20 votes

New York City rental market pushed to breaking point by tenant debts

55 comments

  1. [9]
    tempestoftruth
    Link
    That is a shocking statistic. We thought we had a housing crisis before the pandemic; we're about to find out just how much worse it can get. This demands attention and long-term solutions from...

    A quarter of the city’s apartment renters haven’t paid since March, according to the Community Housing Improvement Program (CHIP), a group that represents mostly landlords of rent-stabilized buildings.

    That is a shocking statistic. We thought we had a housing crisis before the pandemic; we're about to find out just how much worse it can get. This demands attention and long-term solutions from government that it is, most likely, incapable of legislating. Just as an onlooker (I don't rent) this is terrifying. I can't imagine what it must be like to be a renter who can't pay rent right now.

    13 votes
    1. [8]
      Amarok
      Link Parent
      The real problem is that NY state government is not capable of financing any given solution. They are already pushing towards $15Bn in deficit thanks to covid-19 (up from around $5Bn last year)....

      The real problem is that NY state government is not capable of financing any given solution. They are already pushing towards $15Bn in deficit thanks to covid-19 (up from around $5Bn last year). This is going to result in cutting essential services statewide unless the federal government steps in. They'll legalize cannabis and hemp soon enough, and that can provide a couple billion in new revenue for those essential services, but it's not going to be able to plug the hole.

      I honestly wouldn't be surprised if NY breaks ties with the federal government and keeps its tax money at home. They've been footing the bill for a lot of the country's federal spending (along with most of the populated blue states) and if they don't see the federal government willing to give back during a crisis, they'll simply keep the money. That might even start a trend in the blue states and leave middle America hung out to dry.

      Normally this would never happen, but with our current bully in chief living in his personal fantasy land and a totally corrupt legislature, anything is possible. Trump is already refusing to help and directing those federal funds to bailouts for large corporations and scams rather than the places and people that need the relief.

      There is a sentiment, very old, in the northeastern US that we'd all be better off with a border wall along the southern edge of PA letting the rest of the USA fend for itself and own its stupidity. It's not rooted in reality at all but I've heard it for most of my life in one form or another at bars in political conversations, from church groups, as opinion pieces in local newspapers, etc. The idea of 'New England' is still very much alive here.

      This scenario could go to some very crazy and stupid places. It'll all depend on November's election, really. If Trump wins all bets are off.

      9 votes
      1. [6]
        AugustusFerdinand
        Link Parent
        Do you have any more info on this? I'm interested in reading further.

        I honestly wouldn't be surprised if NY breaks ties with the federal government and keeps its tax money at home. They've been footing the bill for a lot of the country's federal spending (along with most of the populated blue states) and if they don't see the federal government willing to give back during a crisis, they'll simply keep the money. That might even start a trend in the blue states and leave middle America hung out to dry.

        Do you have any more info on this? I'm interested in reading further.

        5 votes
        1. [5]
          Amarok
          (edited )
          Link Parent
          Sure thing. It's kinda hard to find up to date information on this, even Wikipedia's article is from 2013 which isn't useful. Best recent one I can dig up is this article on donor states which...

          Sure thing. It's kinda hard to find up to date information on this, even Wikipedia's article is from 2013 which isn't useful. Best recent one I can dig up is this article on donor states which compares them on several metrics using data from 2018/2019.

          Edit: Here's another recent study from the Rockefeller Institute (PDF) that is perhaps less confusing to follow than the other analysis.

          I am eternally amused by the red state rhetoric about evil government taxes and programs when so much of spending in those red states is being subsidized by the government redirecting funds from the blue states. If conservatives only realized that every single one of them is and always has been a welfare recipient I think they'd explode from the cognitive dissonance.

          If you total up the entire northeast's contribution from that data you can see why the sentiment I described about walling off the rest of the country still has traction around here. Most of the people living here are well aware of this discrepancy in spending and no one I've ever met is happy about it. Cuomo brings it up in every single one of his covid briefings, too, so it's a hot topic at present.

          Sometimes you even hear other new yorkers talking about spinning off NYC as a separate state, which is even more crazy-town talk considering that NYC generates the lion's share of the state revenue. The rest of new york state is massive, rural, and sparsely populated with the exception of the rust belt cities along the old erie canal.

          These reports do make it clear that NY alone can switch from a brutal deficit to a legendary surplus overnight if they ever decide to tell the fed to pound sand.

          9 votes
          1. [4]
            AugustusFerdinand
            Link Parent
            Thank you for the link, although I'm not finding anything in there in regards to the above and what legal mechanics are available for them to do so. Even a name of the mechanic will allow me to do...

            I honestly wouldn't be surprised if NY breaks ties with the federal government and keeps its tax money at home.

            Thank you for the link, although I'm not finding anything in there in regards to the above and what legal mechanics are available for them to do so. Even a name of the mechanic will allow me to do my own research on the matter, as any searching for "donor states" is mostly using the same data from the article you mentioned.

            1 vote
            1. [3]
              Amarok
              Link Parent
              There aren't any legal mechanics for doing this sort of break - it would be a tax protest enacted at the state level if it ever takes place. It's an unconstitutional action. The fact that our...

              There aren't any legal mechanics for doing this sort of break - it would be a tax protest enacted at the state level if it ever takes place. It's an unconstitutional action.

              The fact that our governor is talking about it on a weekly basis (ostensibly as a lever to pressure congress to provide aid) just shows you how far from normal we've come in the last six months.

              5 votes
              1. [2]
                AugustusFerdinand
                Link Parent
                Ah, damn. Was looking for some heavy legal reading to keep me entertained today.

                Ah, damn. Was looking for some heavy legal reading to keep me entertained today.

                3 votes
                1. Amarok
                  (edited )
                  Link Parent
                  Look into "Article V Convention" if you want to see what options the states really have to deal with a broken or rogue federal government. They created it, and they still retain the power to...

                  Look into "Article V Convention" if you want to see what options the states really have to deal with a broken or rogue federal government. They created it, and they still retain the power to dissolve it or remake it in any way that you can get 38 of them to agree with.

                  It's been done one time - when the original constitution was ratified in 1787. It's quite possible we'll live to see it happen again in our lifetimes if the country continues to spiral into insanity.

                  Just be aware that the Koch brothers and other billionaires/corporations are actively trying to make it happen and will interfere heavily in the process if it ever does.

                  You'll note two routes. One is for amendments (including an amendment like 'this constitution is sunset on this date in favor of a new one') and a more direct convention to ratify a new constitution. The latter is something of a scandal in the legal community so I expect you can find plenty of reading. :)

                  7 votes
      2. skybrian
        (edited )
        Link Parent
        You're predicting secession which is very unlikely. My guess is that New York State would figure out a way to sell more bonds. It looks like in New York State, this might require an amendment to...

        You're predicting secession which is very unlikely. My guess is that New York State would figure out a way to sell more bonds.

        It looks like in New York State, this might require an amendment to the state constitution, but that's still a lot easier than any other solution.

        5 votes
  2. [41]
    ThatFanficGuy
    Link
    Just the second paragraph, and it's already a painful scene: Good lord those are some prices. In light of which the following makes no sense to me: What the fuck do you think they could do? No...

