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Covid-19: Landlords will kill our economy
- taleodor 7y ago> We need legislation to ban rents for COVID-19-affected businesses. This only works if the government mandates full moratorium on both rents and mortgages. That also means that no interest on mortgage is accrued during this time. Otherwise, landlords are screwed in the same way as tenants - they can't pay mortgage and the property may turn into foreclosure. More so, frequently landlords are screwed even more - because it may be hard to get rid of non-paying tenant especially during this time. So tenant may get sort of temporary free pass by just not paying rent. Bottom line - Landlords are not the right target of this rage. Appeal to Governments, not to Landlords.
- Scoundreller 7y agoBut who should the government punish? Everyone equally? The richest X%? The poorest X%? Particular industr[y,ies]? If everyone says “not us, somebody else!” there will be no redistribution.
- taleodor 7y agoTo me, under circumstances universal income may be the most sensible solution. Which would also largely avoid questions like this one (btw everyone still going to take a hit - no doubt about that, but at least it could be negotiated between parties then). Governments still need to figure out if they have enough resources though - it's a lot of work if one is willing to take it. Unfortunately, what I see instead here in Canada is heavy subsidies for large banks who are just passing it as more debt to everyone else. May do even more harm long-term.
- robocat 7y agoDo you own a business? Why do you think universal income solves the problem of an entertainment company that is legally shutdown, has zero income, and can’t pay it’s bills? At it’s core, aren’t you just suggesting we become communists (for a while?). Disclaimer: I am from what might be called a liberal socialist capitalist country (I might call myself a capitalist hippy).
- 6510 7y agoThe goal is to get organized. Whatever the solution might be I'm sure people will call it communism and they might not be to far off either. Wait! You just gave me a hilarious idea! If people have to stay home for months we might as well pay them to enroll in some kind of online course. You know, re-education, only without the camp.
- snoopsbooks 7y agoThe government should punish itself. Issue more debt and backstop unemployment. Otherwise, it will just propagate.
- hellisothers 7y agoThe parent comment is proposing a system where nobody is punished, everything is deferred. Not all landlords are fat cats in a mansion, if you remove the flow of cash to only some people, those people will be crushed if they depend on that flow to send it further upstream.
- nybble41 7y agoDeferring payment without interest is punishment. Goods in the future are worth less than the same goods in the present.
- Scoundreller 7y agoAnd where's someone unemployed going to get 3 month's of rent if they only work in 0 or 1 of the next 3 months?
- marcofatica 7y agoThat's why you're supposed to have savings, but it seems these days people prefer to spend frivolously
- Scoundreller 7y agoLandlords and tenants alike it seems.
- 6510 7y agoBut we've increased rent to rule out savings.
- Scoundreller 7y agoI mean, by definition, landlords own more homes than they need. Worst case scenario, the asset doesn't disappear, it just gets put to auction for someone that can afford it to buy it. Possibly the government could restrict that auction to non-property owners to help sort out the first-sentence problem.
- rad_gruchalski 7y agoIs ‘punish’ even the right term? We’re all equally screwed one way or another. Everywhere in the world.
- swat535 7y agoYou fail to realise that in a lot of cases the landlord is also the one who gave himself the mortgage. Quite a lot of commercial real-estate is owned by financial institutions and when it isn't the trust fund shareholder is also on the board of directors of the bank.
- appleiigs 7y agoYou fail to realise that in a lot of the cases the landlord is also the tenant. Anyone who owns a house or condo is a landlord... cutting the landlords income for a month is a big problem.
- swat535 7y agoIt is to fundamentally misunderstand the notion of what a landlord is when you consider someone who is simultaneously a tenant. You cannot charge yourself to rent space you own. They may occupy a space in the building but that does not make them a tenant. A tenant is someone who rents precisely because they do not own the space
- justaguyhere 7y agoThis makes a lot of sense. Rentiers are among the worst. My rental contract is so strict that it is insane. For example, I have to give 60 day notice, but those 60 days have to begin on the 1st of a month. It can't be 2nd or the last day of the previous month, it has to be the 1st. Rentiers deserve no protection, especially when everyone else is bleeding
- t-writescode 7y agoI’ve never seen a contract so strict. There might be a lawsuit in there. If not, there’s definitely a complaint you can raise. They probably don’t accept the first of the month if it’s a Sunday, either, right?
