7 ms·

31% Can’t Pay the Rent: ‘It’s Only Going to Get Worse’

87 points by Willson50 6y ago

mkl 6y ago
> through the first five days of April, 31 percent of tenants had so far failed to pay their rent, compared with 18 percent in the same period a year ago. If the headline had said 18%, the situation would have sounded bad to me, but apparently that's normal?
- throwawayjava 6y ago
  Depends on how long the rent goes delinquent. It's not uncommon for the rent to finally show up around the 15th. I used to rent out a property and would typically write the lease so that the rent was due within 5 days of the 1st. I would send a reminder but I didn't really start to worry as long as it showed up before the 20th. If it took longer than that I would start to worry. The difference here is that the percent of that 31% who really can't afford the rent -- not now, and not any time soon -- is probably closer to 100%.
  - mkl 6y ago
    The article implied synchronised rents, and now you have too. To clarify: Are all rents in the US monthly and due on the first of the month? In NZ rent is weekly, on no particular day (can be different for each tenant).
    - chronomex 6y ago
      Yes, in the US rents are usually due on the first of the month and all months cost the same amount.
    - throwawayjava 6y ago
      > To clarify: Are all rents in the US monthly and due on the first of the month? Yes, at least in all the markets I'm aware of. If someone moves in after in the middle of a month, you'll pro-rate the rent for that first fraction of a month so that everyone's back on the monthly cycle for the rest of the lease (typically 12 months, but in some markets there's a strong preference for a particular month and so the lease will be written to end after less than 12 months. Typically uni towns where you really want to lease to end on August 31st regardless of when it started). To clarify the 15th: paychecks typically also always arrive bimonthy and on fixed days. So, people would fail to budget for the 1st but would be able to cover rent when their second bimonthly paycheck hit their account. As a land owner extracting rent from folks, I think it's more than fair that they get a ~10 day interest fee loan as needed. And even if I were an asshole, it wouldn't be in my economic interest to do anything about those sorts of 10 day delays. But I sort of suspect a lot of the folks who couldn't afford rent on the 1st of April 2020 won't be able to afford rent on the 15th of April 2020 either...
    - deleted 6y ago
      [deleted]
    - dhd415 6y ago
      Residential rentals in the US are priced by the month and I've never seen one in which the rent was not due on the first of the month.
      - deleted 6y ago
        [deleted]
      - kccqzy 6y ago
        Where I live, although the rent was technically due on the first, there's an automatic grace period of three days without late fees so the actual due date is the fourth.
    - noitsnot 6y ago
      Years of renting. I imagine it goes by state law but the grace period has always been three days. The 4th of the month is when the late fee would be tacked on.
  - sethammons 6y ago
    The article pointed out that a significant portion of renters spend over half their income on their rent. If they are not working, they will not be able to ever make up the difference.
    - ramraj07 6y ago
      Seems about par for the average New Yorker. Folks in NYC seem especially gullible to spend more than half their paychecks on rent, something even folks in SF would hesitate. This is not for lack of options - my colleagues who make the same as me would rather pay $1000 more a month to stay in Manhattan instead of (a very comfortable still) place in Brooklyn. The commute is still very tolerable by any modern city standard, probably around 30 minutes (12 if you want to stay in downtown Brooklyn), but apparently thats too long?
      - sv9 6y ago
        Maybe instead we should ask ourselves why the rent is so high instead of blaming people who just want to minimize the time they take out of their short lives to spend commuting to a job they need to survive.
- tree3 6y ago
  Included in that 18% are people who aren't supposed to pay rent in the first 5 days of a month. Their rent is just due later in the month.
  - jobigoud 6y ago
    In that case the use of the word "failed" is very misleading.
bArray 6y ago
"31% Can't Pay the Rent" != "31% Are Not Paying Rent" "Can't" indicates they are unable, whereas I suspect at least some are taking advantage of the current situation [1]. Any situation where it's possible to take advantage, you can almost guarantee that people will. This is not the way forwards - not paying rent will have a large knock-on effect for landlords (which, despite some sentiment, isn't necessarily the 1%). The US government needs to provide money if they are going to demand that people stay at home and not work. Ultimately they either bring the economy to a screaming halt (entirely) or trickle money to those unable to work in order to keep things going. In my opinion stalling the economy is a bad idea - it can cost a lot of time and money to get it going again. [1] https://news.yahoo.com/rent-strike-idea-gaining-steam-170345369.html https://news.yahoo.com/rent-strike-idea-gaining-steam-170345...
- WrtCdEvrydy 6y ago
  The economy will be fine... the black plague had great economic outcomes as it always does when a whole bunch of people die. We should reopen the entire country tomorrow... no travel restrictions, open every border and see what happens.
  - mkl 6y ago
    Maximising economic opportunities for lucky survivors is not the goal here.
  - save_ferris 6y ago
