9 ms·

The Victims of the Eviction Moratorium

49 points by jseliger 6y ago

ceejayoz 6y ago
As with much of the US pandemic response, a half measure with significant consequences.
- testfoobar 6y ago
  The sad part is how politicians and organized groups are seemingly afraid to change their direction for fear of voter retribution. Comparing datasets across states and regions, it is not entirely clear to me which had the most effective policies. I would like to see an official CDC report that identifies which policies worked and which did not. I don't think we're going to see a report - because it would become an instant political hot potato. Eviction moratoriums in 2021 - a full year after the start of the crisis are nonsensical. Individual owners such in the article will eventually lose their properties to deeper pockets - further entrenching wealth disparity.
  - jedmeyers 6y ago
    > Individual owners such in the article will eventually lose their properties to deeper pockets How do we know that’s not the actual goal of those policies?
    - testfoobar 6y ago
      So much of the official government response has been to support entrenched wealth. Some examples: large stores remained open, while small stores were forced to close in many regions. Financial support was provided to large businesses via PPP funding that wasn't available to small businesses. Capital subsidies of near 0% loans were extend to the largest companies (e.g. the Fed owns Apple bonds) while smaller businesses were left to die on the vine. Connected industries like airlines continue to receive bailouts. It is all kind of sad, really.
      - jedmeyers 6y ago
        > So much of the official government response has been to support entrenched wealth. There is a word that describes this kind of merger of corporate and government power, I just don't seem to remember it.
        testfoobar 6y ago
        How do you get well meaning folks to see where it is all heading?
      - imbnwa 6y ago
        If you give people free stuff they'll get lazy, they need to learn to work hard so they can eventually pull the ladder up behind them too
  - nerdponx 6y ago
    No, the "half" aspect of the measure is the fact they didn't even try to protect small landlords. These laws were not passed by socialists, so the argument that "landlording shouldn't exist anyway" doesn't apply. It never made sense from day 1.
  - sofixa 6y ago
    > Eviction moratoriums in 2021 - a full year after the start of the crisis are nonsensica The US economy is still heavily impacted by the pandemic, and entire sectors are dead or heavily damaged ( e.g. tourism, airlines, etc.). Unemployment is at 6.3%, which is significantly more than pre-pandemic (3.5%). Not to mention all the employed with reduced income ( e.g. restaurant staff, cab drivers etc.). What do you propose should happen to all those that are still un or underemployed ? What is the bigger problem, millions of people on the streets driven to crime, or millions of property owners losing property and/or money?
testfoobar 6y ago
Sad story. It is time for eviction moratoriums to be lifted. The second peak of the pandemic is behind us in nearly all datasets in the United States.
- techsupporter 6y ago
  But is the second-wave of the economy coming roaring back so that people have jobs to go to in order to pay rent behind us in nearly all datasets in the United States? Or would those people still be thrown out onto the street with no housing? Because if there's anything we need to be doing in the United States, particularly on the West Coast, it's bringing more people to homelessness.
  - testfoobar 6y ago
    No we shouldn't increase homelessness due to job losses from the pandemic. We also shouldn't force landlords to supply free housing.
- maxerickson 6y ago
  We should look forward and choose the best policy for the situation we have at hand, not look backwards with relief that it is getting better. I don't mean that as an argument in favor of rent control or eviction moratoriums, it is an argument in favor of using the best basis for policy decisions. I'd rather see the government just hand landlords money vs throwing people who may just be getting back on their feet into disarray. There has to be some point where things go back to normal, but we are at a point where 2 months from now is basically certain to be a better time to do it than right away.
heavyset_go 6y ago
I find it hard to be sympathetic with people who chose to overleverage themselves with their investments.
- bigmattystyles 6y ago
  You could make the exact same point towards the renters who were banking on their job to pay the rent. One is called a mortgage while the other is called rent.
  - heavyset_go 6y ago
    There's a difference between working to eat, and investing. Investments have inherent risk, and if you can't bear that risk, don't overleverage yourself.
    - bigmattystyles 6y ago
      Reading the article, the owners aren't exactly rolling in it and are also depicted as mostly working class. If it wasn't for a global pandemic, most would have been fine and they would have thought to have invested very conservatively. In my mind, it's just that it's convenient/expedient to make them eat the cost of unpaid rent -
      - buescher 6y ago
        There are plenty of investments that are much more conservative than taking out a loan to buy real estate. Most of them don't even come with mortgage payments.
      - door100 6y ago
        > depicted as mostly working class. What "working class" person owns investment property in NYC? They amount of capital required to do that is so enormous that the article calling them "working class" is deeply misleading. They certainly aren't working class in the way that most NYC tenants are.
bigmattystyles 6y ago
I feel the same way about rent control. It's not fair for society at large to make property owners eat the cost or the lost potential income alone. I am aggressively pro rent control and pro eviction moratorium during the pandemic, but I am for a (progressive) tax to fund these programs. It's just unfair to make yourself feel good by supporting these programs when you don't have any skin in the game. I'm not naïve though, I know that if you raise taxes to fund these programs as a society as opposed to a property owner having to fund it alone, those programs will lose their popularity. This is a case where most people's support for these programs is literally all talk. And yes, some property owners are scum and/or large corporations and people will game the system. But then you address that with oversight with teeth.
- pasabagi 6y ago
  What is the moral basis of rent? Rent is by definition differentiated from service provision in that it is simply the use of a legal right to extract an income. I don't see a moral basis, so I don't see how anything that impacts the interests of renters can be unfair. Bad on pragmatic level, perhaps, but not a moral one.
