Landlords tolerate eviction moratorium with covid because only a fraction of their tenants stopped paying.
I think a scenario where just a few million or whatever were effected you are correct. However if it was almost everyone, landlording would become a straight up mob. You'd have to employ violence and bypass the state to maintain the properties and enterprise. No one would rent out property the legal way if they couldn't collect the rents.
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.
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.
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.
You should sit down and calculate the absolutely disastrous consequences for the economy if you put millions of (jobless) people on the streets, during a massive epidemic.
The rise in property values alone over the last 10+ years should have been more than plenty to cover any landlord's expenses due to the moratorium. They did not plan for the bad times, too bad for them. They had the means to mitigate by preparing, renters living paycheck to paycheck have no such possibility, so the government did its job for once and helped out the under-privileged.
So the landlords can just sell some of their properties, downsize and scale back until better times. They gambled on stability and lost.
I am a landlord (part owner in a family run business) - 9 residential houses/condos/duplexes and 4 commercial buildings. We suspended rents (meaning no payment expected at all) at the start of the state COVID shutdown for some of the 9 residential properties where there was need. Since some have started paying voluntarily based on their capability. For months the commercial properties could not be open we suspended rents as well.
We have good tenants who usually pay on time and aren't problems. There is no way we'd kick them out. Quality tenants are gold. I cannot overstate this. Some tenants have rented from us for over 20 years. We've seen them lose and get jobs before, and we can all weather this one out as well, I'm sure, with cooperation.
If everything just starts up with rent due and evictions happening to a significant population you just have a second wave of recession and a collapse of the rental market. I’d assume most people, particularly landlords and local government would want to avoid that.
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.
It's tricky. One person takes out a loan to start a small business and it fails due the virus. Another takes out a loan to purchase properties and be a landlord who also gets wiped out. Economic rent is a societal problem. But landlords aren't actually reaping in the profits most of the time, and it might be argued that they're providing useful services to people. On the other hand, most go into it with the hope of just sitting on stuff and making passive income for low amounts of work. If landlords are doing societal good, it's mostly accidental, and at best a local maxima of a well function system.
I'd say in the scheme of suffering going on right now this doesn't feel like the most deserving of sympathy. Taking out huge loans is a risk. As a society, this is not a good way for members to build wealth. But they're not villains by any means.
I’m a landlord and I don’t think that’s the average landlords rationale. Yes you become more picky regarding tenants because you don’t want to deal with an eviction. That was always the case though. You’re just going to need to carefully understand how the tenant behaved during Covid. Eg. Did the get evicted from being 18 months in arrears that they will never repay? Did they lose stable income for a period of time but now it’s back? Did the sell a billion dollar tiny house in $HUB and move to your town flush with cash and a remote work lifestyle? All very different and likely already biased groups demographically speaking.
But now, you may have some losses to recoup and this whole thing is akin to theft/shrinkage of goods. It has to get factored into the price. Also, the biggest thing pushing rental prices IMO, housing prices. Since buying is the alternative to renting, they are strongly correlated.
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.
Because you can't evict folks landlords are setting totally ridiculous standards to rent from them or not renting.
It's seen as better than getting stuck with someone not paying who you can't evict.
What happened is landords renting to well off people did fine - white collar workers actually did OK during COVID, and folks with money by and large kept paying. Landlords on lower end got screwed by and large (this includes more immigrant / minority landords). Then if you had some property managers etc on payroll you got all sorts of bailout money - so rich got richer.
One group that actually I think was happy was section 8 landlords because section 8 kept paying - so good on 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.
It's a good question. Certainly many of these landlords have mortgages that need to be paid on their properties and the usual maintenance and upkeep of said properties. If landlords cant pay their mortgages, I'd assume the properties would be foreclosed by the banks - they'd likely give tenants a notice of some period of time before they'd be required to vacate. I don't know all the ramifications but my guess is that property valuations are going to go down fairly steeply as well. I've seen some efforts to hold rent strikes and I think those efforts will have more negative than positive results. I'm sympathetic to those that don't have enough to pay the rent because of job loss and economic shutdown but there are certainly those out there that will take advantage of the situation as an opportunity to try to shirk payments.
