4 ms·

> It depends on the kind of rent control. Housing has important asymmetries it's reasonable to address through legislation. One is asymmetry in scale: you have

by bko 7y ago

> It depends on the kind of rent control. Housing has important asymmetries it's reasonable to address through legislation. One is asymmetry in scale: you have one unit; landlords have many more. Not necessarily true. Sure , the landlord knows more about the apartment but you know more about yourself as a tenant. Landlord takes a huge risk in terms of allowing someone rent, especially given protections afforded to that individual. Most experienced landlord will cite tenant selection as very important and a huge risk. One tenant that refuses to pay rent or damages property can wipe out the return of 9 other units. > This gives them stronger negotiating power. I have more options as to where to move. The landlord owns a very expensive illiquid property. He can't just sell it tomorrow but I could easily choose another rental. > Another is cost of change. It's much more expensive for me in time and money to move than it is for a landlord turn over a new unit. Its very expensive to fill a rental. A landlord usually needs at least a month to find another tenant. That's a month of foregone rent > That means a landlord can extract money well above a true market rate. Market rate is the rate the landlord can get. If a transaction happens at that rate, that's the market rate. > A third is of interest. Individuals and the community have a interest in healthy social bonds, while absentee lords mainly want to extract cash. Not sure what "absentee lords mainly want to extract cash" means. Yes, most landlords manage properties as an investment. Landlords also have an interest in the community as they own equity in that community that would appreciate if the neighborhood gets nicer. I don't see your point.

pmoriarty 7y ago
"Its very expensive to fill a rental. A landlord usually needs at least a month to find another tenant. That's a month of foregone rent" If a month of foregone rent was such a huge burden to landlords then it wouldn't be so common for them to keep their properties vacant. Just recently, Los Angeles lawmakers have proposed a vacancy tax on the 111,000 vacant homes in the area.[1] [1] - https://www.latimes.com/local/lanow/la-me-ln-vacant-housing-tax-rental-homeless-crisis-20190611-story.html https://www.latimes.com/local/lanow/la-me-ln-vacant-housing-...
- graeme 7y ago
  That doesn’t establish how common vacancy rates are. You need to look at the rate, not the number. And politicians passing a law means nothing about the fundamentals: you’d need to know if the law is well targeted, or instead perverse. Do you have any data on how long properties are vacant? And if they’re vacant, are they vacant for a reason like renovations or construction? Every landlord I’ve ever had has wanted to rent their place quickly. They hate missing a month.
- LargeWu 7y ago
  We had to rent our former home for 4 years after we moved, but couldn't sell because the market value was too low after the real estate crash. It's really hard to find tenants that aren't total deadbeats. Raise your rent and it's almost impossible to fill the vacancy. Lower the rent and get nothing but unqualified applicants with terrible credit and criminal records. So sure, maybe I could lower the rent to get someone in there, but that means there's a high chance they'll either a) not pay their rent, b) damage the property, or c) both.
  - sdenton4 7y ago
    Great! If you can't fill the spot to your liking, you should get out of the game. Sell to someone who needs a place to live, or is comfortable lowering rents and dealing with the work load.
    - jiminy_john 7y ago
      spoken like a real champ! You show'em! to those fat cats!!!
    - toomuchtodo 7y ago
      The other option is to simply default and walk away from the property if you can't find a tenant, and you can't afford to eat the loss of selling it.
      - coredog64 7y ago
verall 7y ago
> Landlords also have an interest in the community as they own equity in that community that would appreciate if the neighborhood gets nicer. Yes, but obviously people care most about the communities that they actually live in. "Absentee lords mainly want to extract cash" probably means that, as you say, a landlords interest in their community is related to their investment and the opportunity for the value to rise. People that actually live there have other interests, as the landlord does with the location they actually live. Someone renting out a room in their house or half of a duplex isn't absentee, and would have many non-profit interests in the local community. A landlord that lived a few hours away probably would not.
nothrabannosir 7y ago
> He can't just sell it tomorrow but I could easily choose another rental. At worst, the landlord loses money. At worst, the tenant is on the streets. Emotionally, finding a new tenant is business (maslow level.. 4?). Emotionally, finding a new home touches on your core safety and wellbeing (maslow level 2). Switching tenants means a new contract and new risk to lose money. Switching neighbourhoods means losing your neighbours, your area, any ties you have there, and having to build it all anew. And since we're talking about areas where rent control is necessary, a landlord can quite easily find another tenant and a tenant has a hard time finding another house. But as you can see above that's just a "bonus". Economic analyses tend to discount emotional factors, by their very nature. Make no mistake about it: landlords have a massive advantage in any negotiation with a tenant.
- roenxi 7y ago
  > Make no mistake about it: landlords have a massive advantage in any negotiation with a tenant. This isn't a very strong argument because it applies to, eg, purchasing food at a supermarket. Worst case for a supermarket; wasted produce. Worst case for consumers; literal death. Yet the supermarkets are generally famous for being very low margin and cut-throat competitive. A tenant is only forced to move neighborhoods if the market is rising in lockstep; individual landlords can't force anything. Moving neighborhoods due to financial stresses would be completely miserable. But unfortunately reality is unfair and if people want to live the way they like they also have to make a measurable contribution to the economy. If they are relying on the charity of other people, or the state, then they will have to put up with real inconvenience. If other people are bearing the cost, other people get to make the decisions.
  - DiogenesKynikos 7y ago
    Going grocery shopping is not similar to moving. If you can't shop at one grocery store, you can go to the next. Finding a new place to live and moving is a major undertaking.
  - anderskaseorg 7y ago
    I’m pretty sure you lost track of your own analogy there. If there are better deals at a different supermarket, people will just go there. They might even go to multiple supermarkets in pursuit of deals. Literal death is not a realistic consequence of switching supermarkets (thanks in part to food safety regulations!). There’s a very efficient market here. On the other hand, if there’s a better deal on a different apartment, (1) it probably won’t be available; (2) even if it’s available, it probably won’t really be cheaper after accounting for the huge direct and indirect costs of moving; and (3) even if it’s really cheaper, people will still rightly be reluctant to upend their life to take advantage of it. It’s not “charity” when you’re paying through the nose for something that you don’t have a realistic choice about.
betterunix2 7y ago
"The landlord owns a very expensive illiquid property. He can't just sell it tomorrow but I could easily choose another rental." It is not necessarily easy to move. It can mean a longer or harder commute. It can mean changing which school your children go to (which can be a hardship for them). It can mean losing a connection to some social circle or religious organization (yes, this matters to some people). Trying to stay in the same neighborhood can mean dealing with the same management company, thanks to local governments giving developers effective monopolies over entire neighborhoods. Landlords do not need to sell their property in order to enter a new market; they can use one property as collateral to take out a loan for another. That is more or less how real estate developers operate. "Its very expensive to fill a rental. A landlord usually needs at least a month to find another tenant. That's a month of foregone rent" In the NYC region every landlord I have dealt with has included a clause in the contract requiring 60 days notice before moving out, and reserve the right to bring potential new tenants into my apartment to show it off before I even leave (while I am still paying rent and living in the unit). It is also more expensive than one month's rent to move, at least in my experience in this area, and landlords are notorious for keeping security deposits as payment for "repairs" to their units. "Landlords also have an interest in the community as they own equity in that community that would appreciate if the neighborhood gets nicer" I have yet to see any landlord voluntarily do anything to improve a community. In every case where a property owner has done something to improve a neighborhood, it has been because they were forced in some way by the local government. When neighborhoods decline in ways that threaten their profits, landlords seem to just demand that the government step in rather than taking any action themselves. "I don't see your point." It is not hard to understand. Landlords, especially larger management companies with many large properties, have built-in advantages over their tenants that are not corrected by market forces.