    Just the second paragraph, and it's already a painful scene:

    Look at 25-year-old Jessica Lee and her husband, who needed four roommates to afford their $4,000-a-month four-bedroom apartment in Brooklyn’s hip Bedford-Stuyvesant neighborhood, a relative bargain in the Big Apple.

    Good lord those are some prices.

    Now her husband and everyone else in the house have all lost their restaurant jobs and she’s the only one still working—at a company making hand sanitizer.

    In light of which the following makes no sense to me:

    The landlord is threatening legal action to collect the $20,000 in back rent.

    What the fuck do you think they could do? No job, likely no opportunity for one for a long while – fuck are you supposed to do about that? Print the money?

    Could the landlord not back the fuck up and give the couple some space to collect their bearings?

    Sure, maybe they need the money themselves. Entirely reasonable. But – could you maybe not be such an ass about it until you've tried, I dunno, talking to them about it?

    A new state law prohibits evictions of tenants who face financial hardships while any social-distancing rules are in effect.

    Thank fuck.

    Unless rent revenue rebounds, Sharon Redhead, a second-generation property owner in Brooklyn’s East Flatbush neighborhood, may be forced to sell. The only buyers with enough money to wait for New York’s economy to recover are private equity firms, she says.

    What does that mean? Its phrasing implies that it's a bad situation to find yourself in, but I don't know enough about what private equite firms are or how they operate to ascertain.

    Meanwhile, Lee says her landlord isn’t letting up. But she’s prioritizing food and medicine, because her husband, who lost his job as a restaurant manager, has been stuck for months in bureaucratic hell, unable to collect unemployment.

    Ain't that just something you want in a motherfuckin' pandemic: bureaucracy through the roof so people can't get subsidy to survive on.

    9 votes
    1. [8]
      dubteedub
      Link Parent
      Am I the only one that doesn't think that is that bad? $4k for a 4 bedroom means that each roommate only has to pay $1,000 a month. One bedrooms around D.C. are typically about $1,600 a month on...

      Look at 25-year-old Jessica Lee and her husband, who needed four roommates to afford their $4,000-a-month four-bedroom apartment in Brooklyn’s hip Bedford-Stuyvesant neighborhood, a relative bargain in the Big Apple.

      Good lord those are some prices.

      Am I the only one that doesn't think that is that bad? $4k for a 4 bedroom means that each roommate only has to pay $1,000 a month. One bedrooms around D.C. are typically about $1,600 a month on their own and two bedrooms are something like $2,200 to $2,400. Cities are hella expensive to live in, but this doesn't seem outside of the norm to me in terms of costs.

      What does that mean? Its phrasing implies that it's a bad situation to find yourself in, but I don't know enough about what private equite firms are or how they operate to ascertain.

      Private equity firms are bad as they are used to provide overpriced housing that screw over their rentees.

      That’s not what happened. I talked with tenants from 24 households who lived or still live in homes owned by single-family rental companies. I also reviewed 21 lawsuits against three such companies in Gwinnett County, a suburb of Atlanta devastated by the housing crash. The tenants claim that, far from bringing efficiency and ease to the rental market, their corporate landlords are focusing on short-term profits in order to please shareholders, at the expense of tenant happiness and even safety. Many of the families I spoke with feel stuck in homes they don’t own, while pleading with faraway companies to complete much-needed repairs—and wondering how they once again ended up on the losing end of a Wall Street real estate gamble.

      12 votes
      1. [3]
        ThatFanficGuy
        Link Parent
        Yes. :P On a more serious note: I come from a country where you can get a decent small apartment for $200/mo.. Perfectly livable, many of them new and fresh from a renovation. For $1000/mo., there...

        Am I the only one that doesn't think that is that bad?

        Yes. :P

        On a more serious note:

        I come from a country where you can get a decent small apartment for $200/mo.. Perfectly livable, many of them new and fresh from a renovation. For $1000/mo., there probably isn't an apartment that expensive where I live. If there is, it's luxurious: underground garage, indoor jacuzzi, maybe even a fuckin' sauna, nevermind the better versions of all the necessities.

        $4000/mo. for an apartment, to me, is absolutely outrageous.

        Then again, I live on $100/mo. right now. This is preserved-foods level of sustinence. I can afford a pizza or something for Burger King, but that means the rest of the week is going to be oatmeal and water.

        their corporate landlords are focusing on short-term profits in order to please shareholders

        Ah yes, the source of joy and beauty in the world: future-blind gain-chasing.

        Many of the families I spoke with feel stuck in homes they don’t own, while pleading with faraway companies to complete much-needed repairs

        That's just... not human. I know what it's like to not be able to afford necessities. Nobody's life should be gambled for a buck.

        9 votes
        1. [2]
          stu2b50
          Link Parent
          I mean, that's just CoL differences. You'll almost always be able to find somewhere in the world where the people who live there would find your living costs absurdly high. The rent in comparison...

          $4000/mo. for an apartment, to me, is absolutely outrageous.

          I mean, that's just CoL differences. You'll almost always be able to find somewhere in the world where the people who live there would find your living costs absurdly high.

          The rent in comparison to income available is more useful as a metric. Which I don't think NYC does well, but comparing it to somewhere else in absolute value doesn't really mean anything.

          9 votes
          1. ThatFanficGuy
            Link Parent
            Certainly. My concern was mostly born of my own current lack of funds. Thinking back, it wasn't exactly the salacious and enticing detail of local living that Tildes enjoys so much: just my situation.

            Certainly. My concern was mostly born of my own current lack of funds.

            Thinking back, it wasn't exactly the salacious and enticing detail of local living that Tildes enjoys so much: just my situation.

            2 votes
      2. [2]
        joplin
        Link Parent
        No. My spouse and I finally ended up buying a house in LA when our 3 bedroom rental house went from $3,000/month to $4,000/month when our lease ran out. At those prices it no longer made sense to...

        Am I the only one that doesn't think that is that bad? $4k for a 4 bedroom means that each roommate only has to pay $1,000 a month.

        No. My spouse and I finally ended up buying a house in LA when our 3 bedroom rental house went from $3,000/month to $4,000/month when our lease ran out. At those prices it no longer made sense to rent, even given LA's ridiculous housing costs. But it must seem ludicrous to people living in less expensive locales. It sure seemed ludicrous to us when we moved here from Chicago, which itself is a pretty expensive city to live in.

        5 votes
        1. Amarok
          Link Parent
          Just to drive home your point, when I was living in Rochester NY my rent for an excellent brand new 1800sf apartment with an attached garage, three bedrooms, 2.5 bathrooms was $1675/mo (which I...

          Just to drive home your point, when I was living in Rochester NY my rent for an excellent brand new 1800sf apartment with an attached garage, three bedrooms, 2.5 bathrooms was $1675/mo (which I also split three ways). Rent included cable, internet (fiber), pool, heating, and a gym. That was in one of the most expensive locales in the Rochester suburbs, with condos in the city downtown going for closer to $3500 a month, and smaller apartments in the better parts of downtown being around $1500/mo.

          Where I live now in rural NY, my taxes total about $3000/year for 5.5 acres and a 3600sf house, and thanks to the nearby solar and wind farms my electric is a third of what it used to be. I have better internet here than I did in Rochester. There's still an airport less than ten minutes away, and every store, mall, shopping center, restaraunt, etc one could ask for. Just less night life and no more walking to and from stores/bars.

