8 ms·

Eviction Moratorium Poses Nightmare Scenario for Small Landlord

18 points by jelliclesfarm 6y ago

ncr100 6y ago
Terrifying confluence - will AirBnB take action? The anti-eviction law seems to be being taken advantage of.
- deleted 6y ago
  [deleted]
marcus_holmes 6y ago
Sorry, but if you're renting out a second property then you're not doing it hard. If you're highly leveraged then you knowingly took this huge risk, and something like COVID will sink you. If you're not highly leveraged then you can take a loan to survive the COVID measures. So many people got into property investing under the assumption it was safe. It's not.
- bestnameever 6y ago
  A landlord should not be prevented from evicting a tenant deceptively renting out a unit for the purpose of reselling it on AirBnB. This unit could be made available to a family who needs a place to live. Preventing it from going on to the open market also reduces supply and places upwards pressure on rents.
  - georgespencer 6y ago
    Particularly if the tenant is in arrears. The faux socialist anti-landlord outrage on HN is hilarious.
    - marcus_holmes 6y ago
      Is the purpose of housing to provide an income for a landlord, or to provide somewhere for someone to live? If it's socialist to think that houses are for living in, not for speculatin on, then yeah I'm a socialist. And so should everyone be.
      - georgespencer 6y ago
        I'm sure you don't mean to but you're simplifying this massively, in a way which makes it hard for me to think that we can have a productive conversation. I guess a starting point would be to look at the axioms in your logic -- particularly the use of the word "purpose". You're framing the two potential purposes of a house as: 1. Providing income for a landlord OR 2. Providing somewhere for people to live This is a false dichotomy. A rental property explicitly fulfils both of those purposes. An owner-occupied property likely fulfils a different version of the same purpose: 1. Providing an income for a bank, 2. Providing a place for someone to live. If you're saying that houses should provide a place for someone to live even over providing an income for landlords, that's an argument we can get into. It amounts to: the first priority with housing is the sheltering of inhabitants. If it's possible for economic utility to be derived from that process then that's fine, but whatever happens people must have a roof over their heads. That logic is also flawed, but I'd appreciate you offering a bit more context before we go further -- I'd love to be able to really clearly play your argument back to you in a way you agree with, so that I know I understand it properly. Edit: Sorry to see you being downvoted for asking honest questions and disagreeing with the status quo.
        marcus_holmes 6y ago
        Where I'm coming from is experiencing the housing market in the UK, Australia (which share a perspective on housing similar to the US) and Berlin (which does not). I have owned my own home in the UK, and rented in all three places. In the "anglo" perspective, a house is an investment. Owning your own home is something most people reasonably expect to do during their working life. Having a "property portfolio" is something that most people aspire to. Renting out a second property has been a common way of investing. In the "euro" perspective, a house (actually usually an apartment, even in rural towns) is a place to live. Most people rent all their lives. Owning your own home is seen as optional, kinda nice maybe, but not really something you need to do. Renting a property to someone else is a bureaucratic nightmare that almost no-one does (however subletting for short periods is extremely common). Most renting is done from companies who specialise in owning and renting housing (similar to commercial property companies in the anglo world). Regulation in the anglo world is stringly tilted towards the owner. Tenants can be easily evicted (compared to the bureaucratic nightmare of trying to evict a Berlin tenant). Tenants have very few rights over the property (getting refused permission to do even minor things like put up picture hooks is common). Subletting is usually not allowed. Rent inspections are commonly every 3-6 months. Rent is not controlled, and landlords can charge whatever the market will bear. Tenancies are usually a year at most, and being evicted so the landlord can sell the property is a common experience. In contrast, Berlin prioritises the tenant. Tenants can, for instance, repaint the property, make cosmetic adjustments (even knocking down and moving interior walls without permission). Kitchens are usually owned by the tenant not the landlord, and installed by the tenant. Subletting is common. There are no inspections. Rent is heavily controlled, price changes are limited and have to be justified. Tenancies usually go on for many years, sometimes decades, without interruption. If the property is sold the new owner must respect the existing tenancy agreements. So, yes. This is a dichotomy. A house is either an investment, that incidentally someone lives in, with no rights and no ability to control their tenancy. Or it's a place for someone to live, providing a secure home for the tenant and a controlled, extremely regulated, income for the owner. That's where I'm coming from. I hope you understand my perspective better now :)
  - marcus_holmes 6y ago
    This is a tiny, tiny problem. If this is used as a reason to allow evictions, then that'll be the thin end of the wedge to justify more, and soon people in real need will be evicted.
    - bestnameever 6y ago
      Can you please clarify whether what you are claiming is factual or speculative?
      - marcus_holmes 6y ago
        I would say that the "this is a tiny problem" is factual, and "it'll be used as a wedge to justify evicting ordinary tenants in arrears" is speculative.
- neilv 6y ago
  This "something like COVID"... I don't blame, for example, the many retirees with an investment rental, for not predicting a global pandemic followed by an eviction moratorium. In the spirit of societal safety nets, it seems time for the US to step in with more assistance to people with housing rents and mortgages, to keep everyone afloat. Similarly, when rental owners are small-time private parties who can't afford the loss of income -- and their only mistake was faith in the value of American real estate and government, and in their own ability to find good tenants -- I have no problem with them being assisted. (If it matters, my perspective is of an apartment renter in a high cost of living area, who is fortunate to be employed and able to pay rent, despite the pandemic. I sympathize with those in trickier situations right now, and hope they'll get the help they need.)
  - pfisch 6y ago
    I mostly agree, but this fantasy/system where housing prices will just continue to increase infinitely while wages stagnate is ludicrous. People shouldn't have bottomless faith in American real estate going up in price forever. This entire idea that people should buy a house and have that be their nest egg is awful, and the consequences of it are playing out in every city in the country as a slow motion tragedy of mass homelessness.
    - bestnameever 6y ago
