While I realize this is a personal anecdote, the pandemic made starkly clear that the government will basically commandeer your property and force you to let tenants live there, so with that added risk it's no surprise landlords are being extra careful who they rent to.
I had a family member rent to someone in Feb of 2020. He paid one month of rent, and then nothing until the government finally let the eviction go through in Dec 2021. I don't entirely blame.the government, in that if my family member did even basic due diligence they would have seen how much of a grifter this guy was, with previous bankruptcies and other recent evictions. Still, in the past, when you made a mistake and got a bad tenant, the option was eviction. And while the government largely paid most.of this grifter's rent, my family member was still out over 15k in lost rent and legal fees.
As a consequence of this, nobody in my family would ever consider renting a property as a long term rental again - there is just too much risk, which means you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.
This happened to me in Seattle. I have a duplex and my renter just stopped paying. It's a joke that this had anything to do with Covid - the job market is tighter than it's ever been.
I will never again take a chance on a renter in this city. If you have anything wrong with your credit or income history -- I'm sorry, but I can't take a chance on anyone anymore. Good luck finding a place to live. Don't blame me, blame the city government.
The other thing that's happening: people like me rarely advertise our units. Instead we look through trusted networks -- friends, family, and co-workers. If you don't have a connection, you can't find these units at all.
> I'm sorry, but I can't take a chance on anyone anymore. Good luck finding a place to live. Don't blame me, blame the city government.
I would point out that if people in your position stopped buying rental units and invested your money elsewhere, there would be more housing on the market for renters looking to own their own home.
It's always weird to me how landlords act like they're the ones who are actually building the units. On the supply and demand curve they're on the demand side, not supply.
> As a consequence of this, nobody in my family would ever consider renting a property as a long term rental again - there is just too much risk, which means you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.
Personally I think large corporate landlords in combination with sensible nationwide renters rights are preferable. There are tradeoffs of course, but the protection of the private/small rentier class has had many more bad effects than good for housing policy generally IMO -- Prop 13 being a good example. I think the way that you're describing your relationship with your property in terms of ownership and how you feel about the government intervening in that is shared by most small landlords with investment properties, and gets to the core of a lot of the problems inherent in the small landlord paradigm. Too much skin in the game (lack of diversification) and a dependency on turning a steady profit from a speculative investment in what is a basic human need. There are a lot of things that got us here in the U.S. and unfortunately the reality will likely be a continuance of the status quo.
So the answer to people not paying rent is for small landlords to..not own land?
And having Amazon rent you an apartment is somehow preferable?
How about we do the critical thinking, fix zoning laws where necessary, allow tenants to be kicked out for…being shitty tenants, and make an effort to put laws in place that make it easier for people to make a living wage and pay their rent.
> So the answer to people not paying rent is for small landlords to..not own land?
Yes actually. Well, in part at least. I would put it in the non-reformist reform category. It opens up the possibility of actually doing something about renting in this country, unlike the status quo where people speculating on property demand law change whenever governments choose to keep people in homes instead of protecting their investment income. Of course, folks can own land if they want. But we should absolutely discourage treating what is at its core a shared resource critical to human existence as an investment vehicle.
> And having Amazon rent you an apartment is somehow preferable?
Yes. Regulating Amazon and regulating Ms. Jones who rents out her second floor are much different propositions for the average voter.
> How about we do the critical thinking, fix zoning laws where necessary, allow tenants to be kicked out for…being shitty tenants, and make an effort to put laws in place that make it easier for people to make a living wage and pay their rent.
It is interesting that in your formulation, critical thinking can only lead to a conclusion where the makeup of the rentier class and how we regulate housing investment are irrelevant. Are you a landlord?
I think being a landlord is like everything else, there are upsides and downsides, and there are "amateurs" and "professionals".
By which I mean that being a landlord is a business, and it takes time and experience to learn the ins and outs of any business, and ultimately experience improves performance.
By extension the landlord with one property, gets little overall experience (maybe one lease a year or so) so they encounter all the rental-business-challenges, one at a time over a long period of time.
It may take years to get a bad tenant, or years to figure out what is the correct amount to spend on maintainence, or discover what kind of garden works best, and so on.
With only one property under management, there is also magnification of the effect of individual events. One property, and one bad tenant, is a big deal. One property and the need for a new kitchen, of bathroom etc is a big deal.
A portfolio of multiple properties helps to spread the load. 1 bad tenant is only 10% of income and so on. Plus with 10 properties you can have a regular plumber, electrician, handyman etc, and so you get good rates, and good service, because you become important to them.
Your family member has learned an expensive lesson about vetting tenants, that lesson will cause some to exit the market, and others how to "understand the landlord business better."
Typically it makes landlords more risk-adverse, and this has knock-on effects for those who are indeed bad tenants. (for starters the only ones who will rent to bad tenants are inexperienced (bad?) landlords.
The spill over of this are folks who have flags (previous bankruptcies) who may be perfectly OK now, but are victim then to landlords that aren't prepared to take on that risk.
Some larger landlords can take on some percentage of "medium risk" - small landlords will learn (the hard way) to only take on "no risk".
It would be preferable that real estate becomes so hazardous and awful to “invest” in for any party it becomes cheap enough for most people to buy and use for its intended purpose.
The small vs. large landlord distinction is mostly immaterial. The behavior of landlords is dictated by their level of relative market power. When it too high relative to tenants they will start to fuck you over. It is guaranteed to happen unless there is a countervailing force to drive bad landlords into bankruptcy and let good landlords take over.
The fact its a basic human need is also something of a red herring. So is food but we dont have abusive amateurs running that market. It functions.
The problem with this market is that you can own largely untaxed land. Ownership of land inhibits competition in the rental market and drives dysfunction. It lets amateurs play in the same market as professionals and it richly rewards those with extra capital to spare to buy ever more desirable locations rather than rewarding those who simply do a better job at providing housing.
Frankly, this is an awful idea. Investment in real estate is basically the best way for the middle class to use their savings to build wealth and long-term financial stability.
And I don't see how modern property law is geared toward the interest of small landlords. In every major city—i.e. the places with affordability problems—the laws are extremely friendly to tenants and hostile to landlords. Sure, there's the peculiarity of Prop 13 in California, but I don't see how you can generalize that to any other part of the country.
> Frankly, this is an awful idea. Investment in real estate is basically the best way for the middle class to use their savings to build wealth and long-term financial stability.