          2 votes
      3. jwong
        Link Parent
        That’s not bad for a big city. From parts of BedStuy, you can be in lower Manhattan in less than 20 minutes. My apartment there was only $2900 for a gigantic 4-bedroom apartment ($725 each person)...

        That’s not bad for a big city. From parts of BedStuy, you can be in lower Manhattan in less than 20 minutes. My apartment there was only $2900 for a gigantic 4-bedroom apartment ($725 each person) with two living rooms. That was considered a relative steal, but there’s definitely deals around if you are willing to split larger apartments.

        4 votes
      4. AugustusFerdinand
        Link Parent
        Yes. Also, it's $4k for a 4 bedroom that needs 6 people to pay for it. The article states "Jessica Lee and her husband, who needed four roommates..."

        Am I the only one that doesn't think that is that bad? $4k for a 4 bedroom means that each roommate only has to pay $1,000 a month.

        Yes.

        Also, it's $4k for a 4 bedroom that needs 6 people to pay for it. The article states "Jessica Lee and her husband, who needed four roommates..."

        2 votes
    2. [32]
      Loire
      Link Parent
      It's not an easy situation on either side if the landlord is a private owner. Are the property owner's debtors going to "back the fuck up" off of them? The general concensus on tildes is always...

      Could the landlord not back the fuck up and give the couple some space to collect their bearings?

      It's not an easy situation on either side if the landlord is a private owner. Are the property owner's debtors going to "back the fuck up" off of them?

      The general concensus on tildes is always "fuck that guy/girl" when it comes to landlords but I'm not exactly sure why. Tons of landlords are just run of the mill middle-class people like you and I (although upper-class in New York. Everything is relative when you talk about these stupidly expensive cities) that put together some scratch and bought a property because they were told that's the route to prosperity. They have bills to pay like the rest of us. If statistics are any indication they are teetering on the edge of insolvency like the rest of us. Twenty thousand dollars in back rent is an absolute massive fuck ton of cash. Think how much money that would be to you.

      What exactly is the solution here? There isn't one. But the general response of "fuck property owners" isn't constructive.

      7 votes
      1. [19]
        moonbathers
        Link Parent
        Because probably all of us have had landlords screw us over. There's a massive power imbalance between landlords and renters. If my landlord steals money from me I have to spend time and money to...

        The general concensus on tildes is always "fuck that guy/girl" when it comes to landlords but I'm not exactly sure why.

        Because probably all of us have had landlords screw us over. There's a massive power imbalance between landlords and renters. If my landlord steals money from me I have to spend time and money to get it back to the point that it's probably not worth it, but if I don't pay rent my credit is screwed and it's going to be a lot harder for me to rent in the future.

        Tons of landlords are just run of the mill middle-class people like you and I (although upper-class in New York. Everything is relative when you talk about these stupidly expensive cities) that put together some scratch and bought a property because they were told that's the route to prosperity. They have bills to pay like the rest of us. If statistics are any indication they are teetering on the edge of insolvency like the rest of us. Twenty thousand dollars in back rent is an absolute massive fuck ton of cash. Think how much money that would be to you.

        Even if they're not super rich, they still have at least one (and probably more) property when lots and lots of people have none, and they still get the benefit of the power imbalance. Because they have more power they have an obligation to not screw over the people they have power over even if it means they have to take a hit. They're making a decent amount of money for not a lot of work. If they benefit more when times are good they shouldn't be able to avoid losses when times are bad.

        What exactly is the solution here? There isn't one. But the general response of "fuck property owners" isn't constructive.

        The solution should have been for the government to step in and either cover everyone's payments (both landlords and renters) or pause everyone's payments for a while. But since we don't care about other people in this country, nothing of the sort is going to happen. But even aside from that, making millions of people homeless is going to hurt the country a lot more than letting them stay in their homes even if they're behind on their payments. Being homeless makes it harder to get a job, takes a toll on your health, probably causes crime to go up, etc. It's not like landlords will be able to fill those vacancies right now anyway.

        9 votes
        1. [9]
          Deimos
          (edited )
          Link Parent
          Just as an opposing anecdote, my wife and I were landlords for a little over a year, and even in that short time had multiple tenants take advantage of us and even damage our property when all we...

          Because probably all of us have had landlords screw us over.

          Just as an opposing anecdote, my wife and I were landlords for a little over a year, and even in that short time had multiple tenants take advantage of us and even damage our property when all we ever did was try to be reasonable (even nice) with them.

          One of them was going through a rough time and couldn't afford the rent, so we let him stay in the house rent-free for a couple of months while he recovered. When we started asking him to pay again, he texted me explicit threats that worried me enough that I reported them to the police, and then suddenly moved out without saying anything to us, meaning we lost out on over three months' rent. He screwed the basement's tenants out of multiple months of his share of the utility payments too. After I changed the locks, he broke back in and did some damage for no apparent reason. Yeah, it didn't destroy our lives or anything, but trying to be nice ended up costing us a few thousand dollars and a bunch of wasted time and stress for no reason.

          Pretty much everyone I know that's ever been a landlord has multiple stories like this, and the people that keep doing it are usually quite jaded about it. There are lots of good tenants and landlords, but there are bad ones on both sides as well.

          11 votes
          1. [8]
            moonbathers
            Link Parent
            Sure, but landlords inherently have an advantage in the relationship. If that guy tries to rent again, that landlord can look at his past rentals and see what happened with you and he'll probably...

            Sure, but landlords inherently have an advantage in the relationship. If that guy tries to rent again, that landlord can look at his past rentals and see what happened with you and he'll probably have trouble renting in the future. You're out a couple thousand dollars, which does really suck, but if you were in a position to be able to rent apartments out you're in a better position than a guy that is risking being homeless. I don't think both sidesing this is fair. A lot more (in both raw numbers and percentage) tenants are taken advantage of than landlords.

            "With great power comes great responsibility" is a meme but it's how I live my life. If you have more power then you're probably benefiting more from a situation than someone with less power, and that means you should have to deal with the bad parts of that situation too and not pass them on to the people you have power over.

            4 votes
            1. [7]
              Deimos
              (edited )
              Link Parent
              There's no record of it. I'm not really sure how you think that works, and regardless, I didn't want to further piss off the guy that threatened us, had already broken into the rental house, and...

              There's no record of it. I'm not really sure how you think that works, and regardless, I didn't want to further piss off the guy that threatened us, had already broken into the rental house, and made it very clear that he knew where we lived.

              I'm really not interested in arguing about who "the good guy" in the situation is, just trying to give some perspective that it's not a black-and-white situation where the mustache-twirling landlord tycoons are screwing over the virtuous tenants. Being in a better position doesn't mean you deserve to be dragged down.

              8 votes
              1. [6]
                moonbathers
                Link Parent
                I know there are bad tenants and good landlords. My point is that the entire system is unethical and usually favors landlords.

                I know there are bad tenants and good landlords. My point is that the entire system is unethical and usually favors landlords.

                3 votes
                1. [5]
                  skybrian
                  Link Parent
                  I'm wondering how you think the system should be fixed to no longer be unethical? It seems like there are sometimes unethical people and in a dispute, it's quite possible for both sides to lose...

