20 votes

Landlords across America are bracing for a wave of rent defaults

69 comments

  1. [22]
    JXM
    Link
    While the title of this article isn’t great, it’s an interesting piece. I have a small piece of property that I rent and the business that’s there has been closed for six weeks no with no end in...

    While the title of this article isn’t great, it’s an interesting piece.

    I have a small piece of property that I rent and the business that’s there has been closed for six weeks no with no end in sight. The business in question has been there for nearly 30 years. I’ve told my tenant that they aren’t expected to pay anything until they reopen. My wife and I are extremely lucky that we are both still employed and if we are careful, we can get by. I’m not saying this to pat myself on the back, but because I truly hope that other landlords understand what their tenants are going through and try to help them as much as possible.

    Even if people can get get a break this month and pay back their rent in a few months, it’s just adding to a mountain of debt that most people already have trouble crawling out from under.

    I know a ton of people who still haven’t gotten their stimulus checks and where I live, the unemployment system was so overwhelmed that they had to switch back to paper ballots and pull people from the parks service to help input all the data. People who applied at the beginning of March are still waiting for unemployment checks.

    The system is just broken and renters are stuck in the middle.

    For example, he said, a landlord may set up a payment plan that allows a tenant rent relief for a few months if they sign up for another year lease. Back rent is spread over 18 months.

    I don’t know how others feel, but this seems extremely predatory to me. The landlord is basically saying, “I’ll give you a break, but you have to agree to stay for another year to make sure I still get my piece of the pie.” It just leaves a bad taste in my mouth.

    21 votes
    1. [10]
      stu2b50
      (edited )
      Link Parent
      Well, remember that many landlords don't own complete equity of their property, they have a mortgage on it. If they are foreclosed on it, it is only detrimental to the tenants as well. I think a...

      Well, remember that many landlords don't own complete equity of their property, they have a mortgage on it.

      If they are foreclosed on it, it is only detrimental to the tenants as well.

      I think a lot of people have this image of landlords as these boomers or giant faceless corporations who 100% own their property and just spend their free time squeezing money from tenants. And those exists too. But in many cases the monthly mortgage is like most of their rent revenue.

      When something like covid causes like half of your tenants not to pay, you're in DEEP financial trouble. Usually they prepare for 70-90% occupancy rates, never 50%.

      11 votes
      1. JXM
        Link Parent
        I’ve mentioned this in a few other threads about similar topics, but I think your point speaks to why we need larger intervention that can halt the entire system for a while to keep the dominoes...

        I’ve mentioned this in a few other threads about similar topics, but I think your point speaks to why we need larger intervention that can halt the entire system for a while to keep the dominoes from all tumbling at once.

        13 votes
      2. [4]
        precise
        Link Parent
        Regarding the struggles of landlords, I want to state a little of my opinion here. I honestly don't care how much financial trouble landlords may find themselves in. I have more sympathy for the...

        Regarding the struggles of landlords, I want to state a little of my opinion here. I honestly don't care how much financial trouble landlords may find themselves in. I have more sympathy for the small landlord, especially those that work with their tenants in a positive way. That said, the number of times I've seen myself and others told by landlords, people who are well off, "boomers" and their ilk that, "we need to just pull ourselves up by our bootstraps" and "stop living above our means" and "just get another job" is insane.

        So pardon me if I don't give two shits about the landlord with 7-figure asset portfolios who I am already paying money every month. Maybe they should start pulling on their own bootstraps and stop living above their means?

        10 votes
        1. [3]
          JXM
          Link Parent
          I think those are two different groups though. While there is obviously some overlap (an older person is much more likely to have saved up enough to afford to own property other than their primary...

          That said, the number of times I've seen myself and others told by landlords, people who are well off, "boomers" and their ilk that, "we need to just pull ourselves up by our bootstraps" and "stop living above our means" and "just get another job" is insane.

          I think those are two different groups though. While there is obviously some overlap (an older person is much more likely to have saved up enough to afford to own property other than their primary residence), that attitude is much more of a generational thing.

          "I pulled myself up by my bootstraps, so you can too!" seems to be a boomer generation thing, not a landlord thing. At least that's my experience. (The concept alone is crazy and doesn't take into account how different the world is now from when they jumped from lower to middle or upper class).

          1 vote
          1. [2]
            precise
            Link Parent
            Like I said, my opinion based on my experiences :). I'd posit that, because those older people are more likely to own more property, they are more likely to be a landlord. I think the...

            Like I said, my opinion based on my experiences :). I'd posit that, because those older people are more likely to own more property, they are more likely to be a landlord. I think the cross-section is too intense to be ignored, but I also don't think we can say anything in this line of thinking with 100% certainty.

            1 vote
            1. JXM
              Link Parent
              Either way, it just shows a complete lack of awareness for how the world has changed in the past 50 years. That's what drives me crazy. "I bought a house when I was 20 and I made as much as you...

              Either way, it just shows a complete lack of awareness for how the world has changed in the past 50 years. That's what drives me crazy.

              "I bought a house when I was 20 and I made as much as you do!" - Well, yeah. But you also didn't have $20,000 of student loan debt because college was $400 per semester, you could get a house for 1/3 the price of what they cost now and thirty five years of stagnant wages to deal with!

              1 vote
      3. [4]
        NaraVara
        Link Parent
        I would think that if a bank forecloses on a commercial property, they'd inherit all the obligations/liabilities that come with that property, including tenant leases.

        If they are foreclosed on it, it is only detrimental to the tenants as well.

        I would think that if a bank forecloses on a commercial property, they'd inherit all the obligations/liabilities that come with that property, including tenant leases.

        5 votes
        1. [2]
          stu2b50
          Link Parent
          That's not the issue. Not only is the Bank truly a faceless entity that gives 0 shits about 0 except how to extract the most money, they also have 0 willingness to own an apartment building and...

          That's not the issue. Not only is the Bank truly a faceless entity that gives 0 shits about 0 except how to extract the most money, they also have 0 willingness to own an apartment building and are going to ship it off to the first buyer, often a faceless real estate investment company.

          And in the interim, good luck asking Wells Fargo to repair the AC or fix the internet.

          2 votes
          1. NaraVara
            Link Parent
            Internet might be a thing, though that's usually more like Verizon or Comcast's remit than the landlord's. Stuff like plumbing and climate control is usually protected under tenants' rights laws....

            And in the interim, good luck asking Wells Fargo to repair the AC or fix the internet.

            Internet might be a thing, though that's usually more like Verizon or Comcast's remit than the landlord's. Stuff like plumbing and climate control is usually protected under tenants' rights laws. So even if Wells Fargo fails you can at least take comfort in suing their pants off.

            1 vote
        2. AugustusFerdinand
          Link Parent
          It's dependent on local laws (in the US) or where the loan originated. If it was a federally backed loan the bank that holds it can give the tenant a 90 day notice to vacate, during that time the...

          I would think that if a bank forecloses on a commercial property, they'd inherit all the obligations/liabilities that come with that property, including tenant leases.

          It's dependent on local laws (in the US) or where the loan originated. If it was a federally backed loan the bank that holds it can give the tenant a 90 day notice to vacate, during that time the tenant continues to pay the rent amount that was with the landlord. If it was a private mortgage it'll be dependent on the local laws. Examples: In Washington tenants are given 60 days notice to vacate, in Texas you're given an automatic 30 days to vacate from the date of foreclosure.

