15 ms·

What to expect after the eviction moratorium

60 points by duck 5y ago

jdlyga 5y ago
Time to call an old fashioned debt jubilee like they did in the early Roman Empire days. It worked really well for situations like this.
- oh_sigh 5y ago
  Why would anyone ever pay their debts, and why would anyone ever lend money out, if they knew debt jubilees were possible?
  - _jal 5y ago
    You know they're possible, because we're discussing them. Do you pay your debts?
    - oh_sigh 5y ago
      Flying pigs are possible. You know because we're discussing them. When was the last debt jubilee in America(which is where all of my debts are)?
      - ohyeshedid 5y ago
        Might help to clarify if you mean for people or corporations.
      - medvezhenok 5y ago
        1970s) High inflation = *fixed-interest rate debt jubilee over time (as long as wages are inflation-indexed). Also that's the last time the US defaulted on its debt in real terms (i.e. 1971 and the Nixon gold shock)
  - lambda_dn 5y ago
    You don't have to pay your debts now, but the downside is your credit rating takes a dive yet loans are still made everyday.
    - nradov 5y ago
      You can't just stop paying and take the credit score hit. If you're solvent then creditors can get a court order to seize your assets, and if you have a job then they can levy a portion of your pay. For small debts creditors might just write it off but if you owe a lot then they'll absolutely come after you.
      - psyc 5y ago
        None of that is legal in the state I live in. Based on my personal experience in other states, I think you're exaggerating the likelihood that collectors will do anything except leave voicemail. But I don't know your definition of "a lot." Is $15k a lot?
        nradov 5y ago
        Debt lawsuits for amounts under $15k are common in most states. https://www.pewtrusts.org/research-and-analysis/reports/2020/05/how-debt-collectors-are-transforming-the-business-of-state-courts https://www.pewtrusts.org/research-and-analysis/reports/2020...
      - arsome 5y ago
        Unless we're talking about collateralized debt, most of the time my understanding is they'll send debt collectors after you and little else - those debt collectors are often willing to negotiate on the amount because they bought it for less than face value, especially if you put it off for a while. I considered doing this because I got scammed by a water heater rental company that was asking for a ridiculous sum when I bought a new home, but eventually decided to avoid the credit hit. If I were closer to retirement it would have been a no-brainer.
  - anoonmoose 5y ago
    "the market can stay irrational longer than you can stay solvent" you would pay your debts because even if debt jubilees were possible you don't know when it will happen and can't predict it with any degree of accuracy and it's not worth the trouble that would be caused by being wrong
    - arsome 5y ago
      Sure, but you'd be encouraged to make sure you had long-standing, slow-paying debts at all times or you'd be missing out on free money. I'd be taking out a few 30 year mortgages if this were a thing and probably borrowing against equity in my home to dump back into the market on some lower risk items. If you can service reasonably cheap debt and still live decently you may as well take it because a "debt jubilee" is like a lottery win if you happen to hit one in your lifetime, and I'm assuming you'd have them more frequently than that? My best guess: debt would be dramatically more expensive as lenders would have to factor it into the price, and home affordability for young people would drop even lower than it is today if this were a thing. Debt jubilees would seem to actually entrench the current upper and middle classes.
      - anoonmoose 5y ago
        and you'd be absolutely screwed if the jubilee only came around every 50-75 years
        deleted 5y ago
        [deleted]
        arsome 5y ago
        Depends how leveraged you are - personally with that level I'd be able to pass that on to my kids if needed. One of us is printing free money at least.
  - mathgorges 5y ago
    I reckon they would for the same reason people do those things even though bankruptcy exists. Not paying your debts has consequences, even if the _may_ be forgiven. Likewise lending for interest is still profitable, even if it carries risk.
  - mikepurvis 5y ago
    I mean, arguably this is the issue with corporate bailouts— executives can take giant risks knowing that they'll reap the upside but be rescued on the public dime if it goes south and they can convince us all that they're too big to fail and "no one saw it coming." (Even the one bank that was allowed to fail—Bear Stearns—seem to have had the execs do pretty all right by themselves: https://www.businessinsider.com/bear-stearns-where-are-they-now-2012-7 https://www.businessinsider.com/bear-stearns-where-are-they-...) I think in general I'm +0 on debt forgiveness for individuals. But it's not fair to speculate about the behaviours it would induce when we can observe already what related behaviours very much already induce. IMO the real losers in a debt-forgiveness scenario are the "responsible" ones who avoided doing something beneficial in order to not be overstretched— or maybe were even prevented from taking on debt by structural/classist barriers around credit-worthiness, job status, etc. For example, someone who now makes less money because they went to the cheaper state college, and has lived a simpler life afterward because they diligently paid it off every month. This person could be understood for feeling a bit crummy if they look over and a former peer who traveled far away for school, lived extravagantly, and rolled the debt forward for years now enjoys having it disappear in a poof.
- lambda_dn 5y ago
  Everyone would take huge loans and bet on the stock market knowing they never needed to pay them off. It would need to be announced and executed at the same time.
  - arsome 5y ago
    Even if they were announced and executed at the same time, as soon as you knew it was a possibility you'd start behaving dramatically differently assuming this was plausible again within your lifetime or your child's lifetime.
  - medvezhenok 5y ago
    The U.S. defaulted twice on their obligations in real terms in the 20th century: once in 1934, and another in 1971. That was basically a "debt jubilee" - for the country. Not sure the average person could have profited off of either one though (at least not legally). In 1970s you could have taken out fixed-interest rate debt (if you had the foresight), which would have been devalued as part of the 1970s inflation due to the 1971 Nixon Shock, so perhaps if you knew that you could come out ahead at the time. Usually debt jubilees work by transferring private debts onto public sector and then having the public sector default in real terms (by devaluing the currency).