                  I'm wondering how you think the system should be fixed to no longer be unethical? It seems like there are sometimes unethical people and in a dispute, it's quite possible for both sides to lose something. Disputes are commonly handled by the courts.

                  There are also jurisdictions that have rather tenant-friendly laws. The ones I know of are New York City, San Francisco, and Berkeley. Are they unethical systems too?

                  1 vote
                  1. [4]
                    moonbathers
                    Link Parent
                    I think the idea of people owning land and using it to make money off of other people's need for shelter is unethical regardless of how tenant-friendly or not it is. Public housing works in other...

                    I think the idea of people owning land and using it to make money off of other people's need for shelter is unethical regardless of how tenant-friendly or not it is. Public housing works in other countries and we could make it work here, and we could also incorporate some form of housing cooperatives. Ideally the cost of rent would only be the cost of the mortgage on the building plus the average cost of maintenance (and utilities would work as they do now, maybe). As it stands now, an entire class of people have a pretty big leg up on the rest of us simply for having money already, and there's another much larger class of people that pay those people's mortgages or just profits. The group of people who are already ahead get more ahead, and the rest don't.

                    1 vote
                    1. [3]
                      skybrian
                      Link Parent
                      I agree that some people live off their investments, that sometimes this is by being landlords, and it's not fair. Also that there are increasing returns contributing to inequality. But I think...

                      I agree that some people live off their investments, that sometimes this is by being landlords, and it's not fair. Also that there are increasing returns contributing to inequality. But I think that inequality could be fixed without getting rid of the tenant-landlord relationship entirely.

                      I'm wondering, if you're against the idea one person providing housing to another for money, how far does that go? Should subletting be allowed? Can you open a bed-and-breakfast? Invest in a hotel? If a parents' kids don't move out, would it be unethical to start charging rent?

                      My brother recently bought a place and is moving into a co-op apartment in New York. It doesn't feel like his previous relationship to the apartment building owner was ethically wrong and his new relationship to the co-op apartment board is ethically right. They are different financial arrangements, that's all.

                      1. [2]
                        moonbathers
                        Link Parent
                        I'm inclined to say yes. If you're already only paying for the cost of construction + upkeep on the building, I think it's fair to sublet to someone who would they pay that amount. These are...

                        Should subletting be allowed?

                        I'm inclined to say yes. If you're already only paying for the cost of construction + upkeep on the building, I think it's fair to sublet to someone who would they pay that amount.

                        Can you open a bed-and-breakfast?

                        These are basically hotels, aren't they? I don't really know much about them.

                        Invest in a hotel?

                        I think hotels are a bit different in that they're usually not someone's living space.

                        My brother recently bought a place and is moving into a co-op apartment in New York. It doesn't feel like his previous relationship to the apartment building owner was ethically wrong and his new relationship to the co-op apartment board is ethically right. They are different financial arrangements, that's all.

                        It just bugs me that I pay thousands of dollars a year just to exist (almost said thousands of years to exist, lol) and some of that isn't going to (theoretically) useful things like property tax and building maintenance but to someone who just happened to have enough money to buy the building. At least with a co-op no one's profiting off of it, I hope.

                        1. skybrian
                          Link Parent
                          When buying into a co-op, the previous owner profits from it. The mortgage is in large part going to pay for the previous owner's profits from real estate capital gains. But the underlying...

                          When buying into a co-op, the previous owner profits from it. The mortgage is in large part going to pay for the previous owner's profits from real estate capital gains.

                          But the underlying economic question is whether prices should be based on cost or based on what people are willing to pay.

                          It seems to me that the situation with crowded cities and gentrification is similar to a crowded bus or a traffic jam. As we complain about the crowds or the traffic, just by being there we are part of the problem, since we all take up space. The only way to not be part of the problem is to be somewhere else.

                          So if you're paying a high rent and it's market rate, in some sense it's because you're taking up valuable space that someone else could use if you moved away. It's similar to a congestion charge. The justification for a congestion charge is that it's a way of deciding who gets something scarce and discouraging frivolous use.

                          Under the current system the landlord profits from the congestion charge if they're lucky enough to own something in the right location. This isn't inevitable, but I do think desirable, crowded places are inevitable under any economic system. There will always be desirable apartments that many people want but only a few people can have. There are probably more efficient and less cruel ways to figure out who gets to live there, though?

                          It would be nice, if we have to have congestion charges, that they actually contributed to fixing the problem by building more housing. Instead there is often opposition, both from the property owners and from renters.

                          2 votes
        2. [5]
          joplin
          Link Parent
          I think Loire covered most of what I wanted to say, but I will add that it seems like you're making a lot of assumptions about property owners. For example this: You have no idea what kind of...

          I think Loire covered most of what I wanted to say, but I will add that it seems like you're making a lot of assumptions about property owners. For example this:

          They're making a decent amount of money for not a lot of work.

          You have no idea what kind of money they're making. They may own the property outright and every dollar paid to them goes into their pocket, but usually that's not the case. Unless they're a large real estate company, they probably have a mortgage on the place they're renting out. (And even many company owned units have a mortgage, too.) They also have to pay property taxes on it and do repairs to keep it in working order. Depending on the property they may also have to pay an association fee.

          Furthermore, owning a property can be a lot of work. You can hire a property manager, but that costs money. How do you deal with repairs? You can get someone else to do them, but again, then you're paying some of that money you made to someone else. Many people do it themselves to save on costs. Even then you have to buy replacement parts and tools. If you own more than one property you probably have a business to protect yourself from personal liability which can mean doing things like filing taxes quarterly and possibly monthly payroll taxes (and actually running payroll every 2 weeks) if anyone other than you works for it. Oh, and of course, there's also insurance for the properties. Depending on whether you own a single unit in a multi-unit building, you may also be on the hook for things like the cable bill if the building has an agreement with a single company. (You can charge the renter for it, but sometimes you still have to deal directly with the company when things go wrong, etc.)

          So yeah, I'm sure there are scenarios where the owner owns the unit outright, has minimal need for repairs because things are fairly new, and only has to deal with taxes and HOA dues once a month or so. But that's probably not the majority of units that people are renting.

          The solution should have been for the government to step in and either cover everyone's payments

          Agreed! I wish we had that. I am glad that our incompetent legislators have done what they have so far, but would like to see them do far more.

          4 votes
          1. [4]
            moonbathers
            Link Parent
            I know that the landlord I had in college was making $72k a year in rent off of fourteen bedrooms in the building. If he spent even eight hours a week working on the building times fifty weeks a...

            You have no idea what kind of money they're making.

            I know that the landlord I had in college was making $72k a year in rent off of fourteen bedrooms in the building. If he spent even eight hours a week working on the building times fifty weeks a year, that's $180 an hour. That's a ludicrous amount of money earned for simply having enough money to buy a building to rent out. Yeah, he's got property tax (which was $12k a year) and insurance and maintenance and maybe a mortgage, but the rest of us have to deal with those things too and we get paid less money and/or have to spend substantially more amount of time working for it.

            An apartment is never going to be rented for less than the mortgage + property taxes + insurance + any other fees on the building per unit. At worst, they're going to break even. The landlord's only going to take a loss when tenants either are behind on payments or cause damage greater than their security deposit, or if a unit sits vacant. Reuters, citing a real estate research company, says the apartment vacancy rate was 4.8% in the second quarter of this year, up from 4.6% that time last year. census.gov has a graph of the same showing 6.6% this year and 7% last year. I also found this resource which seems like it's from the Federal Reserve showing that the apartment vacancy rate has been at most 8% since 2013 and 7% since 2014.