    Half of the European population died during the Black Plague, it’s simply not acceptable to use that case as a reference for economic growth. Governments have a responsibility to all their citizens, not just stockholders.
  - simonh 6y ago
    Does the economy exist to serve the needs of the people, or do the people exist to serve the needs of the economy?
    - 6y ago
wtvanhest 6y ago
Equity residential collected 93% of rent for April 1. The difference in tenants is real. Equity residential tenants are higher end rentals in big to midsized cities with strong economies. http://investors.equityapartments.com/file/Index?KeyFile=403555723 http://investors.equityapartments.com/file/Index?KeyFile=403...
- hn_throwaway_99 6y ago
  I mean, extremely unsurprising. The vast majority of white caller workers I know are working from home. Of course, those who are in industries that are getting slaughtered (travel, non-emergency medicine, local business services, etc.) are having a tough time, but wouldn't expect those delinquencies to show up until May or later. Where I live, there is a huge service economy (restaurants, bars, gyms, etc.) and most of those service workers were laid off extremely fast, with very little savings to get through extended unemployment.
  - kian 6y ago
    White Caller? That's a pretty excellent Mondegreen.
- Spooky23 6y ago
  Right now. Corporate America will be culling the herd in a few weeks. Financial services are already purging.
monadic2 6y ago
Now is the time for landlords to prove their value.
- ZhuanXia 6y ago
  Just going to leave this here: https://en.m.wikipedia.org/wiki/Georgism https://en.m.wikipedia.org/wiki/Georgism
- toolz 6y ago
  I'm sure that people freely choosing to give landlords hundreds and even thousands of dollars monthly has already proven their worth.
  - nerdponx 6y ago
    freely choosing I'm as skeptical of neo-Georgism as anyone, but this is a pretty standard fallacy. I seriously doubt that most people who rent their homes and business properties have viable alternatives to renting.
    - toolz 6y ago
      Define viable. You mean a dwelling place that protects you from the elements well enough that they won't even be in the top 50 ways you'll be likely to die statistically? Homeless shelters take care of that and there are other options in between. As for businesses - I know plenty of multi-million dollar businesses that have no need for a brick and mortar, but the business angle isn't even an argument - there's never a need for anyone to create a business, there's only incentive and the incentive is high enough that people freely choose to pay rent for businesses that require a physical location.
      - monadic2 6y ago
        > You mean a dwelling place that protects you from the elements well enough that they won't even be in the top 50 ways you'll be likely to die statistically? Homeless shelters take care of that and there are other options in between. Yikes.
jacknews 6y ago
Rents will have to come down or be waived. Almost by definition "rent" is simply extracting value from the productive economy through ownership. If the productive economy takes a dive or disappears, the amount you can extract must do likewise.
- missedthecue 6y ago
  >Almost by definition "rent" is simply extracting value from the productive economy through ownership. What? Do you define any profit margin as such? Housing rent is not the same thing as the term 'economic rent'. Housing is as much a liability as an asset. There is risk with owning it. Rent payments are compensation for said risk. All profit is just compensation for risk.
  - peacefulhat 6y ago
    Then should rents go up? It is now much riskier to be a landlord, risk that is going uncompensated...
    - gruez 6y ago
      Theoretically yes, although the demand curve also comes into play. In a parallel universe where the risks of a pandemic/lockdown was known and taken seriously, you would definitely expect rents to be higher.
      - sv9 6y ago
        Maybe the landlords should've been more responsible and saved for a rainy day. Isn't that what the less-well-off are always told to do? Poor planning on their part shouldn't be the fault of renters.
        SpicyLemonZest 6y ago
        I don't mean to be pithy, but rents are established by supply and demand, not by an analysis of who's at fault or a decision about whether some particular landlord needs more money.
nezy 6y ago
So 31% of people are living above their means and/or don't have a rainy day fund. The US is a nation of four year olds.
shubidubi 6y ago
I don't get why it's not ok to steal food from a grocery store but it is ok to not pay rent. Both are basic necessities and in both cases you hurt someone else by not paying for service (food/shelter).
- enraged_camel 6y ago
  No one is saying that not paying rent is "okay". These people would continue to pay rent if they could.
  - flyingcircus3 6y ago
    There is florist in the article that is introduced as someone who could pay rent from her savings. However, she has decided she would "rather conserve her money than pay bills now."
    - roel_v 6y ago
      And even worse, there is a guy in there who still has a job, has the money, and isn't paying rent because of "solidarity" with the florist! What sort of weirdness is that? I feel sympathy for those in precarious finances who really can't pay, but then articles like this come with examples of people who can pay but don't because... theoretical "social injustice"? That surely doesn't make me sympathetic to any cause...
      - lidHanteyk 6y ago