  - pydry 6y ago
    There would be a moral basis with a 100% land value tax or a property tax that approximates it. Without it, though, rent is partially a stream of income derived from labor (upkeep, management, construction) and partially a stream of income derived from a state granted monopoly over a parcel of 4 billion year old land. The moratorium is, in part, tacit recognition of this. Everybody knows that a large slice of rental income is completely unearned - even landlords. Few would seriously believe that the sky high rental incomes derived from these is really earned, for instance - it's an entitlement: https://www.savingadvice.com/articles/2019/08/06/1067844_10-ridiculous-examples-of-san-francisco-rent-prices-in-2019.html https://www.savingadvice.com/articles/2019/08/06/1067844_10-...
    - imtringued 6y ago
      I am interested in constructing new housing and renting it out, comments like yours make me wonder why I should even bother and even if I did why would I have any reason to give an antagonistic tenant any favors if it will bite me in the ass? No, it's quite simple. Being a landlord is being a business owner. You are providing a service and in exchange you get paid enough to make construction of housing worthwhile. Except, most landlords break even and only get paid in the form of building equity. It'll take decades to pay the mortgage off. >The moratorium is, in part, tacit recognition of this. Everybody knows that a large slice of rental income is completely unearned - even landlords. >Few would seriously believe that the sky high rental incomes derived from these is really earned, for instance If nobody is paying for the house then there will be no house for you to live in. It's that simple.
daniel-thompson 6y ago
Clearly some landlords are getting hurt due to some tenants taking unethical advantage of the situation. But I think we need to wait to draw broad conclusions until this can be systematically analyzed at the macro level, rather than doing so from the one-off anecdotes in the article.
- testfoobar 6y ago
  Landlords are part of the financial system. Deciding landlords must take the loss on rent so that their tenants can be safe is sensible health and social policy during the acute uncertain phase of the pandemic last year. That uncertainty is now gone. If the government wants to house people in rental properties indefinitely, then the government can pay to do so at the prevailing market rates.
  - mjfl 6y ago
    Why should landlords take the loss on rent and not who they pay mortgage to?
    - mauvehaus 6y ago
      Sunk cost. They'll lose their equity stake in the property (as well as future income) if the bank forecloses on the property because the landlords aren't making mortgage payments. Do the banks want to be in the situation of being landlords (even temporarily) of a huge number of tenants who are not or cannot pay rent? Doubtful. Does that mean they're a little less likely to foreclose on a rental property when there are lots of small landlords in this situation? Probably. Would I want to gamble a rental property on a banks reluctance to foreclose owing to the widespread nature of the problem? Absolutely not.
      - nerdponx 6y ago
        So cancel mortgages as well as rent, for landlords with below some threshold of total property value. Too-big-to-fail banks eat some temporary losses, small landlords don't lose their shirts, and rent still gets effectively canceled.
tomg 6y ago
I don’t understand how a waiter and a home-care provider can afford to buy a rental property that is apparently worth charging $80,000/yr in rent. I’m in the wrong business! [edit: to be clear, this is tongue in cheek, though the circumstances where a bank made this loan seem unusual to me]
- watsocd 6y ago
  By being extremely frugal. Did you read the part of the article where the owner does not live in the house. The owner lives in a "cheap studio apartment nearby with their two young daughters". That is how!
  - tomg 6y ago
    > By being extremely frugal. Did you read the part of the article where the owner does not live in the house. The owner lives in a "cheap studio apartment nearby with their two young daughters". That is how! You’re referring to Gao, I’m referring to Won. Different people.
    - yellowapple 6y ago
      And the top-level was seemingly referring to Gao by referencing the $80k in back rent.
      - tomg 6y ago
        > Won says her tenant owes her more than $80,000 in back rent.
        tomg 6y ago
        Oh whoops I've been wrong this whole time, my bad!
  - sbierwagen 6y ago
    Frugal? Interesting. Let us closely examine the text. >Take Won, a Chinese immigrant landlord who asked that we only use her last name. She owns a two-family house in Queens and works as a home health aide caring for an elderly couple. Her husband is a waiter at a restaurant in Manhattan's Chinatown, though he's barely been able to work since the pandemic began. Won says her tenant owes her more than $80,000 in back rent. "I just want the government to open the court," she tells Reason. She owns a house in New York City. To put it mildly, NYC real estate is not cheap. How did she do it? Cash transaction? Is it mortgaged? Those are two very different types of ownership... but Reason makes no distinction between the two. Why? If she was on the hook for a mortgage payment, surely they would have brought it up, since it would have made her case much better. But they didn't. The tenants owe $80,000 over a year? $6,666 a month? How big is this house? When did Won buy it? How much did she pay? It would be two very different stories if Won had bought the place in 1970 for ten grand, versus a $2 million straw buy for a PRC upper party member. Reason doesn't want to tell us which, because it is an explicitly ideological publication, funded to promote a specific view of the world. I don't blame Reason for wanting to be the NYT of Libertarianism, but you do need to apply a degree of critical thinking to what they say. There is absolutely zero chance a home health aide bought a house in New York City by "being frugal" any time in the 21st century. Either she bought it many decades ago, or the money came from somewhere else.
ausbah 6y ago
unless there is data pointing to abuse like this being widespread, I think the alternative of evicting those who can't pay rent in pandemic is still a greater sin
omginternets 6y ago
It's kind of a damned if you do, damned if you don't situation, isn't it? I feel like the stimulus cheques should have been made out exclusively to people who: 1. lost a job 2. suffered a wage cut 3. suffered a significant loss of revenue Number 3 would include landlords and freelancers. I'm one of the lucky people for whom the pandemic increased savings (by decreasing spending), so I don't think it's appropriate that I received two (!) stimulus cheques. I've donated one to Wikipedia and the other to a couple of local charities, but I'm sure there's a smarter way to redistribute that money...