- hn_throwaway_99 5y ago
  We're getting there - we just call it inflation, so that instead of cancelling debt all at once we basically just cancel it slowly over an extended period of time.
- AnimalMuppet 5y ago
  Here's a bunch of mortgages, which are turned into a CDO and sold to a pension fund. Now you declare a debt jubilee. Great! Those mortgages are gone. Unfortunately, so are the pensions. It could still be a net win. But it's going to come down rather badly on some people, and they aren't all rich rentiers...
jacob019 5y ago
What effect will it have on the housing market at large?
legitster 5y ago
Some anecdata: my parents own a ten unit apartment building in a small (fairly poor) town. In the last 18 months, only one of them was creating issues worthy of eviction (and it was unrelated to non-payment - most tenants are on some form of SSI). So they took the moratorium with a bit of a shrug.
- monsecchris 5y ago
  Perhaps they got lucky, or it may be that your parents have chosen wisely on the tenants.
  - aynyc 5y ago
    What the parents did is the dirty little secret for low-income tenants. Rent to people on Section 8 or on government assistance. Govs don't miss those payments, and tenants tend to be more stable in fear of losing the program. The problem is that you have to dealing with government agencies.
monsecchris 5y ago
I have rented in about 15 locations in the last 10 years and have a rental property of my own and I largely agree with everything here, but this particular sentence is fantasy. > A landlord can maintain a revolving door of low-income tenants, evict those who fall behind on rent, and keep the security deposit. The idea this is somehow going to be a long term money making strategy is a fantasy. If a tenant pays rent on time and doesn't wreck the place, a landlord isn't kicking them out without a really good reason because there is a huge risk you get a garbage tenant who doesn't pay and wrecks the place, or you fail to get a tenant at all.
- kevinpet 5y ago
  I think you are mistaking the strategy that works for you with the only viable strategy. The article calls out that this is a strategy that can work in some places, and it clearly can -- if evictions are fast enough and they aren't a large fraction of tenants.
- slownews45 5y ago
  Absolutely - total trash statement. Landlords want tenants who a) stay, b) don't damage unit, c) pay rent on time. THAT is a guaranteed money maker. The overhead of flipping a unit in landlord time is high. You've got eviction, cleanout, repair costs, showing costs, lost rent, landlord / management co time etc etc. In CA you can only keep portion of deposit used for repairs, you can't use it to cover all your other overhead costs on a flip. So you are guaranteed to lose money on the flip relative to renting it. All the gravy comes when you can keep that tenant, keep unit in good shape with little work. The big money is going to be to the folks who are successful with actively screening tenants. I know a landlord, basically upmarket, everyone I think kept paying the entire pandemic. Now that is gravy (she refinanced a ton of the properties down to rock bottom rates, got bailout money for prop mgmt staff, and is collecting rents) - that's pure goldmine
  - fock 5y ago
    > that's pure goldmine or antisocial.
cronix 5y ago
> Mass eviction, both in and out of pandemic times, is best understood as a symptom of a system out of whack. I think the shock will be releasing the dam all at once after you've held back all of the water in its entirety for over a year instead of letting it trickle naturally, and giving those people room to find what to do. Now they're all going to be scrambling for the same resources all at once, and in a lot larger numbers, in a time when those things are getting more expensive and rare. I believe this solution is much worse in the long run than what it was trying to prevent. For the renters, the landlords, everybody. > a system out of whack The moratorium was outside of the system, artificially created by politicians, imposed on the system. AFAIK, there has never been a moratorium of this kind in US history.
- mikeyouse 5y ago
  If you ignore that the whole goal of this was to prevent evicting people during a novel virus pandemic that killed over 600,000 Americans, sure, it might be "worse". Something like 20 million people lost their jobs in March/April/May of 2020 - arguing that it would have been "better" for them to lose their houses too is beyond parody. Edit rather than replying to 5 people saying the same dumb thing: Sure, some people got assistance, many people even did, but when something like 1/4 of Americans have less than $5k in savings and the government stimulus payments took several months to reach bank accounts (more if you hadn't filed in prior years) -- maybe, just maybe further interventions were important to keep people off the street and out of communal housing?
  - ericmcer 5y ago
    They lost their jobs but not their income. unemployment benefits and stimulus allowed all my service industry friends to come out ahead. I don’t understand why the strategy was to give people cash to cover their rent and also allow them to not pay it. That is obviously going to lead to a scenario where benefits get spent while rents go unpaid.
  - Unklejoe 5y ago
    Most of the people who lost their jobs due to COVID were eligible for unemployment, and some even made more on unemployment than their job.
hn_throwaway_99 5y ago
The section titled "Eviction moratoriums may hurt mom-and-pop landlords and favor corporate ones" is absolutely true, and it will result in even more wealth concentration. I have a family member who had the misfortune to rent out a house he previously lived in (he was moving and due to some issues in the neighborhood wanted to rent his old house out for a year before selling) in Feb of 2020. I think his renter paid one month of rent, and then nothing after that. And I looked the guy up, I have sympathy for people who are really on hard times or who lost jobs but this dude is a grifter who is just taking advantage of the situation. So he's lived there coming on 18 months paying absolutely nothing. My relative was fortunate enough to get a good dose of rental assistance (as this article said, the process was extremely chaotic), but I guarantee he will never be a landlord again. The risk/rewards of a tenant/landlord relationship used to feel well known, but now it feels like the government can basically commandeer your property at will. So this means you are just going to be left with large corporate landlords who are diversified enough that they can take the risk. And what makes me so angry about this is that, as someone who is generally on the "left" side of the political spectrum, I see all these calls for "cancel rent", as if housing grows on trees and landlords are all some kind of Ebenezer stereotype, instead of being a lot of small-time folk just trying to get by.