          1 vote
    2. [8]
      NaraVara
      Link Parent
      A lot of private landlords really seem to be of the mindset that they are entitled to a fixed sum of money regardless of what the macroeconomic environment looks like. Even before the pandemic...

      I don’t know how others feel, but this seems extremely predatory to me. The landlord is basically saying, “I’ll give you a break, but you have to agree to stay for another year to make sure I still get my piece of the pie.” It just leaves a bad taste in my mouth.

      A lot of private landlords really seem to be of the mindset that they are entitled to a fixed sum of money regardless of what the macroeconomic environment looks like. Even before the pandemic this was a complaint in high-rent areas, like New York, where the vacancy rate on commercial properties was super high because the landlords weren't willing to sign leases at rates that businesses could function. And this was generally in older buildings that they outright owned free-and-clear. They were just going to sit there and bleed money in the hopes that some magical retail outlet would show up that could pull the insane margins needed to pay them.

      8 votes
      1. [4]
        JXM
        Link Parent
        That's because, legally, they are entitled. If you don't pay, you get evicted and sued. And the landlord will win. As I mentioned in my original comment, I don't agree with it but that's the way...

        A lot of private landlords really seem to be of the mindset that they are entitled to a fixed sum of money regardless of what the macroeconomic environment looks like.

        That's because, legally, they are entitled. If you don't pay, you get evicted and sued. And the landlord will win. As I mentioned in my original comment, I don't agree with it but that's the way it is in most places.

        That's why I've mentioned in other comments in this thread and a few others that we need some sort of larger action that takes these types of things into account.

        I get that the landlords might have a mortgage themselves, which is paid for by the rent they receive. They are being squeezed by the bank, so they in turn have to squeeze their tenants. But the system as a whole just has a complete lack of empathy for people's situations. It's all numbers.

        Even before the pandemic this was a complaint in high-rent areas, like New York, where the vacancy rate on commercial properties was super high because the landlords weren't willing to sign leases at rates that businesses could function. And this was generally in older buildings that they outright owned free-and-clear.

        It sounds like the rental rate is just too high for a business to make money there. Maybe there needs to be some sort of market-wide correction there? Or people just need to realize they won't get tenants at the rate they're asking? I don't get the logic behind leaving it empty but I'm not an economics guy at all, so maybe I'm missing something.

        6 votes
        1. [2]
          NaraVara
          Link Parent
          Kind of, but that's just because the law was written to enshrine that kind of entitlement. There is an alternate universe where rent controls limit how much rates can be changed year over year and...

          That's because, legally, they are entitled

          Kind of, but that's just because the law was written to enshrine that kind of entitlement. There is an alternate universe where rent controls limit how much rates can be changed year over year and robust tenants rights rules allow extended periods of dereliction in the event of financial hardship. Some places used to even have squatters' rights rules that are so strong that you could successfully win title to the land if the landlord didn't come by and check on it often enough (though this is mostly for productive, agricultural land).

          I don't get the logic behind leaving it empty but I'm not an economics guy at all, so maybe I'm missing something.

          That's the thing though, it isn't logical. These people are acting against their economic interests because of the sense of entitlement I mentioned. There isn't much doubt that there needs to be some massive market-wide correction in some of these high-cost metros.

          7 votes
          1. JXM
            Link Parent
            I agree with what you’re saying. I was pointing out that the deck is stacked against renters in a lot of places. We need more controls and things need to shift more toward the rights of tenants.

            I agree with what you’re saying. I was pointing out that the deck is stacked against renters in a lot of places. We need more controls and things need to shift more toward the rights of tenants.

            3 votes
        2. joplin
          Link Parent
          I've heard that here in Los Angeles many landlords take great pains to never lower their rent. If something's not moving, rather than lower the rent on it, they'll offer 1 or 2 months "rent free"...

          I've heard that here in Los Angeles many landlords take great pains to never lower their rent. If something's not moving, rather than lower the rent on it, they'll offer 1 or 2 months "rent free" (but of course you need to have first and last month's rent up front plus security deposit which is another month's rent). It's absurd, but they claim that once rates go down, it's much harder to get them back up, so they'll fight tooth and nail not to drop them if possible. The thinking goes that if it really is that hard to get rents to rise back to where they were, it might be worth it to lose one month's rent now, knowing that it will even out in the long run and will keep your rents higher.

          And I guess that makes sense if it really is that hard. If I'm renting an apartment at say $1,000/mo. and I can either lower it to $800/mo. or lose 1 months rent and keep it at $1,000/mo., it makes sense to keep it at $1,000/mo. After 1 year, I'd have $11,000 vs. $9600. Even if I can't rent it for 2 months, I end up with $10,000 vs $9600 after a year. (Heck, even at $900/mo., you only end up with $10,800 after a year vs. $11,000 if you only rent it for 11 months @ $1000/mo.) But of course, you never know if you're going to be able to rent it out in 1 month or 2 or 6, and you have no way of knowing what the economy is going to do in the future, either.

          5 votes
      2. [3]
        Artrax
        Link Parent
        Do you have numbers on that? Because Vacancy Rates in Cities in the industrialized world that also have high rents are usually lower than 2%, making the claim "rents are up because people leave...

        like New York, where the vacancy rate on commercial properties was super high because the landlords weren't willing to sign leases at rates that businesses could function

        Do you have numbers on that? Because Vacancy Rates in Cities in the industrialized world that also have high rents are usually lower than 2%, making the claim "rents are up because people leave their units empty" not very likely to be true

        1. NaraVara
          Link Parent
          It's much higher than that in NYC From the NYC Comptroller

          It's much higher than that in NYC

          From the NYC Comptroller

          Rising Rents Have Contributed to Rising Vacancy Rates
          Retail rents rose by 22 percent on average citywide between 2007 and 2017. In some parts of the City, the rate >of growth was much more rapid. Average rents doubled over the period in some neighborhoods, such as Soho >(zip code 10012), while falling in others – for example in the Financial District.

          Regression analysis shows rising retail rents are a significant driver of retail vacancy. Controlling for other >factors, a one percent increase in average retail rents is associated with 0.33 percent increase in vacant retail >square footage.

          Property taxes paid by retail tenants as part of their rent are also an increasing burden, doubling over the last ten >years to over $2.2 billion in 2017, and accounting for a rising share of total retail rent burdens. In 2007, retail >tenants paid $1.1 billion in property taxes, equal to about 20 percent of total retail rents paid. The $2.2 billion in >property taxes paid by retail tenants in 2017 accounted for 23 percent of total retail rents paid.

        2. whbboyd
          Link Parent
          They're talking about rents on commercial/retail spaces (i.e. stores), not residential or overall.

          They're talking about rents on commercial/retail spaces (i.e. stores), not residential or overall.

    3. Loire
      Link Parent
      It's definitely predatory unless the tenants always planned to be their long term. And with the job market the way it is right now, 10%+ of people don't know where they will be living in 12+...

      I don’t know how others feel, but this seems extremely predatory to me. The landlord is basically saying, “I’ll give you a break, but you have to agree to stay for another year to make sure I still get my piece of the pie.” It just leaves a bad taste in my mouth.

      It's definitely predatory unless the tenants always planned to be their long term. And with the job market the way it is right now, 10%+ of people don't know where they will be living in 12+ months time.