jackfoxy 6y ago
Let's not be too conspiratorial, but it is worth pointing out destruction of the bourgeoisie is a central tenant of the Communist Manifesto. https://www.sparknotes.com/philosophy/communist/full-text/bourgeois-and-proletarians/ https://www.sparknotes.com/philosophy/communist/full-text/bo... Also Carroll Quigley, mentor of Bill Clinton, expressed shocking disdain toward the bourgeoisie in Tragedy and Hope. https://www.amazon.com/Tragedy-Hope-History-World-Time/dp/094500110X/ref=sr_1_1 https://www.amazon.com/Tragedy-Hope-History-World-Time/dp/09... Is it much exaggeration to say the message from the far left and from the establishment to those who staked all their capital on one or two rental properties is tough sh!t?
- content_sesh 6y ago
  Investing in real estate is like investing in anything else: you're taking a risk and you can, in fact, lose money. Sounds like some of these landlords were irresponsible and didn't understand that before staking all their capital
- nerdponx 6y ago
  It's not exaggerating at all, but city councils typically aren't full of Marxists.
nerdponx 6y ago
This is all ass-backwards to me. Cancel mortgages, too. Problem solved.
door100 6y ago
Cea Weaver, who is used as a foil and whose perspective is unfairly maligned in this article, is basically 100% correct. Landlordism should not exist. Housing is a human right and should not be an investment commodity. > Emergency policies enacted in times of crisis are prone to becoming permanent, which some members of the #CancelRent movement say is the goal. This is a good thing. The COVID crisis has exacerbated the huge inequalities in housing in the US, and now is a better time than ever to fix things.
- whitepaint 6y ago
  > Landlordism should not exist. So, if I own an apartment / house / room, I can't go and have a contract with another person willing to take on that contract and live in my place by the agreed rules beforehand?
  - door100 6y ago
    I believe in a world in which housing is a public good and a human right, so that no one would have to rent from anyone else in order to have access to housing. In this world, housing would cease to be a profitable investment vehicle, and thus landlordism would no longer exist. Could I "enter in a contract" to lease "land that I own" in a national park? No, because national parks are a public good that everyone shares in their ownership and right to access. Housing should be the same way.
DC1350 6y ago
I don’t really get how this is possible. They should be able to take out a loan against the property to pay for any expenses, and just sell it at the end to pay off debts if they need to once this is over. They’re upset about lost income but not really struggling... Their net worth is just as high as a renter with a few hundred thousand in the bank. I would have a hard time feeling sorry for somebody in that position > working-class landlords lol
- josephg 6y ago
  You’re assuming they own the property outright with no mortgage, which is pretty unlikely. If they have a loan already the bank might not want to loan them more money against the property in the current market. And if they sell it, to who? It’ll be at a massive discount right now and they might not be able to cover the amount they owe to the bank.
  - yellowapple 6y ago
    > You’re assuming they own the property outright with no mortgage, which is pretty unlikely. If they own property in New York City and were able to qualify for any sort of mortgage on a working class dual-income, then it's highly unlikely that they bought that property at any point within the last 30 years, in which case - if there was a mortgage - it should be long paid-for by now.
TaylorAlexander 6y ago
This is why I really like Vienna’s housing policy. They have half a million affordable housing units which are very nice. They’ve removed the private profit motive and speculation on land value that drives up housing prices. And if they needed to put a hold on rent collection, it would be the government that suffered the loss rather than private owners. https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_011314.html https://www.huduser.gov/portal/pdredge/pdr_edge_featd_articl...
topspin 6y ago
Obviating property rights is another factor in our increasingly 'low trust' society.
mcguire 6y ago
"On September 4, 2020, the Centers for Disease Control and Prevention (CDC) issued a national eviction moratorium that is currently set to expire at the end of March." The CDC issued a moratorium? "Won says her tenant owes her more than $80,000 in back rent. ... But we did find that the father in the family is currently employed in the construction industry, and that the tenants are renting a second apartment in a house in Queens Village, where they've also stopped paying rent and owe $12,000 to the couple that owns the house, who are also Chinese immigrants." So they're renting two apartments and not paying for either? It's weird that Reason didn't manage to contact any of the renters. I wonder how much effort they put in? Or I wonder if it is a hit-piece?
npunt 6y ago
I have a friend who has lived in the same place for 20 years and has built a family there. They've never missed rent and have been excellent tenants, but nevertheless they're being pushed out and the property is being sold to developers. The developers are trying to intimidate my friend and hoping he doesn't know his rights and just leaves quietly - typical prisoner's dilemma final game betrayal that many property managers pull on people. Were it not for the eviction moratorium my friend's family would have to up-end two decades of their life during a pandemic when none of them are vaccinated and one is immunocompromised, while juggling kids and trying to find a job. I understand there are some people taking advantage of these circumstances by not paying rent, but the fact is a lot of people are in pretty dire circumstances right now without many options. Obviously this situation is also terrible for the people highlighted in this piece too and I feel for them - they worked hard and built something from nothing, and highlighting their story is important. I'm of two minds about what to feel about the broader context though, as non-residence real estate is ultimately an investment which carries risks, including unforeseen risks like pandemics. We learned quite recently in the 2008 recession that over-leveraged real estate is a systematic risk, and whether its a pandemic or a financial crisis, it's prudent that investors be able to manage a shock of at least 12 months without rent. Even absent external circumstances, a pipe could burst or another maintenance nightmare could emerge that would make an investment property uninhabitable for a long time. Its very unfortunate that the US has such an investment-oriented view of residential real estate. In times like these, that approach pits people against each other rather than brings us together to better manage the crisis. Housing insecurity is an awful thing to have to deal with, and if everything is simultaneously quantified into 'how much am I going to make/lose', the fabric of society is going to tear.
