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> If the landlords didn't want to deal with loans then they should have paid cash for the properties. If the tenants didn't want to pay rent, they should not h

> If the landlords didn't want to deal with loans then they should have paid cash for the properties. If the tenants didn't want to pay rent, they should not have signed leases. Why is it that tenants can get a break on their obligations but landlords can't? Why are tenants more deserving of help? Most landlords are not rich. They are providing a service to their tenants, who cannot afford to purchase buildings and would have no hope of opening a business if there were not landlords around willing to rent things out.

nradov 6y ago
Owning real estate is an investment, not a right. It's no different than any other investment. If I have a loss on leveraged stock investments should the government bail me out?
- twblalock 6y ago
  We are not talking about investment losses here. We are talking about breach of contract. A renter signs a contract promising to pay rent. The value of the building, whether it drops or increases, is the investment component of being a landlord. That is not in dispute here. If a building drops in value the landlord just has to deal with it. But until now, if someone promised to pay rent and did not do it, a landlord could sue them, or evict them, because the landlord would be the victim of a breach of contract that has nothing to do with investment value. What is in dispute here is that people who promised to pay rent are being allowed to stop paying, but landlords who promised to pay their mortgages are not allowed to stop paying. That's not fair. It's not good for the economy either, because most businesses can't afford to buy property and need to rent from landlords, and we are now making it very unattractive to be a landlord.
  - t-writescode 6y ago
    > but landlords who promised to pay their mortgages are not allowed to stop paying. Why not provide them an extension during this time, as well?
    - twblalock 6y ago
      We should! But for some reason, a lot of people think we shouldn't.
      - imtringued 6y ago
        Because the next step after that would be to bail out the banks. You can't solve this problem without conjuring money via government debt.
  - jakelazaroff 6y ago
    I disagree with your conclusion. If landlords think owning land is too risky, they’ll sell their properties, supply will increase, prices will drop and new buyers will come in to take advantage of the low prices before the market inevitably recovers. Owning land is lucrative in NYC and that’s unlikely to change anytime soon.
sudosysgen 6y ago
Because landlording is an investment, having shelter is a necessity. The landlords should carry the risk of tenants failing to pay. If we stopped relief to everyone, tenants would stop paying, rents would crater, and landlord would be ruined much moreso than tenants, it's just the nature of investment.
- twblalock 6y ago
  The investment component of being a landlord is the value of the property. The ability to enforce contracts, e.g. that when a tenant promises to pay they must pay, it not part of the investment component of being a landlord. That is not an investment, but rather a contract between two parties. Rent is revenue. Investment is based on the value of the underlying asset. They are not the same thing. Our society has always assumed that the investment has a risk element but the rent is ensured by law and there are remedies if it is not paid -- remedies which are now being suspended for tenants paying landlords, but not for landlords paying their mortgages.
  - jacobkania 6y ago
    You keep saying this, but is the value of the property not what someone is willing to pay for it? If nobody can/will pay rent, the property is worthless. The risk you take on as a real estate investor isn’t just that of the property value, it’s also the risk of not having a tenant. If you have a tenant, they can’t pay, then they leave and you can’t find another renter for a year, you’ve made a bad investment even though your property value hasn’t changed.
    - twblalock 6y ago
      Risk of not having a tenant has nothing to do with the current situation. The current situation is the possibility of being stuck with a tenant who will not pay the rent and cannot be removed, indefinitely. At first these rent forgiveness measures were supposed to last a few months. Now we are nearly in the 10th month of the pandemic and these measures are being renewed. There are tenants who have not paid rent since March. Most landlords would rather have no tenants at all, than have tenants who do not pay rent for almost a year yet force their landlords to continue to provide for them by paying for maintenance, and insurance, and property tax, and the mortgages.
ABCLAW 6y ago
Over the course of a given rental, unless the property was purchased almost immediately before a real-estate crash or rental crisis, the amount of cashflow generated by a tenant will cover the majority of the volume required to generate equity in the property. In certain cases, the financing for commercial real estate, for instance, will literally substitute the credit rating of tenants for those of the landlords - because ultimately that's where the money is coming from. If a landlord is rendered insolvent, they aren't even rendered destitute; they sell or refinance the property to generate liquidity. If many landlords do the same thing, the volume of real estate on the market increases, the price of real estate drops, and the market is now on it's way to pricing in the effects of the shock which caused the crunch. The fact that we've been spewing money at asset holders for over a decade is why real-estate metrics are so out of line from historical cycles.
- twblalock 6y ago
  > The fact that we've been spewing money at asset holders for over a decade is why real-estate metrics are historically crazy. No, the reason is restrictions on building which have constrained supply.
  - ABCLAW 6y ago
    Which would make sense except there are plenty of metropolitan areas which are not physically constrained or suffering horrendous zoning issues which also have the issue. The world exists outside the particular clusterfuck that is the SF bay real estate market.
    - deleted 6y ago
      [deleted]
    - mdrabla 6y ago
      Bad bot, the subject is NYC not SF. Very different places
  - brutusborn 6y ago
    Why can't it be both?
petre 6y ago
> A renter signs a contract promising to pay rent. They should use the force majeure clause to terminate their contracts and the landlords could sue if they don't like that. A pandemic is not unlike a flood or earthquake. This is exactly why such a clause exists in contracts. My boss negotiates a lower rent during a crisis. It’s fair enough. Would the landlord prefer a smaller amount to none at all?
- twblalock 6y ago
  > They should use the force majeure clause to terminate their contracts and the landlords could sue if they don't like that. A pandemic is not unlike a flood or earthquake. This is exactly why such a clause exists in contracts. If they terminate their contracts they need to move out. That's not what is happening here. Tenants are trying to stop paying, but also stay in the property for free, indefinitely.
- TomVDB 6y ago
  > Would the landlord prefer a smaller amount to none at all? As was explained a week or so ago by somebody in that business on Reddit: for commercial real estate, many landlords would prefer none at all over a smaller amount, because the loan is written with the assumption of a certain rent per unit, and if the average rent goes down, it breaches the loan conditions and the loan is revoked (or something like that.)
Weebs 6y ago
Because landlords are trying to profit off of the conditions created by the broader local community. They make a bet on which space created by the community will allow them to extract more rent than the cost to maintain the building and pay the loan, and later sell the property for more than they paid. Tenants are either members of the community who want a home, or are trying to provide a service to the community. One group is trying to speculate on the value others will provide and get a cut, and they're able to do this because as they've ensured scarcity of affordable space. It's extraction
- twblalock 6y ago
  It's not extraction, it's a service. If there were no landlords, it would be impossible to start a business in NYC without buying a building. Most businesses would never be able to afford that. Thank goodness there are landlords who are willing to rent out their buildings!
  - Weebs 6y ago
    It's not either or, you don't have to have individual ownership for properties. A landlord can be replaced by a neighborhood cooperative that redirects the value produced from the building back into the community (schools, public service funding, etc.) Private ownership and rent contracts is only one way of many to solve the problem of granting access to space without outright purchase. Also, providing a service and extracting value from others work aren't mutually exclusive. Consider this: a foreign organization extracts natural resources, refines them, sells the new product back to the localsy (and other outside communities) for large profits that are mostly redirected outside of the native community. I would clearly call that extraction, the fact that they also provide a service to the community doesn't negate that.