        Solidarity is a principle of social justice [0]. It's very simple, and related to tragedies of the commons. When there is some common resource, solidarity is the idea that we should all adopt common attitudes towards that resource. I can afford to pay my rent. I have no problems doing so. However, if I were to learn that my rental management group were facing a large rent rebellion, that I believed that the rebels had legitimate complaints, and that the rental management group could survive the rebellion by evicting all of the rebels but only if I paid my rent, then I would consider not paying my rent. Therefore, I can imagine a situation where I would not pay my rent despite being able to afford it, and be expressing solidarity by doing so. I don't really care whether or not you're sympathetic right now to this particular cause, but you should consider the principles behind the actions that people are taking, and spend some time putting yourself in everybody else's shoes. [0] https://en.wikipedia.org/wiki/Solidarity https://en.wikipedia.org/wiki/Solidarity
aww_dang 6y ago
Meanwhile gov banks have been keeping foreclosed housing off-market for over a decade to prop up the price.
- felipemnoa 6y ago
  Way too lazy to verify this myself. Any links?
  - Rury 6y ago
    Apparently, there are a couple of mega wealthy properties ($2M-$20M) near me made over 20 years ago that have never had anyone live in them ever, as supposedly banks financed them for foreign businessmen but were never repaid the mortgages when said businessmen fled the country along with their debt obligations. At least this is the story I was given, after buying a car from a caretaker of two of such properties - one of which I was very familiar with, as it had a prominent observatory built in its roof... But that story checks out, as when the market crashed ~2008, the FED bailed underwater mortgage assets (such as these supposedly) off banks hands to avoid bank runs via QE. You can see that mortgage-backed securities still comprise a significant portion of the FED's balance sheet: https://www.federalreserve.gov/releases/h41/current/h41.htm https://www.federalreserve.gov/releases/h41/current/h41.htm https://www.federalreserve.gov/monetarypolicy/bst_fedsbalancesheet.htm https://www.federalreserve.gov/monetarypolicy/bst_fedsbalanc...
noad 6y ago
Corporations are really leading the way here. If they can't preserve enough cash to last a month and plan to strike as their opening negotiating tactic then people should too. Why not?
nerfhammer 6y ago
> using security deposits as a stopgap wait, is that even legal? Aren't security deposits meant to be held in trust?
dbcurtis 6y ago
Let's follow the money. Tenant fails to pay rent because of economic hardship. Building owner get in a cash squeeze and can't pay vendors like plumber, snow clearing, landscaping, and eventually can't make loan payments. Mortgage holders see a rise in troubled loans, eventually writing a large number of them off for large losses. REITs take losses on investments they must write off. Your own retirement plan or personal investment portfolio takes a hit because some portion of it is REITs. Everything is interconnected. I see a lot of simplistic "landlords must suck it up" comments in this thread. Really, who is so naive as to think that the typical commercial property is not leveraged?
- drawkbox 6y ago
  > I see a lot of simplistic "landlords must suck it up" comments in this thread. Your answer is for the rent payer, with no economy, to "suck it up". If the top felt the pain of recessions more than the bottom, you can bet there would be less recessions where massive wealth value extraction happens. You have to align the market incentives right. Make the top feel the pain, at the bank level even, and you are gonna have better ratings agencies, better leverage ratios, and less pump and dump bubbles setup. Right now if the top always gains, even in pain, there will be more and more pain as they look for gains guaranteed. If we truly are in a trickle down system, shouldn't emergency hits to the recession start at the top, the trickle source? Money trickles up and down and all around, but money only trickles where other money is found.
  - dbcurtis 6y ago
    > Your answer is for the rent payer, with no economy, to "suck it up". You miss-read me. First of all, I did not suggest any answer. I suggested that people put more thoughtfulness into their analysis. What I am saying is that there really is no one person to "suck it up". The furloughed school cafeteria worker is going to take a double hit because the public employee retirement system probably holds REITs. Scapegoating landlords is the tactic of leftest South American dictators. Landlords are middlemen, earning a return on providing housing liquidity. They take on short-term risk in the form of their tenants potential inability to pay, and long-term risk in the form of long-term loans collateralized by their properties. The system doesn't work unless someone is willing to take on that risk profile. Stop scapegoating landlords.
PakG1 6y ago
130 tenants? People at that level, I would have considered them to be corporations collecting rent, not individual landlords. Well, he probably collects everything through a corporation too, I imagine. My point is that I've never put a face to a corporate landlord before. It's always been a faceless corporation, even for corporations where the founding face is famous. Reading this was weird for me. He behaves like an individual landlord too, personally answers all the emails, doesn't have a secretary? Maybe 130 tenants is too low a number to justify hiring help. Blows my mind.
greggeter 6y ago
Let's just concentrate on convincing our Betters to let us get back to work.