yellowapple 6y ago
I'm really struggling to find sympathy with the landlords in this situation. From multiple angles: 1. Landlords already serve no real market function. They're middlemen - literal rent-seekers that offer no real service to their tenants. And somehow I'm supposed to feel bad for them? 2. The bulk of the housing shortages throughout the US (and other developed nations, for that matter) derives directly from the treatment of real estate as an investment rather than, you know, merely space to live/work/play. People buying homes (particularly low-density ones, mind you!) as "investments" are the perpetrators of that shortage, not somehow the victims; not only do they consume an outsized portion of the housing supply, but they have a vested interest in benefiting from the effects of that constrained housing supply, and therefore will logically do everything in their power to continue to constrain it because it pushes their property values higher. 3. If real estate is to be treated as an investment, then the risks of that investment must be acknowledged. Why should I feel differently about landlords who burned their savings on rental properties than I would about people who burned their savings on, say, GameStop stocks or some cryptocurrency pump-and-dump? Like, if anything the renter demanding $12k from the landlord has a point. The very notion of land ownership externalizes opportunity costs on everyone else in a given area, specifically because land is finite / in fixed supply and therefore land ownership is definitionally zero-sum (one person's ownership of land is at the exclusion of others). Landlords are long overdue to internalize these externalized opportunity costs - specifically, through a land value tax (possibly supplemented with a flat income tax starting above some threshold; Milton Friedman was a proponent of this combined tax scheme), the proceeds of which would fund programs like UBI and single-payer healthcare to make up for those opportunity costs. I feel for these landlords only in the sense that they're newcomers to this country hoping to find opportunities to better themselves and secure their financial future, and I hope they - alongside the rest of their fellow Americans - can get some much-needed financial support. That doesn't mean they're somehow the "good guys" in this story just because they're poor immigrants. ---- And to be clear, the delinquent renters/squatters certainly ain't the "good guys" in this story, either. Refusing to pay anything for the space one inhabits - especially when one has the means to do so - also externalizes opportunity costs onto other renters (who are now excluded from that unit despite their willingness and ability to pay for it). I might disagree strongly with the morality of a landlord extracting rent, but refusing to pay rent entirely is not the way to go about fixing that. Rather, the fix is in actually correcting the circumstances that led to this situation - namely, by forcing the internalization of externalized opportunity costs, and by replacing landlords with housing cooperatives.
imtringued 6y ago
>"Those are part of the costs of being a landlord," Weaver responds. No they aren't. Landlords want to at least cover their costs. If they lose out on rental income they are forced to raise rents to compensate their loss. This will mean higher rents and a subsidy for dishonest squatters. The idea that you can make housing cheaper by making it a bad investment is hilarious. If constructing new housing is a bad investment for landlords then nobody will provide housing as a service. Everyone will have to buy their own house or condo. >"In public housing, people are paying 30 percent of their income," Weaver told Reason. "What I am envisioning is a world in which housing is owned by a collective and people are paying 30 percent of their income in order to live in their housing. If your income is zero, you pay zero. If your income is $500,000 a year, you're paying 30 percent of that." What makes her think that rich people can't afford to hide their income? It wouldn't surprise me if they could just start a company and simply keep the funds inside the company and only pay out as much as necessary. This is way too easy to game and the ROI is insane. If you earn 500k you would end up with 350k so by engaging in tax shenanigans you could increase your income by 40%. Who's insane enough to not do that? >When asked how the federal government could afford such a program, Weaver told Reason that it could "print" the money. No, the way the federal government will be able to afford such a program is by providing housing at cost. Subsidies aren't the right answer and outright printing money isn't it either. If you really wanted such a program you would spin it as a jobs program first with the additional housing as a bonus. By lowering unemployment you increase the number of people who can afford to pay rent. So it's a win win situation. The slow acting benefit of additional housing would take years to have an effect.
- heavyset_go 6y ago
  > No they aren't. Landlords want to at least cover their costs. If they lose out on rental income they are forced to raise rents to compensate their loss. Costs don't dictate prices, the market dictates prices. Nobody is going to pay $50 for a quart of milk just because it cost you that much to produce it.
sep_field 6y ago
All the land in the Bay Area was stolen from indigenous peoples as part of a pogrom of genocide. Many other areas in the United States have a similar issue. Until reparations are paid to the people who were here first, I have zero sympathy for so called "land owners".
- deleted 6y ago
  [deleted]
chub500 6y ago
Abraham buys land in Genesis: "For the full price let him give it to me in your presence as property for a burying place." Gen 23:9. Private property contract law is nothing new. My thought is how many of these landlords will end up turning to more nefarious means to make ends meet? It seems when the legal system fails people inevitably turn to vigilantism.
jacknews 6y ago
The answer is not to allow evictions, but to have a moratorium on loan payments. Why should banks expect payments to continue as if nothing happened when large parts of the economy have been forced to close?