There are a lot of things that are profitable but not good for society as a whole. Land as an investment vehicle is one of them.
> And I don't see how modern property law is geared toward the interest of small landlords. In every major city—i.e. the places with affordability problems—the laws are extremely friendly to tenants and hostile to landlords. Sure, there's the peculiarity of Prop 13 in California, but I don't see how you can generalize that to any other part of the country.
These policy wars are happening constantly in most densely populated parts of the US. Here's an article covering one example outside of California: https://crosscut.com/opinion/2021/06/do-renter-protections-r.... I disagree with the characterization of status quo renters rights in the average American city as being hostile to landlords and friendly to renters -- what would be an example of a policy that you classify as being in this category?
For one, in many jurisdictions it can take two, three, even four months to evict a non-paying tenant.
Many cities will give free attorneys to tenants being evicted. So now the landlord has a bunch of factually dubious and difficult to dispute allegations made against them.
> For one, in many jurisdictions it can take two, three, even four months to evict a non-paying tenant.
Eviction is a legal proceeding for a lot of good reasons for both tenant and rentier. You could say the process could be faster, but it is fair.
> Many cities will give free attorneys to tenants being evicted. So now the landlord has a bunch of factually dubious to difficult to dispute allegations made against them.
Do you think that pro-tenant necessarily means unfair? I'm just saying that there are extensive tenant protections that make this a difficult space to operate in, especially if you serve low-income tenants who are more likely to become delinquent on rent or have behavioral issues.
And when you have a free attorney and have no good case because you're just not paying your rent, your best bet is to throw spaghetti at the wall and see what sticks. Have you ever worked with lawyers. That's how every single lawsuit works. The initial complaint and counter-complaint has a bunch of claims, almost all of them legally or factually dubious, and they get whittled down over the course of motion practice. The whole point is that it's expensive and time-consuming and intimidating for the other side.
> Frankly, this is an awful idea. Investment in real estate is basically the best way for the middle class to use their savings to build wealth and long-term financial stability.
Yeah, at the expense of everyone lower on the financial ladder than they are. Personally, I'd be ok with it being straight up illegal to own a residence you do not live in. A bunch of rich people might cry about it, but compared to the suffering of people living on the street or just struggling to pay outrageously inflated cost of basic shelter, I don't give a shit.
I have many times, it has almost always been much preferable to my experiences with small landlords. The micromanaging of apartments, corner cutting when it comes to maintenance efforts, bizarre unenforceable stipulations in rental agreements, discrimination and more -- I've seen some of each of these problems in my time renting from both large and small landlords, but the small landlords were almost always worse. Less capital and less experience is part of why I'm guessing. For me, I don't care about my landlord knowing my name if my apartment is managed competently and within local legal guidelines.
My experience with corporate landlords is the complete opposite of yours. You call the office and they tell you to call the manager. You call the manager and they tell you to call the office. You call the office back and the call gets disconnected. You drive down to the office and they are "in a meeting". Letters and emails are ignored. The only way to get them to do anything is to sue them. Apparently this tanks your "shadow credit score" though.
The individual landlords I have rented from were always much more flexible and accommodating. When I call them they are responsive. They treat you like another person instead of a number on a spreadsheet. They actually cared about their property and would do even preventative maintenance.
As for the first statement it is my experience with my current landlord. Their negligence resulted in the death of an infant and they still refuse to change their policies.
As for the second statement see this image from the article.
> Still, in the past, when you made a mistake and got a bad tenant, the option was eviction.
I think a lot of landlords see renting as easy money and then when they do have an issue like this they are looking for anyone to blame when they really never did their due diligence. There was relief for landlords during the pandemic for landlords as well, especially those that still had a mortgage on properties.
If you enact laws that make it impossible or very hard to punish defectors from business contracts, don't be surprised that the particular market sector withers and loses its vibrancy.
Geniune poverty should be taken care of by the welfare system, not by random landlords who may be in a precarious situation themselves. Not everyone who owns an extra property is rich and it does not make sense to treat a small local businessperson exactly the same as Amazon.
Landlords and businesses owners got their own form of welfare, which was significantly more than those that were without a job. Landlords need to know landlord/tenant laws but many simply want to be able to do whatever they want then act surprised when they find out what they did violated some state law. I have little sympathy for landlords who got relief then want to complain. Reminds me of businesses that got millions in PPP loans, but then put up signs saying... sorry we have a crappy business, it was due to welfare.
Still, in the past, when you made a mistake and got a bad tenant, the option was eviction.
You say "in the past" but you really mean "when there isn't a global pandemic". Events change things. It's simply a risk of renting property to people that very few landlords bothered to consider.
There is absolutely no reason why landlords should be immune to circumstances that affect everyone. Complaining about it, and tacitly suggesting that your rental income should be prioritized over a disease that eventually killed hundreds of thousands of people, is silly.
A society that literally enable cheaters is not going to go far, and it's actually (like in this case) going to backfire to the (poor and) honest people.
It's the same in France.. some basically end up paying gypsies to forcefully remove tenants that dont' pay
A society that literally enable cheaters is not going to go far..
As a permanent policy, sure. That wouldn't work.
However, a society that allows landlords to force people to move when everyone is meant to be quarantined will have significantly bigger problems than a temporary block on evictions even if that hurts landlords.
> And while the governent largely paid most.of this grifter's rent, my family member was still out over 15k in lost rent and legal fees.
Not "the government". Taxpayers. Taxpayers bailed out rent seekers.
> you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.
If this were to happen, it would be a good thing. Consolidation erodes the electoral base of rent seekers, which makes Georgist policies much easier to implement.
> > you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.
> If this were to happen, it would be a good thing.
Doubtful. For one thing, renting from individuals is far more pleasant than renting from giant housing conglomerates. With an individual landlord everything is negotiable and flexible, it's a person you can talk to. When renting from a corporation, there are strict rules enforced by teams of lawyers and zero flexibility.
> Consolidation erodes the electoral base of rent seekers
You got that exactly backwards. Yes, there are more individuals renting out their single properties each, but those are ordinary people who have no lawyers and no lobbyists and they don't have any coordinated voice and no influence with politicians.
The more rental properties are consolidated to giant corporations, the more outsized their influence in congress becomes as they can afford an army of lobbyists to bend the laws ever more in their favor.
Depends on the individual you are renting from. I learned the hard way to never have a lawyer for a landlord. Landlords shouldn’t be allowed to represent themselves (too bad it’s a constitutional right!). Anyway, come to find out the guy set the deposit amount specifically to make it just enough that even if you went to court to get it back, you’d never get it back because that’s how much you’d spend to get it back.