      6 votes
    4. [2]
      joplin
      Link Parent
      We're in a similar situation. Our renter is an individual rather than a business, but we've told her not to worry about rent. She's also been laid off, so that doesn't help. (It's not clear if...

      I have a small piece of property that I rent and the business that’s there has been closed for six weeks
      I’ve told my tenant that they aren’t expected to pay anything until they reopen.

      We're in a similar situation. Our renter is an individual rather than a business, but we've told her not to worry about rent. She's also been laid off, so that doesn't help. (It's not clear if she'll get her job back when this is over, or if the business has folded.)

      In any event, thank you for being a compassionate human being. My spouse has been following our Mayor's account on Facebook, and the city has been setting down some rules about what landlords can and can't do. There were actually people in the comments saying things like, "Won't somebody think of the landlords?!?!" It's insane.

      4 votes
      1. JXM
        Link Parent
        Where I live, we don't have any restrictions. The guidance from local government has been, "tenants should speak with their landlords about alternatives if they can't pay their rent." Luckily the...

        Where I live, we don't have any restrictions. The guidance from local government has been, "tenants should speak with their landlords about alternatives if they can't pay their rent."

        Luckily the civil court isn't processing any cases currently, so no one will be immediately evicted.

        I've noticed that the comments on our local government's social media posts have been particularly nasty and full of people who just seem devoid of empathy for other people. They just want things back to normal so they can go out to restaurants and the beach again.

        4 votes
  2. [47]
    bloup
    Link
    What if it was never legal for people to be landlords in the first place? Everyone should read Henry George.

    What if it was never legal for people to be landlords in the first place? Everyone should read Henry George.

    11 votes
    1. [4]
      skybrian
      Link Parent
      Could you explain what you read? The Wikipedia article for Henry George doesn't talk about eliminating landlords.

      Could you explain what you read? The Wikipedia article for Henry George doesn't talk about eliminating landlords.

      8 votes
      1. bloup
        Link Parent
        I am not sure if Henry George ever advocated for making landlording illegal. But he did want to make it so it would basically be impossible to create a business model based on landlording, by...

        I am not sure if Henry George ever advocated for making landlording illegal. But he did want to make it so it would basically be impossible to create a business model based on landlording, by taking a substantial portion of the rent via a tax on the value of the land then returning it to the public through a basic income or financing public works.

        I really just wanted people to think critically about economic rent, specifically land rent. Like what would the world look like today if throughout all of human history, land ownership operated on the principle of "use it or lose it"? I wasn't necessarily trying to propose a solution, here.

        Anyway, I suggested people read Henry George because I think he nails his analysis of land rents. If you want a book, check out his best selling work Progress and Poverty. You can also try Wealth of Nations by Adam Smith or Political Economy by David Ricardo. Pretty much all the classical economists were pretty anti-landlord.

        Lastly, if you want a good basic overview of what economic rents are, this Investopedia article is pretty good. The idea that economic rents are literally, by definition, market inefficiencies is a pretty uncontroversial one in modern economics: https://www.investopedia.com/terms/e/economicrent.asp

        8 votes
      2. [2]
        Arshan
        Link Parent
        My understanding of Georgism was that it argued that rent from land and natural resources are publically owned. Ironically, I was just reading up on it today in my personal overview of socialism....

        My understanding of Georgism was that it argued that rent from land and natural resources are publically owned. Ironically, I was just reading up on it today in my personal overview of socialism. Georgism is more generally focused on the idea of Economic Rent, which is distinct from the colloquial understanding of the word. Simplifying it a bit, but it is the profit that the owner of a form of capital gets above the use cost of the object. Now whether or not residing in a building is considered productive by Georgist, I have no idea, I am just trying to clarify from what I know.

        See wikipedia article for Georgism

        7 votes
        1. skybrian
          Link Parent
          Yeah, that's my understanding. It seems like a single land tax would result in higher property taxes in popular places as a way of encouraging density. Single home owners couldn't afford it so...

          Yeah, that's my understanding. It seems like a single land tax would result in higher property taxes in popular places as a way of encouraging density. Single home owners couldn't afford it so they would sell out to property developers who can build larger buildings, spreading the cost over more tenants.

          It's basically pro-housing, pro-development, and pro-density, and would have the opposite effect of zoning restrictions, with the wrinkle that much of the rent that landlords get in good locations goes to the government as property tax.

          I don't think it makes sense to have zoning restrictions and a single land tax since they are working at cross-purposes? Removing restrictions on housing development first would be a good start; jacking up property tax as well seems unnecessary though it might be a better way to fund the government than other ways.

          3 votes
    2. [37]
      JXM
      Link Parent
      Serious question: if landlords aren’t allowed, how do people who can’t afford to buy land have a place to live? I’m not familiar with Henry George’s work so I’m not sure how the system is supposed...

      Serious question: if landlords aren’t allowed, how do people who can’t afford to buy land have a place to live?

      I’m not familiar with Henry George’s work so I’m not sure how the system is supposed to work.

      4 votes
      1. [32]
        precise
        Link Parent
        Co-op owned properties, where all of the "tenants" have a stake in the property would be a start.

        Co-op owned properties, where all of the "tenants" have a stake in the property would be a start.

        8 votes
        1. [14]
          NaraVara
          Link Parent
          Being in a co-op isn't necessarily being landlord free. Instead, rather than being lorded over by a single landlord you're lorded over by a committee of your neighbors before you can do things...

          Being in a co-op isn't necessarily being landlord free. Instead, rather than being lorded over by a single landlord you're lorded over by a committee of your neighbors before you can do things like paint your walls or change your backsplash (depending on what your board's bylaws are). That might be better, it might be worse. But it does disadvantage certain groups such as: working people who don't have time to dedicate to ancillary governance boards, new/young people who haven't had a chance to build up political capital and ingratiate themselves to the committee bigwigs, immigrants who may not have the cultural/tribal knowledge to really get chummy with their neighbors, or any sorts of "weird" people that their neighbors might not like for having alternative lifestyles.

          One nice thing about purely transactional relationships is that as long as you get your money, we can all mind our own business.

          6 votes
          1. [10]
            bloup
            Link Parent
            Is it any easier for literally any kind of tenant to participate in the governance of the property upon which they reside when they have a landlord instead of some kind of elected board of their...

            Is it any easier for literally any kind of tenant to participate in the governance of the property upon which they reside when they have a landlord instead of some kind of elected board of their neighbors? Like do you seriously think that a culturally mismatched immigrant, or an extremely busy person, or someone living an “alternative” lifestyle would have an easier time convincing their landlord, a completely private and otherwise economically unrelated individual who is harmed financially when you have problems and sees literally no personal benefit upon their resolution, to make changes to the management of the property than they would convincing their own neighbors, a class of people with which they share a common interest?

            If not, how can you possibly call any of those disadvantages relative to landlording?

            6 votes
            1. [4]
              joplin
              Link Parent
              Possibly, yes. Convincing 1 person is almost always easier than convincing multiple people. I've had reasonable and unreasonable landlords in the past. But I've always had more unreasonable...

              Is it any easier for literally any kind of tenant to participate in the governance of the property upon which they reside when they have a landlord instead of some kind of elected board of their neighbors?

              Possibly, yes. Convincing 1 person is almost always easier than convincing multiple people. I've had reasonable and unreasonable landlords in the past. But I've always had more unreasonable neighbors than landlords at any given time.