- at_a_remove 5y ago
  I see it too, and the answer seems to be that if we just socialism hard enough, everything will work out alright. This time, this time it will work.
  - uglygoblin 5y ago
    This is reductive and the reality is the system typically fights hard against socialistic policy so we end up with half solutions like a moratorium instead of the government paying the rents on behalf of the tenants. Now you claim "Socialism. Bad." because of it.
    - at_a_remove 5y ago
      Hey, speaking of reductive ... your interpretation of what I said is a great example of that. As the parent poster said, most landlords are small-timers, but they get caricatured as New York slumlords scarfing down caviar while their tenants flinch over continually sparking bare wires flicker from a partially torn down kitchen wall. We have seen how the legislation passed for relief got warped to pay out to the big timers (just think of those hotel chains) instead of focusing on the smaller folks. But when I bring up points like this, I just get the "well, if we abolished private property and everyone had a government-issued home ..." And the parent poster has had experience with that kind of comeback.
at_a_remove 5y ago
I imagine the debt collection agencies cackling madly and rubbing their hands with delight. They aren't addressed in the article but one might imagine that they're going to do blockbuster business in short order.
rland 5y ago
Just another symptom of the broader issue: at scale, real estate is either an investment or it actually houses people. It cannot be both. Unfortunately, the engine driving this thing (the whole country) is real estate as an investment.
- pirate787 5y ago
  This is false dichotomy. Investment capital builds and improves all real estate. The real issue are zoning restrictions that limit supply and Fed policy that has flooded the system with few places to invest.
  - rland 5y ago
    Who passes zoning restrictions time and time again?
- yanderekko 5y ago
  >It cannot be both. Uh, of course it can.
- Unklejoe 5y ago
  > It cannot be both. I see this mentioned often, as if it's supposed to be obvious, but I don't really get it. Care to explain?
  - dghlsakjg 5y ago
    A minimum unit of housing per person is a necessity for society. It is also incredibly difficult to scale since we can't just build more land in the places it is needed. We expect the value of our investments to rise at a rate faster than inflation. If housing is a good investment eventually it becomes unaffordable for the minimum unit per person. We are so used to the concept that housing always goes up that it is hard to grasp, so a good thought exercise is to flip housing with food. Imagine if the price of food went up more than inflation year after year, and cities restricted how much of it could be grown and sold. We would have people that buy and hold food so they can sell it to hungry people for even more next year. Some people would starve because no one is selling anything below a certain price. North America has built a system around the idea of housing values always going up. But eventually you hit a limit where a necessity of life becomes completely unaffordable (compounding returns being what they are). So if you believe that housing is an investment in aggregate (that is that all housing lumped together will rise faster than inflation), then the inevitable conclusion is that housing becomes unaffordable for more and more people higher and higher up the income chain (Ahem, bay area). Every other good that we consume with tends to go down in price (indexed to inflation especially when value is considered). Food, clothing, electronics, cars are all much better deals than they were 50 years ago. Housing is the opposite
prpl 5y ago
If it is all at once, and if the numbers overshadow current supply/demand numbers, will supply and demand both jump in lockstep leading to a lateral shuffle? If that’s true, I would guess it’s just a net negative for everyone involved (landlords would be better off trying to keep current tenants rather than renting to an equivalent tenant likely at the same rate).
- sokoloff 5y ago
  I suspect that those evicted will [understandably] have a tough time passing the rental application/credit/history check for their next place. Why would a landlord rent to anyone who is looking for an apartment right after the eviction moratorium expires without doing significant investigation into "are they looking for a place because they got evicted?" vs "are they looking for a place because they chose to move?" It's far better to have an empty unit than a unit occupied by someone not paying rent. I remember having to show canceled rent checks as part of the application process for a new place. If I were a landlord, this [or an equivalent] would become part of the application process.
conductr 5y ago
I did not renew leases and instead sold my properties. Seemed like a good time for selling and mass evictions is not something I wanted to be a part of as a mom-and-pop landlord.
- MattGaiser 5y ago
  This is what happened in Canada. Limits on evictions, except supposedly if you were moving in to live in it. So, lots and lots of properties got sold.
throwaway75787 5y ago
I resent that I have been diligently paying my rent from savings this whole time, even since I lost my job in December, while so many people are avoiding that by gaming the system. Not to speak of anyone who legitimately needs rent assistance or the moratorium.
- deleted 5y ago
  [deleted]
midhhhthrow 5y ago
This will have deep long lasting repercussions. Do you think anyone is going to rent out their house anymore after getting burned like this? This will further reduce the rental supply in the long term, driving rents up even more as the few remaining landlords demand ever higher cap rates.
krinchan 5y ago
I never realized boarding houses were almost entirely illegal. I’ve often wondered where they went and why they don’t exist. It seems almost the single most useful thing conservatives and libertarians could do that is precisely within their deregulatory wheelhouse. I mean we all know why this isn’t the case. It’s also why Democrats aren’t pushing for it either.
- AnimalMuppet 5y ago
  > I mean we all know why this isn’t the case. It’s also why Democrats aren’t pushing for it either. Um, no, we don't all know why. What are you saying is the reason?
