5 ms·

>Offered >Deferment >We are all in this together. Not quite sure how these square.

by bsanr 7y ago

masonic 7y ago
This attitude will just drive more properties off the leasing market and on to the relative safety of AirBnB type marketplaces.
- throwaway2048 7y ago
  I wonder how the safety of "AirBnB type marketplaces" is looking right now.
nate_meurer 7y ago
What's confusing about this to you? Would you prefer OP to default on their mortgage, in which case the tenants would likely get tossed out anyway?
- bsanr 7y ago
  I'd prefer capital owners to hedge their risk appropriately.
  - nate_meurer 7y ago
    So would I. Maybe I should ask a different questions: would you give OP the same critique if they'd offered their tenants rent reductions instead of deferrals?
    - salawat 7y ago
      That's absolutely what should happen actually (rent decrease coupled with price falls). There's no way that real estate prices can stay stable given the current environment. Prices should be going downward fast across the board, due to the drying up of overall chances to transact for most people. Without those opportunities to engage in business, what little business we can keep going should be kept going. I think the solution is somewhere in the realm of "pay what you can, and everyone keep adjusting prices down to keep as many people doing the necessary work that we can keep taking place." Trying to act like the securities depending on on pre-covid conditions mean anything now is like clutching a Reichsmark or Confederate dollar and expecting a satisfactory exchange with a vending machine. The apparatus simply won't support it. The social structure that backed that store of value isn't there. I think when we look back on this, this pandemic may be quite literally the transition point in Market philosophy moving forward. I'm not sure what it'll look like, but I know if I had a choice in what to hand down to those coming after me, it would be a reset in which those that come after me can have a chance to build up what my parents and grandparents had the chance to. Maybe I'm just resigned to being the Lost Generation v.2; but the Gilded Age nonsense we've been cruising with up until now needs to stop; both in a normative moral sense, and in a pragmatic, people need to not be sacrificed so the inequality created by current market structures can be perpetuated. Tear down/stop the pumps trickling wealth up, dump value back in the bottom, let people sit on what productive assets they are physically using, and let people adapt to this new physical threat. We'll figure out the rest in time. Frankly, the people worrying about a transition to a command economy should realize we were already in one. It was just one where the top 1% were accountable to no one, and growth numbers were what was being optimized for even if there wasn't any net benefit to society at large. See the increasing frequency of corporate malfeasance (Boeing, opioid epidemic, Telcos, PG&E etc) if you really don't believe that everything was reaching the point of too big to fail. We just needed something like this pandemic to happen in order for everyone's physical survival to decouple from the economy's idea of survival to ram the point home. Around each and every person is the corpse of an industrialized society. We need to figure out what the hell to do with it to maintain carrying capacity. Then we need to just do it. Ugly times these. Ugly times indeed.
marcus0x62 7y ago
It seems like a pretty reasonable offer — if you understand how rental markets work. Landlords take on the substantial risk of long-term ownership, maintenance, and uncertain market demand for their product. Operating costs —- that’s excluding financing costs — typically run 45% of rents. Tenants usually, but not always, pay a higher rental rate than the equivalent ownership cost but have no obligations and no capital commitment beyond the term of their lease. Think about the tenants the OP listed — a bookstore and a restaurant. Do you honestly think someone would start a bookstore or a restaurant if their only option was to buy a building to operate in? The time option is of a huge benefit to the typical tenant and, of course, like anything it costs something. Of course, there are some terrible landlords out there, but if they were all so bad, tenants would band together and jointly purchase property as a co-op. That this doesn’t happen on a broad basis in the commercial property market even in markets where there is availability of small to medium spaces at relatively low cost tells me the tenants are getting something valuable out of the arrangement.
- bsanr 7y ago
  The business 101 was unnecessary. What matters in this scenario is that these businesses are under government order not to operate. They are unable to make money. Deferment, then, amounts to a catch-22: pay now and go bankrupt; defer, have finances hampered well into the future, and still go bankrupt; or break the lease, shutter the business, and start up elsewhere. The building owner loses a tenant should any of these scenarios play out, and only receives income in the first (wildly cynical) two. The proper thing to do would be to either waive rent, ask for a percentage relative to the business that could be completed, or to automatically defer payments if they don't arrive on schedule. You can understand why some would find it unconscionable to insist on anything resembling business-as-usual during this time. Capital owners should be expected to be active supporters of their community interests. If not, I'm unconvinced that they shouldn't simply be chucked out with whatever charity proffered; what good are they?
dang 7y ago
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html We detached this subthread from https://news.ycombinator.com/item?id=22680612 https://news.ycombinator.com/item?id=22680612.
deleted 7y ago
[deleted]

>Offered >Deferment >We are all in this together. Not quite sure how these square.

by bsanr 7y ago

>Offered >Deferment >We are all in this together. Not quite sure how these square.