              Also, I have known immigrants and others who conformed because they preferred to and they "fit in," but were happy to help out others like themselves who might not be as conforming. If they're your landlord and they're like you, they might be more willing to listen than several neighbors who aren't like you.

              6 votes
              1. [2]
                cfabbro
                (edited )
                Link Parent
                Yeah, tyranny of the majority is unfortunately a thing, and I also suspect that it would start to come into play pretty significantly if every property was run by coops/HOAs instead of...

                Yeah, tyranny of the majority is unfortunately a thing, and I also suspect that it would start to come into play pretty significantly if every property was run by coops/HOAs instead of individuals. And beyond that, NIMBYism is something that would likely become a serious issue within those communities too, where the greater good is forced to take even more of a backseat to selfish interests within those communities, since everyone involved would feel they have a more personal stake to protect their coop property's value as partial owners.

                4 votes
                1. precise
                  Link Parent
                  You're correct on those two points in my view. I think co-ops would need to make very clear their purpose. In my view a co-op shouldn't govern like a condo association and just be worried about...

                  You're correct on those two points in my view. I think co-ops would need to make very clear their purpose. In my view a co-op shouldn't govern like a condo association and just be worried about property value. While property value is important, in my opinion co-ops should function as humanitarian organizations. The points is to support your neighbor more than the property. The property is secondary in the dynamic if you ask me. If the members of a co-op approached the situation with that view, I think both of those issues, especially NIMBYism would be minimized. Furthermore, In any democratic institution, tyranny of the majority is possible. I'd argue though, that tyranny of the majority is more just than tyranny of the landlord. Whereby the landlord only seeks profit, and often has no humanitarian motive; a democracy vs a dictatorship.

                  3 votes
              2. precise
                Link Parent
                While convincing 1 person might be easier, consider the fact that that one person might not see you as anything more than a replaceable income. It clouds the judgement of that one person, as you...

                While convincing 1 person might be easier, consider the fact that that one person might not see you as anything more than a replaceable income. It clouds the judgement of that one person, as you said sometimes for the good and sometimes for the bad. If you remove that cloud, remove the profit in all of it, say with neighbors, I posit it would lead to more productive conversation and understandings.

                4 votes
            2. [5]
              NaraVara
              Link Parent
              Easier or harder, if you're shut out you're shut out. For the most part it's an equal level of being shut out. Except the board will also hassle them when they're paying all their bills on time...

              Is it any easier for literally any kind of tenant to participate in the governance of the property upon which they reside when they have a landlord instead of some kind of elected board of their neighbors?

              Easier or harder, if you're shut out you're shut out.

              Like do you seriously think that a culturally mismatched immigrant, or an extremely busy person, or someone living an “alternative” lifestyle would have an easier time convincing their landlord, a completely private and otherwise economically unrelated individual who is harmed financially when you have problems and sees literally no personal benefit upon their resolution

              For the most part it's an equal level of being shut out. Except the board will also hassle them when they're paying all their bills on time anyway for painting their mailbox the wrong color. By virtue of only having an economic stake in things, they can't hassle you about anything that isn't explicitly part of your leasing agreement.

              1 vote
              1. [4]
                bloup
                Link Parent
                If "you're shut out you're shut out" then how are any of your "disadvantages" actually disadvantages? Yeah, painting the mailbox of the property I lease whatever color I want is totally not the...

                Easier or harder, if you're shut out you're shut out.

                If "you're shut out you're shut out" then how are any of your "disadvantages" actually disadvantages?

                For the most part it's an equal level of being shut out. Except the board will also hassle them when they're paying all their bills on time anyway for painting their mailbox the wrong color. By virtue of only having an economic stake in things, they can't hassle you about anything that isn't explicitly part of your leasing agreement.

                Yeah, painting the mailbox of the property I lease whatever color I want is totally not the kind of thing that could get a person evicted.

                There's also the fact that by being a tenant, even if you could make improvements to the property without consulting the landlord, you would literally be spending your own money to make your landlord richer by improving his property values.

                And don't forget the fact that if your mailbox just so happens to need a coat of paint, the only things that incentivize your landlord into fixing the problem are their own personal conscience and your complaints. They have no personal stake in the mailbox looking terrible. Which means that on top of all that other stuff, the landlord is incentivized to give the job to the lowest bidder and not whoever would be the optimum choice for the tenant's quality of life.

                Seriously, even if you could find me even just 1 measly example of a housing cooperative that actually cared about what color a person painted their mailbox (and I challenge you to), the fact that you'd still get a choice even if maybe your top choice is not allowed for some dumb reason, is still way better than no choice at all.

                2 votes
                1. [3]
                  NaraVara
                  (edited )
                  Link Parent
                  There's a lot more scope to be shut out of when the relationship isn't just transactional. There are coops in India where they won't even let you in if you don't hew to the same dietary...

                  If "you're shut out you're shut out" then how are any of your "disadvantages" actually disadvantages?

                  There's a lot more scope to be shut out of when the relationship isn't just transactional. There are coops in India where they won't even let you in if you don't hew to the same dietary restrictions as the community, which mostly ends up being a way to engage in low-key casteism or regional prejudices. You also see rules weaponized against unmarried women living alone.

                  Yeah, painting the mailbox of the property I lease whatever color I want is totally not the kind of thing that could get a person evicted.

                  If you can't pay your mortgage in a coop you will still get evicted or foreclosed on. So I'm not seeing where the difference is here. AND HOAs and coops can put liens on your property if you're not in line with the aesthetic rulings of the association even if you own the property free and clear.

                  There's also the fact that by being a tenant, even if you could make improvements to the property without consulting the landlord, you would literally be spending your own money to make your landlord richer by improving his property values.

                  Being in a coop isn't separate from being a renter. It's an alternative to condominum ownership or membership in a homeowners' association. Renting will always involve being under the responsibility of a landlord. The whole point is that you're paying someone else to assume the risks of property ownership. You're getting a renting vs. property ownership dichotomy confused with an alternative model for property ownership.

                  They have no personal stake in the mailbox looking terrible.

                  Property assessments, HOAs, urban blight laws, anti-slum or tenant protection laws. . .

                  1 measly example of a housing cooperative that actually cared about what color a person painted their mailbox (and I challenge you to)

                  The primary complaint people have against coops is needing to appeal to the board to make even minor, cosmetic changes to their units. It can be stuff as simple as a a kitchen backsplash or painting a wall. These are well known issues with coops that anyone who wants to discuss them in good faith needs to acknowledge. It's the primary reason they're not more popular, because people get rightly apprehensive of having your typical HOA-brained people dictating what they can do with their property. This is why when you're looking into buying into a coop (which I am, incidentally) they tell you to get to know the people who live in the building, get to know the board, and understand if this is something you can deal with.

                  3 votes
                  1. [2]
                    bloup
                    Link Parent
                    In a non-equity cooperative, members of the cooperative are leaseholders and pay a monthly rent to the cooperative. This kind of arrangement absolutely is an alternative to the landlord-tenant...

                    In a non-equity cooperative, members of the cooperative are leaseholders and pay a monthly rent to the cooperative. This kind of arrangement absolutely is an alternative to the landlord-tenant relationship. I honestly see no functional difference between condos and equity coops.