After randomly running into his ex-wife at a party and hearing that it was all done on purpose, we started to put together a class action with all of his past tenants. Then we moved to the EU instead.
> Doubtful. For one thing, renting from individuals is far more pleasant than renting from giant housing conglomerates. With an individual landlord everything is negotiable and flexible, it's a person you can talk to. When renting from a corporation, there are strict rules enforced by teams of lawyers and zero flexibility.
I've had the exact opposite experience.
> You got that exactly backwards. Yes, there are more individuals renting out their single properties each, but those are ordinary people who have no lawyers and no lobbyists and they don't have any coordinated voice and no influence with politicians.
"Rent seeking" is a very specific economics term which has nothing to do with landlords. In fact, in this scenario, the tenants exploiting government restrictions to capture the landlord's value were the ones engaged in rent-seeking.
The first sentence of the link you posted shows that the GP used the term correctly:
> Rent seeking (or rent-seeking) is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity.
Landlords produce nothing. They don't provide housing; builders do. All landlords do is hoard housing and get other people to pay their mortgages. They literally want to get paid for owning stuff.
Anyone who has said that "landlords produce nothing" have never been a landlord (and, honestly, I'm not sure they've ever owned a house either).
And I can say this as someone who is a homeowner. I hate owning a house, and I loved renting. There is a ton of work to do maintaining a house, and it's not really a job I want - I've got a job, and I don't want another one. With renting, if anything is broken, anything needs maintenance - not my problem. Also, if I want to move, I just leave when my lease is up. No need to go through the entire house sales process (which, obviously is quite easy these days, but obviously it's not always like that, and it's rarely like that everywhere - plenty of people have been "locked" into their homes by declining neighborhood values).
I'm certainly not saying my approach fits for everyone, but saying "Landlords produce nothing" is just false. While land may be an appreciating asset, homes themselves fall apart over time and need lots of upkeep and maintenance.
There's a trivial way to check whether or not a landlord is a rent seeker: offer to pay the bill for a mutually agreeable all-inclusive property management service in lieu of rent.
At the very least, they do maintain housing. It takes constant upkeep and updating to keep a structure in decent condition. Unless they're a slum lord, which isn't the most sustainable business model.
Some landlords rehab a completely unlivable structure into something livable. That's something too.
I am a renter and I hesitate to own my home because of the upkeep costs and responsibility. So I subscribe to shelter-as-a-service.
Yes, landlords maintain housing. So do homeowners who live in their homes. If anything, homeowners have more incentive to properly maintain their property than landlords, because they live there. Maintaining things properly often costs more money than doing the type of "good enough" repair that a landlord would be tempted to do because it's less money out of their pocket. So, if anything, "landlords maintain housing" is an argument against landlords.
The point is that "landlords maintain housing," along with "landlords pay property taxes" and other such statements are at best a wash. Those things would happen anyway, no matter who owned the housing.
Yup. What a homeowner does to maintain their home is a nontrivial amount of work and cost, so if a landlord does it they should charge a nonzero price for that service, right?
Or are you saying they shouldn't be 'competing' with homeowners at all? In my experience a landlord is not willing to buy at the same price point as an owner occupier, as they are less emotional about the property.
I used to be a landlord and didn't enjoy it much, so nowadays I own paper (stocks, notes) and literally do nothing.
The residents are no better off paying a landlord to pay for repairs than they are paying for them themselves. That's ridiculous. How does paying an inflated price for the same "service" I can do for myself by picking up a phone benefit me?
To be clear, I am saying landlords should not exist, at least not as they do now. They're the equivalent of scalpers for housing.
The landlord providing the tenant with shelter (and the labor of maintaining that shelter, fronting the capital for the ownership of the shelter, insuring the shelter, assuming the risks associated with ownership, etc) is in fact a "reciprocal contribution of productivity". He is engaged in collecting rents, but he is not rent-seeking, which is the process of capturing value without providing anything of economic value in return. The exchange of money between landlord and tenant results in a net economic gain for both parties, and is therefore not rent-seeking, while the tenant exploiting government restrictions on evictions to capture shelter without providing a reciprocal contribution is engaged in rent-seeking (specifically, he is seeking the landlord's rents!)
If you read past the first sentence of the article it explains this quite clearly.
What really happened was that taxpayers (read: People who earn and save money and hold some property) bailed out the people who took an opportunity to skip out on paying rent, and took a hit anyway, while their renters were getting all kinds of other free handouts in taxpayer subsidies. Great. So maybe we need some wealth redistribution. But cheering the consolidation of the rental market in the hands of corporations is like snickering evil. You're advocating for the destruction of the middle class. I guess it would make revolution an easier sell. But you know what else could make you happy? Joining the middle class, buckling up and saving money, taking the hard part of it without feeling like a constant victim, and stop wasting your time trying to destroying the wealth people spend their lives working for. Harming other people to bring them down really isn't going to elevate anyone, and you know it. Rooting for the middle class to be destroyed for your own personal satisfaction is greedy, indolent and ultimately self destructive.
[edit: It's sad to see you channeling your grievance into something that will only keep you down.]
Pffft - lmao. So everyone should be equally poor? Have you read no history? The only thing the Soviet Union was attempting to do by building socialism was to turn illiterate serfs into a "middle class". The actual, successful construction of a middle class via market capitalism turned out to be the most successful experiment in human human history to lift hundreds of millions of people out of poverty, eradicate famine and plagues, and create almost universal literacy. The very fact that you have the words and "thoughts" with which to question bourgeois society speaks to the great pains your forebears went to to make sure you weren't a slave peasant, and that's what you want to go back to? Shame on ya.
Is anyone else concerned that the screening report just has yes/no for existence of landlord-tenant court records? Regardless of whether the tenant won (or even started, it could be the landlord getting sued for security deposit for example) the case.
I've sued a landlord because their contracted towing company illegally took my car.
I won that case and got my towing fees back but I guess there's a stain on my record now even though this is really the landlord's fault for picking a shitty towing company who can't even follow state non-consent towing laws.
That's exactly the kind of tenant they don't want! So from the landlords perspective whether you won or lost is irrelevant, if you lost you were a 'bad renter' and if you won then you are apparently savvy enough to beat a landlord in court which has to be like kryptonite to them, they are lying awake in bed at night worrying about the existence of such tenants.