by bko 7y ago

pmoriarty 7y ago

"Its very expensive to fill a rental. A landlord usually needs at least a month to find another tenant. That's a month of foregone rent" If a month of foregone rent was such a huge burden to landlords then it wouldn't be so common for them to keep their properties vacant. Just recently, Los Angeles lawmakers have proposed a vacancy tax on the 111,000 vacant homes in the area.[1] [1] - https://www.latimes.com/local/lanow/la-me-ln-vacant-housing-tax-rental-homeless-crisis-20190611-story.html https://www.latimes.com/local/lanow/la-me-ln-vacant-housing-...

graeme 7y ago
That doesn’t establish how common vacancy rates are. You need to look at the rate, not the number. And politicians passing a law means nothing about the fundamentals: you’d need to know if the law is well targeted, or instead perverse. Do you have any data on how long properties are vacant? And if they’re vacant, are they vacant for a reason like renovations or construction? Every landlord I’ve ever had has wanted to rent their place quickly. They hate missing a month.
LargeWu 7y ago
We had to rent our former home for 4 years after we moved, but couldn't sell because the market value was too low after the real estate crash. It's really hard to find tenants that aren't total deadbeats. Raise your rent and it's almost impossible to fill the vacancy. Lower the rent and get nothing but unqualified applicants with terrible credit and criminal records. So sure, maybe I could lower the rent to get someone in there, but that means there's a high chance they'll either a) not pay their rent, b) damage the property, or c) both.
- sdenton4 7y ago
  Great! If you can't fill the spot to your liking, you should get out of the game. Sell to someone who needs a place to live, or is comfortable lowering rents and dealing with the work load.
  - jiminy_john 7y ago
    spoken like a real champ! You show'em! to those fat cats!!!
  - toomuchtodo 7y ago
    The other option is to simply default and walk away from the property if you can't find a tenant, and you can't afford to eat the loss of selling it.
    - coredog64 7y ago