  - krinchan 5y ago
    It’ll cost votes. Universally. No matter who the constituents normally vote for they will not vote for someone that supports low-income housing of that sort. It’s kinda obvious in hindsight, I just never connected the dots till it was pointed out in this article (and read the linked article). Poor and homeless people overwhelmingly don’t vote. Land owners are overwhelmingly in favor of zoning and land use policy that preserves the value of their homes. Anyone trying to pass laws at any level from municipal up to the state and especially federal levels is likely to face near universal backlash across party lines, unfortunately.
    - AnimalMuppet 5y ago
      Oh. I feel dumb now. Of course that's the reason, or at least a very major part of the reason.
France_is_bacon 5y ago
Wall of text, sorry. . As a whole, the USA is awash in cash. If millions and millions of people lose their homes, it will be a boondoggle for large REITS (Real Estate Investment Trusts) and other companies investing in real estate. In 2008, when the housing market crashed, huge companies bought up all the properties for cheap. These companies want to make a nation of renters, and get rid of homeowners, except for the wealthy, of course. Why do you think housing and rental prices are accelerating by an unprecedented amount? It's because the large REITs are slowly gaining monopoly power and raising prices. There is not one single county in the USA that is affordable to rent, to someone making minimum wage. Affordable means that rent is less than 33% of income. I don't have a solution. What would happen if the large companies ended up owning 80% of the housing and apartment units? They could charge whatever they want. They would be in total control. For example, Invitation Homes, a subsidiary of Blackstone Group, went on a $10 billion real estate buying spree, purchasing $150 million worth of houses per week. They easily outbid anyone else. “He had a handful of cashier’s checks. These new guys had duffle bags full," said one buyer at a foreclosure auction. Corporate homeownership can not only subject tenants to higher living costs, but often destroys their ability to buy these homes themselves, as companies pay top dollar, in instant cash, to take them off the market. In 2011, Morgan Stanley issued a report called “A Rentership Society.” With over 1.6 million foreclosed homes in the United States and more on the way, the report forecast “a surge in the number of renters and a potentially massive opportunity for investors to convert the glut of repossessed homes into rental properties.” Of course, the very wealth corporations, and their owners, continue to bribe the shit out of government officials (lobbying = bribery on that scale) to prevent any curtailment. There is a lobbying organization, the National Rental Home Council, to look after their interests in the government, such as defeating rent-control laws. As investors realized the extent of their gold mine, they branched out beyond simply buying foreclosures and hit the open market, competing with everyday homebuyers. Here is an example: a high bid of $208,000 came from a couple with a child looking for their first house. American Homes 4 Rent matched their offer, all cash. They got the house, the seventh it had purchased on that street. As a result, rents have skyrocketed. When visited with the town’s vice mayor, Bruce Hull, in April 2017, he was told that, it hasn’t been that long since you could get a three-bedroom, two-bath for $1,000 a month. Those houses were now closer to $1,800 a month, and this was by design. . There is the saying: capitalism is the worst economic system, except for all the others. Well, the way in which capitalism is the worst is monopolies. The accumulation of wealth by the top percentage of a population. This is the reason there is trust-busting, as done by Theodore Roosevelt for example, is to stop the inherent unfairness built into the capitalist system. This is not a fairy tale, or made up. Monopolies are the main real drawback of capitalism. So that is really the main thing to watch out for in a capitalistic society. Government must to stop monopolies. Including Facebook, Google, etc. Corporations are NOT entities to themselves. Government gives them rights and permissions to start corporations. It is government that allows corporations to exist as a legal person, and shield investors from being personally responsible for debts if a corporation goes bankrupt. A corporation must apply to government and get permission before it opens. If you look at laws, governments can ban all kinds of corporations, regardless of what the owners want. It is the government which is in control, at the very base of it. For example, a governmental entity (town, city, etc) can ban all strip clubs from starting in their city. Or make heavy industrial companies, like auto repair shops, only open on certain streets in a city with zoning laws. They can prevent people from starting a company in their city if the person is on record for being a cheater or bad person. A company does not have unrestricted rights and it is specifically under the control of governmental rules and regulations and permission. Breaking up of monopolies is great. When AT&T was a monopoly, there was zero innovation. Why did the have to innovate? They had a monopoly. There were basically dial phones with the rotating dial. I remember when push button dialing started, it was earth-shatteringly cool. Then they had a "princess phone" that they introduced. But that was it. You had a choice of 3 models. When AT&T was broken up, there was an explosion of innovation. Thousands of phone choices. Cell phones. Pagers. It was great. . For these REITS and corporations buying up homes, there should be a hard ceiling of how many homes and apartments that they are allowed to purchase, and this should include subsidiary companies - no trying to get around it by slimy business tactics.
codyswann 5y ago
Narrator's Voice: "There will be a lot of evictions"
hui-zheng 5y ago
Not saying for everyone in this situation, but for many people who find themselves not have enough savings to survive a year or two without working. How do these people end up here in the first place? Why so many people living in the most prosperous country in the world saving nothing for themselves? Why people over spend so much and live so much beyond their means? How and when would people take some serious responsibility for themselves? I bet that you find much less first-generation immigrants in this situation, even though they make much less income and are in much more disadvantage in every part of their lives. Think about that.

