within a week, however he managed to support himself, his child, and stay-at-home wife in between biannual rent payments so income was seemingly not an issue) to a couple she elected not to renew their lease after finding out they'd been harassing the other tenants and just had the fire department block off the street the house was on as the male member of the couple was rolling around in the street naked incoherently screaming while on some substance. Their unit had been smoked in, despite a no smoking policy in the lease, and numerous holes smashed into the walls.
A friend of mine lives in a duplex and is a longtime friend of the landlord. His downstairs neighbor decided to break his lease, leave in the middle of the night, and on the way gave the keys and address to "some homeless person a couple of blocks away" that then proceeded to tell others, use the place as somewhere to get high, break windows to get in/out so they wouldn't be seen at the front door, and shit everywhere except the bathroom despite there being running water for the next two months until the landlord decided to visit the place when calls, texts, and emails went unanswered.
Another friend works in one of the maintenance companies that handles properties for landlords. Her stories go on and on and on over bad tenants.
I'm sure that most people just pay their rent, but that doesn't mean that end of lease costs don't exist. Things break that don't bother the tenant or they don't want to report it. A new puppy chews up a baseboard. Tenant smokes so the place has to be cleaned and deodorized. A faucet leak went unreported and now the cabinet below the sink needs to be rebuilt. Pulling that kitty "just hang in there" poster pulled some plaster off the wall. Carpet that needn't be changed once every 5 years has more wear than expected because they had a child that runs in circles in one spot all day long. They unknowingly dropped a Jolly Rancher under the coffee table and it dissolved to make a permanent purple stain in the middle of the room. You've got to replace a beam in the ceiling because they used incorrect screws and split the beam when hanging their sex swing. A teenager pulled up some of the hardwood flooring to hide weed from their parents. Some are normal occurrences that make a security deposit meaningless, others are simple mistakes, negligence, or any number of reasons why it's not all sunshine and profits to be a landlord.
Yeah, I hear a lot of landlords talk about bad experiences, when most people I know rent (as I'm 20-something) and definitely do not do this kind of shit. It's possible that this is a function of...
Yeah, I hear a lot of landlords talk about bad experiences, when most people I know rent (as I'm 20-something) and definitely do not do this kind of shit.
It's possible that this is a function of some landlords holding a lot of property. If you've owned ten properties for ten years and your tenants are totally reasonable 95% of the time, you have 95% well-paying tenants and probably make a reasonable amount of money, but you still have one or two horror stories to share.
I mean no matter what circles you're running in I think we can agree you're not model tenants. :) People are going to come up with all sorts of anecdotes personal to them but at the end of the day...
In 12 years of renting I legitimately can't think of a single roommate, over a dozen of varying people, that didn't cause some form of damage to our properties whether maliciously or otherwise and I run in overly well educated middle class circles.
I mean no matter what circles you're running in I think we can agree you're not model tenants. :)
Also, I'll throw my personal anecdote on the pile. As a homeowner -- shit just breaks all the time. Constantly. I agree that when you own something you take better care of it but it's not some sort of magical power either. People who come home and leave a shower drunkenly on are just as likely to do that when they own the place.
Now I certainly wouldn't want to rent my house to them and as a landlord you have the power and ability to screen your tenants. Back when I was still renting in a market with <1% vacancies landlords could pick from 20-50 applicants to find the person that seemed the least likely to fuck up their shit.
I mean I'm not making those arguments nor do I agree with them. I agree that landlords provide a service -- I have stated that clearly. I also agree that much like any service they do deserve some...
I mean I'm not making those arguments nor do I agree with them. I agree that landlords provide a service -- I have stated that clearly. I also agree that much like any service they do deserve some compensation else why would they do it? I'm not here to villify landlords -- they are simply behaving as expected and how we'd all behave in their shoes. But that doesn't mean the system itself cannot be viewed critically.
My argument is directed at the system in general, its market inefficiencies and its propensity to drive more and more inequality and social unrest. Without going on too much of a tangent, of all the solutions being explored in public discourse (wealth tax, inheritance tax, more government spending, less government spending, more unions, less unions, etc. etc.) it's my belief that an LVT is the most sensible and effective solution so I'll continue to shout it from the rooftops until more people start shouting back. :P
Wow. Well, that's obviously not great, but... I guess I still don't really get it. They live there, right? Won't it be a huge pain for them if it breaks and they have to wait for it to get fixed?...
Wow. Well, that's obviously not great, but... I guess I still don't really get it. They live there, right? Won't it be a huge pain for them if it breaks and they have to wait for it to get fixed?