- mrguyorama 7y agoPlenty of states in America give tenants nearly zero protections
- t-writescode 7y agoHonestly sounds like measures that could get pushed at local levels by local people, successfully
- Ancalagon 7y agoNo because the local governments are owned by homeowners
- t-writescode 7y agoThat’s a quitting attitude. This is possible.
- justaguyhere 7y agoYes they will, my apartment's leasing office is open all day Saturday and half day Sunday. They have their bases covered. They know what they are doing, the company owns multiple buildings and hundreds of apartments. They have written contracts for every single teeny tiny thing. I find it amusing that I am getting downvoted. Everything I said here is true. In places like NYC, it is not easy to get a half decent apartment without paying through the nose. I've heard it is worse in SF, but I haven't lived there, so can't comment. Maybe people here own more than one home that they rent and get pissed at anything negative that is said about landlords. But the thing is, I've rented most of my life and despite being an ideal tenant (always pay rent on time, no parties/pets/noise ... and so on), all I have experienced is a serious headache while looking for apartments. All the downvotes isn't going to change that.
- Veen 7y ago> Ban rent for COVID-19-affected businesses 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.
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- cutler 7y agoSo what? Why should society provide security for the gamblers of the property free-for-all? They took the risk. Too bad if it goes bad. Try working for your income instead of trying to get something for nothing.
- snoopsbooks 7y agoAgree. Bankrupt everyone who takes a risk. That will teach them all a lesson.
- dang 7y agoCan you please not post ideological flamewar comments to HN? They lead to ideological flamewars, which are predictable (therefore boring, therefore off-topic) and also nasty (therefore destructive, therefore against the site rules). https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
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- pornel 7y agoIt's a get-rich-quick scheme that has inflated house prices. These landlords aren't providing any value — they're literally rent-seeking.
- drenginian 7y agoI think most landlords are wealthy people who are easily placed to weather this financial crisis. By definition if you are wealthy enough to own property beyond one house then you’re wealthy enough to survive this. And if you can’t afford to, then sell it and suffer like all the other real business owners are suffering. Why should landlords be a protected species in all this?
- t-writescode 7y agoYou can’t sell if no one is buying and if it’s anything like some stories I’ve heard, some people are doing interest only loans on houses If you sell it for less than your mortgage, you’re still on the hook for that loan, too. The situation is complicated and ‘just sell it’ comes with other problems.
- drenginian 7y agoBeing bankrupted by a landlord also comes with other problems. The biggest expense renters typically have is ..... rent. And for many businesses it’s a major expense too. Governments are desperately coming up with financial support packages for what? To give to landlords?
- t-writescode 7y agoThis doesn’t contradict anything I said
- charonn0 7y agoNot all wealth is liquid. Not all wealth can be liquefied.
- jlokier 7y agoEquity release may provide that liquidity, if you can find a willing provider.
- nunez 7y ago
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- cutler 7y agoIt's not communist thinking - it's the future. A small section of society siphoning-off vast wealth while contributing next to nothing is simply unsustainable. Dictatorial politics aside, the reason China is leaving western economies looking like the relics of a bygone age is mainly down to state regulation of property and business ownership.
- ianlevesque 7y agoWell, there’s a reason the Plague ended feudalism.
- vearwhershuh 7y agoProposal: set an immediate 3% interest rate ceiling on all credit cards. This eliminates the immediate cash crunch that everyone is feeling. If a cc company complains, nationalize them. Then take six months to put together a comprehensive debt-forgiveness program that looks at income, family situation, etc. Forgive things like food, rent, etc. Slowly increase the interest rate cap as the economy recovers. We need ongoing money in peoples hands now to put everyone at ease that they aren't going to be out on the streets in a week with their kids, not a piddling one-time payment in a month.