87 points by Willson50 6y ago

mkl 6y ago

> through the first five days of April, 31 percent of tenants had so far failed to pay their rent, compared with 18 percent in the same period a year ago. If the headline had said 18%, the situation would have sounded bad to me, but apparently that's normal?

throwawayjava 6y ago
Depends on how long the rent goes delinquent. It's not uncommon for the rent to finally show up around the 15th. I used to rent out a property and would typically write the lease so that the rent was due within 5 days of the 1st. I would send a reminder but I didn't really start to worry as long as it showed up before the 20th. If it took longer than that I would start to worry. The difference here is that the percent of that 31% who really can't afford the rent -- not now, and not any time soon -- is probably closer to 100%.
- mkl 6y ago
  The article implied synchronised rents, and now you have too. To clarify: Are all rents in the US monthly and due on the first of the month? In NZ rent is weekly, on no particular day (can be different for each tenant).
  - chronomex 6y ago
    Yes, in the US rents are usually due on the first of the month and all months cost the same amount.
  - throwawayjava 6y ago
    > To clarify: Are all rents in the US monthly and due on the first of the month? Yes, at least in all the markets I'm aware of. If someone moves in after in the middle of a month, you'll pro-rate the rent for that first fraction of a month so that everyone's back on the monthly cycle for the rest of the lease (typically 12 months, but in some markets there's a strong preference for a particular month and so the lease will be written to end after less than 12 months. Typically uni towns where you really want to lease to end on August 31st regardless of when it started). To clarify the 15th: paychecks typically also always arrive bimonthy and on fixed days. So, people would fail to budget for the 1st but would be able to cover rent when their second bimonthly paycheck hit their account. As a land owner extracting rent from folks, I think it's more than fair that they get a ~10 day interest fee loan as needed. And even if I were an asshole, it wouldn't be in my economic interest to do anything about those sorts of 10 day delays. But I sort of suspect a lot of the folks who couldn't afford rent on the 1st of April 2020 won't be able to afford rent on the 15th of April 2020 either...
  - deleted 6y ago
    [deleted]
  - dhd415 6y ago
    Residential rentals in the US are priced by the month and I've never seen one in which the rent was not due on the first of the month.
    - deleted 6y ago
      [deleted]
    - kccqzy 6y ago
      Where I live, although the rent was technically due on the first, there's an automatic grace period of three days without late fees so the actual due date is the fourth.
  - noitsnot 6y ago
    Years of renting. I imagine it goes by state law but the grace period has always been three days. The 4th of the month is when the late fee would be tacked on.
- sethammons 6y ago
  The article pointed out that a significant portion of renters spend over half their income on their rent. If they are not working, they will not be able to ever make up the difference.
  - ramraj07 6y ago
    Seems about par for the average New Yorker. Folks in NYC seem especially gullible to spend more than half their paychecks on rent, something even folks in SF would hesitate. This is not for lack of options - my colleagues who make the same as me would rather pay $1000 more a month to stay in Manhattan instead of (a very comfortable still) place in Brooklyn. The commute is still very tolerable by any modern city standard, probably around 30 minutes (12 if you want to stay in downtown Brooklyn), but apparently thats too long?
    - sv9 6y ago
      Maybe instead we should ask ourselves why the rent is so high instead of blaming people who just want to minimize the time they take out of their short lives to spend commuting to a job they need to survive.
tree3 6y ago
Included in that 18% are people who aren't supposed to pay rent in the first 5 days of a month. Their rent is just due later in the month.
- jobigoud 6y ago
  In that case the use of the word "failed" is very misleading.