                    I got a little carried away with the mailbox stuff, sorry about that. I was more being sarcastic because pretty much every co-op I’ve ever seen is an apartment building and I’ve never been to an apartment building that even had mailboxes to paint.

                    I think that it is much more worthwhile to consider non-equity co-ops as an alternative to landlording than equity co-ops since it retains the leasing agreement. Ultimately, you do need a solution for relatively itinerant housing.

                    anti-slum or tenant protection laws

                    Ya, those kinds of laws literally only exist because landlords have no personal stake in maintaining the property they lease out, which is my whole point. Landlords have such a small incentive to maintain their properties that we literally had to create an incentive in the form of state-violence because they would not do it otherwise.

                    5 votes
                    1. NaraVara
                      (edited )
                      Link Parent
                      This really hasn’t been my experience with any landlord I’ve lived under. For the most part, as long as I paid my rent on time they gave me no trouble and were very responsive to my calls. The...

                      Landlords have such a small incentive to maintain their properties that we literally had to create an incentive in the form of state-violence because they would not do it otherwise.

                      This really hasn’t been my experience with any landlord I’ve lived under. For the most part, as long as I paid my rent on time they gave me no trouble and were very responsive to my calls. The maintenance guy in my building shows up at any time of day if I have an issue. Previously, when I lived under a private landlord he just gave me his handyman’s number and told me to feel free to call him with any issues as long as it was under $5k. And if it was over that to just clear it with him first.

                      I’m not sure what additional incentive a coop board would have over a landlord. If you’re paying leases and don’t have any equity. The board that does own the building and has equity still has all the cards. You’re just leasing at their pleasure. This is an ideological commitment, not a solidly practicable one.

                      3 votes
          2. [3]
            precise
            (edited )
            Link Parent
            To counter, I'd say a direct democracy style of governance would resolve some of the valid issues you point out. By engaging in a direct democracy and not forming committees, there is no group to...

            To counter, I'd say a direct democracy style of governance would resolve some of the valid issues you point out. By engaging in a direct democracy and not forming committees, there is no group to indirectly lord over the community. This resolves the issue of having to rub elbows with the big wigs, because hopefully the big wigs wouldn't exist. It's true that cliques and groups with naturally form, but in an equitable direct democracy, if nobody has more power than the other, there would be no big wigs.

            I'd also posit, that in a direct democracy, simple regulations like painting your walls could come down to a direct vote, and not a select few's decision. "Hey, quick poll, does anybody mind or object to my doing X?" If it doesn't lower property value, I honestly doubt any neighbors would care. As you point out, most people would want to mind their own business.

            To address those who do not have the time for being involved on governance for other reasons, as you listed working folks and people who may not be able to immediately integrate well into the community because of cultural differences, there would need to be two things:

            1. An outreach program, a few friendly folks that volunteer to initially welcome new people into the neighborhood, invite them to get involved in point 2.

            2. A diverse style of governance and legislation. In the American Congress, representatives have various methods of voting. They can vote by paper ballot, electronically from the chambers, do an audible vote, they can send one of their staff members to vote, they can vote by telephone, and even vote remotely as they are during this pandemic. This methodology could be just as easily applied to something much less significant, being community issues. Facebook polls, emails, community meetings, mailed ballots, group texts. It doesn't have to be super formal, but as long as everybody has been informed, the needs should be met. Further, waiting period for voting should be universal, say post a poll and give it a week. This hopefully gives everybody enough time to address the situation.

            As an alternative to all of this, unless the co-op decides that residents must vote, is it doesn't have to be compulsory. If a member just wants to pay their dues, mind their own, and doesn't really care if the neighbors build a 50 foot tall dinosaur in their backyard, then they can do just that. It doesn't minimize their self representation at any future point, and they are still informed.

            2 votes
            1. [2]
              NaraVara
              Link Parent
              Unfortunately real people have jobs and social lives and families that they'd rather spend their time on than poring over the details of a trash pickup contract. The net result of this is that the...

              By engaging in a direct democracy and not forming committees, there is no group to indirectly lord over the community.

              Unfortunately real people have jobs and social lives and families that they'd rather spend their time on than poring over the details of a trash pickup contract. The net result of this is that the "direct democracy" ends up being dominated by the people with the most time on their hands and the strongest desire to make decisions on behalf of others. This is a recipe for Karenocracy.

              If it doesn't lower property value, I honestly doubt any neighbors would care.

              Do you have neighbors? Oh they'll care. And they'll come up with many elaborate justifications for a rube goldberg mechanism by which it affects their "property values."

              Most of your other proposals basically come down to relying on the good will of the majority to mitigate the inherent issues which are dubious fixes at best. Not least of which because you could make the same proposals and plead similarly on behalf of landlords. And if you're talking bylaw fixes, then again we're discussing territory where we're making laws to constrain relationships that could end up exploitative or abusive if standard incentives went unchecked. Which, you again said was the issue with landlords.

              3 votes
              1. precise
                Link Parent
                I'm going to be honest, your line about "real people" is kind of offensive. I can only read into it that you believe my views on this subject are incorrect and that is based in your opinion....

                I'm going to be honest, your line about "real people" is kind of offensive. I can only read into it that you believe my views on this subject are incorrect and that is based in your opinion.

                Anyways... in my state, when proposals are brought to ballot by either the state congress or by petition of the people, it goes through a process. The key point in this process is that the proposal is listed with a completely unbiased, neutral description alongside the option. It describes exactly what the proposal would do, the reasoning, and the effects. The motivation for this is an informed democracy is a healthy democracy. Something like this outlined in the co-op charter would limit how much any ruling party could do in that regard. Also, the composure of this karenocracy would have to at least have a simple majority, and at that point, couldn't you technically say that the democracy is functioning? It is true that the folks with the most time on their hands will be the most prominent members of the co-op, but if nobody has more representation than anybody else, does it matter?

                There would always be neighbors who would pipe up, and for the record.. yes I have neighbors. That's an unfortunate truth of any housing model, just loiter in your local zoning office to see it in action.

                When you talk about good will, I'd wholeheartedly argue that your neighbors and community members have infinitely more goodwill than your landlord. Pleading with the landlords who have absolutely no incentive to change anything is why we are having this conversation in the first place. Yes, we would have to make bylaws and charters to constrain what people can and can't do, but it would not be extraneous. You say they could become exploitative or abusive if they went unchecked, but I'd argue that's already the case with landlords. That's why a transparent governance is important. The landlord does not have any desire or requirement to be transparent in any of their dealings.

                So what should we do? Continue to deal with all of these problems, that already apply to land ownership and communities today, and just beg the folks that have no incentive to cause any positive change to do just that? Should we avoid implementing fixes because all those problems that we already have still exist in our solution, even though they can more easily be mitigated? Or should you implement this solution, making the problems you've very willingly pointed out much more easy to fix?

                Almost all of those problems you listed come down to who has capital and inversely, power. Take capital out of the equation through properly chartered, and transparent co-ops and you will solve these problems.

                2 votes
        2. [7]
          skybrian
          Link Parent
          I don't know much about it but I'm skeptical that co-op ownership makes much difference? It's apparently common in New York City and it's unclear that buying an apartment that way is much...

          I don't know much about it but I'm skeptical that co-op ownership makes much difference? It's apparently common in New York City and it's unclear that buying an apartment that way is much different from buying a condo somewhere else.

          Does anyone have experience with co-ops?

