5 ms·

Its not all mortgages though. What do you tell the property owner who paid off mortgage, and uses the rent as primary income? Should the govt pay these people

Its not all mortgages though. What do you tell the property owner who paid off mortgage, and uses the rent as primary income? Should the govt pay these people? I suppose they could get the banks to loan the money interest free...

Daishiman 6y ago
They're not gonna be getting rent if businesses close anyway so telling to them to get stuffed because rentier capitalists are lower in the hierarchy of business to preserve doesn't sound like a bad idea to me.
naringas 6y ago
maybe people shouldn't be able to make a living out awating rent? this is pure 'rent-seeking', I understand the appeal tho... wouldn't it be nice if I didn't have to do anything at all for a living but wait for my tenants to pay up?
- betterunix2 6y ago
  "maybe people shouldn't be able to make a living out awating rent?" It's not exactly free money -- landlords do have to deal with the maintenance of the property, fixing/replacing broken appliances, and so forth. Before a landlord goes bankrupt they will cut back on maintenance that is not absolutely essential (something I lived through in my younger years, seeing benches fall apart, trash not being removed, and weeds taking over the front and back yards of the building), and eventually would not be able to pay for maintenance that actually is essential (good luck getting your plumbing fixed when your landlord cannot pay the plumber). There is also the matter of cascading bankruptcies when large numbers of landlords are not being paid, resulting in their loans no longer paying (likely dinging retirement accounts and pension funds). The fact is that a major shake-up in how we organize housing e.g. getting rid of rent-seeking landlords would be difficult in normal times. Doing such a thing during a deepening economic crisis would make everything worse for everyone, including people not directly involved.
  - tdeck 6y ago
    Sure, but are they doing $1k+ worth of maintenance work a month per unit? Certainly not. Many landlords probably spend more time sending out bills than they do on maintaining the property.
    - betterunix2 6y ago
      I doubt many landlords are making $1k+ in profits each month. Most of the rent is paying for the mortgage, property taxes, and other fees (all of which you would have to pay if you owned your own home). A landlord also needs to set aside money to cover costs on properties that are vacant (and even a landlord who only rents a single property will still face occasional vacancy in the best of times) or whose tenants are not paying rent. Then there are all the other things, like maintenance, insurance, and so forth. Whatever is left over after all that is the landlord's profit.
    - zeveb 6y ago
      > Sure, but are they doing $1k+ worth of maintenance work a month per unit? There ain't no such thing as a free lunch. In a market with units for sale and for rent, prices tend to reach an equilibrium. The only difference is that rent includes a premium for the relative ease with which one can move. Another way of looking at it is that traditionally it was considered reasonable for annual rent to be 1/20th of the purchase price of a property. Likewise, 5% annual maintenance was considered reasonable. Unsurprisingly … 1/20th == 5%. > Many landlords probably spend more time sending out bills than they do on maintaining the property. That was certainly not my experience when renting. My most recent apartment had multiple full-time employees maintaining it and had an annual improvements budget. I won't claim that it had all the amenities I would have liked, but the landlord was definitely not just letting the cash roll in.
- coredog64 6y ago
