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Renter's protections is one of those ideas that sound good on paper. Having to keep a non-paying rentee is disastrous for a landlord who is also trying to pay

Renter's protections is one of those ideas that sound good on paper. Having to keep a non-paying rentee is disastrous for a landlord who is also trying to pay their mortgage. Sure, some landlords are large real estate companies, but all you're doing is forcing out small landlords and ensuring that large companies own all of the rental properties. (Like all regulation, it is at a fundamental level pro-monopolistic, favoring large companies that can handle the overhead of complying with the regulation and punishing small players who cannot.)

svnt 2y ago
If you lose the mortgage on your investment property, you lose your investment property. Risk/reward and all that. If a renter is evicted, the consequences for their life are much more severe. Not all regulation is pro-monopolistic. The accumulation of general regulation and restriction is often supported by incumbents but that doesn’t support the sweeping conclusion you’ve reached.
- lukas099 2y ago
  The consequences for renters is also severe if not enough housing is supplied because it doesn't make financial sense to do so.
- patrick451 2y ago
  If I own rental property, I should not be personally responsible for subsidizing your bad financial decisions.
- weitendorf 2y ago
  It's not as simple as saying that the downside for landlords is merely loss of their investment and that the downside for renters is homelessness. The risk of non-paying tenants influences market dynamics on both sides and impacts even landlords who never encounter non-paying tenants, and even renters who make all their payments perfectly. For landlords, they have to be much more selective of which tenants they take, and deny rental applications for those with eg bad credit or incomes that are technically enough to cover rent but leave too little of a buffer. They have to either pay for some kind of insurance (I don't know if this exists but I would assume it does) or diversify across enough properties so that they're financially protected from the risk of getting a non-paying tenant. And of course, yes they may have to deal with the hassle of a drawn out eviction of a non-paying (and often intentionally or unintentionally destructive) tenant who will likely never be able to repay the landlord even if held liable in civil court, which raises their costs in aggregate. For tenants, besides having those increased costs and income/credit requirements passed through to them, they also have to pay higher security deposits. But probably the biggest problem is the effect on supply. Small scale property owners (especially the kind that ends up becoming an "accidental landlord" because they eg bought a condo and then moved) are highly disincentivized from renting their property out, and when they do, they're highly incentivized to not put it on the open-market and instead opt for their personal network/word of mouth/in-group. For example, lots of large tech companies have internal housing rental groups and many properties may only be advertised in places like that, or within a tight-knit social group where there are real reputational risks to being a non-paying tenant. Really the problem IMO is that excessively permissive rental protections are a kind of social welfare benefits that are purely born by one part of the private sector. If governments compensated landlords for unpaid rent and intentional destruction from uncooperative tenants (which they have done in some cases for eg covid, but these are often done ad-hoc so landlords can't count on them and adjust practices accordingly) who take 6-12+ months to evict, then most of these problems would disappear.
carlosjobim 2y ago
The landlord deserves zero empathy in these cases. It is his job to select a reliable tenant, that's usually his entire job. Anybody else who fails completely with their responsibilities at their job can expect to be fired and lose their income, or worse. There's an extremely large surplus of honest, tidy and reliable tenants, so it's not a problem for a responsible landlord to avoid going to court, if they just put in the minimum effort at doing their job. And if they can't handle that, they should sell the real estate and not be a landlord.
- recursive 2y ago
  Wait, who's responsible for maintaining the building?

svnt 2y ago

If you lose the mortgage on your investment property, you lose your investment property. Risk/reward and all that. If a renter is evicted, the consequences for their life are much more severe. Not all regulation is pro-monopolistic. The accumulation of general regulation and restriction is often supported by incumbents but that doesn’t support the sweeping conclusion you’ve reached.

lukas099 2y ago
The consequences for renters is also severe if not enough housing is supplied because it doesn't make financial sense to do so.
patrick451 2y ago
If I own rental property, I should not be personally responsible for subsidizing your bad financial decisions.
weitendorf 2y ago
It's not as simple as saying that the downside for landlords is merely loss of their investment and that the downside for renters is homelessness. The risk of non-paying tenants influences market dynamics on both sides and impacts even landlords who never encounter non-paying tenants, and even renters who make all their payments perfectly. For landlords, they have to be much more selective of which tenants they take, and deny rental applications for those with eg bad credit or incomes that are technically enough to cover rent but leave too little of a buffer. They have to either pay for some kind of insurance (I don't know if this exists but I would assume it does) or diversify across enough properties so that they're financially protected from the risk of getting a non-paying tenant. And of course, yes they may have to deal with the hassle of a drawn out eviction of a non-paying (and often intentionally or unintentionally destructive) tenant who will likely never be able to repay the landlord even if held liable in civil court, which raises their costs in aggregate. For tenants, besides having those increased costs and income/credit requirements passed through to them, they also have to pay higher security deposits. But probably the biggest problem is the effect on supply. Small scale property owners (especially the kind that ends up becoming an "accidental landlord" because they eg bought a condo and then moved) are highly disincentivized from renting their property out, and when they do, they're highly incentivized to not put it on the open-market and instead opt for their personal network/word of mouth/in-group. For example, lots of large tech companies have internal housing rental groups and many properties may only be advertised in places like that, or within a tight-knit social group where there are real reputational risks to being a non-paying tenant. Really the problem IMO is that excessively permissive rental protections are a kind of social welfare benefits that are purely born by one part of the private sector. If governments compensated landlords for unpaid rent and intentional destruction from uncooperative tenants (which they have done in some cases for eg covid, but these are often done ad-hoc so landlords can't count on them and adjust practices accordingly) who take 6-12+ months to evict, then most of these problems would disappear.

carlosjobim 2y ago

The landlord deserves zero empathy in these cases. It is his job to select a reliable tenant, that's usually his entire job. Anybody else who fails completely with their responsibilities at their job can expect to be fired and lose their income, or worse. There's an extremely large surplus of honest, tidy and reliable tenants, so it's not a problem for a responsible landlord to avoid going to court, if they just put in the minimum effort at doing their job. And if they can't handle that, they should sell the real estate and not be a landlord.

recursive 2y ago
Wait, who's responsible for maintaining the building?