The worst I've ever done is some surface level water damage to a windowsill, and I fixed it myself. The worst I've heard of in my friend group is breaking a balustrade by falling on it. Expensive, but not thousands of dollars.
Yeah. That's clearly bad behavior, but I do find it hard to believe that it's very common, not least because when I was in college I did a databases project for my degree that involved analyzing...
Yeah. That's clearly bad behavior, but I do find it hard to believe that it's very common, not least because when I was in college I did a databases project for my degree that involved analyzing some property violations data for the city. When adjusted for how often inspections were performed, there was no difference between owner occupied and rental properties in how often violations (including broken widows, leaking pipes/water damage, lack of insulation or insulation damage, and trash on lawns) were found.
Obviously it's just one (small) city, but it seems unlikely to be a total outlier.
I think it's important to draw distinction between a system which allows landlords to passively profit in perpetuity from what needs to be considered a public good and dehumanizing landlords...
I think it's important to draw distinction between a system which allows landlords to passively profit in perpetuity from what needs to be considered a public good and dehumanizing landlords themselves. I think we need to draw attention to the former and the latter undermines that goal in my opinion.
I know I sound like a broken record, so my apologies for that. You don't need to put a cap on rent -- that directly competes with your first (very correct) point and harms renters in the long run....
It doesn't seem so hard to me - for the long term, build more housing, and for the short term, put a cap on how much landlords can raise rent. Beyond a certain level, it's pure profit for the wealthy with no actual value created for society, and that's something the government needs to step in to fix.
I know I sound like a broken record, so my apologies for that.
You don't need to put a cap on rent -- that directly competes with your first (very correct) point and harms renters in the long run. What you need is to socialize the rent.
The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.
I'm just going to add a top level comment because I think everyone is talking past one another but I actually think there is some common ground to be found here. Providing housing to people who...
I'm just going to add a top level comment because I think everyone is talking past one another but I actually think there is some common ground to be found here.
Providing housing to people who are not landowners is a service -- not everyone wants to own land or cannot own land because their locality is temporary. There is a cost to this service in terms of mild-to-extreme property damage, people who stop paying rent etc. I think everyone can agree on this.
Being a landlord is inherently rent-seeking. You are not creating any new wealth, you are extracting value derived from the community (try renting out an equivalent SF condo in the middle of nowhere) based on your position of titleholder. Maybe you just paid fair market value for your property, or maybe you inherited it from your family who purchased it 100 years ago. It matters not -- it's a system that's inherently inefficient because we are incentivizing rent-seeking behaviour.
This is something that will only get worse as we grow our population and cities become denser. A land value tax extracts a portion of the rent for the community that the value is derived from that scales with the value the community is providing.
I suppose it's true that it is a service, but I maintain that it's not a necessary service, and that we could organize society in a way that is neither radically different for the vast majority of...
Providing housing to people who are not landowners is a service -- not everyone wants to own land or cannot own land due because their locality is temporary. There is a cost to this service in terms of mild-to-extreme property damage, people who stop paying rent etc. I think everyone can agree on this.
I suppose it's true that it is a service, but I maintain that it's not a necessary service, and that we could organize society in a way that is neither radically different for the vast majority of people than things are today, nor requires landlords to solve this problem.
I mean short of nationalizing all private land I don't think there is way to do away with landlords. I'll just leave another Henry George quote here I'm quite fond of on the nationalization of land:
I mean short of nationalizing all private land I don't think there is way to do away with landlords.
I'll just leave another Henry George quote here I'm quite fond of on the nationalization of land:
To formally confiscate all land would involve a needless shock, and would require a needless extension of government. Both can be avoided. Great changes are best brought about under old forms. When nature makes a higher form, it takes a lower one and develops it. This, too, is the law of social growth. Let us work with it. I do not propose to purchase or confiscate private property in land. Let those who now hold land retain possession, if they want. They may buy and sell or bequeath it. Let them even continue to call it "their" land. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land — only to confiscate rent.
"Don't let perfect be the enemy of good." Rather than throw the dice on a radical remaking of society that, for the time being, is politically impossible, look for realistic ways to improve things.
"Don't let perfect be the enemy of good."
Rather than throw the dice on a radical remaking of society that, for the time being, is politically impossible, look for realistic ways to improve things.
I reserve the right to discuss things that seem politically impossible at the present moment. It is informative to short term efforts to discuss and understand long term goals.