nradov 6y ago

Owning real estate is an investment, not a right. It's no different than any other investment. If I have a loss on leveraged stock investments should the government bail me out?

twblalock 6y ago
We are not talking about investment losses here. We are talking about breach of contract. A renter signs a contract promising to pay rent. The value of the building, whether it drops or increases, is the investment component of being a landlord. That is not in dispute here. If a building drops in value the landlord just has to deal with it. But until now, if someone promised to pay rent and did not do it, a landlord could sue them, or evict them, because the landlord would be the victim of a breach of contract that has nothing to do with investment value. What is in dispute here is that people who promised to pay rent are being allowed to stop paying, but landlords who promised to pay their mortgages are not allowed to stop paying. That's not fair. It's not good for the economy either, because most businesses can't afford to buy property and need to rent from landlords, and we are now making it very unattractive to be a landlord.
- t-writescode 6y ago
  > but landlords who promised to pay their mortgages are not allowed to stop paying. Why not provide them an extension during this time, as well?
  - twblalock 6y ago
    We should! But for some reason, a lot of people think we shouldn't.
    - imtringued 6y ago
      Because the next step after that would be to bail out the banks. You can't solve this problem without conjuring money via government debt.
- jakelazaroff 6y ago
  I disagree with your conclusion. If landlords think owning land is too risky, they’ll sell their properties, supply will increase, prices will drop and new buyers will come in to take advantage of the low prices before the market inevitably recovers. Owning land is lucrative in NYC and that’s unlikely to change anytime soon.

sudosysgen 6y ago

Because landlording is an investment, having shelter is a necessity. The landlords should carry the risk of tenants failing to pay. If we stopped relief to everyone, tenants would stop paying, rents would crater, and landlord would be ruined much moreso than tenants, it's just the nature of investment.