  “Rent-seeking” does not mean “collects rent”. It’s a specific term that describes someone who inserts themselves into economic transactions without providing value. The classic example is someone who puts a chain across a path and then charges to move the chain out of the way. WRT landlords, you can still describe some of their behavior as “rent-seeking” if they are perpetuating a social or political environment where they get greater returns for doing nothing (e.g. NIMBY/BANANA)
- refurb 6y ago
  No, collecting rent is not “rent seeking”. Rent seeking is collecting “rents” (which is different than rent for a home) from either a public good (like land) or through lobbying for legal changes that prevent competition and increase earnings. A house built on a piece of land is an improvement and doesn’t fall under “rent seeking”. You could make the argument that the land the house is on is rent seeking, sure, but that would mean only a part of the income would be considered rent seeking.
  - 1-more 6y ago
    Once the property is paid off everything over property tax and maintenance is rent seeking though, right?
    - refurb 6y ago
      I would say no, as the owner is still profiting based on the value offered (the home for rent). I wouldn't think that whether it's financed or not would change that. So the rent seeking would remain constant. If the home+land is value at $500k, but the land is worth $200k, then 40% of the income could be regarded as "rent seeking".
      - 1-more 6y ago
        But really they're profiting off of their ability to control access to that property with the backing of the state.
- raducu 6y ago
  Obviously, someone has to hold the bag, but who? You cannot just expect everybody to receive their guaranteed returns on investment as if nothing happened. But who and how much -- that is a very tough decision.
- Nasrudith 6y ago
  The result would be an even greater lack of housing supply and vastly worse quality (including disaster safety and hygene), as without renting only immediate capital is available for assets which currently take decades to generate funding to build. Going with trailers as middle class residencies would also be more wasteful as they are built to last and outright depricate in value to "have to pay to get rid of even with salvage rights" levels. The whole point of money is that it is fungible so it would just go elsewhere. Not a very good outcome. Imperative "shoulds" don't mean a thing in emergent systems and problem solving. Parents should love and nurture their children but we still have child abuse unfortunately.
Ericson2314 6y ago
They can live off unemployment like everyone else. And guess what, mortgage payments were already suspended in NY. Yup, they fucked over renters just like that.
headsupernova 6y ago
"get a job, landlord" or "apply for unemployment" but really there should be some minimum UBI so that nobody starves or lives on the streets.
tomp 6y ago
What's the alternative? Evict the tenant, no rent money, it's not like you're getting another tenant until the economy recovers...
- betterunix2 6y ago
  There are still plenty of employed people, and a landlord would rather offer a big discount to someone who can pay rent than continue to deal with a tenant who is unable to do so.
  - loktarogar 6y ago
    It takes time to get a new restaurant off the ground. It's not an overnight fix.
  - josephcsible 6y ago
    > a landlord would rather offer a big discount to someone who can pay rent than continue to deal with a tenant who is unable to do so No they wouldn't, because of rent control. Once they accept a lower rent, they're stuck with it for the long haul. In most cases, rent control makes you significantly better off going without rent for long periods of time than lowering rent.