I reserve the right to discuss things that seem politically impossible at the present moment. It is informative to short term efforts to discuss and understand long term goals.
While it's good advice, how long must we rely on reformism to inch our way to satisfactory conditions for everyone? For as long as there has been a capitalist status quo, it has been politically...
While it's good advice, how long must we rely on reformism to inch our way to satisfactory conditions for everyone? For as long as there has been a capitalist status quo, it has been politically impossible to change. As long as it has been impossible, reformism has been used to change the system. So how long should we fight for milquetoast reforms while the workers suffer?
Oh indeed, it sucks. It isn't just capitalism though, it's all of human history. Punctuated by revolution, whereafter things go back to being exploitative. There's been a lot of good stuff too :)...
Oh indeed, it sucks. It isn't just capitalism though, it's all of human history. Punctuated by revolution, whereafter things go back to being exploitative.
There's been a lot of good stuff too :) And, incrementally, quality of life for the masses has improved.
It doesn't seem so hard to me - for the long term, build more housing, and for the short term, put a cap on how much landlords can raise rent. Beyond a certain level, it's pure profit for the wealthy with no actual value created for society, and that's something the government needs to step in to fix.
If your landlord has never stepped inside the building, they don't need to be involved in the process.
2/3 of my landlords have fit that description. Everything was handed off to a mainainence company.
Also, the huge housing market bubble is also driving up costs across the board. Landlords wanna recoup those overinflated mortgage costs somehow.
Oh yeah, I totally agree. Landlords are, by and large, just parasites. I tend not to make that opinion my leader, though, because the internet is weirdly friendly to landlords (at least in my experience).
Landlords don't provide anything. Architects design the housing, construction workers build the housing, and repair people maintain the housing. Some landlords might do some repairs, but that's distinct from their "job" as landlords. Profiting off of housing - something everyone needs to live - is unethical, no matter which way you spin it.
This argument is used to defend a lot of unethical industries, but let me give you this hypothetical: would you defend someone who runs a factory using child labor because they assumed the financial risk? For me, financial risk does not excuse immoral actions.
Because buildings are expensive, financing is essential for building and maintaining them. The architects and construction workers and repair people don't (and shouldn't) work for free. Apartments don't spontaneously happen. If there is no owner, they're not going to happen.
Sometimes governments build and own housing. Or really, their contractors do it. Would you say the government did nothing? Making decent housing available for rent is an accomplishment no matter who does it, and there are different kinds of contributions.
(But that's not to say it can't be done badly.)
Who do you think pays the repair people to maintain the housing?
That is a completely unfair and baseless comparison. I get the impression that you think all landlords are inherently evil, and not just the bad ones.
To your broader point, the landlord is assuming the risk of unexpected repairs, as well as all the risk that comes with signing up for a mortgage. If you buy a home, and your life situation changes so that you can no longer afford the mortgage payments, you are screwed. Renting alleviates some of this risk as you are no longer attached to a 30 year financial commitment. A landlord assumes the same risks anybody else buying a home does.
The tenants. The reality is that a very small portion of rent actually goes towards those repairs, and the landlord pockets the rest as profit. I wouldn't mind if they just paid for the repairs and upkeep, but they don't just do that; they take many times that much money as profit, all for doing no work.
How so? I'm making the point that "financial risk" does not excuse unethical behavior. And I don't care about the state of a landlord's soul. Some of them might be good people, but that doesn't change the fact that the act of making profit off of housing is wrong. Just like I feel that the cops are bad because a protected class that enacts government-sanctioned violence on citizens is wrong. I don't care if there are some "good cops" out there, the problem is systemic, not individual.
I'm not sure how you expect the system to work without any profit motive. I can't imagine anyone would ever build apartment buildings if they weren't allowed to make money off them.
Let me highlight another way renting is an essential part of the housing market, from the perspective of renters. For many people, buying a home is not an attractive or even viable option. If you move regularly (for work purposes, or just because you like moving around the country), then having to buy and sell every place you live in becomes an extremely expensive hassle, to the point where renting is considerably cheaper.
There is value in providing people a low risk or low upfront cost alternative to buying real estate, and anything that provides value isn't inherently "evil" to profit off from. At least, no more "evil" than a grocery store profiting off selling food.
I say all of this as a big fan of Singapore's housing solution, in which 81% of all housing in the country is built and subsidized by the government. Private real estate development and lease agreements still exists, and I don't think there is anything inherently unethical about that.
Our problem is our inability to provide a reasonable alternative to renting for the underprivileged. This creates a scenario where unethical landlord behavior can thrive, because these particular tenants do not have a choice.