twblalock 6y ago
The investment component of being a landlord is the value of the property. The ability to enforce contracts, e.g. that when a tenant promises to pay they must pay, it not part of the investment component of being a landlord. That is not an investment, but rather a contract between two parties. Rent is revenue. Investment is based on the value of the underlying asset. They are not the same thing. Our society has always assumed that the investment has a risk element but the rent is ensured by law and there are remedies if it is not paid -- remedies which are now being suspended for tenants paying landlords, but not for landlords paying their mortgages.
- jacobkania 6y ago
  You keep saying this, but is the value of the property not what someone is willing to pay for it? If nobody can/will pay rent, the property is worthless. The risk you take on as a real estate investor isn’t just that of the property value, it’s also the risk of not having a tenant. If you have a tenant, they can’t pay, then they leave and you can’t find another renter for a year, you’ve made a bad investment even though your property value hasn’t changed.
  - twblalock 6y ago
    Risk of not having a tenant has nothing to do with the current situation. The current situation is the possibility of being stuck with a tenant who will not pay the rent and cannot be removed, indefinitely. At first these rent forgiveness measures were supposed to last a few months. Now we are nearly in the 10th month of the pandemic and these measures are being renewed. There are tenants who have not paid rent since March. Most landlords would rather have no tenants at all, than have tenants who do not pay rent for almost a year yet force their landlords to continue to provide for them by paying for maintenance, and insurance, and property tax, and the mortgages.

ABCLAW 6y ago

Over the course of a given rental, unless the property was purchased almost immediately before a real-estate crash or rental crisis, the amount of cashflow generated by a tenant will cover the majority of the volume required to generate equity in the property. In certain cases, the financing for commercial real estate, for instance, will literally substitute the credit rating of tenants for those of the landlords - because ultimately that's where the money is coming from. If a landlord is rendered insolvent, they aren't even rendered destitute; they sell or refinance the property to generate liquidity. If many landlords do the same thing, the volume of real estate on the market increases, the price of real estate drops, and the market is now on it's way to pricing in the effects of the shock which caused the crunch. The fact that we've been spewing money at asset holders for over a decade is why real-estate metrics are so out of line from historical cycles.

twblalock 6y ago
> The fact that we've been spewing money at asset holders for over a decade is why real-estate metrics are historically crazy. No, the reason is restrictions on building which have constrained supply.
- ABCLAW 6y ago
  Which would make sense except there are plenty of metropolitan areas which are not physically constrained or suffering horrendous zoning issues which also have the issue. The world exists outside the particular clusterfuck that is the SF bay real estate market.
  - deleted 6y ago
    [deleted]
  - mdrabla 6y ago
    Bad bot, the subject is NYC not SF. Very different places
- brutusborn 6y ago
  Why can't it be both?

petre 6y ago

> A renter signs a contract promising to pay rent. They should use the force majeure clause to terminate their contracts and the landlords could sue if they don't like that. A pandemic is not unlike a flood or earthquake. This is exactly why such a clause exists in contracts. My boss negotiates a lower rent during a crisis. It’s fair enough. Would the landlord prefer a smaller amount to none at all?

twblalock 6y ago
> They should use the force majeure clause to terminate their contracts and the landlords could sue if they don't like that. A pandemic is not unlike a flood or earthquake. This is exactly why such a clause exists in contracts. If they terminate their contracts they need to move out. That's not what is happening here. Tenants are trying to stop paying, but also stay in the property for free, indefinitely.
TomVDB 6y ago
> Would the landlord prefer a smaller amount to none at all? As was explained a week or so ago by somebody in that business on Reddit: for commercial real estate, many landlords would prefer none at all over a smaller amount, because the loan is written with the assumption of a certain rent per unit, and if the average rent goes down, it breaches the loan conditions and the loan is revoked (or something like that.)

Weebs 6y ago

Because landlords are trying to profit off of the conditions created by the broader local community. They make a bet on which space created by the community will allow them to extract more rent than the cost to maintain the building and pay the loan, and later sell the property for more than they paid. Tenants are either members of the community who want a home, or are trying to provide a service to the community. One group is trying to speculate on the value others will provide and get a cut, and they're able to do this because as they've ensured scarcity of affordable space. It's extraction

twblalock 6y ago
It's not extraction, it's a service. If there were no landlords, it would be impossible to start a business in NYC without buying a building. Most businesses would never be able to afford that. Thank goodness there are landlords who are willing to rent out their buildings!
- Weebs 6y ago
  It's not either or, you don't have to have individual ownership for properties. A landlord can be replaced by a neighborhood cooperative that redirects the value produced from the building back into the community (schools, public service funding, etc.) Private ownership and rent contracts is only one way of many to solve the problem of granting access to space without outright purchase. Also, providing a service and extracting value from others work aren't mutually exclusive. Consider this: a foreign organization extracts natural resources, refines them, sells the new product back to the localsy (and other outside communities) for large profits that are mostly redirected outside of the native community. I would clearly call that extraction, the fact that they also provide a service to the community doesn't negate that.