49 points by jseliger 6y ago

ceejayoz 6y ago

As with much of the US pandemic response, a half measure with significant consequences.

testfoobar 6y ago
The sad part is how politicians and organized groups are seemingly afraid to change their direction for fear of voter retribution. Comparing datasets across states and regions, it is not entirely clear to me which had the most effective policies. I would like to see an official CDC report that identifies which policies worked and which did not. I don't think we're going to see a report - because it would become an instant political hot potato. Eviction moratoriums in 2021 - a full year after the start of the crisis are nonsensical. Individual owners such in the article will eventually lose their properties to deeper pockets - further entrenching wealth disparity.
- jedmeyers 6y ago
  > Individual owners such in the article will eventually lose their properties to deeper pockets How do we know that’s not the actual goal of those policies?
  - testfoobar 6y ago
    So much of the official government response has been to support entrenched wealth. Some examples: large stores remained open, while small stores were forced to close in many regions. Financial support was provided to large businesses via PPP funding that wasn't available to small businesses. Capital subsidies of near 0% loans were extend to the largest companies (e.g. the Fed owns Apple bonds) while smaller businesses were left to die on the vine. Connected industries like airlines continue to receive bailouts. It is all kind of sad, really.
    - jedmeyers 6y ago
      > So much of the official government response has been to support entrenched wealth. There is a word that describes this kind of merger of corporate and government power, I just don't seem to remember it.
      - testfoobar 6y ago
        How do you get well meaning folks to see where it is all heading?
    - imbnwa 6y ago
      If you give people free stuff they'll get lazy, they need to learn to work hard so they can eventually pull the ladder up behind them too
- nerdponx 6y ago
  No, the "half" aspect of the measure is the fact they didn't even try to protect small landlords. These laws were not passed by socialists, so the argument that "landlording shouldn't exist anyway" doesn't apply. It never made sense from day 1.
- sofixa 6y ago
  > Eviction moratoriums in 2021 - a full year after the start of the crisis are nonsensica The US economy is still heavily impacted by the pandemic, and entire sectors are dead or heavily damaged ( e.g. tourism, airlines, etc.). Unemployment is at 6.3%, which is significantly more than pre-pandemic (3.5%). Not to mention all the employed with reduced income ( e.g. restaurant staff, cab drivers etc.). What do you propose should happen to all those that are still un or underemployed ? What is the bigger problem, millions of people on the streets driven to crime, or millions of property owners losing property and/or money?

testfoobar 6y ago

Sad story. It is time for eviction moratoriums to be lifted. The second peak of the pandemic is behind us in nearly all datasets in the United States.

techsupporter 6y ago
But is the second-wave of the economy coming roaring back so that people have jobs to go to in order to pay rent behind us in nearly all datasets in the United States? Or would those people still be thrown out onto the street with no housing? Because if there's anything we need to be doing in the United States, particularly on the West Coast, it's bringing more people to homelessness.
- testfoobar 6y ago
  No we shouldn't increase homelessness due to job losses from the pandemic. We also shouldn't force landlords to supply free housing.
maxerickson 6y ago
We should look forward and choose the best policy for the situation we have at hand, not look backwards with relief that it is getting better. I don't mean that as an argument in favor of rent control or eviction moratoriums, it is an argument in favor of using the best basis for policy decisions. I'd rather see the government just hand landlords money vs throwing people who may just be getting back on their feet into disarray. There has to be some point where things go back to normal, but we are at a point where 2 months from now is basically certain to be a better time to do it than right away.

heavyset_go 6y ago

I find it hard to be sympathetic with people who chose to overleverage themselves with their investments.

bigmattystyles 6y ago
You could make the exact same point towards the renters who were banking on their job to pay the rent. One is called a mortgage while the other is called rent.
- heavyset_go 6y ago
  There's a difference between working to eat, and investing. Investments have inherent risk, and if you can't bear that risk, don't overleverage yourself.
  - bigmattystyles 6y ago
    Reading the article, the owners aren't exactly rolling in it and are also depicted as mostly working class. If it wasn't for a global pandemic, most would have been fine and they would have thought to have invested very conservatively. In my mind, it's just that it's convenient/expedient to make them eat the cost of unpaid rent -
    - buescher 6y ago
      There are plenty of investments that are much more conservative than taking out a loan to buy real estate. Most of them don't even come with mortgage payments.
    - door100 6y ago
      > depicted as mostly working class. What "working class" person owns investment property in NYC? They amount of capital required to do that is so enormous that the article calling them "working class" is deeply misleading. They certainly aren't working class in the way that most NYC tenants are.

bigmattystyles 6y ago

I feel the same way about rent control. It's not fair for society at large to make property owners eat the cost or the lost potential income alone. I am aggressively pro rent control and pro eviction moratorium during the pandemic, but I am for a (progressive) tax to fund these programs. It's just unfair to make yourself feel good by supporting these programs when you don't have any skin in the game. I'm not naïve though, I know that if you raise taxes to fund these programs as a society as opposed to a property owner having to fund it alone, those programs will lose their popularity. This is a case where most people's support for these programs is literally all talk. And yes, some property owners are scum and/or large corporations and people will game the system. But then you address that with oversight with teeth.