Let's take a hypothetical position that I think most people would not find radical. What if every renter gained a small amount of equity in their home each month?
This would massively alter the relationship between landlords and renters, in favor of the renters, but would still allow land investors to realize a profit. For people who don't want to own a home, they would be able to either keep a share of the profit from the property, or sell back their equity when they leave. For those who did stick around for a long time, they could resell the property when they left, or pass it on to children who could live there or rent it out themselves, eventually passing it on to their tenants.
Small change, the profit motive persists, but "landlording" as an institution would be massively altered, and its various abuses ameliorated in many cases. It would also help solve the problem people have brought up here in which some tenants damage property because they don't have a stake in it!
You're not wrong, but when those financial risks are realized (like a downturn in housing market or collapse of renter's abilities to pay), I hear an awful lot of 'Landlords need bailouts too!'
If nothing else, it is tone-deaf. Especially for owners whom have multiple properties in a hot housing market. Sell one off at over-inflated prices and survive off the assets.
Most renters haven't got nearly that flexibility, hence why they are renting.
This isn't about individual morality, it's about whether the institution of landlording is a net positive for society, and it isn't. As I said, it doesn't matter how many landlords are, individually, good people; they are part of a system that helps take wealth from the working class and concentrate it among landowners, and that is inherently bad, for all of us.
See, you clearly are worried about those unrealized risks. And, indeed, we consistently see landlords' associations and property owners' lobbies pushing laws that make it easier to reduce or socialize the financial risk that is supposedly the only reason they exist. For landlords themselves, as a class, it's clear that they are motivated by the ability to skim a profit off the top of what would otherwise need to be paid to realize the existence and maintenance of buildings.
Exactly this. "Landlords assume financial risk on behalf of tenants" is a technically correct but deeply misleading, because:
Non-occupant ownership - that is, profit-seeking - is the primary reason that housing costs so much in most places in the world. If landlording wasn't allowed, there would be less financial risk involved for prospective owner occupants.
Fairly minor overhauls of the lending system, perhaps in addition to the implementation of some kind of UBI, could almost entirely eliminate the need for any middleman between those who are now renters and those who build or currently own housing.
There is a huge gulf between paying rent (which is essentially a black hole for tenant money, and almost pure profit for most landlords) and building equity. Hypothetically, a system in which all tenants slowly build equity in their homes over time and can either sell that equity back when they move or eventually own their homes outright could still provide for a significant return on investment for landlords without keeping people who cannot own a home for financial or logistical reasons locked out of the vast benefits of property ownership, which the current system does.
Property co-ops can set up efficient contracts with e.g. property management and maintenance providers just as well as landlords can, and provide a democratic, rather than autocratic, approach for governance of apartment buildings.
I disagree that it's the primary reason. There are a lot of other more important factors.
The past few decades has seen migration of people from the countryside into cities at breakneck pace, drawn by educational and employment opportunities and urban amenities. The modern economy has shifted heavily toward service and knowledge work, and cities provide agglomeration benefits to modern companies.
Renting and buying housing in rural, semi-rural, and exurban areas in the US is extremely cheap. You can rent a stately 5-bedroom, 5-bathroom house for $1.2k in Decatur, Illinois. But there's a reason why folks leaving Decatur nickname it "Decay-tur".
Cities have failed to keep up building enough housing to accommodate urban migrants. This is hampered by:
Not even to mention Elizabeth Warren's work landmark work The Two-Income Trap pointing out that household incomes nearly doubled because women entered the workforce—a good thing. But that interacts with the primacy of housing (and location) in access to educational and employment opportunities in our modern economy has led to a fierce and overheated house price bidding war—a bad thing.
This is all entirely fair - I should say a major contributing factor, rather than the primary factor.
If landlording wasn't allowed, then housing would be less attainable for other reasons. Even if the homes are cheaper, many people simply do not have the credit to qualify for a 30 year loan. For many, their lifestyle makes homeownership undesirable. Without renting as an option, where would many of these people live?
There are a lot of other ways to make that resource allocation possible which are more equitable and more efficient. I'm not a policy expert in that area, but there's a good amount of scholarship on the topic. Of the top of my head:
mandatory universal rent-to-own with progressive equitization so landlords can't easily keep extracting rent from people above and beyond their costs
laws requiring justification from increased costs for increasing rent (this one keeps landlords but helps reduce rent-seeking)
municipal investment in high density housing which is then sold to co-ops
and many more.