      I remember a housing slump growing up and I wonder whether those will happen again or whether the circumstances that allowed those slumps to happen in major metros just don't exist anymore.
    - tluyben2 6y ago
      >buy a house You mean buy multiple houses? Because, at least here, that is the problem. People having 1 house to live in and grow old in is a not a bad idea imho; the idea that you need to sell that for a lot of profit and then 'go into real estate' is an issue. Britons are mostly spoonfed on that idea so they (the ones I know, obviously but also what I see on tv) sell their first property (mostly in London) for a killing and then start buying up multiple properties; few in the country side (usually do-er uppers), few in france, few in Spain, Greece etc. If you sell your house for instance in London and you make (because people do this when want to retire / paid off the mortgage) Gbp600k (the average price of a house in London) you can buy 3-8 houses were I live (and they do). Those become airbnbs or (illegal) rentals (b&bs) and ruin the neigborhoods + drive up house prices as people tend to bring their friends. This place is a ghost town in the winter and, with Covid, it is now too in the summer as no-one lives here; it's all rentals. That and the idea that this is an 'easy gold mine' even though they have to work like maniacs to sustain these properties, make sure everything works, receive the guests etc which is just really hard (for most people, but esp people over 60) and can fall over any day even without covid, but it very much does with covid. Many are panic selling etc which now hopefully will give some locals a house for the (until now) live-in kids, but probably speculators will just come and buy them.
- voisin 6y ago
  > So many people got into property investing under the assumption it was safe. It's not. Amen! It seems in recent years everyone was buying a condo “investment” and bragging how they would cash flow and the asset would appreciate without any recognition as to the illiquidity and risks. Serves them right IMHO.
throwaway2245 6y ago
“It’s not somebody who is impacted by COVID, but somebody who is taking advantage of the situation” Taking advantage here is an interesting choice. It seems to mean: Reducing your profits that you usually get as a landlord taking advantage of the situation.
- bestnameever 6y ago
  Did you read the article? The tenant was leasing the unit for the purpose of reselling the unit on AirBnB which was against the terms of the lease, and also used the pandemic to seek lower rent which the landlord sympathetically gave prior to them becoming aware that they were being deceived by the tenant. I would say that being dismissive of the tenant taking advantage of the landlord in this situation is also an interesting choice.
georgespencer 6y ago
Landlords are often portrayed as mutton-gobbling land barons both in the media and the comment section on Hacker News. I know a little bit about both UK and US rental markets and have a slightly different perspective. The common threads are that any economic harm which befalls a landlord is something they should have been prepared for, and that they're better off than most people because they have a second property.[1] The frequent corollary of this is that tenants are justified in taking advantage of landlords wherever possible, because the system is somehow unfair on them.[2] In part this is because rental units are an asset class leveraged by both sophisticated and unsophisticated investors. Multi-family home operators with huge balance sheets and economic resilience are one part of the equation, but a lot of rental stock is in the hands of folks like us. Which is to say: they're consumers. They certainly understand risk and cashflow through the simplistic lens of voids and arrears, but what we're seeing here is analogous to the suspension of trading on a stock market, or a massive breach of MMMR in calling a short. It's not a simple case of "you may lose a little profit", it's "the rules of the game have been changed in a way nobody could have predicted." If you don't believe tenants ought to have seen this coming, then there's really no reason to believe landlords should have, either. It's forgivable that policymakers have screwed this up, but it should be simple to correct: banks have sufficient liquidity (and the hope of a bailout if they don't) to withstand the immediate shock. Therefore renters who can demonstrate that they are affected by coronavirus should receive clemency from their landlords, who should receive clemency from their lender, who should receive clemency from the government if required. (There is an uncomfortable reality that keeping folks in unproductive jobs is not all that useful, so furlough schemes and other economic relief for those impacted by coronavirus must end in order to force the affected portion of the workforce into productivity, but that's another conversation for another time.) The ire directed at landlords also often supposes that they are responsible for high rents, and usually this is based on the premise that if they sold their non-owner occupied properties, the excess liquidity would reduce house prices and enable more people to move from renting to home ownership. I have never seen a single study which supports the view that landlords do anything other than provide a necessary service at a price the market bears. Responsibility rests with local authorities and the federal government to create affordable homes and combat the fact that, for example, the United Kingdom has set targets for the creation of new houses for more than 40 years, and has failed to hit them each year for the last 40. They acknowledge the solution to the problem (introducing affordable homes into the market, rather than forcing landlords to sell - a carrot, not a stick which benefits some consumers and hurts others), but do not deliver. I'll nope out of this thread if someone mentions rent controls. [1] https://news.ycombinator.com/item?id=24079791 https://news.ycombinator.com/item?id=24079791 [2] https://news.ycombinator.com/user?id=throwaway2245 https://news.ycombinator.com/user?id=throwaway2245
twelve40 6y ago
Just like delaying salaries is forcing your employees to provide free credit to your business, a moratorium is: forcing a group of people to finance another group of people out of nowhere, out of contract, on a whim. There could be other solutions, like rearranging taxes etc, but the most convenient is just to fuck the small landlords with an emergency decree because they have nowhere to go and can't do anything about this.
- vanusa 6y ago
  Yes there are side effects (and we should do something to ameliorate these side effects) -- but it's done with a broader purpose in mind: to avoid a humanitarian catastrophe -- which, even if you don't particular care about the people directly affected -- has the further effect of prolonging the pandemic. Or in other words: to prevent the boat from tipping over completely. So while there are side effects -- it's not like you can say it's being done "on a whim"
vanusa 6y ago
But not nearly as much of a "nightmare" as being forced to live on the streets (or worse, in a homeless shelter) -- with kids in tow.