bArray 6y ago

"31% Can't Pay the Rent" != "31% Are Not Paying Rent" "Can't" indicates they are unable, whereas I suspect at least some are taking advantage of the current situation [1]. Any situation where it's possible to take advantage, you can almost guarantee that people will. This is not the way forwards - not paying rent will have a large knock-on effect for landlords (which, despite some sentiment, isn't necessarily the 1%). The US government needs to provide money if they are going to demand that people stay at home and not work. Ultimately they either bring the economy to a screaming halt (entirely) or trickle money to those unable to work in order to keep things going. In my opinion stalling the economy is a bad idea - it can cost a lot of time and money to get it going again. [1] https://news.yahoo.com/rent-strike-idea-gaining-steam-170345369.html https://news.yahoo.com/rent-strike-idea-gaining-steam-170345...

WrtCdEvrydy 6y ago
The economy will be fine... the black plague had great economic outcomes as it always does when a whole bunch of people die. We should reopen the entire country tomorrow... no travel restrictions, open every border and see what happens.
- mkl 6y ago
  Maximising economic opportunities for lucky survivors is not the goal here.
- save_ferris 6y ago
  Half of the European population died during the Black Plague, it’s simply not acceptable to use that case as a reference for economic growth. Governments have a responsibility to all their citizens, not just stockholders.
- simonh 6y ago
  Does the economy exist to serve the needs of the people, or do the people exist to serve the needs of the economy?
  - 6y ago

wtvanhest 6y ago

Equity residential collected 93% of rent for April 1. The difference in tenants is real. Equity residential tenants are higher end rentals in big to midsized cities with strong economies. http://investors.equityapartments.com/file/Index?KeyFile=403555723 http://investors.equityapartments.com/file/Index?KeyFile=403...

hn_throwaway_99 6y ago
I mean, extremely unsurprising. The vast majority of white caller workers I know are working from home. Of course, those who are in industries that are getting slaughtered (travel, non-emergency medicine, local business services, etc.) are having a tough time, but wouldn't expect those delinquencies to show up until May or later. Where I live, there is a huge service economy (restaurants, bars, gyms, etc.) and most of those service workers were laid off extremely fast, with very little savings to get through extended unemployment.
- kian 6y ago
  White Caller? That's a pretty excellent Mondegreen.
Spooky23 6y ago
Right now. Corporate America will be culling the herd in a few weeks. Financial services are already purging.

monadic2 6y ago

Now is the time for landlords to prove their value.