Daishiman 6y ago

They're not gonna be getting rent if businesses close anyway so telling to them to get stuffed because rentier capitalists are lower in the hierarchy of business to preserve doesn't sound like a bad idea to me.

naringas 6y ago

maybe people shouldn't be able to make a living out awating rent? this is pure 'rent-seeking', I understand the appeal tho... wouldn't it be nice if I didn't have to do anything at all for a living but wait for my tenants to pay up?

betterunix2 6y ago
"maybe people shouldn't be able to make a living out awating rent?" It's not exactly free money -- landlords do have to deal with the maintenance of the property, fixing/replacing broken appliances, and so forth. Before a landlord goes bankrupt they will cut back on maintenance that is not absolutely essential (something I lived through in my younger years, seeing benches fall apart, trash not being removed, and weeds taking over the front and back yards of the building), and eventually would not be able to pay for maintenance that actually is essential (good luck getting your plumbing fixed when your landlord cannot pay the plumber). There is also the matter of cascading bankruptcies when large numbers of landlords are not being paid, resulting in their loans no longer paying (likely dinging retirement accounts and pension funds). The fact is that a major shake-up in how we organize housing e.g. getting rid of rent-seeking landlords would be difficult in normal times. Doing such a thing during a deepening economic crisis would make everything worse for everyone, including people not directly involved.
- tdeck 6y ago
  Sure, but are they doing $1k+ worth of maintenance work a month per unit? Certainly not. Many landlords probably spend more time sending out bills than they do on maintaining the property.
  - betterunix2 6y ago
    I doubt many landlords are making $1k+ in profits each month. Most of the rent is paying for the mortgage, property taxes, and other fees (all of which you would have to pay if you owned your own home). A landlord also needs to set aside money to cover costs on properties that are vacant (and even a landlord who only rents a single property will still face occasional vacancy in the best of times) or whose tenants are not paying rent. Then there are all the other things, like maintenance, insurance, and so forth. Whatever is left over after all that is the landlord's profit.
  - zeveb 6y ago
    > Sure, but are they doing $1k+ worth of maintenance work a month per unit? There ain't no such thing as a free lunch. In a market with units for sale and for rent, prices tend to reach an equilibrium. The only difference is that rent includes a premium for the relative ease with which one can move. Another way of looking at it is that traditionally it was considered reasonable for annual rent to be 1/20th of the purchase price of a property. Likewise, 5% annual maintenance was considered reasonable. Unsurprisingly … 1/20th == 5%. > Many landlords probably spend more time sending out bills than they do on maintaining the property. That was certainly not my experience when renting. My most recent apartment had multiple full-time employees maintaining it and had an annual improvements budget. I won't claim that it had all the amenities I would have liked, but the landlord was definitely not just letting the cash roll in.
coredog64 6y ago
“Rent-seeking” does not mean “collects rent”. It’s a specific term that describes someone who inserts themselves into economic transactions without providing value. The classic example is someone who puts a chain across a path and then charges to move the chain out of the way. WRT landlords, you can still describe some of their behavior as “rent-seeking” if they are perpetuating a social or political environment where they get greater returns for doing nothing (e.g. NIMBY/BANANA)
refurb 6y ago
No, collecting rent is not “rent seeking”. Rent seeking is collecting “rents” (which is different than rent for a home) from either a public good (like land) or through lobbying for legal changes that prevent competition and increase earnings. A house built on a piece of land is an improvement and doesn’t fall under “rent seeking”. You could make the argument that the land the house is on is rent seeking, sure, but that would mean only a part of the income would be considered rent seeking.
- 1-more 6y ago
  Once the property is paid off everything over property tax and maintenance is rent seeking though, right?
  - refurb 6y ago
    I would say no, as the owner is still profiting based on the value offered (the home for rent). I wouldn't think that whether it's financed or not would change that. So the rent seeking would remain constant. If the home+land is value at $500k, but the land is worth $200k, then 40% of the income could be regarded as "rent seeking".
    - 1-more 6y ago
      But really they're profiting off of their ability to control access to that property with the backing of the state.
raducu 6y ago
Obviously, someone has to hold the bag, but who? You cannot just expect everybody to receive their guaranteed returns on investment as if nothing happened. But who and how much -- that is a very tough decision.
Nasrudith 6y ago
The result would be an even greater lack of housing supply and vastly worse quality (including disaster safety and hygene), as without renting only immediate capital is available for assets which currently take decades to generate funding to build. Going with trailers as middle class residencies would also be more wasteful as they are built to last and outright depricate in value to "have to pay to get rid of even with salvage rights" levels. The whole point of money is that it is fungible so it would just go elsewhere. Not a very good outcome. Imperative "shoulds" don't mean a thing in emergent systems and problem solving. Parents should love and nurture their children but we still have child abuse unfortunately.

Ericson2314 6y ago

They can live off unemployment like everyone else. And guess what, mortgage payments were already suspended in NY. Yup, they fucked over renters just like that.

headsupernova 6y ago

"get a job, landlord" or "apply for unemployment" but really there should be some minimum UBI so that nobody starves or lives on the streets.

tomp 6y ago

What's the alternative? Evict the tenant, no rent money, it's not like you're getting another tenant until the economy recovers...

betterunix2 6y ago
There are still plenty of employed people, and a landlord would rather offer a big discount to someone who can pay rent than continue to deal with a tenant who is unable to do so.
- loktarogar 6y ago
  It takes time to get a new restaurant off the ground. It's not an overnight fix.
- josephcsible 6y ago
  > a landlord would rather offer a big discount to someone who can pay rent than continue to deal with a tenant who is unable to do so No they wouldn't, because of rent control. Once they accept a lower rent, they're stuck with it for the long haul. In most cases, rent control makes you significantly better off going without rent for long periods of time than lowering rent.