18 points by jelliclesfarm 6y ago

ncr100 6y ago

Terrifying confluence - will AirBnB take action? The anti-eviction law seems to be being taken advantage of.

deleted 6y ago
[deleted]

marcus_holmes 6y ago

Sorry, but if you're renting out a second property then you're not doing it hard. If you're highly leveraged then you knowingly took this huge risk, and something like COVID will sink you. If you're not highly leveraged then you can take a loan to survive the COVID measures. So many people got into property investing under the assumption it was safe. It's not.

bestnameever 6y ago
A landlord should not be prevented from evicting a tenant deceptively renting out a unit for the purpose of reselling it on AirBnB. This unit could be made available to a family who needs a place to live. Preventing it from going on to the open market also reduces supply and places upwards pressure on rents.
- georgespencer 6y ago
  Particularly if the tenant is in arrears. The faux socialist anti-landlord outrage on HN is hilarious.
  - marcus_holmes 6y ago
    Is the purpose of housing to provide an income for a landlord, or to provide somewhere for someone to live? If it's socialist to think that houses are for living in, not for speculatin on, then yeah I'm a socialist. And so should everyone be.
    - georgespencer 6y ago
      I'm sure you don't mean to but you're simplifying this massively, in a way which makes it hard for me to think that we can have a productive conversation. I guess a starting point would be to look at the axioms in your logic -- particularly the use of the word "purpose". You're framing the two potential purposes of a house as: 1. Providing income for a landlord OR 2. Providing somewhere for people to live This is a false dichotomy. A rental property explicitly fulfils both of those purposes. An owner-occupied property likely fulfils a different version of the same purpose: 1. Providing an income for a bank, 2. Providing a place for someone to live. If you're saying that houses should provide a place for someone to live even over providing an income for landlords, that's an argument we can get into. It amounts to: the first priority with housing is the sheltering of inhabitants. If it's possible for economic utility to be derived from that process then that's fine, but whatever happens people must have a roof over their heads. That logic is also flawed, but I'd appreciate you offering a bit more context before we go further -- I'd love to be able to really clearly play your argument back to you in a way you agree with, so that I know I understand it properly. Edit: Sorry to see you being downvoted for asking honest questions and disagreeing with the status quo.
      - marcus_holmes 6y ago
        Where I'm coming from is experiencing the housing market in the UK, Australia (which share a perspective on housing similar to the US) and Berlin (which does not). I have owned my own home in the UK, and rented in all three places. In the "anglo" perspective, a house is an investment. Owning your own home is something most people reasonably expect to do during their working life. Having a "property portfolio" is something that most people aspire to. Renting out a second property has been a common way of investing. In the "euro" perspective, a house (actually usually an apartment, even in rural towns) is a place to live. Most people rent all their lives. Owning your own home is seen as optional, kinda nice maybe, but not really something you need to do. Renting a property to someone else is a bureaucratic nightmare that almost no-one does (however subletting for short periods is extremely common). Most renting is done from companies who specialise in owning and renting housing (similar to commercial property companies in the anglo world). Regulation in the anglo world is stringly tilted towards the owner. Tenants can be easily evicted (compared to the bureaucratic nightmare of trying to evict a Berlin tenant). Tenants have very few rights over the property (getting refused permission to do even minor things like put up picture hooks is common). Subletting is usually not allowed. Rent inspections are commonly every 3-6 months. Rent is not controlled, and landlords can charge whatever the market will bear. Tenancies are usually a year at most, and being evicted so the landlord can sell the property is a common experience. In contrast, Berlin prioritises the tenant. Tenants can, for instance, repaint the property, make cosmetic adjustments (even knocking down and moving interior walls without permission). Kitchens are usually owned by the tenant not the landlord, and installed by the tenant. Subletting is common. There are no inspections. Rent is heavily controlled, price changes are limited and have to be justified. Tenancies usually go on for many years, sometimes decades, without interruption. If the property is sold the new owner must respect the existing tenancy agreements. So, yes. This is a dichotomy. A house is either an investment, that incidentally someone lives in, with no rights and no ability to control their tenancy. Or it's a place for someone to live, providing a secure home for the tenant and a controlled, extremely regulated, income for the owner. That's where I'm coming from. I hope you understand my perspective better now :)