ZhuanXia 6y ago
Just going to leave this here: https://en.m.wikipedia.org/wiki/Georgism https://en.m.wikipedia.org/wiki/Georgism
toolz 6y ago
I'm sure that people freely choosing to give landlords hundreds and even thousands of dollars monthly has already proven their worth.
- nerdponx 6y ago
  freely choosing I'm as skeptical of neo-Georgism as anyone, but this is a pretty standard fallacy. I seriously doubt that most people who rent their homes and business properties have viable alternatives to renting.
  - toolz 6y ago
    Define viable. You mean a dwelling place that protects you from the elements well enough that they won't even be in the top 50 ways you'll be likely to die statistically? Homeless shelters take care of that and there are other options in between. As for businesses - I know plenty of multi-million dollar businesses that have no need for a brick and mortar, but the business angle isn't even an argument - there's never a need for anyone to create a business, there's only incentive and the incentive is high enough that people freely choose to pay rent for businesses that require a physical location.
    - monadic2 6y ago
      > You mean a dwelling place that protects you from the elements well enough that they won't even be in the top 50 ways you'll be likely to die statistically? Homeless shelters take care of that and there are other options in between. Yikes.

jacknews 6y ago

Rents will have to come down or be waived. Almost by definition "rent" is simply extracting value from the productive economy through ownership. If the productive economy takes a dive or disappears, the amount you can extract must do likewise.

missedthecue 6y ago
>Almost by definition "rent" is simply extracting value from the productive economy through ownership. What? Do you define any profit margin as such? Housing rent is not the same thing as the term 'economic rent'. Housing is as much a liability as an asset. There is risk with owning it. Rent payments are compensation for said risk. All profit is just compensation for risk.
- peacefulhat 6y ago
  Then should rents go up? It is now much riskier to be a landlord, risk that is going uncompensated...
  - gruez 6y ago
    Theoretically yes, although the demand curve also comes into play. In a parallel universe where the risks of a pandemic/lockdown was known and taken seriously, you would definitely expect rents to be higher.
    - sv9 6y ago
      Maybe the landlords should've been more responsible and saved for a rainy day. Isn't that what the less-well-off are always told to do? Poor planning on their part shouldn't be the fault of renters.
      - SpicyLemonZest 6y ago
        I don't mean to be pithy, but rents are established by supply and demand, not by an analysis of who's at fault or a decision about whether some particular landlord needs more money.

nezy 6y ago

So 31% of people are living above their means and/or don't have a rainy day fund. The US is a nation of four year olds.

shubidubi 6y ago

I don't get why it's not ok to steal food from a grocery store but it is ok to not pay rent. Both are basic necessities and in both cases you hurt someone else by not paying for service (food/shelter).

enraged_camel 6y ago
No one is saying that not paying rent is "okay". These people would continue to pay rent if they could.
- flyingcircus3 6y ago
  There is florist in the article that is introduced as someone who could pay rent from her savings. However, she has decided she would "rather conserve her money than pay bills now."
  - roel_v 6y ago
    And even worse, there is a guy in there who still has a job, has the money, and isn't paying rent because of "solidarity" with the florist! What sort of weirdness is that? I feel sympathy for those in precarious finances who really can't pay, but then articles like this come with examples of people who can pay but don't because... theoretical "social injustice"? That surely doesn't make me sympathetic to any cause...
    - lidHanteyk 6y ago
      Solidarity is a principle of social justice [0]. It's very simple, and related to tragedies of the commons. When there is some common resource, solidarity is the idea that we should all adopt common attitudes towards that resource. I can afford to pay my rent. I have no problems doing so. However, if I were to learn that my rental management group were facing a large rent rebellion, that I believed that the rebels had legitimate complaints, and that the rental management group could survive the rebellion by evicting all of the rebels but only if I paid my rent, then I would consider not paying my rent. Therefore, I can imagine a situation where I would not pay my rent despite being able to afford it, and be expressing solidarity by doing so. I don't really care whether or not you're sympathetic right now to this particular cause, but you should consider the principles behind the actions that people are taking, and spend some time putting yourself in everybody else's shoes. [0] https://en.wikipedia.org/wiki/Solidarity https://en.wikipedia.org/wiki/Solidarity

aww_dang 6y ago

Meanwhile gov banks have been keeping foreclosed housing off-market for over a decade to prop up the price.