Indeed, though is there any protected status in the US for "people that make use of the court system" that would bar such discrimination? As a landlord, legal costs will eat into your margins real fast. The landlord uses this service to gauge their own risk taking this person on as a tenant, and the presumption (accurate, I'd imagine) is that past landlord-tenant court records predicts a higher chance that this landlord will incur legal costs (and possibly also negative judgments) with this tenant as well.
Personally, I certainly don't like this practice as a prospective tenant, but it would nonetheless be tempting to consider using it were I a landlord.
> it would nonetheless be tempting to consider using it were I a landlord.
Of course it would. I still don't like this practice.
> is there any protected status in the US for "people that make use of the court system" that would bar such discrimination?
There are certain laws that protect people who use the court system in some ways, but there is not (to my knowledge) a general protection. But whistleblowers, litigants in harassment claims, etc. have anti-retaliatory protections.
It is not considered retaliation legally. Whistleblowers, people who complain about bad treatment or sexual harassments or illegal practices in fact do have bigger problems to get hired.
The janitor at my old job sued his previous employer for racial discrimination. It was extremely egregious and well documented. He couldn't get hired anywhere else in his previous field because when you googled his name the court documents were the first thing that popped up.
Yep. I remember reading about a woman who was whistleblower - she exposed serious financial crime and even got special reward for it (from some non-profit). People involved in crime in fact ended up in prison.
Later, there was interview with her and she said she had huge problem to find a new job for years. Employers really did not like that she exposed someone else.
If the whistle-blower acted in concert with even one other coworker, and made it clear to all that their actions were concerted, and the whistleblowing was itself legal (e.g. not divulging a trade secret for the sole purpose or harming the employer), then the refusal to hire such a worker could be a violation of 8(a)1 of the National Labor Relations Act.
But this would be hard to demonstrate in most circumstances.
It depends. Almost all whistleblower laws are statutory and vary by jurisdiction and subject. Therefore, it just depends on how the statute is phrased - and almost never did the legislature even consider this (or other questions like “What if the whistleblower was wrong?”) So, the results tend to vary considerably.
The yes/no in some cases could allow fixed-income people to be approved when they are short of the required income or credit history because they've never had a rental problem. A lot of fixed-income seniors pay a large portion of their income to rent but have done so reliably for decades, for example.
So now that I know about these records, I better think twice before asserting my rights as a tenant. If my landlord decides to steal my deposit, ignore the leaky roof, and refuse to fix the furnace, I'll just roll over and take it. Can't have a "Yes" on my permanent record; won't be able to rent in the future!
This has been the advice for quite some time. Just having court cases on your record can be seen as a black mark for both housing and some employers regardless of you winning them or their merit.
It's not a majority yet, but it's been slowly eating it's way into these sectors for the past couple decades.
Similar "scores" are being silently enacted for such trivial things like returning merchandise to retail stores. Stores now share information and will outright reject returns if you are deemed to have done too many returns in the past at a totally unrelated business.
Leave town with a $2 bank balance and forget to close the account out? Good luck getting a new bank account for the next 7 years with the "minimum account balance" fees drawing it into the negative regardless of fixing the oversight when notified.
Same for chargebacks on your credit card - chargeback more than then the calculated long-term EV of your account and you will find the process all of a sudden becomes very difficult and your account is likely closed shortly thereafter.
Same goes with Amazon - have a high value account that does $50k/yr in purchases? Returns are always granted no questions asked. Low value? You will start seeing pushback from customer service very quickly and account closure regardless of the validity or reasons for return.
The above are all examples I've personally experienced or witnessed.
Airline mileage programs that turned into revenue programs are likely where most of this ends up. Companies simply will stop servicing low EV customers altogether on an individual vs. the group basis as it's done now.
Just to take the bank example: the bank should block any attempts to remove money from the account once it goes negative and then put a hold on it until the owner contacts them. Charging negative and continuously charging fees should just be illegal.
It's probably wrong for landlords to be able to hold suing a previous landlord and winning against a prospective tenant. The winning part implies the tenant was correct and asserted their rights.
Of course, tenants being afraid to assert their rights is in the unethical self-interest of a landlord. A society that's attempting to be just should not want that.
That goes both ways. Tenant could lose and be in the right. At the very least if tenant won it shouldn’t be held against them as this discourages utilization of tenant protection laws.
Yes, it goes both ways; the tenant could have won by cheating and lying. There is no way to conclude anything without examining all of the facts and coming to your own conclusions.
Most of the time the amount is sufficient for small claims, and usually those records, especially if given a settlement, are not so much public record.
The point is that this yes/no datum is going to be interpreted as a black stain, regardless of what it means.
A landlord reviewing 50 applications for a place isn't going to go into the particulars. Depending on the landlord's approach, anything with a yes won't make the short list.
Credit reports should not have suspicious stains whose meaning could be that there is in fact nothing wrong (there was a dispute which was caused by someone else, and resolved in the applicant's favor).
The obvious solution is the one I've long advocated in this forum and elsewhere: a housing market where landlords can pick and choose tenants should not be permitted to exist. Build housing until the median number of applicants for a vacant home becomes 1 or 0. Make landlords desperate again.
You can make the exact symmetrical argument if tenants are not allowed to pick landlords (which is what happen in practice). Well, except about rent increase that happens anyways.
What market are you in where tenents can't pick landlords? With mom and pop landlords, it can be a crapshoot. But I have rented from coorporate landlords twice. Each time, I was able to research them, and I avoided several with bad reputations. I've never had problems with the landlords I did rent from.
> a housing market where landlords can pick and choose tenants should not be permitted to exist
1. That implies that home owners would not be permitted to rent only to family members (or friends), because that constitutes picking and choosing tenants.
2. Not being able to pick and choose tenants literally means you cannot evict existing tenants for any reason, like years of non-payment of rent, or damage to the unit or whatever. Such a move can be interpreted as trying to replace tenants with a better choice of tenants; i.e. picking and choosing tenants.
3. Only a complete fool or someone desperate would rent their home out under such a rule. (Even in a housing market in which you can screen tenants, you can still get awful tenants. Imagine if you had tenants foisted upon you by some rules. Yikes!) The result would be fewer rental units on the market.
4. But, in this imaginary world, banks would likewise not be allowed to pick and choose to whom they give money to buy a house, so there would be a lot less renting.
You should expect that the market would build enough units that there were about as many homes as applicants in the absence of regulation. Getting to more than that should be doable with only minor incentives.