            So maybe you can be conservative and assume your rental income will on average be 10% less than if your building was completely full all the time. You can compensate for that by making your units 10/9 more expensive than they would be if they were always rented out.

            If you've got a duplex and you live in one half of it and rent the other half out, which is the situation least in the landlord's favor that I can think of, you're not going to need a property manager. Maybe you contract someone to show and list it for you, but I can't imagine that's going to be much money. You can hire a maintenance person to fix stuff when you need it, but that's no different than homeowners doing the same thing, and you'll price that into the rent for the other half of the duplex.

            My bone to pick with landlords and the entire concept of rent is that by having money it becomes easier to make more money. It's not full-time work to manage a single house that you're renting out and you make a couple hundred bucks a month doing it. Sure most of that is going toward the mortgage/taxes/etc, but you are certainly considering those things when you decide how much rent is going to be (and I've never heard of a rental market being bad for landlords to the point that they can't afford to own places to rent). I can't imagine a situation where you'd be making less money per hour spent on managing your house/etc than at some random low-paying job in your area.

            It might take a long time to pay off that mortgage, but once you do you've either got even more money coming in or you can most likely sell the building for more than what you got it for (unless you're in one of the few areas of the country that people are leaving, like certain rust belt cities). If you own enough property that it's full-time work, you're pulling in substantially more money than the average full-time worker in your area, and while most of it will go toward expenses the margins from your tenants will still net you a good amount of money.

            I believe that everyone has a right to shelter and that it's not ethical that people can make money off of other people needing a place to exist. It's also not ethical that people can make money simply by having money already. It causes generational income inequality and we can all see how that's done for us in the United States.

            4 votes
            1. [3]
              joplin
              Link Parent
              Are you sure? There are 14 units in the building. Let's say they bought it for $1.4 million US, and put down a 50% payment of $700,000. For a regular 30 year fixed rate mortgage at 3.8% (the...

              I know that the landlord I had in college was making $72k a year in rent off of fourteen bedrooms in the building. If he spent even eight hours a week working on the building times fifty weeks a year, that's $180 an hour. That's a ludicrous amount of money earned for simply having enough money to buy a building to rent out.

              Are you sure? There are 14 units in the building. Let's say they bought it for $1.4 million US, and put down a 50% payment of $700,000. For a regular 30 year fixed rate mortgage at 3.8% (the current rate in my area of town with good credit), he's paying $3,545.03/mo. on his mortgage. So adding those things up I get:

              Rental Income:    $72,000.00
              Taxes:           -$12,000.00
              Mortgage:        -$42,530.36
                               -------------
                                $17,459.64
              

              That's before we get to maintenance cost. Let's say it's around $500/unit/year. He has to cover things like roof or garage repairs, in addition to plumbing and electrical in each unit, and all the other stuff. So that's an additional $6,000/year, leaving $11,459.64/year that he's making. Which works out to $28.65/hour at 8 hours per week for 50 weeks. That doesn't sound so ludicrous to me.

              Edited to add:

              I believe that everyone has a right to shelter and that it's not ethical that people can make money off of other people needing a place to exist.

              Huh? How is it unethical to offer housing to people who couldn't afford to buy, but want a place to live? Or people who don't want to buy because they might not be around long enough to make it worth their while? I agree everyone has a right to shelter, but it does cost money to run an apartment building or house.

              It's also not ethical that people can make money simply by having money already. It causes generational income inequality and we can all see how that's done for us in the United States.

              People aren't making money simply by having money already. They're making money by taking risks and investing their money into property or businesses that could fail, or by loaning it to others for a fee. It certainly is easier to grow money as you are able to make more investments and spread the risk around. But you are still taking those risks and have to deal with the consequences if they don't work out, as a landlord with no income due to a pandemic might find out.

              3 votes
              1. Greg
                Link Parent
                The mortgage as a whole isn't a cost, only the mortgage interest is. A significant proportion of the payment is building equity for the landlord. At 3.8% (which I make $3,262/month, unless I...

                The mortgage as a whole isn't a cost, only the mortgage interest is. A significant proportion of the payment is building equity for the landlord.

                At 3.8% (which I make $3,262/month, unless I missed something?) that works out to $1318 to the bank and $1944 to the landlord* - it effectively triples the per-hour rate.

                They could also hire a property manager and make the vast majority of that money for effectively zero effort. Or indeed have a much lower mortgage, as @moonbathers mentioned.

                I'm not trying to vilify landlords here, but I absolutely am saying it's an easy and well rewarded job. When the person providing that easy money is working a tough, thankless, poorly rewarded job I'm hardly surprised to see anger and frustration about it.

                *Technically there's a question of inflation to consider by the time the landlord can access that money, but there's also appreciation of the property, so let's just say they cancel out. In reality the appreciation would generally push this even more in the landlord's favour.

                4 votes
              2. moonbathers
                Link Parent
                I think my specific example doesn't work well in your favor because the building in question is assessed for about $570,000 and there's no garage. I'll also admit that not having a garage is maybe...

                I think my specific example doesn't work well in your favor because the building in question is assessed for about $570,000 and there's no garage. I'll also admit that not having a garage is maybe not common, but that cost for a building of its size and age is probably about average in my area. $28.65/hour isn't ludicrous, but even halving the mortgage payment (and leaving your $500/month figure in place) results in a profit of about $80/hour.

                1 vote
        3. [4]
          Loire
          Link Parent
          You are absolutely right on this. Unfortunately that's not the administration we have. Twenty thousand dollars (per property) is a pretty big hit, especially if they have a mortgage. It just goes...

          The solution should have been for the government to step in and either cover everyone's payments (both landlords and renters) or pause everyone's payments for a while

          You are absolutely right on this. Unfortunately that's not the administration we have.

          Because they have more power they have an obligation to not screw over the people they have power over even if it means they have to take a hit.

          Twenty thousand dollars (per property) is a pretty big hit, especially if they have a mortgage. It just goes back to your comment on pausing payments. In the end the bank is going to take ownership of the location if the property owner can't locate the means of financing their mortgage because of nearly half a year in delinquent rent.

          I don't know if you have experienced corporate/wall street owned apartment living but is pretty fucking terrible. I've never had a private property owner fuck me over and I have never had a corporate entity not take the majority of my damage deposit on ridiculous charges like "stove top scratched".

          3 votes
          1. [3]
            moonbathers
            Link Parent
            The first landlord I ever had was an individual guy who stole $600 from me and my friends and refused to fix glaring issues until we called the city about it, then left us a passive aggressive...

            The first landlord I ever had was an individual guy who stole $600 from me and my friends and refused to fix glaring issues until we called the city about it, then left us a passive aggressive note about it.

            In the end the bank is going to take ownership of the location if the property owner can't locate the means of financing their mortgage because of nearly half a year in delinquent rent.

            I think this is preferable to tenants being kicked out. Even if the bank will eventually kick them out too, it gives them a little bit longer to figure something out.