pasabagi 6y ago
What is the moral basis of rent? Rent is by definition differentiated from service provision in that it is simply the use of a legal right to extract an income. I don't see a moral basis, so I don't see how anything that impacts the interests of renters can be unfair. Bad on pragmatic level, perhaps, but not a moral one.
- pydry 6y ago
  There would be a moral basis with a 100% land value tax or a property tax that approximates it. Without it, though, rent is partially a stream of income derived from labor (upkeep, management, construction) and partially a stream of income derived from a state granted monopoly over a parcel of 4 billion year old land. The moratorium is, in part, tacit recognition of this. Everybody knows that a large slice of rental income is completely unearned - even landlords. Few would seriously believe that the sky high rental incomes derived from these is really earned, for instance - it's an entitlement: https://www.savingadvice.com/articles/2019/08/06/1067844_10-ridiculous-examples-of-san-francisco-rent-prices-in-2019.html https://www.savingadvice.com/articles/2019/08/06/1067844_10-...
  - imtringued 6y ago
    I am interested in constructing new housing and renting it out, comments like yours make me wonder why I should even bother and even if I did why would I have any reason to give an antagonistic tenant any favors if it will bite me in the ass? No, it's quite simple. Being a landlord is being a business owner. You are providing a service and in exchange you get paid enough to make construction of housing worthwhile. Except, most landlords break even and only get paid in the form of building equity. It'll take decades to pay the mortgage off. >The moratorium is, in part, tacit recognition of this. Everybody knows that a large slice of rental income is completely unearned - even landlords. >Few would seriously believe that the sky high rental incomes derived from these is really earned, for instance If nobody is paying for the house then there will be no house for you to live in. It's that simple.

daniel-thompson 6y ago

Clearly some landlords are getting hurt due to some tenants taking unethical advantage of the situation. But I think we need to wait to draw broad conclusions until this can be systematically analyzed at the macro level, rather than doing so from the one-off anecdotes in the article.

testfoobar 6y ago
Landlords are part of the financial system. Deciding landlords must take the loss on rent so that their tenants can be safe is sensible health and social policy during the acute uncertain phase of the pandemic last year. That uncertainty is now gone. If the government wants to house people in rental properties indefinitely, then the government can pay to do so at the prevailing market rates.
- mjfl 6y ago
  Why should landlords take the loss on rent and not who they pay mortgage to?
  - mauvehaus 6y ago
    Sunk cost. They'll lose their equity stake in the property (as well as future income) if the bank forecloses on the property because the landlords aren't making mortgage payments. Do the banks want to be in the situation of being landlords (even temporarily) of a huge number of tenants who are not or cannot pay rent? Doubtful. Does that mean they're a little less likely to foreclose on a rental property when there are lots of small landlords in this situation? Probably. Would I want to gamble a rental property on a banks reluctance to foreclose owing to the widespread nature of the problem? Absolutely not.
    - nerdponx 6y ago
      So cancel mortgages as well as rent, for landlords with below some threshold of total property value. Too-big-to-fail banks eat some temporary losses, small landlords don't lose their shirts, and rent still gets effectively canceled.

tomg 6y ago

I don’t understand how a waiter and a home-care provider can afford to buy a rental property that is apparently worth charging $80,000/yr in rent. I’m in the wrong business! [edit: to be clear, this is tongue in cheek, though the circumstances where a bank made this loan seem unusual to me]

watsocd 6y ago
By being extremely frugal. Did you read the part of the article where the owner does not live in the house. The owner lives in a "cheap studio apartment nearby with their two young daughters". That is how!
- tomg 6y ago
  > By being extremely frugal. Did you read the part of the article where the owner does not live in the house. The owner lives in a "cheap studio apartment nearby with their two young daughters". That is how! You’re referring to Gao, I’m referring to Won. Different people.
  - yellowapple 6y ago
    And the top-level was seemingly referring to Gao by referencing the $80k in back rent.
    - tomg 6y ago
      > Won says her tenant owes her more than $80,000 in back rent.
      - tomg 6y ago
        Oh whoops I've been wrong this whole time, my bad!
- sbierwagen 6y ago
  Frugal? Interesting. Let us closely examine the text. >Take Won, a Chinese immigrant landlord who asked that we only use her last name. She owns a two-family house in Queens and works as a home health aide caring for an elderly couple. Her husband is a waiter at a restaurant in Manhattan's Chinatown, though he's barely been able to work since the pandemic began. Won says her tenant owes her more than $80,000 in back rent. "I just want the government to open the court," she tells Reason. She owns a house in New York City. To put it mildly, NYC real estate is not cheap. How did she do it? Cash transaction? Is it mortgaged? Those are two very different types of ownership... but Reason makes no distinction between the two. Why? If she was on the hook for a mortgage payment, surely they would have brought it up, since it would have made her case much better. But they didn't. The tenants owe $80,000 over a year? $6,666 a month? How big is this house? When did Won buy it? How much did she pay? It would be two very different stories if Won had bought the place in 1970 for ten grand, versus a $2 million straw buy for a PRC upper party member. Reason doesn't want to tell us which, because it is an explicitly ideological publication, funded to promote a specific view of the world. I don't blame Reason for wanting to be the NYT of Libertarianism, but you do need to apply a degree of critical thinking to what they say. There is absolutely zero chance a home health aide bought a house in New York City by "being frugal" any time in the 21st century. Either she bought it many decades ago, or the money came from somewhere else.