60 points by duck 5y ago

Time to call an old fashioned debt jubilee like they did in the early Roman Empire days. It worked really well for situations like this.

oh_sigh 5y ago
Why would anyone ever pay their debts, and why would anyone ever lend money out, if they knew debt jubilees were possible?
- _jal 5y ago
  You know they're possible, because we're discussing them. Do you pay your debts?
  - oh_sigh 5y ago
    Flying pigs are possible. You know because we're discussing them. When was the last debt jubilee in America(which is where all of my debts are)?
    - ohyeshedid 5y ago
      Might help to clarify if you mean for people or corporations.
    - medvezhenok 5y ago
      1970s) High inflation = *fixed-interest rate debt jubilee over time (as long as wages are inflation-indexed). Also that's the last time the US defaulted on its debt in real terms (i.e. 1971 and the Nixon gold shock)
- lambda_dn 5y ago
  You don't have to pay your debts now, but the downside is your credit rating takes a dive yet loans are still made everyday.
  - nradov 5y ago
    You can't just stop paying and take the credit score hit. If you're solvent then creditors can get a court order to seize your assets, and if you have a job then they can levy a portion of your pay. For small debts creditors might just write it off but if you owe a lot then they'll absolutely come after you.
    - psyc 5y ago
      None of that is legal in the state I live in. Based on my personal experience in other states, I think you're exaggerating the likelihood that collectors will do anything except leave voicemail. But I don't know your definition of "a lot." Is $15k a lot?
      - nradov 5y ago
        Debt lawsuits for amounts under $15k are common in most states. https://www.pewtrusts.org/research-and-analysis/reports/2020/05/how-debt-collectors-are-transforming-the-business-of-state-courts https://www.pewtrusts.org/research-and-analysis/reports/2020...
    - arsome 5y ago
      Unless we're talking about collateralized debt, most of the time my understanding is they'll send debt collectors after you and little else - those debt collectors are often willing to negotiate on the amount because they bought it for less than face value, especially if you put it off for a while. I considered doing this because I got scammed by a water heater rental company that was asking for a ridiculous sum when I bought a new home, but eventually decided to avoid the credit hit. If I were closer to retirement it would have been a no-brainer.
- anoonmoose 5y ago
  "the market can stay irrational longer than you can stay solvent" you would pay your debts because even if debt jubilees were possible you don't know when it will happen and can't predict it with any degree of accuracy and it's not worth the trouble that would be caused by being wrong
  - arsome 5y ago
    Sure, but you'd be encouraged to make sure you had long-standing, slow-paying debts at all times or you'd be missing out on free money. I'd be taking out a few 30 year mortgages if this were a thing and probably borrowing against equity in my home to dump back into the market on some lower risk items. If you can service reasonably cheap debt and still live decently you may as well take it because a "debt jubilee" is like a lottery win if you happen to hit one in your lifetime, and I'm assuming you'd have them more frequently than that? My best guess: debt would be dramatically more expensive as lenders would have to factor it into the price, and home affordability for young people would drop even lower than it is today if this were a thing. Debt jubilees would seem to actually entrench the current upper and middle classes.
    - anoonmoose 5y ago
      and you'd be absolutely screwed if the jubilee only came around every 50-75 years
      - deleted 5y ago
        [deleted]
      - arsome 5y ago
        Depends how leveraged you are - personally with that level I'd be able to pass that on to my kids if needed. One of us is printing free money at least.
- mathgorges 5y ago
  I reckon they would for the same reason people do those things even though bankruptcy exists. Not paying your debts has consequences, even if the _may_ be forgiven. Likewise lending for interest is still profitable, even if it carries risk.
- mikepurvis 5y ago
  I mean, arguably this is the issue with corporate bailouts— executives can take giant risks knowing that they'll reap the upside but be rescued on the public dime if it goes south and they can convince us all that they're too big to fail and "no one saw it coming." (Even the one bank that was allowed to fail—Bear Stearns—seem to have had the execs do pretty all right by themselves: https://www.businessinsider.com/bear-stearns-where-are-they-now-2012-7 https://www.businessinsider.com/bear-stearns-where-are-they-...) I think in general I'm +0 on debt forgiveness for individuals. But it's not fair to speculate about the behaviours it would induce when we can observe already what related behaviours very much already induce. IMO the real losers in a debt-forgiveness scenario are the "responsible" ones who avoided doing something beneficial in order to not be overstretched— or maybe were even prevented from taking on debt by structural/classist barriers around credit-worthiness, job status, etc. For example, someone who now makes less money because they went to the cheaper state college, and has lived a simpler life afterward because they diligently paid it off every month. This person could be understood for feeling a bit crummy if they look over and a former peer who traveled far away for school, lived extravagantly, and rolled the debt forward for years now enjoys having it disappear in a poof.
lambda_dn 5y ago
Everyone would take huge loans and bet on the stock market knowing they never needed to pay them off. It would need to be announced and executed at the same time.
- arsome 5y ago
  Even if they were announced and executed at the same time, as soon as you knew it was a possibility you'd start behaving dramatically differently assuming this was plausible again within your lifetime or your child's lifetime.
- medvezhenok 5y ago
  The U.S. defaulted twice on their obligations in real terms in the 20th century: once in 1934, and another in 1971. That was basically a "debt jubilee" - for the country. Not sure the average person could have profited off of either one though (at least not legally). In 1970s you could have taken out fixed-interest rate debt (if you had the foresight), which would have been devalued as part of the 1970s inflation due to the 1971 Nixon Shock, so perhaps if you knew that you could come out ahead at the time. Usually debt jubilees work by transferring private debts onto public sector and then having the public sector default in real terms (by devaluing the currency).
hn_throwaway_99 5y ago
We're getting there - we just call it inflation, so that instead of cancelling debt all at once we basically just cancel it slowly over an extended period of time.
AnimalMuppet 5y ago
Here's a bunch of mortgages, which are turned into a CDO and sold to a pension fund. Now you declare a debt jubilee. Great! Those mortgages are gone. Unfortunately, so are the pensions. It could still be a net win. But it's going to come down rather badly on some people, and they aren't all rich rentiers...