            1 vote
            1. [2]
              Loire
              Link Parent
              ...You think it's better for the banks to repossess, leaving property owners out of luck on whatever payments they have already made on the place, and all the financial ruin that entails, further...

              think this is preferable to tenants being kicked out. Even if the bank will eventually kick them out too, it gives them a little bit longer to figure something out.

              ...You think it's better for the banks to repossess, leaving property owners out of luck on whatever payments they have already made on the place, and all the financial ruin that entails, further concentrating ownership of rental units in the hands of the wealthy elite, and corporations of America, just so that renter's can have an extra couple of months of delinquency to figure out their situation?

              I understand the sentiment that seems like the kind of decision that would make renting significantly worse in the long term.

              4 votes
              1. moonbathers
                Link Parent
                All of this is going to happen if millions of people are left homeless too. They aren't going to be able to fill the vacant units.

                leaving property owners out of luck on whatever payments they have already made on the place, and all the financial ruin that entails, further concentrating ownership of rental units in the hands of the wealthy elite, and corporations of America

                All of this is going to happen if millions of people are left homeless too. They aren't going to be able to fill the vacant units.

                2 votes
      2. [5]
        ThatFanficGuy
        Link Parent
        I agree – which I why I don't come close to mentioning it. If you want to squish my response in a single sentence, it would be much closer to "These are people asking vast sums of money from those...

        But the general response of "fuck property owners" isn't constructive.

        I agree – which I why I don't come close to mentioning it. If you want to squish my response in a single sentence, it would be much closer to "These are people asking vast sums of money from those who can't afford it yet need somewhere to live, which I have little respect for".

        Suing for rent sounds like an inconsiderate overkill in this situation, which I why my respect for the landlord plummeted immediately. We're not talking about sharing a toy: we're talking about thousands of dollars worth of transactions. You can't pull that much out of your ass in a jiffy.

        I realize that suing someone in the US is more like a formal procedure than a serious offence in itself, but it still feels largely unnecessary in this situation. No one is having it easy in New York. Can you lot just come to an agreement, instead of making each other's lives more stressful? Make a separate temporary contract if you must. Suing for that money without trying to work something out first just tells me the landlord is severely lacking in emotional intelligence, regardless of whether they themselves are in debt to someone and need the cash.

        I would lend them more compassion if the renters were in a position to leave, or pay up, but wouldn't because they themselves are entitled. They aren't: they're stuck in an awful position they can't get out of. It's very stressful for them, and they can barely do a thing about it. So yeah, naturally, my side is with them.

        Could they maybe do something? Maybe. I've been in their position, and let me tell you: it's beyond stressful. It's existential. It doesn't just get to your head: it gets to your energy levels and your estimation of life prospects. Maybe you could find a gig online, but you sure as shit can't find the energy to. Maybe someone finds you and offers you a remote position. Maybe you'll find an unlocked suitcase full of $50 bills and no GPS tracker. Other than a miracle, you'll probably not do well, no matter how much you want to.

        So yeah, I'm siding with the underdog here.

        If this is something you can extrapolate "fuck property owners" from, enjoy yourself.

        5 votes
        1. [4]
          Loire
          (edited )
          Link Parent
          You are under the assumption that this wasn't attempted an ended in failure. It's been five months what makes you think and alternative hasn't been attempted? Very few people want to spend the...

          I realize that suing someone in the US is more like a formal procedure than a serious offence in itself, but it still feels largely unnecessary in this situation. No one is having it easy in New York. Can you lot just come to an agreement, instead of making each other's lives more stressful? Make a separate temporary contract if you must. Suing for that money without trying to work something out first just tells me the landlord is severely lacking in emotional intelligence, regardless of whether they themselves are in debt to someone and need the cash.

          You are under the assumption that this wasn't attempted an ended in failure. It's been five months what makes you think and alternative hasn't been attempted? Very few people want to spend the time and money going to court, when they can come to an amicable solution. If your tennant owes 20,000 dollars in back rent and refuses to pay then your option is either to A) evict them, which is an impossibly lengthy process in New York, or B) Sue them for what you are owed.

          I would lend them more compassion if the renters were in a position to leave, or pay up, but wouldn't because they themselves are entitled. They aren't: they're stuck in an awful position they can't get out of. It's very stressful for them, and they can barely do a thing about it. So yeah, naturally, my side is with them.

          The renter's are in a position to leave. If they don't have a job in the city then why keep living there? Move to a smaller town with significantly more economical renting conditions until you either get re-hired or find a new job. They can movie to Poughkeepsie for literally a quarter of their current rent and still be within reasonable driving distance of the city for interviews. They are making the choice to remain in delinquency on the off hand that things turn around in New York and they get their job back before the eviction process can go through.

          Let's be frank here: The renter's signed a contract. They entered a deal. The contract was "I will provide you with this living space for x amount of months and for that service you will provide me with y amount of compensation." The property owner has upheld their end of the deal for five months without receiving any of the promised recompense.

          Is this economic fall out their fault? Not at all. But it isn't the property owner's either. Something somewhere has got to give and you are picking and choosing who you prefer to take the fallout.

          If this is something you can extrapolate "fuck property owners" from, enjoy yourself.

          I apologize if you are taking my previous comment to heart, but it wasn't meant for you to react personally towards. Just an open discussion about how it's not exactly a great situation for property owners either.

          6 votes
          1. skybrian
            Link Parent
            Contracts seem to be part of the problem. They are blind to changes in circumstance. There should be a standard that both leases and mortgages should have some kind of "disaster area" provision...

            Contracts seem to be part of the problem. They are blind to changes in circumstance. There should be a standard that both leases and mortgages should have some kind of "disaster area" provision for times like this allowing for reduced payments. Unfortunately nobody planned ahead so we're stuck with a dumb situation where ad-hoc changes are needed, and no process to do them.

            7 votes
          2. spit-evil-olive-tips
            Link Parent
            Population of NYC is 8.4 million. According to the article: So that's 1.4 million people facing eviction. Do you think every single one of them should move out of NYC and to a small town? Moving a...

            If they don't have a job in the city then why keep living there? Move to a smaller town with significantly more economical renting conditions until you either get re-hired or find a new job.

            Population of NYC is 8.4 million. According to the article:

            Two-thirds of New Yorkers rent their homes

            A quarter of the city’s apartment renters haven’t paid since March

            So that's 1.4 million people facing eviction. Do you think every single one of them should move out of NYC and to a small town?

            Moving a household costs money. Paying first/last/deposit on a new rental costs money. If they haven't paid rent since March, do you think they have enough money in savings, or enough available credit, to spend hundreds or thousands on moving expenses?

            They can movie to Poughkeepsie for literally a quarter of their current rent

            The population of Poughkeepsie is 30,000. How many of those 1.4 million New Yorkers could move there before the surplus housing stock runs out?

            Obviously, they wouldn't all move to Poughkeepsie...but you can repeat this for every little suburb and exurb around NYC. There simply isn't enough housing stock for this to work as a general solution for everyone facing eviction. Sure, we could build that extra housing...given enough money, and enough time. Oh, and also build new schools and hospitals and other services to deal with the influx of people. But none of that solves the "facing eviction now" problem.

            Also, the economy of small towns like Poughkeepsie isn't exactly booming either. Plenty of people in those towns are facing evictions too. And if you're a restaurant worker in NYC, your job prospects for restaurant work in Poughkeepsie aren't going to be great either...especially if there's a few thousand other unemployed restaurant workers also looking for work in the small towns around NYC.

            and still be within reasonable driving distance of the city for interviews.