Why don't you ask people in any nation where this is already national policy, such as Austria? Don't just imply that it is not possible, when there are existence proofs.
For that matter, just ask your parents. It was national policy of the U.S. to build an overabundance of housing for the 50 years after the Great Depression, which is why landlords' income as a fraction of the national economy hit an all-time low in the mid 1980s. It has since rebounded to all-time highs, which is why nobody can find a place to live.
>Why don't you ask people in any nation where this is already national policy, such as Austria? Don't just imply that it is not possible, when there are existence proofs.
What? How? Real estate prices to income ratio in Austria is one of the worst in the EU. Few people can afford to buy without inheritance. Austrian real estate market is broken AF.
Growing by less than 40% in 100 years is slow. Austrians hardly had to scramble to provide housing for themselves.
(Now this line of reasoning is simplified quite a bit, because housing is area dependent. Even if the population in some country remains constant, say that everyone suddenly decides that a very tiny area of the country is the only worthwhile place to live. They all concentrate there and now there is a housing problem now. Well, not everywhere, just in that spot! In other spots there are empty, cheap houses.)
Make being a landlord too onerous and people will stop being landlords. Take Sweden for example, landlords are selling off their rental apartments at an increased rate as the profits of renting are decreasing and the risks increasing. The end result is that there is almost nothing available to rent at any price and it can take 5-10 years of standing in line to get a halfway decent rental apartment.
Having a liquid supply of decent rental apartments on the market is important for a dynamic economy.
Wouldn't that increase the rents even further? Specially if we were go below 1 on long term. As the existing renters must also cover the building and maintenance cost for the empty units...
General prices would drop, but renters would end up paying for something they are not using or even have access to...
> The obvious solution is the one I've long advocated in this forum and elsewhere: a housing market where landlords can pick and choose tenants should not be permitted to exist.
Do you leave your domicile unlocked for anyone to visit, while you are elsewhere? No? A landlord doesn't want to do that, either.
That would also be addressed by a more detailed explanation of court records, or a binary yes/no of whether the tenant was ultimately found guilty of a transgression against previous landlords, no?
The previous comment is pointing out that this could be a problem if you've been sued by an unscrupulous landlord in the past. That problem exists for fixed income people as well.
BTW, you were right that Pebble used those memory LCDs in their smartwatches. Unfortunately I can't reply to your comment from that time. Thanks for letting me know!
The ideal tenant candidate already owns a house and doesn't need to rent.
Having been both landlord and tenant at various stages of my life, my first law of landlording is that trouble from tenants varies inversely with the square of the rent.
Annoying "well actually" counterexample: my rent hasn't kept up with inflation, and I'm doing everything possible to avoid coming to the notice of my landlord. A call about a leaky faucet could cost me an additional six thousand dollars a year.
As a landlord, I insist you look to move. You're being abused. If your local landlords are more or less the same, move. You're in an abusive city.
As a landlord:
1. I insist any small problems are brought to my attentions ASAP. Early repairs cost less and dealing with it promptly creates good will
2. I get the place professionally cleaned before move in. It only costs me $150 (a hard working cleaner can clean an empty unit in a three/four hours)
3. I provide a full set of cleaning supplies when tenants move in. The supplies are already there so use them ;)
4. I give a $50 gift card to Target midway through the contract. What are you going to buy at Target? Hopefully, cleaning supplies ;)
A decent landlord won't mind if you break a lease if you've stayed there long enough (more than eight months). Even if you do, it should not be more than two month's rent.
I charge a bit below market rate to ensure the unit is always rented (divide a month by 12. An empty unit costs money). However, I target professionals to avoid problems (students), but not rich professionals - I once rented the two bedroom unit to a pair of recently graduated nurses.
I'm not in the business of making friends. I'm in the business of having a cordial relationship with a client who is satisfied and keeps renewing. A missed renewal costs me a lot of money. My goal is that my tenants move out only if they move out of the city or decide to buy a place.
> I target professionals to avoid problems (students), but not rich professionals
Can you go into more detail here? I've heard this before that having too high of an income can count against you as a tenant - presumably because the tenant has the wherewithal to make the landlord's life unpleasant if they really felt like it.
I don't avoid very high income earners, it's just that the unit I'm renting is a small house I could afford to live in at the time I bought it. This unit naturally fits a certain, soon to be upper middle income young family. However, I'm currently renting the units to a couple who just moved into the city that each makes more than what my wife and I make.
My biggest concern with them was that they'd only want to rent for a few months to get to know the city before buying a place of their own. A missed renewal is very expensive (lost income) and time consuming.
I wasn't expecting any replies on my original comment, so I suppose I should add some context. In a former career I was a Washington state-licensed electrician (07a) and spent four years in commercial real estate maintenance. This probably puts me in the top 10%-ile in capability to/interest in performing household chores.
I also live in a screaming hot rental market, (North Seattle) and the last apartment complex I lived in raised the rent like clockwork by 10% every six months. Where I live now I haven't seen a rent increase in three years, which makes me rather overdue for one.
I was using "a dripping faucet" in the sense of the prototypically trivial home repair. (Shut off water, replace twenty dollar faucet cartridge, turn water back on) I wouldn't call the landlord for that in the same way I don't call the landlord to replace smoke detector batteries, change light bulbs, replace furnace filters, do yearly water heater sediment flushes, oil squeaky door hinges, or to clean my toilet.
If, like, the refrigerator failed, then I would be calling the landlord.
You're saying that rather than spend what, $1k or so at most (which would be what it would cost replace the refrigerator entirely), you'd rather poke the bear and risk a 77% rent hike (which would be what you'd have if you'd gotten 6 rent increases of 10% over the past 3 years)? It's not like the landlord can sue you when you move out if you leave them an equivalent, but brand new refrigerator.
Why would I leave them a brand new refrigerator? The economically rational course of action would be, on moving out, to put the refrigerator that came with the unit back in place, while I depart with the refrigerator that I purchased with my own money. After all, the unit's refrigerator died of old age while I was occupying it, I didn't do anything to it, and shouldn't be liable for replacement costs. Just store the failed appliance intthe living room until I move out.
Letting the landlord replace it a year later than they otherwise would have saves them money!
FWIW: There are plenty of landlords in the world who are willing to keep rents down in order to keep a good tenant, IE: you take good care of the property and pay on time. On the other hand, if they decide to up your rent over a leaky faucet, then it was only a matter of time anyway.