Landlords do not provide a service. They act as middlemen between people who need housing and maintenance, and people who provide housing and maintainence, using property law to maintain a position of power in which they skim money off the top. Individually, landlords might be good people, but the institution is destructive and unethical.
Wait, what? Who "provides housing" if not the owner of the house?
The people who design and build the house, and the people who maintain it.
Ask yourself this: the landlord has some mortgage on the property, and thus pays some monthly amount to a bank, and some to maintenance companies. They then take a profit on top. If the landlord did not at any point own the house or building, how would things be different for the tenant, other than their total monthly payments for housing being lower?
I don't understand what you mean.
The people who designs it are architects. But a design is not a house. You need materials to make it out of. (And I'm pretty sure you can download free designs for houses off the internet. At the least, you could probably look up some designs at your local library.)
The people who construct the house are generally construction workers of some sort. They do not provide or pay for the materials, they just put them together. The people who maintain the house are paid by the owner to maintain it. They do not do it out of the goodness of their hearts and they also did not pay for or provide the materials to make it.
The owner paid for the materials and they were provided by usually a lumber yard, a brick making company, etc. But they only provided them because the owner paid for them.
All of these people contributed to the house together, but none of it would have happened if the owner hadn't compensated them all to make it happen. Who would compensate the architects, construction workers, lumber yard, and brick makers if people didn't provide money to build houses?
Providing money for other people to do a job is not a difficult or challenging action, beyond having money. When you buy a cupcake, did you work hard to buy it?
Exactly this. There are about a dozen different ways to allocate those resources while mitigating risks for all involved that don't create a group of people who are heavily incentivized to charge more and do less while sitting on the most important residential property in the market.
People wanting to buy cupcakes doesn't, by itself, cause bakeries to appear, and yet it's essential for the customers to be there for the bakeries to exist. In a civilization where people usually expect to be paid for their work, the work rarely happens without buyers. (Though of course you could make cupcakes at home.)
Buildings are big and expensive, so they need big buyers with lots of money. Some ways of this happening are simple (a landlord spends their own money and does their own maintenance) and others are really complex, with banks or investors supplying the money and the landlord hiring other people. But the role of the big buyer doesn't go away, even if it's split up and delegated N ways.
In the end it's a decision-making process. Who ultimately decides that some expensive work on a building needs to be done? How is it that they are trusted with that much spending power? I'm not going to claim that the ways this happens are always or even usually fair, but it has to happen somehow.
That it has to happen somehow is not really a rousing endorsement for the current way of doing it.
Yeah that's fine, I won't argue. I just wanted to counter the argument that the system would just work fine without them. It seems like it might be a better discussion if we turned this into a question: what do landlords do, if they're doing it right? Then maybe talk about how else it might be done.
I'm sorry, I should have explained my position in more depth, because I didn't mean to imply that paying for housing to be built was unnecessary, just that it's not in and of itself a challenging step of the process. If someone is doing the research to determine the best place and use for a building, or organizing the tradespeople or any other skilled labor, that provides value and requires skill. Paying for it does not.
Landlords, when they're doing it right, do the same sorts of things that property management firms do: payment processing and maintenance. But they get paid far in excess of the value of that work. That's the problem.
Yes, rental property can be lucrative in tight markets. If more housing were easy to build then those excess profits wouldn't be there but that's an economics 101 idealization.
Are you intentionally detailing the conversation with dismissive generalizations? You asked what I thought landlords should do for their money, I offered some options, and then... what? Your trend over the last year towards dismissiveness of others stances and unwillingness to engage in conversation beyond snark is really unwelcome. We debate fairly frequently here, and the reason I regularly walk away from those threads is because I never feel like you're talking in good faith anymore. We used to have back and forth, and while we disagreed, it wasn't so dismissive. What happened?
I'm sorry, I thought I was agreeing with you! (Specifically with "they get paid far in excess of the value of that work.") This is often true.
I didn't write much, but didn't intend to be dismissive.
How is that possible? If the market didn't value that work, why would they be paying for it? Why wouldn't someone else come along and offer the same work for less money? I imagine it's because part of the work that you missed is the work that went into getting the capital to purchase the house in the first place.
This is like the old story of hiring a designer to make a new logo. The CEO asks the designer to make a new logo. They whip something out in 5 minutes. The CEO asks why the company paid so much for only 5 minutes of work? The designer replies that company didn't. They paid for 30 years of gaining experience plus 5 minutes of work. If they wanted to pay for only 5 minutes of work, they could have hired a struggling student.