            Lots of New Yorkers don't own cars...which makes "drive to the city for a job interview" a challenge. Hell, it makes moving to any city or town without a serious public transit network a challenge. Should everyone who moves out of NYC add "buy a car" to the list of things they'd need to spend money on in order to move? (and not a beater, but a reliable enough car that they can use it to commute to NYC, if necessary...which from Poughkeepsie is ~100 miles...bearing in mind they might need to make that drive twice daily, and in the winter)

            They are making the choice to remain in delinquency on the off hand that things turn around in New York and they get their job back before the eviction process can go through.

            No, it's not a choice. They don't have the money to pay rent, but they also don't have the money to move.

            It's a shitty situation all around, but evicting people is only going to make things shittier.

            Suppose all 1.4 million of those people were evicted. Where would they go? Is adding a million homeless people in the middle of a global pandemic really a desirable outcome?

            And, what would those landlords do with those now empty units? I somehow doubt there'd be a matching influx of people wanting to move in to the city...so they'd most likely sit idle, not collecting rent. Just like they are now.

            7 votes
          3. ThatFanficGuy
            Link Parent
            Conservation of detail. Shit like this usually gets stated along other extentuating circumstances. I've dedicated a whole paragraph to why this isn't an option. That's correct. I don't see why it...

            It's been five months what makes you think and alternative hasn't been attempted?

            Conservation of detail. Shit like this usually gets stated along other extentuating circumstances.

            The renter's are in a position to leave. If they don't have a job in the city then why keep living there? Move to a smaller town with significantly more economical renting conditions until you either get re-hired or find a new job.

            I've dedicated a whole paragraph to why this isn't an option.

            Something somewhere has got to give and you are picking and choosing who you prefer to take the fallout.

            That's correct. I don't see why it needed to be restated as if I'm committing an intellectual misdemeanor here.

            Let's be frank here: The renter's signed a contract.

            A trope as old as capitalism.

            Much as I prefer sticking to the specifics of deals, a contract is nothing but an agreement between human beings. It's supposed to subscribe both parties to the shared reality of their agreement in a way that other parties could review and point out errors or greed in. It's not a concept independent of the human nature. You can't shrug off circumstance simply because it's not in the contract.

            If it's one party's entire fault that they weren't able to follow the contract – sure, they deserve the blame. They went on with the agreement despite the fact that they couldn't deliver on it, knowingly or otherwise. But we're not talking about a fuck-up: we're talking about a global pandemic swiping you off your feet in a way no one could've predicted.

            I'm not even going to address the supposition that they could or should move: like I said, there's a paragraph about that already. What I would like to address is how you seem to think contracts are to be obeyed by at all costs, ignoring the fact that it binds humans, not machines, to a particular arrangement.

            I dunno how it's done where you're from, but where I'm from, this is understood rather clearly: no one is perfect, life is difficult as it is, so you both move about within reasonable limits until both parties can do good by their promises. It's not even a Russian phenomenon: there's a lot of words online about how people help each other during difficult times, like right now. But, people living further north seem to share this trait. That's where the famous Scandinavian hospitality comes from: being able to rely on others getting your back in a tough climate has always been essential to survival.

            I don't disagree with you on the landlord deserving the money. It's entirely reasonable for them to expect payments. There was, after all, a legal agreement. But, like... why press this hard?

            it wasn't meant for you to react personally towards

            Good! But it still dilutes the discussion to a level where you no longer have to abide by the context, where you get to feel good about arguing your own point while ignoring what's really being said. Something all of Tildes seems to be doing...

            ...see what I did there? Generalized the hell out of it because I was upset with one aspect of one conversation recently? Now everyone can hate me, and I wouldn't know why because in my head it sounded reasonable.

            3 votes
      3. [7]
        JXM
        Link Parent
        I've had a few heated arguments on this site over the past few months with people because I'm a landlord myself. I'm extremely lucky and my grandfather left me a small commercial building that I...

        I've had a few heated arguments on this site over the past few months with people because I'm a landlord myself. I'm extremely lucky and my grandfather left me a small commercial building that I own outright. What I make from it is barely enough to cover the mortgage on my own house, which I could not have afforded had I not been given this piece of property. This is what it's like for most landlords and I think people have this weird idea that all landlords are sitting atop giant piles of cash.

        When this all started the business that's in the building I own came to me and said, "Look, the government shut us down and we aren't allowed to operate. What do we do?" The same business has been there 25 years so we agreed to hold off on rent until they reopened. My wife and I have had to cover that lost income out of our jobs (which we are both lucky to have). We've dipped into our meager savings and been able to make it work. Barely.

        I'm sure there is some percentage of landlords (or corporations) that own tons of property and just want to squeeze every dime out of their tenants, but that's not most people.

        My point in all of this isn't to make this a poor me story, but that I think a lot of landlords are in very similar positions and that a lot of them can't make it work without their rental income. They have someone putting the squeeze on them to pay their own bills, so they have to squeeze their tenants.

        The only way to stop this is to provide some sort of freeze not just for renters but for everyone. The US financial system is a house of cards waiting to collapse.

        5 votes
        1. [5]
          Greg
          Link Parent
          Over the years I've seen both sides of the coin on this one, and while I absolutely agree that the only fair solution is a freeze across the board, I do also think it's worth remembering how...

          Over the years I've seen both sides of the coin on this one, and while I absolutely agree that the only fair solution is a freeze across the board, I do also think it's worth remembering how different the outcomes look for a renter and a landlord.

          A renter who can't pay is at the mercy of their landlord, a landlord who can't pay is at the mercy of their creditors. On the surface, it looks like they're in very similar situations. If neither can work out an amicable solution, the money stops flowing and everyone has a problem.

          For the renter, this likely means eviction. We'll assume their savings are tapped out, so they end up on a friend's sofa with no job and a net worth of negative several thousand dollars thanks to eviction fees, rent arrears, and the rest. Ending up functionally homeless, indebted, and totally dependent on others is a very realistic outcome here.

          For the small time landlord with maybe one or two rental properties, this means a quick sale if possible, or foreclosure if not. They lose their investment property, keep their home, and more than likely end up with a five or six figure lump sum in the bank. Sure, that might be a smaller lump sum than it would have been if everything had gone well, it may even represent a net loss, but even so it's still very plausibly going to be real cash in the tens of thousands of dollars range.

          The landlord's worst case scenario is better than a lot of renters' optimistic life goals. None of this is to say it's the landlord's fault, it's just a very specific sting I don't think I'll ever forget: hearing someone worrying about a disaster that would have still left them far, far better off than me on a good day.

          4 votes
          1. [2]
            Loire
            Link Parent
            That seems to be a pretty large leap assuming properties will be a quick sale in this economy. But in New York perhaps. You have also discounted the money a property owner would lose in a...

            That seems to be a pretty large leap assuming properties will be a quick sale in this economy. But in New York perhaps.

            You have also discounted the money a property owner would lose in a foreclosure. Let's say they have paid 100k into their mortgage and it gets foreclosed. Are they really better off than the evictee at that point?

            2 votes
            1. MimicSquid
              Link Parent
              If they have equity in their property in it's far more likely that they'll sell rather than have a foreclosure. Foreclosures happen mostly when the owner is upside down on their mortgage. Which...