jacob019 5y ago

What effect will it have on the housing market at large?

legitster 5y ago

Some anecdata: my parents own a ten unit apartment building in a small (fairly poor) town. In the last 18 months, only one of them was creating issues worthy of eviction (and it was unrelated to non-payment - most tenants are on some form of SSI). So they took the moratorium with a bit of a shrug.

monsecchris 5y ago
Perhaps they got lucky, or it may be that your parents have chosen wisely on the tenants.
- aynyc 5y ago
  What the parents did is the dirty little secret for low-income tenants. Rent to people on Section 8 or on government assistance. Govs don't miss those payments, and tenants tend to be more stable in fear of losing the program. The problem is that you have to dealing with government agencies.

monsecchris 5y ago

I have rented in about 15 locations in the last 10 years and have a rental property of my own and I largely agree with everything here, but this particular sentence is fantasy. > A landlord can maintain a revolving door of low-income tenants, evict those who fall behind on rent, and keep the security deposit. The idea this is somehow going to be a long term money making strategy is a fantasy. If a tenant pays rent on time and doesn't wreck the place, a landlord isn't kicking them out without a really good reason because there is a huge risk you get a garbage tenant who doesn't pay and wrecks the place, or you fail to get a tenant at all.

kevinpet 5y ago
I think you are mistaking the strategy that works for you with the only viable strategy. The article calls out that this is a strategy that can work in some places, and it clearly can -- if evictions are fast enough and they aren't a large fraction of tenants.
slownews45 5y ago
Absolutely - total trash statement. Landlords want tenants who a) stay, b) don't damage unit, c) pay rent on time. THAT is a guaranteed money maker. The overhead of flipping a unit in landlord time is high. You've got eviction, cleanout, repair costs, showing costs, lost rent, landlord / management co time etc etc. In CA you can only keep portion of deposit used for repairs, you can't use it to cover all your other overhead costs on a flip. So you are guaranteed to lose money on the flip relative to renting it. All the gravy comes when you can keep that tenant, keep unit in good shape with little work. The big money is going to be to the folks who are successful with actively screening tenants. I know a landlord, basically upmarket, everyone I think kept paying the entire pandemic. Now that is gravy (she refinanced a ton of the properties down to rock bottom rates, got bailout money for prop mgmt staff, and is collecting rents) - that's pure goldmine
- fock 5y ago
  > that's pure goldmine or antisocial.

cronix 5y ago

> Mass eviction, both in and out of pandemic times, is best understood as a symptom of a system out of whack. I think the shock will be releasing the dam all at once after you've held back all of the water in its entirety for over a year instead of letting it trickle naturally, and giving those people room to find what to do. Now they're all going to be scrambling for the same resources all at once, and in a lot larger numbers, in a time when those things are getting more expensive and rare. I believe this solution is much worse in the long run than what it was trying to prevent. For the renters, the landlords, everybody. > a system out of whack The moratorium was outside of the system, artificially created by politicians, imposed on the system. AFAIK, there has never been a moratorium of this kind in US history.

mikeyouse 5y ago
If you ignore that the whole goal of this was to prevent evicting people during a novel virus pandemic that killed over 600,000 Americans, sure, it might be "worse". Something like 20 million people lost their jobs in March/April/May of 2020 - arguing that it would have been "better" for them to lose their houses too is beyond parody. Edit rather than replying to 5 people saying the same dumb thing: Sure, some people got assistance, many people even did, but when something like 1/4 of Americans have less than $5k in savings and the government stimulus payments took several months to reach bank accounts (more if you hadn't filed in prior years) -- maybe, just maybe further interventions were important to keep people off the street and out of communal housing?
- ericmcer 5y ago
  They lost their jobs but not their income. unemployment benefits and stimulus allowed all my service industry friends to come out ahead. I don’t understand why the strategy was to give people cash to cover their rent and also allow them to not pay it. That is obviously going to lead to a scenario where benefits get spent while rents go unpaid.
- Unklejoe 5y ago
  Most of the people who lost their jobs due to COVID were eligible for unemployment, and some even made more on unemployment than their job.

hn_throwaway_99 5y ago

The section titled "Eviction moratoriums may hurt mom-and-pop landlords and favor corporate ones" is absolutely true, and it will result in even more wealth concentration. I have a family member who had the misfortune to rent out a house he previously lived in (he was moving and due to some issues in the neighborhood wanted to rent his old house out for a year before selling) in Feb of 2020. I think his renter paid one month of rent, and then nothing after that. And I looked the guy up, I have sympathy for people who are really on hard times or who lost jobs but this dude is a grifter who is just taking advantage of the situation. So he's lived there coming on 18 months paying absolutely nothing. My relative was fortunate enough to get a good dose of rental assistance (as this article said, the process was extremely chaotic), but I guarantee he will never be a landlord again. The risk/rewards of a tenant/landlord relationship used to feel well known, but now it feels like the government can basically commandeer your property at will. So this means you are just going to be left with large corporate landlords who are diversified enough that they can take the risk. And what makes me so angry about this is that, as someone who is generally on the "left" side of the political spectrum, I see all these calls for "cancel rent", as if housing grows on trees and landlords are all some kind of Ebenezer stereotype, instead of being a lot of small-time folk just trying to get by.