The difference is that design skills are not really a limited resource, while land is one of the most limited resources around. Supply cannot grow with demand, so landlords can charge much more than the inherent value of any of the services they sit in the middle of.
People do come along and offer the same work for less money: they're called property managers, and many owners pay for someone else to do all the work, and they still make money.
Nobody's claiming it's difficult or challenging. Is that a requirement for ownership?
My point is that none of the people involved in "providing a house" (by the GP's definition) would provide it if it weren't for the person paying, so to say that the owner of the house doesn't "provide" it is nonsensical.
That's not really the argument, and people in this thread explicitly are claiming that it's difficult and challenging.
You might disagree, but I think that a quirk of history (who happens to inherit or be in position to buy a piece of land) should not dictate the ability to profit from a piece of land forever. Those profits should be limited by law, or at least seized and redistributed through taxation.
What I'm saying is that landlords as they exist aren't a necessary part of making there be housing. Any individual or organization with enough capital could do it, for similar or different reasons than the profit motive that most operate under at the moment.
By this logic, grocery stores are just middlemen. People should go through the hassle of buying their produce directly from the farmers and factories that produce them.
Have you ever built or owned a home?
Working with contractors and repairmen is a hassle, especially if you're trying to make sure you are getting the best deal. A landlord does this work for you, while assuming the risks and responsibilities of a 30 year financial commitment.
The other value that renting provides is short term commitment. For many people, home-ownership is not an appealing option. If you move frequently (more than once every ~3-4 years), the costs associated with buying and selling your homes will prevent you from ever building any equity, and likely end up costing you more than you would have paid in rent. A lot of people fit into this category.
What we need are strong laws to protect renters and control rent pricing, and subsidized publicly funded/subsidized alternatives for underprivileged tenants who have currently no choice. All this talk of banning landlords doesn't make any sense. Even giant wealthy corporations often choose to lease their office space rather than buy. There are obvious pros and cons to both approaches, it is not one-sided.
I have explicitly dealt with these criticisms in a bunch of places in this thread and am not going to go into them again - it seems likely to devolve into bickering.
I am in favor these ideas as well.
@Loire is right, I was a landlord for around a year, but it was almost 10 years ago at this point. My wife and I bought an old house that we were going to demolish to build a new one on the lot. It had existing tenants (two sets living in the upstairs and basement) when we bought it, and we continued renting to them while we did all the preparation for building (figuring out house plans, getting permits, hiring people, etc.). One of the original tenants left, and we had two or three new tenants move into that half of the house over the time we rented it.
It was an awful experience overall, and about the only redeeming part was knowing that we were going to demolish the house in the end anyway, so all the damage and terrible tenant behavior wouldn't really have any lasting impact. We tried to be nice landlords, giving the tenants extra time to pay their rent and even letting one of them pay no rent for a time when he wasn't working. They repaid it by silently disappearing with bills unpaid and stealing and pointlessly damaging things on their way out. One even broke back in after moving out just to do some extra damage. I had to report one of them to the police because he explicitly threatened me when I texted him to ask about paying his rent. I never bothered to figure it out specifically, but I'm sure we didn't make a profit while renting, and probably lost thousands. It would have been better (and a lot less stressful) to just keep the house vacant.
I think a lot of people see landlords as some kind of mustache-twirling tycoon caricature, but have no idea what their situations are, or what renting to tenants is actually like. I'm sure it can be fine in many cases, but from the people I know that do it, it's largely a string of bad experiences (and even some horrific ones), and it generally gets worse the lower the quality (and rent) of the property is. We went to look at a house for sale with some friends recently, and the real-estate agent had made it sound like a selling point that there were long-time tenants in the house. The house was absolutely disgusting. The carpets looked like they hadn't been vacuumed or cleaned in any way in a decade. Multiple of the doors on the kitchen cabinets had been punched through (I don't even know what kind of situation comes up where you punch into a cabinet). The person living in the basement was so disgusting that my wife got halfway down the stairs and had to turn around because she started throwing up from the smell. It would have been unlivable without basically gutting the entire house.
It's not something I want to do again.
This is the third time this has come up in this thread, and it really baffles me. I just don't see this as an attitude in anyone who has seriously considered the issue.
There are individual landlords who are bad people and individual landlords who are good people, but it doesn't matter, because having a moderately large class of people in society who, as a class, own a lot of property and, as a class, stand to gain from charging as much as possible to people who live there while doing as little maintenance as possible, is a net negative for society.
I agree somewhat.