I rent an off-season house every winter in a summer beach town. My rent is so low it's almost free. The landlord just likes having someone around who will keep an eye on the place. It's better for the house to keep it heated all winter (I pay the utilities), the landlord doesn't have to worry as much about break-ins (uncommon around here anyway), and doesn't have to find someone to check for storm damage while she's down in Florida for the winter. Sucks moving twice a year and having to find summer housing, but in return I get a three-bedroom house for less than the local studio apartment rate, and the landlord covers the property tax bill and gets peace of mind.
This is why I'm thankful for my rent controlled apartment. No surprises down the road at all with rent increases being capped to something reasonable; as long as I continue holding a job I can pretty much always afford this apartment. Otherwise, rents could surge past what I could afford any day, as wages rarely keep pace with rents.
100 years ago if you wanted to open a store all you needed was a building and a door. Now if you want to open a store, you need a parking lot bigger than the building itself to serve the same number of people.
You used to be able to house thousands of people in what is now a suburb that houses just a hundred.
It's a crippled land-use philosophy which forces a land shortage in any city more populated than a village.
When paired with artificially constrained supply I would agree due to the negative pressure on housing liquidity.
However as long as rent increases are capped at the maintenance cost increases I don’t see the negative effect, because the landlord still captures the cash flow at the time the lease begins. Yes it has a negative effect on equity compared to if the landlord could raise rents as much as they want, but I don’t see that as an objective good nor does it affect many people besides the landlord.
Rent control does create perverse incentives regarding subletting, evictions due to factors other than the nonpayment of rent, and fulfilling tenant maintenance requests though. But in terms of market participants besides the tenant and landlord I really think only the lack of liquidity is a problem.
Serious question that I don't know the answer to: when and where, in the US, has rent control not been accompanied by constrained supply?
I'm not using your phrasing, "artificially constrained supply", because it seems like artificial could have a very squishy definition. A lot of economists these days are saying that rent control leads to lower supply, but they seem to mean it as more of a natural consequence (i.e. without necessarily needing the kind of NIMBYism and red tape that gets blamed for low supply in the largest cities with rent control).
However as long as rent increases are capped at the maintenance cost increases I don’t see the negative effect
If the rent increase (and thus profit) is capped, but the market price isn't then it soon becomes rational to sell your rental apartments, stop being a landlord and invest in something with better returns. You see this a lot in Sweden. More and more rental apartments are being turned into owned apartments, sold off and removed from the rental markets since it's simply the most profitable thing to do.
nor does it affect many people besides the landlord.
It affects people who need an apartment and who want/have to rent instead of buying. Make being a landlord too hard and risky and you get fewer landlords and fewer apartments to rent on the market. When I got a job in Norway (no rent control) it took me two phone calls and less than a week to find a rental apartment in the part of town I wanted to live. When I got a job in Sweden (strict rent control) it took me months to find a place and it was a short term contract for a place way out in a shitty suburb far from where I wanted to live.
How are they less good for everyone else? Or, put another way, how would a variable mortgage payment work and how would it benefit non-mortgage holders?
Because if housing gets too expensive in some area, you'd leave and that'd open up supply. By locking in the price, future changes in demand are irrelevant to you -- but place great pressure on newcomers to your area.
It's economically inefficient for Grandma to continue living in Palo Alto in a $4 million home when that land could instead have a multi-family housing complex to support the demand for workers in the region. It'd be the same story for someone who's in rent-controlled housing for $400/mo but the equivalent market rate is $3500. It's inefficient.
If we're saying rent control has externalities, we need to acknowledge that any scheme that fixes your housing cost has the same effect.
If mortgage holders are viewed as property owners who borrowed capital to fund their investment, how would it he fair for their mortgage rate to increase with cost of living?
Agreed, but I don't think that really addresses the parent's point. Remove "investment" from their statement, and it's still a perfectly valid question.
Beep boop beep grandma is economically inefficient she must be replaced with more productive economic units boop beep newcomers are more important than existing citizens
Please don't do this here; there's a much less inflammatory way to say what you're saying.
I agree that efficiency of use should not be the driving factor around property use and ownership.
I don't think newcomers should be considered more important than incumbents, but currently the pendulum has swung way too far in the other direction; often newcomers just cannot enter many housing markets, and that's not fair or healthy either. There's nothing inherently "right" about being lucky to be born at a particular time and in the right place and right financial situation to buy housing in a region that just happens to become highly desirable decades later.
> that just happens to become highly desirable decades later
Why should people be forced to give up their homes just because someone else desires them?
By this logic, if newcomers seize granny’s house they should expect to immediately be forced out by the next group who has desire.
There is no coherent argument about fairness or luck here.
The only argument here is a new group of relatively rich people looking for a way to seize desirable properties for themselves without.
Why should a tech-bro who just sits at a keyboard all day be able to force out granny and grandpa who worked as a secretary and an auto-mechanic? Does the tech-bro ‘deserve’ it more?
If they succeed in forcing granny out it will be at least as unfair as it was before.
If granny doesn't leave, it's disingenuous to suggest nobody isn't getting kicked out. It will be someone who has to play by market-rate rules; probably a lower middle class family paying market-rate rent that gets squeezed too far. That's one or two less firemen or teachers or chefs or postal workers in the area.
Why should some people have to give up their homes, but not others, is the more interesting question to ask. If nobody should ever have to give up their living arrangement due to exogenous factors (like a trillion dollar industry popping up in your backyard-- which, to be fair, isn't what happens to most neighborhoods), then we should be doubling down Prop 13 and rent control.
The other comenter was probably referring to how in some states, you essentially have something even better than rent control for your property taxes. With rent control, your rent may only rise maybe 5% next year, its not a price set in stone. In places like CA, your property tax rate is set in stone when you buy. So if you bought a house in the 1970s for like $30,000 and its worth $2,000,000 today, you are only paying taxes on property worth $30k. How that's less good for everyone else is now local government has to find other ways to fund things as the buying power of the taxable revenue per property that doesn't change hands each year gets smaller and smaller.
> So if you bought a house in the 1970s for like $30,000 and its worth $2,000,000 today, you are only paying taxes on property worth $30k.
That is not at all how California Prop 13 works, although it is an often repeated myth.
Under prop13, the property tax goes up 2% every year (technically up to 2%, but unless you're in an economically depressed area it's always 2%).
So it is a damping function, essentially equivalent to rent control, to smooth out the swings in market price and replace it with a fixed yearly increase you can predict.
