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Hey, so here's something I don't understand, some people are saying that the end of the eviction moratorium will push rent prices up as from now on the landlord

Hey, so here's something I don't understand, some people are saying that the end of the eviction moratorium will push rent prices up as from now on the landlords will demand some higher premium for future events like this. But isn't it the case that we're about to hit a massive supply of new homes for sale and places to rent once the evictions get processed? And wouldn't such premiums be already embedded in new rents?

aardvarkr 5y ago
I agree, it’s contradictory. Here’s a hot take for you: people generally have a preset agenda that they want to push and will use anything they can to push it as long as it makes sense on a surface level because it’s just a means to an end and their intended audience doesn’t care because the audience wants to hear about things that conform to their opinions. Yeah that’s pretty cynical and I’m not usually that way but I just took that train of thought to its logical end. I guess people like to be told what to think and don’t care if it doesn’t stand up to scrutiny
refurb 5y ago
The rental market is local, not national. You could evict a ton of people in say Seattle, be extra strict about who you rent to next and still have no problem finding tenants. And that’s what’s happening. In the past, landlord’s knew they had a formal eviction process to rely on if rent wasn’t paid. Now they are assuming that’s either unavailable or severely delayed, so they adjust who they rent to. Marginal tenant? Leave the place empty for a month and wait for someone better. So not necessarily rents going up, but much more strict criteria for renting in the first place, which reduces supply (at least for certain demographics).
- conductr 5y ago
  I’m a landlord and I don’t think that’s the average landlords rationale. Yes you become more picky regarding tenants because you don’t want to deal with an eviction. That was always the case though. You’re just going to need to carefully understand how the tenant behaved during Covid. Eg. Did the get evicted from being 18 months in arrears that they will never repay? Did they lose stable income for a period of time but now it’s back? Did the sell a billion dollar tiny house in $HUB and move to your town flush with cash and a remote work lifestyle? All very different and likely already biased groups demographically speaking. But now, you may have some losses to recoup and this whole thing is akin to theft/shrinkage of goods. It has to get factored into the price. Also, the biggest thing pushing rental prices IMO, housing prices. Since buying is the alternative to renting, they are strongly correlated.
  - refurb 5y ago
    I think the main point is that Covid is not over, and another eviction moratorium is not out of the question. So yes, you can be more picky to avoid an eviction, but what if an eviction is not an option next year? What do you do then? From what I've heard some landlords are moving the bar from the top 30% of tenants to the top 10% and would prefer to keep a unit empty just to get them.
    - conductr 5y ago
      > whole thing is akin to theft/shrinkage of goods. It has to get factored into the price I’d agree and in my mind it’s the risk factor I alluded to with this above quote. In my experience, increasing prices substantially automatically moves the bar for you since only people willing to pay the new price are actually highly qualified tenants. FWIW, I had a $2700/month house that’s now at $4000/month. I did Essentially what you mentioned. In past, I’d list it and have it rented in a week or two. But had to sort through a bunch of under qualified applications. The new price only got a few applicants but they were all highly qualified. The tenant I accepted pre-paid for 12 months lease. The tight housing market and cash rich buys are the driving force though. My tenants probably would have bought a house but couldn’t find one and got pushed to renting until they do. This didn’t exist before, at least not to current levels, and without it I don’t think I’d be able to charge a premium. I don’t know what I’d do if I was a landlord of low rent units. You cannot “go up market” like I did. I would certainly have to find a way to be more picky. Definitely not renting to someone who has a past due debt to their previous landlord. Being more diligent about checking landlord references, etc.
Dracophoenix 5y ago
I think you're conflating two events which are correlated with the pandemic and claiming The "boom" in housing sales is more like that decade-old canard about the "shortage" of software engineers. Many of those sales aren't to the average joe moving to bottom-of-the-barrel low cost areas. Rather the to urban professionals (and a small but increasing part to financial firms) who wish to reside in an area cheaper than those in major metropolitan areas without being too distant from them. In other words it's a new suburban exodus and white it had begun a few years ago, it's been catapulted forward by state quarantining policies and WFH. In addition, greater individual access to market data has allowed for deals to be made across state (and even international) lines. The housing stock hasn't increased, just the options of where to live. With regards to landlords, many don't have any guarantee that they'll have any new paying tenants, leave alone one that would subsidize the contractual violations of the previous tenants. As rent isn't infinitely elastic, landlords will likely have to sell their property to a financial holding company or a luxury property developer in order to recoup the losses sustained under the moratorium.
- Dracophoenix 5y ago
  *claiming that their concurrent occurrence implies one event is the cause of the other.