ausbah 6y ago

unless there is data pointing to abuse like this being widespread, I think the alternative of evicting those who can't pay rent in pandemic is still a greater sin

omginternets 6y ago

It's kind of a damned if you do, damned if you don't situation, isn't it? I feel like the stimulus cheques should have been made out exclusively to people who: 1. lost a job 2. suffered a wage cut 3. suffered a significant loss of revenue Number 3 would include landlords and freelancers. I'm one of the lucky people for whom the pandemic increased savings (by decreasing spending), so I don't think it's appropriate that I received two (!) stimulus cheques. I've donated one to Wikipedia and the other to a couple of local charities, but I'm sure there's a smarter way to redistribute that money...

jackfoxy 6y ago

Let's not be too conspiratorial, but it is worth pointing out destruction of the bourgeoisie is a central tenant of the Communist Manifesto. https://www.sparknotes.com/philosophy/communist/full-text/bourgeois-and-proletarians/ https://www.sparknotes.com/philosophy/communist/full-text/bo... Also Carroll Quigley, mentor of Bill Clinton, expressed shocking disdain toward the bourgeoisie in Tragedy and Hope. https://www.amazon.com/Tragedy-Hope-History-World-Time/dp/094500110X/ref=sr_1_1 https://www.amazon.com/Tragedy-Hope-History-World-Time/dp/09... Is it much exaggeration to say the message from the far left and from the establishment to those who staked all their capital on one or two rental properties is tough sh!t?

content_sesh 6y ago
Investing in real estate is like investing in anything else: you're taking a risk and you can, in fact, lose money. Sounds like some of these landlords were irresponsible and didn't understand that before staking all their capital
nerdponx 6y ago
It's not exaggerating at all, but city councils typically aren't full of Marxists.

nerdponx 6y ago

This is all ass-backwards to me. Cancel mortgages, too. Problem solved.

door100 6y ago

Cea Weaver, who is used as a foil and whose perspective is unfairly maligned in this article, is basically 100% correct. Landlordism should not exist. Housing is a human right and should not be an investment commodity. > Emergency policies enacted in times of crisis are prone to becoming permanent, which some members of the #CancelRent movement say is the goal. This is a good thing. The COVID crisis has exacerbated the huge inequalities in housing in the US, and now is a better time than ever to fix things.

whitepaint 6y ago
> Landlordism should not exist. So, if I own an apartment / house / room, I can't go and have a contract with another person willing to take on that contract and live in my place by the agreed rules beforehand?
- door100 6y ago
  I believe in a world in which housing is a public good and a human right, so that no one would have to rent from anyone else in order to have access to housing. In this world, housing would cease to be a profitable investment vehicle, and thus landlordism would no longer exist. Could I "enter in a contract" to lease "land that I own" in a national park? No, because national parks are a public good that everyone shares in their ownership and right to access. Housing should be the same way.

DC1350 6y ago

I don’t really get how this is possible. They should be able to take out a loan against the property to pay for any expenses, and just sell it at the end to pay off debts if they need to once this is over. They’re upset about lost income but not really struggling... Their net worth is just as high as a renter with a few hundred thousand in the bank. I would have a hard time feeling sorry for somebody in that position > working-class landlords lol

josephg 6y ago
You’re assuming they own the property outright with no mortgage, which is pretty unlikely. If they have a loan already the bank might not want to loan them more money against the property in the current market. And if they sell it, to who? It’ll be at a massive discount right now and they might not be able to cover the amount they owe to the bank.
- yellowapple 6y ago
  > You’re assuming they own the property outright with no mortgage, which is pretty unlikely. If they own property in New York City and were able to qualify for any sort of mortgage on a working class dual-income, then it's highly unlikely that they bought that property at any point within the last 30 years, in which case - if there was a mortgage - it should be long paid-for by now.

TaylorAlexander 6y ago

This is why I really like Vienna’s housing policy. They have half a million affordable housing units which are very nice. They’ve removed the private profit motive and speculation on land value that drives up housing prices. And if they needed to put a hold on rent collection, it would be the government that suffered the loss rather than private owners. https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_011314.html https://www.huduser.gov/portal/pdredge/pdr_edge_featd_articl...

topspin 6y ago

Obviating property rights is another factor in our increasingly 'low trust' society.

mcguire 6y ago

"On September 4, 2020, the Centers for Disease Control and Prevention (CDC) issued a national eviction moratorium that is currently set to expire at the end of March." The CDC issued a moratorium? "Won says her tenant owes her more than $80,000 in back rent. ... But we did find that the father in the family is currently employed in the construction industry, and that the tenants are renting a second apartment in a house in Queens Village, where they've also stopped paying rent and owe $12,000 to the couple that owns the house, who are also Chinese immigrants." So they're renting two apartments and not paying for either? It's weird that Reason didn't manage to contact any of the renters. I wonder how much effort they put in? Or I wonder if it is a hit-piece?

npunt 6y ago

I have a friend who has lived in the same place for 20 years and has built a family there. They've never missed rent and have been excellent tenants, but nevertheless they're being pushed out and the property is being sold to developers. The developers are trying to intimidate my friend and hoping he doesn't know his rights and just leaves quietly - typical prisoner's dilemma final game betrayal that many property managers pull on people. Were it not for the eviction moratorium my friend's family would have to up-end two decades of their life during a pandemic when none of them are vaccinated and one is immunocompromised, while juggling kids and trying to find a job. I understand there are some people taking advantage of these circumstances by not paying rent, but the fact is a lot of people are in pretty dire circumstances right now without many options. Obviously this situation is also terrible for the people highlighted in this piece too and I feel for them - they worked hard and built something from nothing, and highlighting their story is important. I'm of two minds about what to feel about the broader context though, as non-residence real estate is ultimately an investment which carries risks, including unforeseen risks like pandemics. We learned quite recently in the 2008 recession that over-leveraged real estate is a systematic risk, and whether its a pandemic or a financial crisis, it's prudent that investors be able to manage a shock of at least 12 months without rent. Even absent external circumstances, a pipe could burst or another maintenance nightmare could emerge that would make an investment property uninhabitable for a long time. Its very unfortunate that the US has such an investment-oriented view of residential real estate. In times like these, that approach pits people against each other rather than brings us together to better manage the crisis. Housing insecurity is an awful thing to have to deal with, and if everything is simultaneously quantified into 'how much am I going to make/lose', the fabric of society is going to tear.

