If the rent is relied upon to pay a mortgage, then it wouldn't be wise to wait until the pandemic is over. Landlords also have bills to pay. Rationally, this pandemic won't ever be over. The Spanish Flu still circulates.
Also, there is no particular reason to believe that jobs will spring back to where they were, if they ever do.
Those landlords should get a real job in that case. They chose to treat housing like a speculative asset and it didn't go their way.
Makes zero sense to me that our pandemic response was about "keeping small businesses afloat" rather than keeping transmission low for a few weeks. I guess besides sacrificing grandma to the economy for $2 margaritas at Applebee's we should have evicted millions during winter so that landlords wouldn't be aversely affected by a pandemic. Weird how the eviction moratorium included aid for them as well, but I guess they were the real victims here and should have gotten more.
Still, in the past, when you made a mistake and got a bad tenant, the option was eviction.
You say "in the past" but you really mean "when there isn't a global pandemic". Events change things. It's simply a risk of renting property to people that very few landlords bothered to consider.
There is absolutely no reason why landlords should be immune to circumstances that affect everyone. Complaining about it, and tacitly suggesting that your rental income should be prioritized over a disease that eventually killed hundreds of thousands of people, is silly.
Maybe we should learn how to, because this may not be the last pandemic we face.
Retailers and citizens can't pay rent. Landlords only need that money (per se) because they owe money to banks via mortgage, or the government via taxes. So government should order the banks to halt collections on real estate, and government should halt collections of property taxes.
Banks might go under? Have the fed print them money. Governments can't afford it? Have the government print money.
Inflation due to increased monetary supply? That's where my idea ends. Perhaps instead of the printed money being a gift, perhaps it is a zero percent long term loan.
Landlords need the money to live? Give its employees the same cushioning we should be giving all citizens through the pandemic.
edit - I am absolutely going to ask people who downvote to give a reason.
A lot of people are in debt to their landlords due to non-payment of rent from when the economy shut down and the subsequent recession. Sure, they may have jobs now, but the "rising wages" due to the current "labor shortage" aren't significant enough to be generating an extra $10-20k for back rent for average-wage workers.
But I'm sure there's also plenty of people scared of COVID and/or using COVID as a reason to not work or pay rent and hope the whole thing works it self out.
A landlord would not go for a rental contract that places the risk of something like a pandemic solely on their own shoulders. Those landlords more often than not financed the property (development, property costs, construction) with long term loans themselves, so they have to repay that with interest in top of what the taxman wants, payroll, etc.
Paying people to spend more than they can afford in order to let them keep paying rent is a bad idea that ultimately helps only landlords.
If someone lost their job due to covid, then they need to find a new job, and that often means finding a new job somewhere else and quite possibly for different pay. Similarly landlords in areas where jobs have dissapeared need to know what the true demand is for their units so they can be priced appropriately.
Just paying money to pretend nothing has changed in each location is not good for either the rental market, or the job market, or the people who are pretending.
My vacant rental property has been off the market since the pandemic started. It will not go back on the market until this ends. The government is giving renters the legal ability to squat until this is all over. Why would I want to risk end up with an unevictable tenant who could do more damage to my property during that time that their rent is worth?
It is irrational behavior for these landlords to evict or pileup unrealistic future obligations. On the other side of covid it will be far better to have an existing in place restaurant or bar tenant than to try and lease space in a glut market and take on lots of tenant onboarding costs.
That's a "should" statement. Another "should" statement is that no one should rely on the rent from their properties to pay their mortgage.
As it stands, it was known to landlords that the CDC has the power, during pandemics, to engage in action such as this one or even more severe. Yet they chose to take on risk, which provides essentially no service to society.
This may be a silly question, but why were they paying rent during the pandemic? Almost all non-profits I've talked to stopped paying bills months ago aside from payroll and utilities, figuring it is better to be getting complaints from landlords than to shut down.