aardvarkr 5y ago

I agree, it’s contradictory. Here’s a hot take for you: people generally have a preset agenda that they want to push and will use anything they can to push it as long as it makes sense on a surface level because it’s just a means to an end and their intended audience doesn’t care because the audience wants to hear about things that conform to their opinions. Yeah that’s pretty cynical and I’m not usually that way but I just took that train of thought to its logical end. I guess people like to be told what to think and don’t care if it doesn’t stand up to scrutiny

refurb 5y ago

The rental market is local, not national. You could evict a ton of people in say Seattle, be extra strict about who you rent to next and still have no problem finding tenants. And that’s what’s happening. In the past, landlord’s knew they had a formal eviction process to rely on if rent wasn’t paid. Now they are assuming that’s either unavailable or severely delayed, so they adjust who they rent to. Marginal tenant? Leave the place empty for a month and wait for someone better. So not necessarily rents going up, but much more strict criteria for renting in the first place, which reduces supply (at least for certain demographics).

conductr 5y ago
I’m a landlord and I don’t think that’s the average landlords rationale. Yes you become more picky regarding tenants because you don’t want to deal with an eviction. That was always the case though. You’re just going to need to carefully understand how the tenant behaved during Covid. Eg. Did the get evicted from being 18 months in arrears that they will never repay? Did they lose stable income for a period of time but now it’s back? Did the sell a billion dollar tiny house in $HUB and move to your town flush with cash and a remote work lifestyle? All very different and likely already biased groups demographically speaking. But now, you may have some losses to recoup and this whole thing is akin to theft/shrinkage of goods. It has to get factored into the price. Also, the biggest thing pushing rental prices IMO, housing prices. Since buying is the alternative to renting, they are strongly correlated.
- refurb 5y ago
  I think the main point is that Covid is not over, and another eviction moratorium is not out of the question. So yes, you can be more picky to avoid an eviction, but what if an eviction is not an option next year? What do you do then? From what I've heard some landlords are moving the bar from the top 30% of tenants to the top 10% and would prefer to keep a unit empty just to get them.
  - conductr 5y ago
    > whole thing is akin to theft/shrinkage of goods. It has to get factored into the price I’d agree and in my mind it’s the risk factor I alluded to with this above quote. In my experience, increasing prices substantially automatically moves the bar for you since only people willing to pay the new price are actually highly qualified tenants. FWIW, I had a $2700/month house that’s now at $4000/month. I did Essentially what you mentioned. In past, I’d list it and have it rented in a week or two. But had to sort through a bunch of under qualified applications. The new price only got a few applicants but they were all highly qualified. The tenant I accepted pre-paid for 12 months lease. The tight housing market and cash rich buys are the driving force though. My tenants probably would have bought a house but couldn’t find one and got pushed to renting until they do. This didn’t exist before, at least not to current levels, and without it I don’t think I’d be able to charge a premium. I don’t know what I’d do if I was a landlord of low rent units. You cannot “go up market” like I did. I would certainly have to find a way to be more picky. Definitely not renting to someone who has a past due debt to their previous landlord. Being more diligent about checking landlord references, etc.

Dracophoenix 5y ago

I think you're conflating two events which are correlated with the pandemic and claiming The "boom" in housing sales is more like that decade-old canard about the "shortage" of software engineers. Many of those sales aren't to the average joe moving to bottom-of-the-barrel low cost areas. Rather the to urban professionals (and a small but increasing part to financial firms) who wish to reside in an area cheaper than those in major metropolitan areas without being too distant from them. In other words it's a new suburban exodus and white it had begun a few years ago, it's been catapulted forward by state quarantining policies and WFH. In addition, greater individual access to market data has allowed for deals to be made across state (and even international) lines. The housing stock hasn't increased, just the options of where to live. With regards to landlords, many don't have any guarantee that they'll have any new paying tenants, leave alone one that would subsidize the contractual violations of the previous tenants. As rent isn't infinitely elastic, landlords will likely have to sell their property to a financial holding company or a luxury property developer in order to recoup the losses sustained under the moratorium.

Dracophoenix 5y ago
*claiming that their concurrent occurrence implies one event is the cause of the other.