- marcus_holmes 6y ago
  This is a tiny, tiny problem. If this is used as a reason to allow evictions, then that'll be the thin end of the wedge to justify more, and soon people in real need will be evicted.
  - bestnameever 6y ago
    Can you please clarify whether what you are claiming is factual or speculative?
    - marcus_holmes 6y ago
      I would say that the "this is a tiny problem" is factual, and "it'll be used as a wedge to justify evicting ordinary tenants in arrears" is speculative.
neilv 6y ago
This "something like COVID"... I don't blame, for example, the many retirees with an investment rental, for not predicting a global pandemic followed by an eviction moratorium. In the spirit of societal safety nets, it seems time for the US to step in with more assistance to people with housing rents and mortgages, to keep everyone afloat. Similarly, when rental owners are small-time private parties who can't afford the loss of income -- and their only mistake was faith in the value of American real estate and government, and in their own ability to find good tenants -- I have no problem with them being assisted. (If it matters, my perspective is of an apartment renter in a high cost of living area, who is fortunate to be employed and able to pay rent, despite the pandemic. I sympathize with those in trickier situations right now, and hope they'll get the help they need.)
- pfisch 6y ago
  I mostly agree, but this fantasy/system where housing prices will just continue to increase infinitely while wages stagnate is ludicrous. People shouldn't have bottomless faith in American real estate going up in price forever. This entire idea that people should buy a house and have that be their nest egg is awful, and the consequences of it are playing out in every city in the country as a slow motion tragedy of mass homelessness.
  - bestnameever 6y ago
    I remember a housing slump growing up and I wonder whether those will happen again or whether the circumstances that allowed those slumps to happen in major metros just don't exist anymore.
  - tluyben2 6y ago
    >buy a house You mean buy multiple houses? Because, at least here, that is the problem. People having 1 house to live in and grow old in is a not a bad idea imho; the idea that you need to sell that for a lot of profit and then 'go into real estate' is an issue. Britons are mostly spoonfed on that idea so they (the ones I know, obviously but also what I see on tv) sell their first property (mostly in London) for a killing and then start buying up multiple properties; few in the country side (usually do-er uppers), few in france, few in Spain, Greece etc. If you sell your house for instance in London and you make (because people do this when want to retire / paid off the mortgage) Gbp600k (the average price of a house in London) you can buy 3-8 houses were I live (and they do). Those become airbnbs or (illegal) rentals (b&bs) and ruin the neigborhoods + drive up house prices as people tend to bring their friends. This place is a ghost town in the winter and, with Covid, it is now too in the summer as no-one lives here; it's all rentals. That and the idea that this is an 'easy gold mine' even though they have to work like maniacs to sustain these properties, make sure everything works, receive the guests etc which is just really hard (for most people, but esp people over 60) and can fall over any day even without covid, but it very much does with covid. Many are panic selling etc which now hopefully will give some locals a house for the (until now) live-in kids, but probably speculators will just come and buy them.
voisin 6y ago
> So many people got into property investing under the assumption it was safe. It's not. Amen! It seems in recent years everyone was buying a condo “investment” and bragging how they would cash flow and the asset would appreciate without any recognition as to the illiquidity and risks. Serves them right IMHO.