But I think there's a lack of examination of individuals, networks, and trust in renting. Also, the landlord class has multiple subclasses. Maybe it is even two classes.
Trust and reputation are big variables in renting. Airbnb was revolutionary in that it convinced people to rent out private property to strangers, a previously inconceivable proposition. It managed to do so by primarily creating a reputation marketplace.
There are two and a half markets:
On #2 — It's an open not-secret that having a good tenant reputation and renting from people in your network can net significant discounts. I've gotten (and keep getting) good discounts because my past landlords provide referrals and I have a network.
I'll also get requests from people I know looking for in-network tenants by word of mouth, offering excellent rates on nice places that they don't want to put on the free market because of the risk of getting a bad tenant who will cause damage or squat and drag out an eviction process.
On #3 — There's housing capacity that is off market because people don't trust strangers. My mom has a spacious home with empty bedrooms with attached bathrooms.
It's interesting to think how this might affect measured inflation. I believe for the CPI they survey people on what they're actually paying, which may be far below market rates. This isn't going to reflect prices seen by people who don't have connections.
And of course "having connections" is going to be biased.
I'm not going to deny your landlord-ing experience but is this really representative of so many people? Like, surely a great majority of people wouldn't do more than occasionally miss a monthly bill if you behave like a normal person toward your tenants as a landlord?
All accounts will be anecdotal, and therefore someone will dismiss them as not indicative of the whole, but of those I know that are/have been landlords (three people with five properties between them), Deimos' experience is more common than not.
My mother-in-law is one of them, at her peak she had a duplex and a triplex (two properties, four total rentals as she lived in one). Good tenants come and go, but she's had those that ranged from an artist that paid rent twice a year (when she'd get fed up with him not paying and give him an ultimatum, he'd magically show up with all of the back rent in cash within a week, however he managed to support himself, his child, and stay-at-home wife in between biannual rent payments so income was seemingly not an issue) to a couple she elected not to renew their lease after finding out they'd been harassing the other tenants and just had the fire department block off the street the house was on as the male member of the couple was rolling around in the street naked incoherently screaming while on some substance. Their unit had been smoked in, despite a no smoking policy in the lease, and numerous holes smashed into the walls.
A friend of mine lives in a duplex and is a longtime friend of the landlord. His downstairs neighbor decided to break his lease, leave in the middle of the night, and on the way gave the keys and address to "some homeless person a couple of blocks away" that then proceeded to tell others, use the place as somewhere to get high, break windows to get in/out so they wouldn't be seen at the front door, and shit everywhere except the bathroom despite there being running water for the next two months until the landlord decided to visit the place when calls, texts, and emails went unanswered.
Another friend works in one of the maintenance companies that handles properties for landlords. Her stories go on and on and on over bad tenants.
I'm sure that most people just pay their rent, but that doesn't mean that end of lease costs don't exist. Things break that don't bother the tenant or they don't want to report it. A new puppy chews up a baseboard. Tenant smokes so the place has to be cleaned and deodorized. A faucet leak went unreported and now the cabinet below the sink needs to be rebuilt. Pulling that kitty "just hang in there" poster pulled some plaster off the wall. Carpet that needn't be changed once every 5 years has more wear than expected because they had a child that runs in circles in one spot all day long. They unknowingly dropped a Jolly Rancher under the coffee table and it dissolved to make a permanent purple stain in the middle of the room. You've got to replace a beam in the ceiling because they used incorrect screws and split the beam when hanging their sex swing. A teenager pulled up some of the hardwood flooring to hide weed from their parents. Some are normal occurrences that make a security deposit meaningless, others are simple mistakes, negligence, or any number of reasons why it's not all sunshine and profits to be a landlord.
Yeah, I hear a lot of landlords talk about bad experiences, when most people I know rent (as I'm 20-something) and definitely do not do this kind of shit.
It's possible that this is a function of some landlords holding a lot of property. If you've owned ten properties for ten years and your tenants are totally reasonable 95% of the time, you have 95% well-paying tenants and probably make a reasonable amount of money, but you still have one or two horror stories to share.
I mean no matter what circles you're running in I think we can agree you're not model tenants. :)
People are going to come up with all sorts of anecdotes personal to them but at the end of the day we can see that the data tells us that renting is a profitable affair, even in Canada where horror stories like @Deimos mentioned are more common. Here's a slightly old Canadian article detailing the continued growth of the rental market.