This isn't a fair analogy at all. Landlords didn't cause the cause the pandemic. If anything, the government did. However, they are the ones who are forced to pay for provide a service that the government desires, housing, at their own expense. This might make sense if it were a tax, but it disproportionately effects certain people. Imagine if they 1% of people were randomly selected to forfeit 10% of their 401k for housing during the pandemic.
Even worse, a long term eviction moratorium is incentivizes landlords to filter out poorer tenants with income and credit requirements, making housing more expensive for them.
I didn’t expect a global pandemic either. Nobody expects the Spanish Inquisition.
Nobody is forcing anybody to house people for free. Sure, you can’t evict, but you can sell your property and let that be someone else’s problem. The fact is, the price of rental properties didn’t crash, which means the majority of landlords didn’t mind the situation they were in all that much. I don’t know whether that’s because most people paid rent, most landlords didn’t mind not getting rent, or that there’s lots of money sloshing around looking for investment opportunities; I suspect it’s a mix of the first and third.
I can certainly understand your view despite my almost pathological hatred of landlordism. I just think a once in a century pandemic is the type of event where it's useful for the government to step in and safeguard essentials for the population.
And asking landlords not to throw people on the street at no additional cost (let's say they do evict, who is going to be doing viewings at the height of the pandemic?) to them is a very low impact ask.
Edit: I think the root cause disagreement is how we categorise housing, as an essential or an investment. I can see why you'd be squeamish about such heavy-handed intervention with investments but my view is that's a category error. This is like wartime rationing, people need to eat and they need to live.
Except, of course, that tenants are not paying because the economy is being shut down in response to COVID. The better solution would be for the government to take over some fraction of the loans, large enough to prevent contagion but small enough to avoid zombie businesses. Not an easy balance to strike but probably the only way to see this through to the end of the crisis.
Landlords are part of the financial system. Deciding landlords must take the loss on rent so that their tenants can be safe is sensible health and social policy during the acute uncertain phase of the pandemic last year. That uncertainty is now gone.
If the government wants to house people in rental properties indefinitely, then the government can pay to do so at the prevailing market rates.
We already let landlords stop paying. Some landlords are already let off from paying their mortgages during the pandemic. Pandemic mortgage holidays are a thing.
Generally the landlord's mortgage holiday is not being passed on to the tenant though.
If you think the government should pay rent to prevent the banks from losing income from landlords, what's wrong with this simpler system: Tenant stops paying -> landlord stops paying -> government pays the bank?
But it's not really a concern. Unless they really screw up, serious banks don't run out of money at this scale. There are problems from stopping mortgage payments, but "the bank closes" isn't likely to be one.
Same reason you can talk about government covering the rent. The government doesn't have more money than the banks. Its super power is the ability to obtain or create money as needed.
It could give it to tenants to pay landlords, give it to landlords to pay the bank, or give it to the bank directly.
(Btw, I don't think it should give direct to the bank, because people need to cover more than just rent, they need food and other things, and individuals have different urgent priorities which any blanket directed payment would miss. For this reason, I don't think it should pay rent directly either.)
>Even if they think they can force the current tenant into bankruptcy and collect, there won't be much to collect after taking away the tenant's only income stream.
A lot of landlords have no choice. They themselves are businesses, often leveraged to the hilt, with not a whole lot of room to offer grace.
And yes, I realize there are massive REITs behind some of these properties, that have large earnings and reap huge windfalls for shareholders. That doesn't mean they're equipped to receive no income for months during a pandemic. It's sort of the way our economy works: right on the edge at all times.
It's not good news for landlords if they can't find tenants because they've all been blacklisted even though many would have been good tenants absent the current crisis. Landlords who have monthly carrying costs but no tenants will quickly get hit in the wallet. In the end, unless there is an overabundance of renters, the landlords are going to have to look past this event and look at data from before the pandemic.
Also, there is no particular reason to believe that jobs will spring back to where they were, if they ever do.
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