This attitude will just drive more properties off the leasing market and on to the relative safety of AirBnB type marketplaces.

throwaway2048 7y ago
I wonder how the safety of "AirBnB type marketplaces" is looking right now.

nate_meurer 7y ago

What's confusing about this to you? Would you prefer OP to default on their mortgage, in which case the tenants would likely get tossed out anyway?

bsanr 7y ago
I'd prefer capital owners to hedge their risk appropriately.
- nate_meurer 7y ago
  So would I. Maybe I should ask a different questions: would you give OP the same critique if they'd offered their tenants rent reductions instead of deferrals?
  - salawat 7y ago
    That's absolutely what should happen actually (rent decrease coupled with price falls). There's no way that real estate prices can stay stable given the current environment. Prices should be going downward fast across the board, due to the drying up of overall chances to transact for most people. Without those opportunities to engage in business, what little business we can keep going should be kept going. I think the solution is somewhere in the realm of "pay what you can, and everyone keep adjusting prices down to keep as many people doing the necessary work that we can keep taking place." Trying to act like the securities depending on on pre-covid conditions mean anything now is like clutching a Reichsmark or Confederate dollar and expecting a satisfactory exchange with a vending machine. The apparatus simply won't support it. The social structure that backed that store of value isn't there. I think when we look back on this, this pandemic may be quite literally the transition point in Market philosophy moving forward. I'm not sure what it'll look like, but I know if I had a choice in what to hand down to those coming after me, it would be a reset in which those that come after me can have a chance to build up what my parents and grandparents had the chance to. Maybe I'm just resigned to being the Lost Generation v.2; but the Gilded Age nonsense we've been cruising with up until now needs to stop; both in a normative moral sense, and in a pragmatic, people need to not be sacrificed so the inequality created by current market structures can be perpetuated. Tear down/stop the pumps trickling wealth up, dump value back in the bottom, let people sit on what productive assets they are physically using, and let people adapt to this new physical threat. We'll figure out the rest in time. Frankly, the people worrying about a transition to a command economy should realize we were already in one. It was just one where the top 1% were accountable to no one, and growth numbers were what was being optimized for even if there wasn't any net benefit to society at large. See the increasing frequency of corporate malfeasance (Boeing, opioid epidemic, Telcos, PG&E etc) if you really don't believe that everything was reaching the point of too big to fail. We just needed something like this pandemic to happen in order for everyone's physical survival to decouple from the economy's idea of survival to ram the point home. Around each and every person is the corpse of an industrialized society. We need to figure out what the hell to do with it to maintain carrying capacity. Then we need to just do it. Ugly times these. Ugly times indeed.

marcus0x62 7y ago

It seems like a pretty reasonable offer — if you understand how rental markets work. Landlords take on the substantial risk of long-term ownership, maintenance, and uncertain market demand for their product. Operating costs —- that’s excluding financing costs — typically run 45% of rents. Tenants usually, but not always, pay a higher rental rate than the equivalent ownership cost but have no obligations and no capital commitment beyond the term of their lease. Think about the tenants the OP listed — a bookstore and a restaurant. Do you honestly think someone would start a bookstore or a restaurant if their only option was to buy a building to operate in? The time option is of a huge benefit to the typical tenant and, of course, like anything it costs something. Of course, there are some terrible landlords out there, but if they were all so bad, tenants would band together and jointly purchase property as a co-op. That this doesn’t happen on a broad basis in the commercial property market even in markets where there is availability of small to medium spaces at relatively low cost tells me the tenants are getting something valuable out of the arrangement.

bsanr 7y ago
The business 101 was unnecessary. What matters in this scenario is that these businesses are under government order not to operate. They are unable to make money. Deferment, then, amounts to a catch-22: pay now and go bankrupt; defer, have finances hampered well into the future, and still go bankrupt; or break the lease, shutter the business, and start up elsewhere. The building owner loses a tenant should any of these scenarios play out, and only receives income in the first (wildly cynical) two. The proper thing to do would be to either waive rent, ask for a percentage relative to the business that could be completed, or to automatically defer payments if they don't arrive on schedule. You can understand why some would find it unconscionable to insist on anything resembling business-as-usual during this time. Capital owners should be expected to be active supporters of their community interests. If not, I'm unconvinced that they shouldn't simply be chucked out with whatever charity proffered; what good are they?

dang 7y ago

"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html We detached this subthread from https://news.ycombinator.com/item?id=22680612 https://news.ycombinator.com/item?id=22680612.

deleted 7y ago

[deleted]