I wonder if policy could be useful here: temporary rent and mortgage freezes perhaps?
Landlords are often portrayed as mutton-gobbling land barons both in the media and the comment section on Hacker News. I know a little bit about both UK and US rental markets and have a slightly different perspective.
The common threads are that any economic harm which befalls a landlord is something they should have been prepared for, and that they're better off than most people because they have a second property.[1] The frequent corollary of this is that tenants are justified in taking advantage of landlords wherever possible, because the system is somehow unfair on them.[2]
In part this is because rental units are an asset class leveraged by both sophisticated and unsophisticated investors. Multi-family home operators with huge balance sheets and economic resilience are one part of the equation, but a lot of rental stock is in the hands of folks like us.
Which is to say: they're consumers. They certainly understand risk and cashflow through the simplistic lens of voids and arrears, but what we're seeing here is analogous to the suspension of trading on a stock market, or a massive breach of MMMR in calling a short. It's not a simple case of "you may lose a little profit", it's "the rules of the game have been changed in a way nobody could have predicted."
If you don't believe tenants ought to have seen this coming, then there's really no reason to believe landlords should have, either.
It's forgivable that policymakers have screwed this up, but it should be simple to correct: banks have sufficient liquidity (and the hope of a bailout if they don't) to withstand the immediate shock. Therefore renters who can demonstrate that they are affected by coronavirus should receive clemency from their landlords, who should receive clemency from their lender, who should receive clemency from the government if required.
(There is an uncomfortable reality that keeping folks in unproductive jobs is not all that useful, so furlough schemes and other economic relief for those impacted by coronavirus must end in order to force the affected portion of the workforce into productivity, but that's another conversation for another time.)
The ire directed at landlords also often supposes that they are responsible for high rents, and usually this is based on the premise that if they sold their non-owner occupied properties, the excess liquidity would reduce house prices and enable more people to move from renting to home ownership. I have never seen a single study which supports the view that landlords do anything other than provide a necessary service at a price the market bears. Responsibility rests with local authorities and the federal government to create affordable homes and combat the fact that, for example, the United Kingdom has set targets for the creation of new houses for more than 40 years, and has failed to hit them each year for the last 40. They acknowledge the solution to the problem (introducing affordable homes into the market, rather than forcing landlords to sell - a carrot, not a stick which benefits some consumers and hurts others), but do not deliver.
I'll nope out of this thread if someone mentions rent controls.
Landlords have mortgages and a host of other associated costs. If this were made a policy in the UK, you'd have a huge number of small-time buy-to-let landlords going bankrupt and losing their nest-egg to the bank.
I don't understand why landlords would be in a class by themselves when the pandemic hurt businesses/ventures across the board. Why are restaurants forced to close not made whole? What about factories that lost productivity? What about people that lost their lives being "essential workers"?
CA is already the biggest landlord/homeowner friendly state by far with Prop 13 screwing everyone else. Not sure why landlords charging $4000 a month for a 100 year house gets off scot free when we have business shutting down permanently from COVID.
Definitely not a landlord, so forgive the unfamiliarity:
Are you not able to claim rental property losses if you simply have a tenant who is unable to pay?
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My model for dealing with a pandemic-induced economic slow-down is that if you can just jump forward til the end, most things will revert to normal (for airline companies but also tenants who can't pay rent)
It's not clear to me that evicting someone and then needing to cut rates to find a new tenant who can afford to rent is a better deal than keeping someone who has fallen on hard times for very straightforward reasons
I think a scenario where just a few million or whatever were effected you are correct. However if it was almost everyone, landlording would become a straight up mob. You'd have to employ violence and bypass the state to maintain the properties and enterprise. No one would rent out property the legal way if they couldn't collect the rents.
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