felipemnoa 6y ago
Way too lazy to verify this myself. Any links?
- Rury 6y ago
  Apparently, there are a couple of mega wealthy properties ($2M-$20M) near me made over 20 years ago that have never had anyone live in them ever, as supposedly banks financed them for foreign businessmen but were never repaid the mortgages when said businessmen fled the country along with their debt obligations. At least this is the story I was given, after buying a car from a caretaker of two of such properties - one of which I was very familiar with, as it had a prominent observatory built in its roof... But that story checks out, as when the market crashed ~2008, the FED bailed underwater mortgage assets (such as these supposedly) off banks hands to avoid bank runs via QE. You can see that mortgage-backed securities still comprise a significant portion of the FED's balance sheet: https://www.federalreserve.gov/releases/h41/current/h41.htm https://www.federalreserve.gov/releases/h41/current/h41.htm https://www.federalreserve.gov/monetarypolicy/bst_fedsbalancesheet.htm https://www.federalreserve.gov/monetarypolicy/bst_fedsbalanc...

noad 6y ago

Corporations are really leading the way here. If they can't preserve enough cash to last a month and plan to strike as their opening negotiating tactic then people should too. Why not?

nerfhammer 6y ago

> using security deposits as a stopgap wait, is that even legal? Aren't security deposits meant to be held in trust?

dbcurtis 6y ago

Let's follow the money. Tenant fails to pay rent because of economic hardship. Building owner get in a cash squeeze and can't pay vendors like plumber, snow clearing, landscaping, and eventually can't make loan payments. Mortgage holders see a rise in troubled loans, eventually writing a large number of them off for large losses. REITs take losses on investments they must write off. Your own retirement plan or personal investment portfolio takes a hit because some portion of it is REITs. Everything is interconnected. I see a lot of simplistic "landlords must suck it up" comments in this thread. Really, who is so naive as to think that the typical commercial property is not leveraged?

drawkbox 6y ago
> I see a lot of simplistic "landlords must suck it up" comments in this thread. Your answer is for the rent payer, with no economy, to "suck it up". If the top felt the pain of recessions more than the bottom, you can bet there would be less recessions where massive wealth value extraction happens. You have to align the market incentives right. Make the top feel the pain, at the bank level even, and you are gonna have better ratings agencies, better leverage ratios, and less pump and dump bubbles setup. Right now if the top always gains, even in pain, there will be more and more pain as they look for gains guaranteed. If we truly are in a trickle down system, shouldn't emergency hits to the recession start at the top, the trickle source? Money trickles up and down and all around, but money only trickles where other money is found.
- dbcurtis 6y ago
  > Your answer is for the rent payer, with no economy, to "suck it up". You miss-read me. First of all, I did not suggest any answer. I suggested that people put more thoughtfulness into their analysis. What I am saying is that there really is no one person to "suck it up". The furloughed school cafeteria worker is going to take a double hit because the public employee retirement system probably holds REITs. Scapegoating landlords is the tactic of leftest South American dictators. Landlords are middlemen, earning a return on providing housing liquidity. They take on short-term risk in the form of their tenants potential inability to pay, and long-term risk in the form of long-term loans collateralized by their properties. The system doesn't work unless someone is willing to take on that risk profile. Stop scapegoating landlords.

PakG1 6y ago

130 tenants? People at that level, I would have considered them to be corporations collecting rent, not individual landlords. Well, he probably collects everything through a corporation too, I imagine. My point is that I've never put a face to a corporate landlord before. It's always been a faceless corporation, even for corporations where the founding face is famous. Reading this was weird for me. He behaves like an individual landlord too, personally answers all the emails, doesn't have a secretary? Maybe 130 tenants is too low a number to justify hiring help. Blows my mind.

greggeter 6y ago

Let's just concentrate on convincing our Betters to let us get back to work.