In practice, however, the property tax goes up more than 2% per year because counties and cities are allowed to attach all kinds of fees under the umbrella of property taxes and those don't count towards the 2% increase limit.
In the past I've been very much against rent control, believing it to be a band-aid on structural problems that helps communities avoid fixing the real problems.
I still believe that to be mostly the case, but I think a) tough luck, communities have housing problems that rarely have easy fixes, and rent control can help, and b) rent control, if implemented in a certain way, is probably something that is generally good.
By "certain way", I mean removing the problem you state: all units in a city should be subject to rent control. In addition, rent increase caps should be indexed with wage growth, or some sort of wage growth + CPI blend that ensures housing costs don't rise faster than wages, but that landlords can still remain financially solvent as their own costs go up. And finally, tenants moving out and new tenants moving in shouldn't be a trigger for a landlord to "reset" the rent to "market" rate.
Change those things, and I think rent control will work much better. And I think it will also serve as downward pressure on purchase prices, because prospective landlords won't want to buy rental properties if their rental income can't cover a high monthly mortgage payment. It might push down on non-rental property prices too, since if they get too high, people will prefer to rent instead of buy.
Of course, all of this needs to be accompanied by building new housing all the time. Affordable rental pricing is great, but it still sucks if you end up unable to rent something because you're competing with 100 other people for 1 unit. Supply must rise in response to demand, and that alone will serve as a powerful check on rent and purchase prices. (Then again, arguably in an place where supply and demand are in equilibrium, you don't need rent control in the first place!)
I'm not an economist or housing expert, so I know this won't fix everything, and there are probably problems with my (overly simple) proposal above. But I agree that the current implementation of rent control in many places (in the US, at least) offers pretty bad trade offs.
But at the same time, once supply is tight, then the incentive to build is high. The only reason why we don't see building happening when supply is low and demand is high is because zoning doesn't allow any more supply. Rent control isn't even in the mix up here. Permissive zoning would mean rent control wouldn't even be relevant as theoretically rents would hardly raise at all past wages in that situation.
Yeah, it's a disaster here in Stockholm. A 12+ year queue with lots of young working people basically subsidising wealthy older people to live in the city centre for under half of market rates.
Renting as a whole should really be much more restricted as a short-term thing though - build more houses for people to own, and lower the deposit requirements so people can start a mortgage earlier.
Every professional worker should be able to own their own home - so they have security, can decorate it, etc. and aren't losing tens of thousands just to a landlord every year.
I don't see why to be honest. If supply is tight, chances are that's because of zoning not allowing for more capacity rather than rent control somehow limiting how much supply is available.
For real. What else is to be done? Pricing out your labor from the local economy isn't sustainable. Plus if the economists are to be believed, once developers are unfettered and available supply goes to infinity to meet our latent demand, rents shouldn't rise beyond wages, and rent control rent increase limits of perhaps 5% a year (as they are where I live) wouldn't even be hit. So why all the consternation? I don't get it.
You've described my situation too, though it's not a rent increase I'm worried about, it's the installation of a mandatory smart lock that I've somehow avoided for a few months now.
I signed a lease which specifically stated that I was responsible for providing the internet for the smart locks and devices within the apartment. I brought this up to them, but they said "Nah, you don't have to do that" and wouldn't remove it from the lease. They were correct though: everything functioned before I had internet and I never had to join them to my network, but it made me think about the rest of the stuff in the very legally binding lease that worked similarly.
As a renter I wouldn't like it too, I would think why does the landlord need to know when I go/come to the house. But as a landlord I use smart lock and the need is different, its useful because I don't have to change locks every time a get a new renter, I just change the codes (specially if I consider doing short term rentals/airbnb at some point/season) and I don't have to worry about any spare copies of the keys made by the renters.
Generally smart locks, in my experience, need internet to change codes without having to be physically present, not for lock/unlock functionality.
First, most locks work with batteries and notify well in advance about low battery, they also come with a old fashined physical keys, so in case it dies, you can still use the key instead of your access code. Second, they work without internet, you need internet only if you want to be able to add/remove access codes remotely while not physical present.
About finding smart locks dystopian, I feel like a lock that notifies lock/unlock is far better than say a device like nest cam/door bell with abilities to capture video/pictures and for whatever reason are more widely accepted than smart locks.
Unless it's a short term rental place where that makes more sense and your paying for the internet bill, don't put smart locks. It feels like mandatory surveillance cameras that you have no control over and your creepy landlord can look at any time. It doesn't matter if I can look too. Tenant changes should ideally be once every few years, so to optimize for a once every few year event feels like false economy.
People want the landlord to implicitly need the tenant to do things in order to enter their private house, or to otherwise to leave physical evidence via a break & entering if they did so. A smart lock can very easily remove all evidence that the landlord entered your house without you knowing, and that feels violating.
Basically anything that could be used by some creepy panty sniffing pervert to help them be a more effective creepy pervert, don't put that on your units. Smart locks help this hypothetical person.
> About finding smart locks dystopian, I feel like a lock that notifies lock/unlock is far better than say a device like nest cam/door bell with abilities to capture video/pictures and for whatever reason are more widely accepted than smart locks.
You're missing the big difference here. A Ring doorbell is both trivial to remove when someone moves out, and generally under the control of the tenant. Smart locks are neither.
> its useful because I don't have to change locks every time a get a new renter, I just change the codes (specially if I consider doing short term rentals/airbnb at some point/season) and I don't have to worry about any spare copies of the keys made by the renters.
Is that something that people generally worry about? I’m pretty sure none of the rentals I’ve lived in over the past decade had the locks changed between tenants.
I live in a remarkably shitty, crime ridden city and having locks changed is a standard part of rental contracts. It’s so standard that every August, our local papers’ “student guides” suggest that new renters ask about having locks changed.
Knowing what I know now, I’d actually leave a city if I saw that term in a contract.
> Is that something that people generally worry about? I’m pretty sure none of the rentals I’ve lived in over the past decade had the locks changed between tenants.
To immediately see why this is important, think what the answers would be when you tell your daughter or spouse that the locks weren't changed before you moved-in.
> Is that something that people generally worry about? I’m pretty sure none of the rentals I’ve lived in over the past decade had the locks changed between tenants.
As a landlord: this would cause me to evict you as soon as possible. Do not hide broken things from me. Something small now is going to become extremely expensive later.