              If they have equity in their property in it's far more likely that they'll sell rather than have a foreclosure. Foreclosures happen mostly when the owner is upside down on their mortgage. Which may well happen if millions of smaller property owners all need to sell at the same time, but isn't automatically the case.

              4 votes
          2. [2]
            JXM
            Link Parent
            While I agree with your sentiment, it’s important to remember that the next step for the landlord is to be in the exact same position as the tenant was before - they have no income so they’re at...

            While I agree with your sentiment, it’s important to remember that the next step for the landlord is to be in the exact same position as the tenant was before - they have no income so they’re at the mercy of the person who owns the debt on their house.

            That’s why we need an across the board freeze. It’s a domino effect that will just destroy the whole economy.

            2 votes
            1. Greg
              (edited )
              Link Parent
              With respect, I don't think that does put them in the same position. Let's look at @Loire's hypothetical from above: the landlord has put in $100,000 on the mortgage. I'll be incredibly...

              With respect, I don't think that does put them in the same position. Let's look at @Loire's hypothetical from above: the landlord has put in $100,000 on the mortgage. I'll be incredibly pessimistic and assume that they just invested at the start of this year, so the equity built from rental income and capital appreciation are both negligible.

              On a $400,000 purchase price, if we model this similarly to the 2008 crisis, they might have to sell as low as $325,000. Take out $10k for fees, lawyers, and the rest and they walk away with $15,000. Make the assumptions just a tad less extreme and they're more likely to walk with well over $50,000.

              Losing $85,000 is absolutely crushing. I hate to think what it would do to a person's mental health, and I absolutely would not wish it upon them. I honestly doubt I'd have the psychological resilience to handle a hit like that, even knowing what I'm about to say about safety nets. However, in absolute terms this person still has their own home to live in, and at least $15,000 in the bank to cover expenses while they work out their next steps.

              Let's go a step further, and say that they couldn't shift the property even at a 20% discount (roughly the depth of the 2008 crash at its worst Edit: I was using UK figures, it looks like the US peak-to-trough hit was more extreme). I admit my own experience lies only in fast moving cities, so while this doesn't seem at all likely to me, I won't say it's impossible. They walk away with nothing. Well, nothing from the rental investment. The primary home is still there, as are any savings (it's unlikely that one would throw their emergency fund into a rental), and there's maybe a month or two of grace to look for jobs, talk to creditors, and generally try to rescue the home situation.

              Again, the stress is palpable. Even writing about it makes me anxious. But it's taken a worst-case catastrophic loss of the entire rental investment before eviction is even on the table.

              Except there's probably some equity in the home, and likely more than there was in the rental. Putting it on the market to recover something, anything, even at a huge loss is the next step. That puts something in the bank, perhaps only $20,000 when all is said and done, but certainly enough for transport and a few months' rent while job hunting.

              Perhaps even that isn't possible. Perhaps the equity in both properties, the savings, everything truly is gone. Then, and only then, are they in the same position as the renter. Far more likely is the opposite: that the losses aren't as extreme as I've modelled, and that the rental sale pays the home mortgage for 6-12 months while they job hunt, or maybe even take the time to sell properly and downsize a little.

              I meant it when I said I've seen both sides of the coin. I'm laying out these safety nets because they're largely things that I know I benefit from, and things that I remember dreaming of having back when I didn't. None of this is a criticism of the landlord or a suggestion that they shouldn't have the protection of a freeze. It's just an observation of how different the two situations really are.

              2 votes
        2. skybrian
          Link Parent
          Giving everyone more money would help quite a lot too, but that's up to Congress.

          Giving everyone more money would help quite a lot too, but that's up to Congress.

  3. [3]
    dubteedub
    Link
    This is absolutely nuts. The population of NYC is 8.4 million. This means that out of 5.6 million total renters, 1.4 million people in just one city are not able to pay rent right now. I can't...

    Two-thirds of New Yorkers rent their homes, making it America’s biggest rental market, and it’s always had its own crazy kind of housing math.

    A quarter of the city’s apartment renters haven’t paid since March, according to the Community Housing Improvement Program (CHIP), a group that represents mostly landlords of rent-stabilized buildings.

    This is absolutely nuts. The population of NYC is 8.4 million. This means that out of 5.6 million total renters, 1.4 million people in just one city are not able to pay rent right now.

    I can't even begin to imagine what it looks like across the country as a whole.

    Some landlords, with their own bills to pay, are running out of savings, so the city is bracing for hundreds of millions of dollars in delinquent property tax payments.

    The follow on effects of this are really going to be insane. Cities and states are already having significant budget issues with a lax of taxes coming in from all of the issues around unemployment. To throw on a drop in property taxes on top of this is going to leave state and local jurisdictions without any ability to handle this on their own.

    The federal government rushed in to protect the mortgage market after lockdowns and other measures to contain to spread of the virus pushed unemployment to Great Depression-era levels starting in March. But despite some proposals from Democrats in Congress, there’s still no rescue plan for renters.

    The rental crisis in this country is about to explode starting in August and the GOP in Congress or the Trump administration are taking any steps to mitigate this and have no intent to.

    With no federal relief in sight, New York state enacted the Tenant Safe Harbor Act last month to stop evictions. It supersedes a previous eviction ban that would have lifted on Aug. 20. In the meantime, landlords can seek money judgments against tenants for missed rent. So while the economic victims of Covid-19 can’t be forced out of their homes, their indebtedness will grow month by month, potentially damaging their credit rating and their ability to find another landlord willing to take a chance on them.

    This crisis is going to leave a generation of people in mountains of debt because of the failures of Trump and the federal government.

    8 votes
    1. shiruken
      Link Parent
      Absolutely just kicking the Millennial generation while they're already down. The average American millennial only has a net worth of $8,000 thanks to the Great Recession, student-loan debt, and...

      This crisis is going to leave a generation of people in mountains of debt because of the failures of Trump and the federal government.

      Absolutely just kicking the Millennial generation while they're already down. The average American millennial only has a net worth of $8,000 thanks to the Great Recession, student-loan debt, and high cost of living.

      8 votes
    2. ThatFanficGuy
      Link Parent
      No no no, see, it's the progressives and China, and those snarky millenials, and those ungodly gay rights activists, and those feminine men... Anyone but the truly-responsible. Can't have a cult...

      because of the failures of Trump and the federal government

      No no no, see, it's the progressives and China, and those snarky millenials, and those ungodly gay rights activists, and those feminine men... Anyone but the truly-responsible. Can't have a cult of personality and accept responsibility.

      4 votes
  4. [2]
    bloup
    Link
    Food for thought: land lording is the only business (that I can think of, anyway, not counting retainers) where you make more money when none of your customers ever call you for service.

    Food for thought: land lording is the only business (that I can think of, anyway, not counting retainers) where you make more money when none of your customers ever call you for service.

    3 votes
    1. Greg
      Link Parent
      I'd say that goes for any subscription based business. Gyms, roadside assistance, insurance, video streaming - the less a customer uses, the more of their monthly fee is profit.

      I'd say that goes for any subscription based business. Gyms, roadside assistance, insurance, video streaming - the less a customer uses, the more of their monthly fee is profit.

      4 votes