          3 votes
          1. [6]
            precise
            Link Parent
            I don't have experience living in a co-op, though I like the idea. The difference is the ownership model, I guess it kind of gets down to the point of who "owns" the property. It seems like it...

            I don't have experience living in a co-op, though I like the idea. The difference is the ownership model, I guess it kind of gets down to the point of who "owns" the property. It seems like it would defeat the whole purpose, because they are technically the landlord, right? Well if you split ownership and initial investment across several different parties in the form of a multiparty deed or an LLC, then it spreads the load a bit. As more people sign on, if they intend to stay they can become a member of said LLC as well. Those who do not want to, can just pay their equal rent, but that can be defined in the charter of each co-op. Co-ops are actually super common in tons of places, you just don't hear about them all that much. I think the point of confusion is initial investment, once the property is owned by the co-op, tenants in the co-op just pay their rent, utilities, etc. You don't have to buy an entire building or take out a mortgage, initially that is done by the founding members, but the costs are spread out as more people join.

            3 votes
            1. [5]
              NaraVara
              Link Parent
              A co-op system doesn't really substitute from rental units, it's more like a substitution for condominiums. In a condo building each person owns their unit and pays a sort of rent to the condo for...

              A co-op system doesn't really substitute from rental units, it's more like a substitution for condominiums. In a condo building each person owns their unit and pays a sort of rent to the condo for communal parts of the property, insurance, maintenance, and various utilities like trash collection. That condo can be managed either by a property management company or by a board of owners within the building.

              In a co-op rather than owning your unit, you own a share of the building and the size of the share is determined by which unit you live in. Co-ops can also be administered either by a co-op board or by a property management company. As they get bigger they tend to contract out most of the day-to-day stuff to property-management and just focus on the fun parts of administration, like planning parties and decorating the common areas.

              But you can still be a tenant in co-op where you rent the unit and you're still subject to a tenant/landlord relationship. It's just that your landlord is the co-op member and you're just a person living in their unit.

              2 votes
              1. [4]
                precise
                Link Parent
                I think you are casting all co-ops into a conventional box that does not properly represent what co-ops have the ability to be. That does not have to be the case, it can vary from co-op to co-op....

                I think you are casting all co-ops into a conventional box that does not properly represent what co-ops have the ability to be.

                you own a share of the building, and the size of the share is determined by which unit you live in.

                That does not have to be the case, it can vary from co-op to co-op. In my view, an ideal co-op would have perfectly equitable shares across all residents, regardless of residence types. The system you describe would lead to less representation for people who have smaller residences and potentially lower income. This defeats the democracy.

                Co-ops can also be administered either by a co-op board or by a property management company. As they get bigger they tend to contract out most of the day-to-day stuff to property-management and just focus on the fun parts of administration, like planning parties and decorating the common areas.

                You don't list this as an absolute, but I just want to clarify that this isn't always the case. A democratically chartered co-op with direct voting and positive community engagement sheds the need for any external entities. What you describe sounds more like an HOA, which is something a co-op should strive to not be.

                But you can still be a tenant in co-op where you rent the unit and you're still subject to a tenant/landlord relationship. It's just that your landlord is the co-op member and you're just a person living in their unit.

                I think the idea of subletting as a co-op member is antithetical to the idea. To install co-ops to get rid of landlords and then landlord through the co-op is just silly. If people want to be simply members of the community, and not engage with the co-op more than regular bills then that can happen.

                3 votes
                1. MimicSquid
                  Link Parent
                  And indeed a common attribute of such co-ops that hold housing units is that the owner must use the unit as their primary residence and that they cannot be rented out. Such covenants also do...

                  And indeed a common attribute of such co-ops that hold housing units is that the owner must use the unit as their primary residence and that they cannot be rented out. Such covenants also do amazing things to the housing price. Because they legally can't be purchased for speculation, the housing price rises noticeably less quickly than the surrounding area.

                  1 vote
                2. [2]
                  NaraVara
                  Link Parent
                  "Have the ability" implies unrealized potential. It's worth considering that it may be unrealized for real, practical reasons. Like this one: This doesn't generally happen because people usually...

                  I think you are casting all co-ops into a conventional box that does not properly represent what co-ops have the ability to be.

                  "Have the ability" implies unrealized potential. It's worth considering that it may be unrealized for real, practical reasons. Like this one:

                  In my view, an ideal co-op would have perfectly equitable shares across all residents, regardless of residence types.

                  This doesn't generally happen because people usually like to get out of things what they put in, and not necessarily have random people who just bought a studio and will probably move out in a couple of years dictating long-term maintenance decisions for their community. What's more, unit size also tends to approximate family size, so you can represent 2-4 people with a 2 or 3 bedroom unit vs. just 1 person in a single.

                  To install co-ops to get rid of landlords and then landlord through the co-op is just silly.

                  Lots of people have jobs that require them to leave for a few months at a time due to work you know. I think it's silly to expect them to eat the cost of their mortgage because they have a rotation or tour of duty.

                  What's more, most people buying into co-ops aren't doing it out of some ideological opposition to the concept of landlording. They just prefer the governance structure to that of a condo board. If your motivating aim is negative "do this to NOT have that" you're not really getting a clear picture of the trade offs you're making since all your focus is on the thing you don't want instead of the thing you do. It tends to create some rose-tinted glasses effects.

                  If people want to be simply members of the community, and not engage with the co-op more than regular bills then that can happen.

                  Not if they expect to have their wishes represented in the governance.

                  1 vote
                  1. precise
                    Link Parent
                    I'm going to be honest, I feel your twisting my words slightly here. I also see that you're continuing to apply a single scenario for all co-ops. As I've said elsewhere in this thread, co-ops are...

                    I'm going to be honest, I feel your twisting my words slightly here. I also see that you're continuing to apply a single scenario for all co-ops. As I've said elsewhere in this thread, co-ops are dynamic and can vary from co-op to co-op. Charters define a co-op and it won't be the same across the board.

                    For your first example, the short term tenant. Unless the co-op is filled with people who are almost exclusively short term residents (I'll get to that later), I'd bet that that one residence is going to be outvoted in a democracy. The majority of people will be longer term residents, they will have an equal say, and be more likely to engage in this discourse. The short term resident may not engage, or they may not like it. Unfortunately, they signed up for a co-op and the collectivist idea of a co-op is going to be inherent. This is why the idea of variety in installation of co-ops is important.

                    Secondly, how representation work is a tricky area. It would be, once again, outlined in the charter. In my view, it would really depend on the residence types. For example, a co-op composed of large dwellings that a single person wouldn't normally occupy might benefit from a per person representation. Meanwhile, an apartment complex with studios and smaller apartments might benefit from a per unit representation model.

                    On to your next point about traveling workers. For people who have to leave for months at a time, it's totally reasonable to not want to pay while you're away. My job actually is very similar, I'm often out of town for 20-25 days/nights a month, so I understand this very well. In the past, I have actually exited my lease and not had a permanent address. On those 5-10-odd days off on my "weekends" I lived in my car, it is quite the experience. That said, I already work outdoors and the time at work is already spent in a tent, so I can understand if that wouldn't be cutout for everybody. All this said, I'm once again arguing for dynamic co-op's, they aren't one size fits all. Perhaps a co-op with a month to month billing structure rather than annual contract? Perhaps the particular co-op could be chartered with these types of workers in mind, say in an oil town?