throwaway2245 6y ago

“It’s not somebody who is impacted by COVID, but somebody who is taking advantage of the situation” Taking advantage here is an interesting choice. It seems to mean: Reducing your profits that you usually get as a landlord taking advantage of the situation.

bestnameever 6y ago
Did you read the article? The tenant was leasing the unit for the purpose of reselling the unit on AirBnB which was against the terms of the lease, and also used the pandemic to seek lower rent which the landlord sympathetically gave prior to them becoming aware that they were being deceived by the tenant. I would say that being dismissive of the tenant taking advantage of the landlord in this situation is also an interesting choice.

georgespencer 6y ago

Landlords are often portrayed as mutton-gobbling land barons both in the media and the comment section on Hacker News. I know a little bit about both UK and US rental markets and have a slightly different perspective. The common threads are that any economic harm which befalls a landlord is something they should have been prepared for, and that they're better off than most people because they have a second property.[1] The frequent corollary of this is that tenants are justified in taking advantage of landlords wherever possible, because the system is somehow unfair on them.[2] In part this is because rental units are an asset class leveraged by both sophisticated and unsophisticated investors. Multi-family home operators with huge balance sheets and economic resilience are one part of the equation, but a lot of rental stock is in the hands of folks like us. Which is to say: they're consumers. They certainly understand risk and cashflow through the simplistic lens of voids and arrears, but what we're seeing here is analogous to the suspension of trading on a stock market, or a massive breach of MMMR in calling a short. It's not a simple case of "you may lose a little profit", it's "the rules of the game have been changed in a way nobody could have predicted." If you don't believe tenants ought to have seen this coming, then there's really no reason to believe landlords should have, either. It's forgivable that policymakers have screwed this up, but it should be simple to correct: banks have sufficient liquidity (and the hope of a bailout if they don't) to withstand the immediate shock. Therefore renters who can demonstrate that they are affected by coronavirus should receive clemency from their landlords, who should receive clemency from their lender, who should receive clemency from the government if required. (There is an uncomfortable reality that keeping folks in unproductive jobs is not all that useful, so furlough schemes and other economic relief for those impacted by coronavirus must end in order to force the affected portion of the workforce into productivity, but that's another conversation for another time.) The ire directed at landlords also often supposes that they are responsible for high rents, and usually this is based on the premise that if they sold their non-owner occupied properties, the excess liquidity would reduce house prices and enable more people to move from renting to home ownership. I have never seen a single study which supports the view that landlords do anything other than provide a necessary service at a price the market bears. Responsibility rests with local authorities and the federal government to create affordable homes and combat the fact that, for example, the United Kingdom has set targets for the creation of new houses for more than 40 years, and has failed to hit them each year for the last 40. They acknowledge the solution to the problem (introducing affordable homes into the market, rather than forcing landlords to sell - a carrot, not a stick which benefits some consumers and hurts others), but do not deliver. I'll nope out of this thread if someone mentions rent controls. [1] https://news.ycombinator.com/item?id=24079791 https://news.ycombinator.com/item?id=24079791 [2] https://news.ycombinator.com/user?id=throwaway2245 https://news.ycombinator.com/user?id=throwaway2245

twelve40 6y ago

Just like delaying salaries is forcing your employees to provide free credit to your business, a moratorium is: forcing a group of people to finance another group of people out of nowhere, out of contract, on a whim. There could be other solutions, like rearranging taxes etc, but the most convenient is just to fuck the small landlords with an emergency decree because they have nowhere to go and can't do anything about this.

vanusa 6y ago
Yes there are side effects (and we should do something to ameliorate these side effects) -- but it's done with a broader purpose in mind: to avoid a humanitarian catastrophe -- which, even if you don't particular care about the people directly affected -- has the further effect of prolonging the pandemic. Or in other words: to prevent the boat from tipping over completely. So while there are side effects -- it's not like you can say it's being done "on a whim"

vanusa 6y ago

But not nearly as much of a "nightmare" as being forced to live on the streets (or worse, in a homeless shelter) -- with kids in tow.