yellowapple 6y ago

I'm really struggling to find sympathy with the landlords in this situation. From multiple angles: 1. Landlords already serve no real market function. They're middlemen - literal rent-seekers that offer no real service to their tenants. And somehow I'm supposed to feel bad for them? 2. The bulk of the housing shortages throughout the US (and other developed nations, for that matter) derives directly from the treatment of real estate as an investment rather than, you know, merely space to live/work/play. People buying homes (particularly low-density ones, mind you!) as "investments" are the perpetrators of that shortage, not somehow the victims; not only do they consume an outsized portion of the housing supply, but they have a vested interest in benefiting from the effects of that constrained housing supply, and therefore will logically do everything in their power to continue to constrain it because it pushes their property values higher. 3. If real estate is to be treated as an investment, then the risks of that investment must be acknowledged. Why should I feel differently about landlords who burned their savings on rental properties than I would about people who burned their savings on, say, GameStop stocks or some cryptocurrency pump-and-dump? Like, if anything the renter demanding $12k from the landlord has a point. The very notion of land ownership externalizes opportunity costs on everyone else in a given area, specifically because land is finite / in fixed supply and therefore land ownership is definitionally zero-sum (one person's ownership of land is at the exclusion of others). Landlords are long overdue to internalize these externalized opportunity costs - specifically, through a land value tax (possibly supplemented with a flat income tax starting above some threshold; Milton Friedman was a proponent of this combined tax scheme), the proceeds of which would fund programs like UBI and single-payer healthcare to make up for those opportunity costs. I feel for these landlords only in the sense that they're newcomers to this country hoping to find opportunities to better themselves and secure their financial future, and I hope they - alongside the rest of their fellow Americans - can get some much-needed financial support. That doesn't mean they're somehow the "good guys" in this story just because they're poor immigrants. ---- And to be clear, the delinquent renters/squatters certainly ain't the "good guys" in this story, either. Refusing to pay anything for the space one inhabits - especially when one has the means to do so - also externalizes opportunity costs onto other renters (who are now excluded from that unit despite their willingness and ability to pay for it). I might disagree strongly with the morality of a landlord extracting rent, but refusing to pay rent entirely is not the way to go about fixing that. Rather, the fix is in actually correcting the circumstances that led to this situation - namely, by forcing the internalization of externalized opportunity costs, and by replacing landlords with housing cooperatives.

imtringued 6y ago

>"Those are part of the costs of being a landlord," Weaver responds. No they aren't. Landlords want to at least cover their costs. If they lose out on rental income they are forced to raise rents to compensate their loss. This will mean higher rents and a subsidy for dishonest squatters. The idea that you can make housing cheaper by making it a bad investment is hilarious. If constructing new housing is a bad investment for landlords then nobody will provide housing as a service. Everyone will have to buy their own house or condo. >"In public housing, people are paying 30 percent of their income," Weaver told Reason. "What I am envisioning is a world in which housing is owned by a collective and people are paying 30 percent of their income in order to live in their housing. If your income is zero, you pay zero. If your income is $500,000 a year, you're paying 30 percent of that." What makes her think that rich people can't afford to hide their income? It wouldn't surprise me if they could just start a company and simply keep the funds inside the company and only pay out as much as necessary. This is way too easy to game and the ROI is insane. If you earn 500k you would end up with 350k so by engaging in tax shenanigans you could increase your income by 40%. Who's insane enough to not do that? >When asked how the federal government could afford such a program, Weaver told Reason that it could "print" the money. No, the way the federal government will be able to afford such a program is by providing housing at cost. Subsidies aren't the right answer and outright printing money isn't it either. If you really wanted such a program you would spin it as a jobs program first with the additional housing as a bonus. By lowering unemployment you increase the number of people who can afford to pay rent. So it's a win win situation. The slow acting benefit of additional housing would take years to have an effect.

heavyset_go 6y ago
> No they aren't. Landlords want to at least cover their costs. If they lose out on rental income they are forced to raise rents to compensate their loss. Costs don't dictate prices, the market dictates prices. Nobody is going to pay $50 for a quart of milk just because it cost you that much to produce it.

sep_field 6y ago

All the land in the Bay Area was stolen from indigenous peoples as part of a pogrom of genocide. Many other areas in the United States have a similar issue. Until reparations are paid to the people who were here first, I have zero sympathy for so called "land owners".

deleted 6y ago
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chub500 6y ago

Abraham buys land in Genesis: "For the full price let him give it to me in your presence as property for a burying place." Gen 23:9. Private property contract law is nothing new. My thought is how many of these landlords will end up turning to more nefarious means to make ends meet? It seems when the legal system fails people inevitably turn to vigilantism.

jacknews 6y ago

The answer is not to allow evictions, but to have a moratorium on loan payments. Why should banks expect payments to continue as if nothing happened when large parts of the economy have been forced to close?