                    For your point on motivation, I guess you're correct in inferring my motivation. In my own words I'd say I'm trying to change the economic dynamic of shelter and property ownership for the benefit of all people. Now you can probably smell the rose from that tinted glass but I digress. That said, I think you are also inferring other people's motivations for joining a co-op, based on your world views as well. One can't be more valid than another because it boils down to opinion, so you can't discredit an idea with said opinion.

                    Finally, your last point about the representation of the introvert who wants nothing to do with governance. As I've said elsewhere, diverse governance with multiple methods of participating minimize this. Informed consent would be the name of the game, as long as the resident is aware of changes, it is their right to opt in our out. If somebody just doesn't want any part of it and then gets upset when the effects of being a co-op appear, then I question why they joined a co-op in the first place.

                    You provide good examples of scenarios where a co-op might struggle, but I'd also argue that with many of your points they apply to other models of land ownership. Also, your points seem to assume there is only one way to have a co-op function, and that is just not the case.

                    2 votes
        3. [4]
          JXM
          Link Parent
          I hadn’t thought of those. It might make moving from place to place a lot harder. I’m not sure how that would work. Would people have to be “accepted” into the co-op? Or could anyone just move in?...

          I hadn’t thought of those. It might make moving from place to place a lot harder. I’m not sure how that would work.

          Would people have to be “accepted” into the co-op? Or could anyone just move in? That could create a whole other set of problems.

          2 votes
          1. precise
            (edited )
            Link Parent
            I don't think it would make things too difficult when moving. A properly run co-op will have enough tenants that if one were to abruptly leave they would be fine until they got a new tenant....

            I don't think it would make things too difficult when moving. A properly run co-op will have enough tenants that if one were to abruptly leave they would be fine until they got a new tenant. (Ironically, this concept of saving up for a potential sudden loss of income... say a pandemic... is totally lost on actual landlords today.) This additional profit would also lead to investments made in the property, improvements and maintenance (something that is also lost on many landlords).

            I think being accepted into a co-op will be as simple as applying and showing you have the financial means to support the co-op. There would be an application process like any other landlord-tenant relationship right now. It wouldn't be set up so freeloaders could come in and take advantage, there would still be bills. The positive return is costs would go down because there isn't a landlord who needs or wants to make a profit on top of their overhead. Larger co-ops will also by nature bring prices down as the risk is split across the tenants. Discrimination laws would still need to apply, this is not like a like-minded commune. While I've seen communes run in a fashion like this, it's entirely compatible with the subdivision, apartment complex and even condominium structures we already have.

            Imagine your average apartment building, say 40 tenants. All their rent goes into a pot, it pays down mortgages, utilities and other expenses. The financials are all transparently run, everybody knows where their money is going. Distribution of moneys is democratically decided in relation to chosen uses with excess money, e.g. savings vs. improvement. If the economy is good, and increasing excess in moneys are being collected, the tenants can vote to lower rent and sit on the savings. If one of their neighbors falls into hard times, the community can vote to use some of those savings or increase rent slightly, to assist them in their expenses. Rent forbearance or forgiveness is also an option in conjunction with that. Contracts would have to stipulate that if the rent was too low then it would have to be increased, but that's an unfortunate aspect of markets. This entirely takes the landlord out of the equation, it's living by the people for the people. There is no profit to be made.

            Edit: I also think that co-ops would encourage land re-usage and dense developments. Co-ops would be easier to run with apartment complexes because there is less maintenance and startup costs. Co-ops would be hard pressed to find enough people willing to invest in new construction, especially a subdivision. I believe we need to focus on dense developments, and we need to stop destroying our land and natural resources in the name of "pretty" cookie cutter houses. That's just my opinion though, but I think co-ops would get us going in that direction.

            10 votes
          2. [2]
            spctrvl
            Link Parent
            I imagine that would vary somewhat from co-op to co-op, but most likely the first, with legal protections against discriminatory admission practices. You'd probably want to have a variety of...

            I imagine that would vary somewhat from co-op to co-op, but most likely the first, with legal protections against discriminatory admission practices. You'd probably want to have a variety of ownership models to cover different cases though; people moving to a city temporarily for instance, might better be served by public housing 'rented' at cost of maintenance, which would also be a good option to have while shopping around for a co-op.

            6 votes
            1. precise
              Link Parent
              I like the idea of variety. You don't want to pigeonhole the idea of a co-op into one model and turn people ideologically away. There would still be plenty of freedom as you could join the co-op...

              I like the idea of variety. You don't want to pigeonhole the idea of a co-op into one model and turn people ideologically away. There would still be plenty of freedom as you could join the co-op with the model you like. An implicit fiscal transparency would be beneficial to this idea. It would also benefit people in different income brackets, just because it's a co-op doesn't mean someone making below the poverty line could live in a 7-figure average subdivision.

              4 votes
        4. [6]
          joplin
          Link Parent
          Sounds kind of like a condo association. All I can say, having lived in a condo is, sounds like a terrible idea if you're after making things equitable for everyone involved. I've seen 2 scenarios...

          Sounds kind of like a condo association. All I can say, having lived in a condo is, sounds like a terrible idea if you're after making things equitable for everyone involved.

          I've seen 2 scenarios come up with HOAs. Either they're small enough that a single tenant or small group takes over and does whatever they want because the laws around HOAs are really weak and nobody who owns a condo can afford to take them to court (and they don't want to deal with the shit of all their neighbors hating them because of the lawsuit), or they're so big that they can't effectively get anything done because nobody can ever agree on policies.

          2 votes
          1. [5]
            precise
            Link Parent
            I think a properly chartered, democratically driven co-op would completely avoid those problems. In a proper democracy a coup like your first scenario shouldn't be possible. The second scenario is...

            I think a properly chartered, democratically driven co-op would completely avoid those problems. In a proper democracy a coup like your first scenario shouldn't be possible. The second scenario is possible in a democracy, but I don't think it's so much of a problem that the co-op would be unsuccessful. I'd also be cautious to compare co-ops to HOAs, HOAs as an organization often don't own any of the properties and just regulate the properties. The members may own property, but they have their own self interest in that the HOA has the potential to make profit that may or may not return to the community. In my view HOAs are a racket. The point of a co-op is everybody is invested in some way so everybody has an interest. Condos are also different in that condos, while part of a collective, are still property owned by the individual occupants.

            The main point I'm trying to get across is that in a co-op, everybody owns the same thing, so everybody is invested. The ownership models will vary from co-op to co-op, but a democratically driven, fiscally transparent, humanitarian co-op is vastly different and superior to any condo association or HOA in my opinion.

            To remove the profit and distribute the capital across the co-op removes the landlord, lowers prices, and assures more secure housing to those in the community. This is not true of a condo association where the capital is not distributed, and it is not true of a HOA because the HOA often does not own property but controls the property, which is the worst of all.

            6 votes
            1. [4]
              skybrian
              Link Parent
              How do these differences in structure change the politics? If the co-op board has more assets under its direct control, it seems like that raises the stakes when there are disputes?

              How do these differences in structure change the politics? If the co-op board has more assets under its direct control, it seems like that raises the stakes when there are disputes?

              1 vote
              1. [3]
                precise
                Link Parent
                The co-op board theoretically could be needed, but in some cases the community could have control over the decisions via a direct democracy. Someone would have to have the keys and passwords, but...