- kadonoishi 7y agoSo stop all payments. Nobody pays rent, landowners don’t pay their mortgages, banks don’t pay interest. Companies don’t pay dividends, bonds don’t pay interest. Just stop using money to organize productive activity for a few months until the coronavirus curve flattens. If all payments are stopped for three months, then it’s simply hitting the “Pause” button on the whole money system. There are no economic data for that quarter. GDP is meaningless, unemployment is meaningless. That quarter is a big fat missing data point. Three months later everyone comes out of their houses and goes back to work. Paychecks resume, rents resume, landlords resume paying their mortgages, and no one ever catches up on any payments from the missing period. Just pretend we skipped three months ahead via a sci-fi time knot.
- adverbly 7y agoAs a pragmatist who likes simplicity, this makes total sense. As a dev, this terrifies me. I can't imagine how many bugs this might cause in financial software.
- Ghjklov 7y agoThis is the kind of solution I would like to see. But you just know, there's a number of people with the power and influence to decide whether or not something get's done DESPISE the idea that people are allowed to have a roof over their head, eat food, and be happy without paying them anything.
- sschueller 7y agoThis doesn't work because not every one has stopped working. The best solution would be for the government to pay the bottom and have the payments "trickle up".
- robocat 7y agoHow does trickle up pay the commercial rent for the example in the article with an events business? From article: “[businesses have gone] from regular trading to zero revenue in a week. My own sector, events, is literally illegal. Bars, restaurants and lots of others are in the same position or soon will be.”, “Some of our landlords have agreed to push a percentage of our rent back to later in the year, but it still has to be paid back. So we’ll pay double rent as we emerge into what will be a catastrophic recession.” I agree the government paying his staff helps the staff and helps fix his other issue “My own business is spending every last cent of our cash to keep our 60-odd staff employed in some way, even though we’re not allowed to do what we do.”
- pouty-gazelle 7y agoPlacing the burden on landlords will unintentionally lead to greater concentration of wealth. Property owners with mortgages will be forced to sell (at a loss, if there is a glut of properties on the market). The buyers will be those who already have a lot of cash, or who are otherwise in a strong enough financial position to wait out the crisis.
- charonn0 7y agoAnother anti-landlord screed from another an entitled prat.
- newen 7y agoLandlords don't contribute to society; all they do is leech wealth away from working people. Furthermore, they increase property prices for everyone by buying property and leaving it empty, or buying property and hiking rent up as much the market allows.
- LatteLazy 7y agoIt's really concerning here that so many comments basically amount to let's ban all landlords. It's really dumb, people clearly have not thought it through.
- appleiigs 7y agoThe article is dumb. If the statement "Landlords don’t employ anyone; their benefit to society is frankly pretty marginal" was true, why did the author willingly sign his rent or lease contract (which binds him to pay a large regular payments for a long period)... Why would he do it if there is no benefit!?
- ianlevesque 7y agoBecause the landlord got there first and staked a claim to the parcel of land, that they then don't use themselves for anything except charging others for the privilege of using it. I mean you can see how it's not a super compelling arrangement even though landlords have made it impossible to avoid in desirable areas.
- appleiigs 7y agoSomeone paid to make the land useful for you. They cleared the land, built a building, added utilities, and made it convenient for you so you didn't have to do all that yourself.
- jlokier 7y agoThe "benefit" obtained by rent is, mainly, permission. When the authoer says landlords don't provide much benefit to society, I think they are comparing against a society in which landlords don't exist. The author pays rent because they have no choice if they want permission to use a property; all available properties are owned by landlords. (You can tell it's more about permission than service provided, because there are so many empty buildings, and many people would be delighted to be permitted to just go ahead and use them.) In the alternative society where landlords don't exist, the author would not need to pay for permission. The "marginal" benefit is other things of value, such as making a nice place, and upkeep and repairs, which many landlords don't do much of.
- ajhurliman 7y agoI think you would see the benefit if you got rid of landlords and let anarchy rule real estate.