at_a_remove 5y ago
I see it too, and the answer seems to be that if we just socialism hard enough, everything will work out alright. This time, this time it will work.
- uglygoblin 5y ago
  This is reductive and the reality is the system typically fights hard against socialistic policy so we end up with half solutions like a moratorium instead of the government paying the rents on behalf of the tenants. Now you claim "Socialism. Bad." because of it.
  - at_a_remove 5y ago
    Hey, speaking of reductive ... your interpretation of what I said is a great example of that. As the parent poster said, most landlords are small-timers, but they get caricatured as New York slumlords scarfing down caviar while their tenants flinch over continually sparking bare wires flicker from a partially torn down kitchen wall. We have seen how the legislation passed for relief got warped to pay out to the big timers (just think of those hotel chains) instead of focusing on the smaller folks. But when I bring up points like this, I just get the "well, if we abolished private property and everyone had a government-issued home ..." And the parent poster has had experience with that kind of comeback.

at_a_remove 5y ago

I imagine the debt collection agencies cackling madly and rubbing their hands with delight. They aren't addressed in the article but one might imagine that they're going to do blockbuster business in short order.

rland 5y ago

Just another symptom of the broader issue: at scale, real estate is either an investment or it actually houses people. It cannot be both. Unfortunately, the engine driving this thing (the whole country) is real estate as an investment.

pirate787 5y ago
This is false dichotomy. Investment capital builds and improves all real estate. The real issue are zoning restrictions that limit supply and Fed policy that has flooded the system with few places to invest.
- rland 5y ago
  Who passes zoning restrictions time and time again?
yanderekko 5y ago
>It cannot be both. Uh, of course it can.
Unklejoe 5y ago
> It cannot be both. I see this mentioned often, as if it's supposed to be obvious, but I don't really get it. Care to explain?
- dghlsakjg 5y ago
  A minimum unit of housing per person is a necessity for society. It is also incredibly difficult to scale since we can't just build more land in the places it is needed. We expect the value of our investments to rise at a rate faster than inflation. If housing is a good investment eventually it becomes unaffordable for the minimum unit per person. We are so used to the concept that housing always goes up that it is hard to grasp, so a good thought exercise is to flip housing with food. Imagine if the price of food went up more than inflation year after year, and cities restricted how much of it could be grown and sold. We would have people that buy and hold food so they can sell it to hungry people for even more next year. Some people would starve because no one is selling anything below a certain price. North America has built a system around the idea of housing values always going up. But eventually you hit a limit where a necessity of life becomes completely unaffordable (compounding returns being what they are). So if you believe that housing is an investment in aggregate (that is that all housing lumped together will rise faster than inflation), then the inevitable conclusion is that housing becomes unaffordable for more and more people higher and higher up the income chain (Ahem, bay area). Every other good that we consume with tends to go down in price (indexed to inflation especially when value is considered). Food, clothing, electronics, cars are all much better deals than they were 50 years ago. Housing is the opposite

prpl 5y ago

If it is all at once, and if the numbers overshadow current supply/demand numbers, will supply and demand both jump in lockstep leading to a lateral shuffle? If that’s true, I would guess it’s just a net negative for everyone involved (landlords would be better off trying to keep current tenants rather than renting to an equivalent tenant likely at the same rate).

sokoloff 5y ago
I suspect that those evicted will [understandably] have a tough time passing the rental application/credit/history check for their next place. Why would a landlord rent to anyone who is looking for an apartment right after the eviction moratorium expires without doing significant investigation into "are they looking for a place because they got evicted?" vs "are they looking for a place because they chose to move?" It's far better to have an empty unit than a unit occupied by someone not paying rent. I remember having to show canceled rent checks as part of the application process for a new place. If I were a landlord, this [or an equivalent] would become part of the application process.

conductr 5y ago

I did not renew leases and instead sold my properties. Seemed like a good time for selling and mass evictions is not something I wanted to be a part of as a mom-and-pop landlord.

MattGaiser 5y ago
This is what happened in Canada. Limits on evictions, except supposedly if you were moving in to live in it. So, lots and lots of properties got sold.

throwaway75787 5y ago

I resent that I have been diligently paying my rent from savings this whole time, even since I lost my job in December, while so many people are avoiding that by gaming the system. Not to speak of anyone who legitimately needs rent assistance or the moratorium.

deleted 5y ago
[deleted]

midhhhthrow 5y ago

This will have deep long lasting repercussions. Do you think anyone is going to rent out their house anymore after getting burned like this? This will further reduce the rental supply in the long term, driving rents up even more as the few remaining landlords demand ever higher cap rates.

krinchan 5y ago

I never realized boarding houses were almost entirely illegal. I’ve often wondered where they went and why they don’t exist. It seems almost the single most useful thing conservatives and libertarians could do that is precisely within their deregulatory wheelhouse. I mean we all know why this isn’t the case. It’s also why Democrats aren’t pushing for it either.