                The co-op board theoretically could be needed, but in some cases the community could have control over the decisions via a direct democracy. Someone would have to have the keys and passwords, but if multiple parties are privy to all actions taken financially, and finances are completely transparent it leaves little room for mistrust. This would mean that this theoretical board wouldn't have more power than other residents, they would just volunteer to do administrative work. Sure they could go rogue, threaten to withhold funds, etc. At that point having a charter which is prepared for such a possibility and getting the courts involved would be important. I think worst case scenario a 3rd party arbiter could be used, someone who has no conflicts of interest.

                1 vote
                1. [2]
                  skybrian
                  (edited )
                  Link Parent
                  That sounds less appealing than having a board. Like, why would I want to co-own property with random people in the building? In my wife's extended family there seems to more a tradition of shared...

                  That sounds less appealing than having a board. Like, why would I want to co-own property with random people in the building?

                  In my wife's extended family there seems to more a tradition of shared ownership of property (often through inheritance) and it seems like a bad idea to me. I'm thinking of a vacant lot that was inherited sometime in the post-WWII era and was neither developed nor sold, apparently due to a paranoid uncle, so they just kept paying the property tax every year. Since he passed away, perhaps it will be sold now after all these decades.

                  This is not directly comparable to a co-op since I doubt it would get quite that crazy with a decent charter, but it shows that two people co-owning a property can be a bad deal, even if they're family. Anything other than single ownership seems like it has some potential for drama.

                  2 votes
                  1. precise
                    Link Parent
                    I guess in my view, co-owning a property with your neighbors is preferable to living under a landlord who has no interest in your well being. I'm not a Marxist, but according to Marx, owning...

                    I guess in my view, co-owning a property with your neighbors is preferable to living under a landlord who has no interest in your well being. I'm not a Marxist, but according to Marx, owning property is immoral and I'd tend to agree. The current societal norm is the landlord-tenant relationship and this leads to tons of equality issues, homelessness and poverty. The landlord-tenant dynamic leads to haves and have-nots, and the basic human right of shelter is then endangered by a profit motive. That said, I think we'll have to agree to disagree because it sounds like we are both basing our reasoning on personal experiences and opinion.

                    3 votes
      2. [4]
        bloup
        Link Parent
        I think you should consider the effect that viewing the simple ownership of land as a possible passive income source has on the cost of land ownership! If tomorrow it suddenly became impossible...

        I think you should consider the effect that viewing the simple ownership of land as a possible passive income source has on the cost of land ownership! If tomorrow it suddenly became impossible for a person to derive a substantial amount of income simply by owning enough properties and having enough tenants (maybe through some kind of tax on the amount of land you own and how desirable it is), how valuable would the landowner now find their properties?

        3 votes
        1. [3]
          precise
          Link Parent
          So... if you can't tell I'm not exactly a capitalist, lol. Can you explain this to me a little more? I think I understand though. Are you saying that we should consider land as a commodity and...

          So... if you can't tell I'm not exactly a capitalist, lol. Can you explain this to me a little more? I think I understand though. Are you saying that we should consider land as a commodity and that restricting ability to own land is restricting commerce? If that's the case, I mean... yeah. That's sort of the point. In this thread we're talking specifically about residential real estate, but for land ownership in general some overall points apply. I have other thoughts on that, but can you make sure I'm on the right track?

          1 vote
          1. [2]
            whispersilk
            Link Parent
            As I read it, bloup is saying that under the current system where simply owning land can make you money, buying as much land as you can reasonably afford becomes a desirable thing, which...

            As I read it, bloup is saying that under the current system where simply owning land can make you money, buying as much land as you can reasonably afford becomes a desirable thing, which artificially drives up the price of land as people compete to own it for the sake of owning it (and of charging other people to rent it). This makes it harder for people who simply want to buy land to live or work on, because big players buying up huge tracts of land means that everyone else is competing for a much smaller amount of land than they otherwise would be.

            If it suddenly became impossible to make a substantial amount of income by renting land you own to other people, owning huge quantities of land would turn from an asset to a liability. People would be rushing to sell un- or under-utilized land, causing land prices to drop substantially.

            4 votes
            1. precise
              (edited )
              Link Parent
              That's how I read into it as well. On it's face, that is correct. My motivation for installing co-ops is more of a moral and ethical one than one based on economics. I believe our current economic...

              That's how I read into it as well. On it's face, that is correct. My motivation for installing co-ops is more of a moral and ethical one than one based on economics. I believe our current economic system is inherently immoral and corrupt. This is actually a prime example! Those who gain capital, do so on the backs of others. The only way to gain capital in capitalism, in an abstract view, is by stepping on and over others to get to the top. This seems extreme, but I think it's more obvious than ever right now, the wealth gap is very apparent. So then in this particular thread, we are discussing land and property ownership. Well as you said, people who have the capital to buy more land than others do so, and then they get a return on investment for simply owning the land. This leads to a rather blatant exponential growth, where the rich land owners get richer and the poor tenants get poorer. As land prices are artificially increased due to monopolistic ownership, that cost is passed down to the tenant. I think most people would agree that this phenomenon is a problem.

              For the record, I specifically view land ownership as immoral for a few reasons. Firstly, I think this is our Earth. To simply lay claim to something is an abstract idea that was invented specifically to create profit. We could argue economic theory until our typing fingers fall off and our keyboards go on strike, but that's my belief. Secondly, I believe excessive patterns of land ownership lead to irresponsible and improper use of natural resources. Thirdly, the idea of the landlord-tenant relationship is immoral in itself. I've mentioned this multiple times in this thread, but to summarize, adding capital to the equation of basic human rights is a recipe for abuse and disaster, as we've learned.

              Thanks for coming to my ted talk ;).

              5 votes
    3. determinism
      Link Parent
      I'm reading Progress and Poverty right now.

      I'm reading Progress and Poverty right now.

      1 vote
    4. [4]
      NaraVara
      Link Parent
      Georgeism doesn't say there shouldn't be landlords. It just says you should tax the excess value of the land they own. Landlords would still exist and get paid for whatever role they play as...

      Georgeism doesn't say there shouldn't be landlords. It just says you should tax the excess value of the land they own. Landlords would still exist and get paid for whatever role they play as property managers.

      1 vote
      1. [3]
        bloup
        Link Parent
        I didn't say anything about georgism. I just asked a rhetorical question designed to try and get people to think about things they might take for granted, and then suggested people read the...

        I didn't say anything about georgism. I just asked a rhetorical question designed to try and get people to think about things they might take for granted, and then suggested people read the perspective a person who provided a great analysis on the problems of land rents.

        In any case, there would definitely be many fewer landlords if we put a big fat tax on the value of land, and what's more, the "landlords" (if you can even call them that anymore, since they would literally not be earning a single cent of money from the value of the land any longer, more like "property lords" now?) that would be leftover would actually earn an income in proportion to their contribution to society.

        2 votes
        1. [2]
          NaraVara
          Link Parent
          50% of your comment was about Georgism though. . .

          I didn't say anything about georgism.

          50% of your comment was about Georgism though. . .

          6 votes
          1. bloup
            Link Parent
            None of my comment was about Georgism. 50% of my comment was about Henry George, who is a person and not an idea.

            None of my comment was about Georgism. 50% of my comment was about Henry George, who is a person and not an idea.

            2 votes