Also, I'll throw my personal anecdote on the pile. As a homeowner -- shit just breaks all the time. Constantly. I agree that when you own something you take better care of it but it's not some sort of magical power either. People who come home and leave a shower drunkenly on are just as likely to do that when they own the place.
Now I certainly wouldn't want to rent my house to them and as a landlord you have the power and ability to screen your tenants. Back when I was still renting in a market with <1% vacancies landlords could pick from 20-50 applicants to find the person that seemed the least likely to fuck up their shit.
I mean I'm not making those arguments nor do I agree with them. I agree that landlords provide a service -- I have stated that clearly. I also agree that much like any service they do deserve some compensation else why would they do it? I'm not here to villify landlords -- they are simply behaving as expected and how we'd all behave in their shoes. But that doesn't mean the system itself cannot be viewed critically.
My argument is directed at the system in general, its market inefficiencies and its propensity to drive more and more inequality and social unrest. Without going on too much of a tangent, of all the solutions being explored in public discourse (wealth tax, inheritance tax, more government spending, less government spending, more unions, less unions, etc. etc.) it's my belief that an LVT is the most sensible and effective solution so I'll continue to shout it from the rooftops until more people start shouting back. :P
Wow. Well, that's obviously not great, but... I guess I still don't really get it. They live there, right? Won't it be a huge pain for them if it breaks and they have to wait for it to get fixed?
The worst I've ever done is some surface level water damage to a windowsill, and I fixed it myself. The worst I've heard of in my friend group is breaking a balustrade by falling on it. Expensive, but not thousands of dollars.
Yeah. That's clearly bad behavior, but I do find it hard to believe that it's very common, not least because when I was in college I did a databases project for my degree that involved analyzing some property violations data for the city. When adjusted for how often inspections were performed, there was no difference between owner occupied and rental properties in how often violations (including broken widows, leaking pipes/water damage, lack of insulation or insulation damage, and trash on lawns) were found.
Obviously it's just one (small) city, but it seems unlikely to be a total outlier.
I think it's important to draw distinction between a system which allows landlords to passively profit in perpetuity from what needs to be considered a public good and dehumanizing landlords themselves. I think we need to draw attention to the former and the latter undermines that goal in my opinion.
I know I sound like a broken record, so my apologies for that.
You don't need to put a cap on rent -- that directly competes with your first (very correct) point and harms renters in the long run. What you need is to socialize the rent.
Interesting, thanks for the link! I will definitely have to look into that as a political position. It seems to make plenty of sense on the surface!
Caveat: I don't necessarily think Georgism as defined in 1879 applies 1:1 to today's world but the concept of a land value tax certainly does.
I'm just going to add a top level comment because I think everyone is talking past one another but I actually think there is some common ground to be found here.
Providing housing to people who are not landowners is a service -- not everyone wants to own land or cannot own land because their locality is temporary. There is a cost to this service in terms of mild-to-extreme property damage, people who stop paying rent etc. I think everyone can agree on this.
Being a landlord is inherently rent-seeking. You are not creating any new wealth, you are extracting value derived from the community (try renting out an equivalent SF condo in the middle of nowhere) based on your position of titleholder. Maybe you just paid fair market value for your property, or maybe you inherited it from your family who purchased it 100 years ago. It matters not -- it's a system that's inherently inefficient because we are incentivizing rent-seeking behaviour.
This is something that will only get worse as we grow our population and cities become denser. A land value tax extracts a portion of the rent for the community that the value is derived from that scales with the value the community is providing.
I suppose it's true that it is a service, but I maintain that it's not a necessary service, and that we could organize society in a way that is neither radically different for the vast majority of people than things are today, nor requires landlords to solve this problem.
I mean short of nationalizing all private land I don't think there is way to do away with landlords.
I'll just leave another Henry George quote here I'm quite fond of on the nationalization of land:
"Don't let perfect be the enemy of good."
Rather than throw the dice on a radical remaking of society that, for the time being, is politically impossible, look for realistic ways to improve things.
I reserve the right to discuss things that seem politically impossible at the present moment. It is informative to short term efforts to discuss and understand long term goals.
While it's good advice, how long must we rely on reformism to inch our way to satisfactory conditions for everyone? For as long as there has been a capitalist status quo, it has been politically impossible to change. As long as it has been impossible, reformism has been used to change the system. So how long should we fight for milquetoast reforms while the workers suffer?
Oh indeed, it sucks. It isn't just capitalism though, it's all of human history. Punctuated by revolution, whereafter things go back to being exploitative.
There's been a lot of good stuff too :) And, incrementally, quality of life for the masses has improved.