AnimalMuppet 5y ago
> I mean we all know why this isn’t the case. It’s also why Democrats aren’t pushing for it either. Um, no, we don't all know why. What are you saying is the reason?
- krinchan 5y ago
  It’ll cost votes. Universally. No matter who the constituents normally vote for they will not vote for someone that supports low-income housing of that sort. It’s kinda obvious in hindsight, I just never connected the dots till it was pointed out in this article (and read the linked article). Poor and homeless people overwhelmingly don’t vote. Land owners are overwhelmingly in favor of zoning and land use policy that preserves the value of their homes. Anyone trying to pass laws at any level from municipal up to the state and especially federal levels is likely to face near universal backlash across party lines, unfortunately.
  - AnimalMuppet 5y ago
    Oh. I feel dumb now. Of course that's the reason, or at least a very major part of the reason.

France_is_bacon 5y ago

Wall of text, sorry. . As a whole, the USA is awash in cash. If millions and millions of people lose their homes, it will be a boondoggle for large REITS (Real Estate Investment Trusts) and other companies investing in real estate. In 2008, when the housing market crashed, huge companies bought up all the properties for cheap. These companies want to make a nation of renters, and get rid of homeowners, except for the wealthy, of course. Why do you think housing and rental prices are accelerating by an unprecedented amount? It's because the large REITs are slowly gaining monopoly power and raising prices. There is not one single county in the USA that is affordable to rent, to someone making minimum wage. Affordable means that rent is less than 33% of income. I don't have a solution. What would happen if the large companies ended up owning 80% of the housing and apartment units? They could charge whatever they want. They would be in total control. For example, Invitation Homes, a subsidiary of Blackstone Group, went on a $10 billion real estate buying spree, purchasing $150 million worth of houses per week. They easily outbid anyone else. “He had a handful of cashier’s checks. These new guys had duffle bags full," said one buyer at a foreclosure auction. Corporate homeownership can not only subject tenants to higher living costs, but often destroys their ability to buy these homes themselves, as companies pay top dollar, in instant cash, to take them off the market. In 2011, Morgan Stanley issued a report called “A Rentership Society.” With over 1.6 million foreclosed homes in the United States and more on the way, the report forecast “a surge in the number of renters and a potentially massive opportunity for investors to convert the glut of repossessed homes into rental properties.” Of course, the very wealth corporations, and their owners, continue to bribe the shit out of government officials (lobbying = bribery on that scale) to prevent any curtailment. There is a lobbying organization, the National Rental Home Council, to look after their interests in the government, such as defeating rent-control laws. As investors realized the extent of their gold mine, they branched out beyond simply buying foreclosures and hit the open market, competing with everyday homebuyers. Here is an example: a high bid of $208,000 came from a couple with a child looking for their first house. American Homes 4 Rent matched their offer, all cash. They got the house, the seventh it had purchased on that street. As a result, rents have skyrocketed. When visited with the town’s vice mayor, Bruce Hull, in April 2017, he was told that, it hasn’t been that long since you could get a three-bedroom, two-bath for $1,000 a month. Those houses were now closer to $1,800 a month, and this was by design. . There is the saying: capitalism is the worst economic system, except for all the others. Well, the way in which capitalism is the worst is monopolies. The accumulation of wealth by the top percentage of a population. This is the reason there is trust-busting, as done by Theodore Roosevelt for example, is to stop the inherent unfairness built into the capitalist system. This is not a fairy tale, or made up. Monopolies are the main real drawback of capitalism. So that is really the main thing to watch out for in a capitalistic society. Government must to stop monopolies. Including Facebook, Google, etc. Corporations are NOT entities to themselves. Government gives them rights and permissions to start corporations. It is government that allows corporations to exist as a legal person, and shield investors from being personally responsible for debts if a corporation goes bankrupt. A corporation must apply to government and get permission before it opens. If you look at laws, governments can ban all kinds of corporations, regardless of what the owners want. It is the government which is in control, at the very base of it. For example, a governmental entity (town, city, etc) can ban all strip clubs from starting in their city. Or make heavy industrial companies, like auto repair shops, only open on certain streets in a city with zoning laws. They can prevent people from starting a company in their city if the person is on record for being a cheater or bad person. A company does not have unrestricted rights and it is specifically under the control of governmental rules and regulations and permission. Breaking up of monopolies is great. When AT&T was a monopoly, there was zero innovation. Why did the have to innovate? They had a monopoly. There were basically dial phones with the rotating dial. I remember when push button dialing started, it was earth-shatteringly cool. Then they had a "princess phone" that they introduced. But that was it. You had a choice of 3 models. When AT&T was broken up, there was an explosion of innovation. Thousands of phone choices. Cell phones. Pagers. It was great. . For these REITS and corporations buying up homes, there should be a hard ceiling of how many homes and apartments that they are allowed to purchase, and this should include subsidiary companies - no trying to get around it by slimy business tactics.

codyswann 5y ago

Narrator's Voice: "There will be a lot of evictions"

hui-zheng 5y ago

Not saying for everyone in this situation, but for many people who find themselves not have enough savings to survive a year or two without working. How do these people end up here in the first place? Why so many people living in the most prosperous country in the world saving nothing for themselves? Why people over spend so much and live so much beyond their means? How and when would people take some serious responsibility for themselves? I bet that you find much less first-generation immigrants in this situation, even though they make much less income and are in much more disadvantage in every part of their lives. Think about that.