verall 7y ago

> Landlords also have an interest in the community as they own equity in that community that would appreciate if the neighborhood gets nicer. Yes, but obviously people care most about the communities that they actually live in. "Absentee lords mainly want to extract cash" probably means that, as you say, a landlords interest in their community is related to their investment and the opportunity for the value to rise. People that actually live there have other interests, as the landlord does with the location they actually live. Someone renting out a room in their house or half of a duplex isn't absentee, and would have many non-profit interests in the local community. A landlord that lived a few hours away probably would not.

nothrabannosir 7y ago

> He can't just sell it tomorrow but I could easily choose another rental. At worst, the landlord loses money. At worst, the tenant is on the streets. Emotionally, finding a new tenant is business (maslow level.. 4?). Emotionally, finding a new home touches on your core safety and wellbeing (maslow level 2). Switching tenants means a new contract and new risk to lose money. Switching neighbourhoods means losing your neighbours, your area, any ties you have there, and having to build it all anew. And since we're talking about areas where rent control is necessary, a landlord can quite easily find another tenant and a tenant has a hard time finding another house. But as you can see above that's just a "bonus". Economic analyses tend to discount emotional factors, by their very nature. Make no mistake about it: landlords have a massive advantage in any negotiation with a tenant.

roenxi 7y ago
> Make no mistake about it: landlords have a massive advantage in any negotiation with a tenant. This isn't a very strong argument because it applies to, eg, purchasing food at a supermarket. Worst case for a supermarket; wasted produce. Worst case for consumers; literal death. Yet the supermarkets are generally famous for being very low margin and cut-throat competitive. A tenant is only forced to move neighborhoods if the market is rising in lockstep; individual landlords can't force anything. Moving neighborhoods due to financial stresses would be completely miserable. But unfortunately reality is unfair and if people want to live the way they like they also have to make a measurable contribution to the economy. If they are relying on the charity of other people, or the state, then they will have to put up with real inconvenience. If other people are bearing the cost, other people get to make the decisions.
- DiogenesKynikos 7y ago
  Going grocery shopping is not similar to moving. If you can't shop at one grocery store, you can go to the next. Finding a new place to live and moving is a major undertaking.
- anderskaseorg 7y ago
  I’m pretty sure you lost track of your own analogy there. If there are better deals at a different supermarket, people will just go there. They might even go to multiple supermarkets in pursuit of deals. Literal death is not a realistic consequence of switching supermarkets (thanks in part to food safety regulations!). There’s a very efficient market here. On the other hand, if there’s a better deal on a different apartment, (1) it probably won’t be available; (2) even if it’s available, it probably won’t really be cheaper after accounting for the huge direct and indirect costs of moving; and (3) even if it’s really cheaper, people will still rightly be reluctant to upend their life to take advantage of it. It’s not “charity” when you’re paying through the nose for something that you don’t have a realistic choice about.

betterunix2 7y ago

"The landlord owns a very expensive illiquid property. He can't just sell it tomorrow but I could easily choose another rental." It is not necessarily easy to move. It can mean a longer or harder commute. It can mean changing which school your children go to (which can be a hardship for them). It can mean losing a connection to some social circle or religious organization (yes, this matters to some people). Trying to stay in the same neighborhood can mean dealing with the same management company, thanks to local governments giving developers effective monopolies over entire neighborhoods. Landlords do not need to sell their property in order to enter a new market; they can use one property as collateral to take out a loan for another. That is more or less how real estate developers operate. "Its very expensive to fill a rental. A landlord usually needs at least a month to find another tenant. That's a month of foregone rent" In the NYC region every landlord I have dealt with has included a clause in the contract requiring 60 days notice before moving out, and reserve the right to bring potential new tenants into my apartment to show it off before I even leave (while I am still paying rent and living in the unit). It is also more expensive than one month's rent to move, at least in my experience in this area, and landlords are notorious for keeping security deposits as payment for "repairs" to their units. "Landlords also have an interest in the community as they own equity in that community that would appreciate if the neighborhood gets nicer" I have yet to see any landlord voluntarily do anything to improve a community. In every case where a property owner has done something to improve a neighborhood, it has been because they were forced in some way by the local government. When neighborhoods decline in ways that threaten their profits, landlords seem to just demand that the government step in rather than taking any action themselves. "I don't see your point." It is not hard to understand. Landlords, especially larger management companies with many large properties, have built-in advantages over their tenants that are not corrected by market forces.