Ho ho, but how are you going to find the small broken things and evict me if I don't tell you about them? Check the place while I'm work? Good luck! As usual with any apartment I've moved into, the first thing I've done is change the locks, then installed pit traps, claymore mines, swinging blades, pressure plates that trigger huge rolling boulders, etc.
Eventually you're going to want or need to move, and the landlord is going to be pissed to discover on move-out inspection that you haven't been keeping them apprised of the condition of the property.
A simple "hey, this happened; I'm not worried about it if you're not" email suffices.
You bring these things to their attention when you’re about to move out and tell them they just happened and are one of the factors on why you are deciding not to renew.
I agree, but the tenant seems to believe the landlord will retaliate instead of being thankful. In my contracts I make it crystal clear the tenants have a responsibility to inform me ASAP about any water issues. However, I also try to be a very understanding landlord.
But… you want those trouble free tenants, you need to do your job. Which is a problem for many landlords.
The guy who rents the house next door to mine decided that lawn care was too much work, so he spread and wet leaves for the express purpose of killing the lawn. Winter is over and he is now surprised that his surgeon tenant doesn’t want to live in a house that appears derlict.
If I were in his shoes I'd go for some decent-to-nice artificial grass. Sure maybe it's a little tacky, but it beats the derelict look and it spares the work he doesn't wanna do.
Yes, but if you're a landlord and you really want to make a higher return on your rental property, you have to delve into the depths of renting to "trouble tenants" because the property price to rent ratio is much better.
A while back in our neighborhood group a landlord posted a unit for rent mandating a 750+ credit score. Half the comments were like "Uhhh... if your score is this high you should get a mortgage. Rates were historically low at the time of the post.
Keep in mind this was in a non-trendy neighborhood in Chicago, not NYC or SF. We are clearly not building enough housing.
Exactly; I prefer rich expats who (or their company) pay multiples of the average rental price for that reason. They don’t complain, pay on time and usually even fix stuff themselves (for free) as they don’t want to wait for anything. And there seems to be an abundance of these people currently as well.
I don't really see the point of this article, it's well known bankruptcies stay on your credit report for 10 years.
With the recent rent moratoriums, I expect landlords to get even harsher. A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state .
If this person went and filed for a second bankruptcy, they could then delay the eviction by years.
The bigger issue of course is we haven't built up enough new housing over the last 40 years, you want there to be so much available housing landlords can't be selective. They have to take the risk of losing a bit of money, because they're going to lose an absolute ton if they let their units remain vacant.
The article isn't just about bankruptcies. It's about a tenant scoring system that has as much power over your life as the credit scoring system, albeit with far less regulation and consumer protections:
> Tenant screening companies compile information beyond what’s in renters’ credit reports, including criminal and eviction filings. They say this data helps give landlords a better idea of who will pay on time and who will be a good tenant. The firms typically assign applicants scores or provide landlords a yes-or-no recommendation.
> A ProPublica review found that such ratings have come to serve as shadow credit scores for renters. But compared to credit reporting, tenant screening is less regulated and offers fewer consumer protections — which can have dire consequences for applicants trying to secure housing.
Selecting tenants is a legal minefield. As a result, many landlords find it safer to offload that decision to a third party. It sounds like these third-party rating services, including their "rent, don't rent" decisions, are filling a need but are ahead of legislation to curb some of their excesses.
If eviction for nonpayment, property destruction, and major lease violations could be filed and processed in days rather than months, the landlords wouldn't have to delve so thoroughly into tenants' backgrounds to screen them. Heck, if that were the case, I'd be renting out my place now, but the legislative hoops make landlording above my risk tolerance so I'll let my condo go for sale and it will probably end up in some big corporate entity that has a much higher appetite for that sort of risk. More than happy to let them deal with that.
From a strictly utilitarian point of view (the favorite view of this website), since there's more tenants than landlords out there, shouldn't we err on the side of protecting tenants from abuse rather than the other way around? You can't have it both ways, so you have to do something.
Because it's high risk to rent out units, many who don't need to, don't do so. I know of several who don't do this but could. They have extra rooms in their first floors of their houses that could function as a more affordable in law suite for example. They have jobs, careers or have stress tolerance issues and thus have much better things to do than to deal with nightmare tenants.
These tenant protections come up because governments want their cake and eat it too. If you live in a functional housing market the need for tenant protections also decrease, because more people can afford to rent places!
There are 1.5 million housing units under construction, which is an all-time record. It'll be interesting to see how quickly that get absorbed in a market with rising interest rates and questionable valuations. There appears to be lots of demand but what I'm seeing in my corner of the world is most of the demand is at the lower end of the market, which I'm guessing isn't what is primarily being developed. People moving up does free up properties at lower ends of the market, so in effect, a trickledown effect, but that takes a while to happen. Maybe we're going to see more and more house sharing and renting of individual rooms (legal or not).
Around these parts, these new housing units are insanely expensive. They are building a lot of them, but there's no altruism involved. Not even one tiny bit. They are building these gigantic highrises, that are destined to be packed with yuppies. There are cranes everywhere in NYC.
Brooklyn and Queens; formerly "affordable" places to live in New York, are now getting $4,000 (or more)/mo for 1-bedroom cribs. I've seen it with my own eyes, in Manhattan. Areas like Alphabet City, that used to be considered "dangerous," are now primo real estate, and well-dressed young couples walk their toy poodles around these neighborhoods.
It's only a matter of time, before NYC becomes an East Coast San Francisco. Manhattan is pretty much there.
I am not personally familiar with the way France is structured, but I have been told that the cities are where the wealthy live, and the suburbs are where the not-wealthy live.
From what I have seen, Seattle is becoming that way. I was pretty surprised, when I visited some friends, down in the suburbs south of Seattle, and saw that it was actually a rather scruffy area. I had gotten used to Bellevue and Redmond.
> They are building these gigantic highrises, that are destined to be packed with yuppies.
Unless there have been major changes in the last few years, many of those buildings will not, in fact, be filled with yuppies. They'll sit vacant, parking the money of the world's ultrarich in a low-tax investment.
Think of apartments the way you think about cars. New ones cost more, and many lower income people think of a new car as a luxury that they can't reasonably afford. But you need people to buy new cars in order for them to become used cars later. And like we saw during the pandemic, when the car factories shut down many of the people who wanted a new car jumped into the used car market instead, and prices for used cars went through the roof.
If you don't build new housing, then the people who can afford it will just end up driving up the price of older homes. Alphabet City is expensive now because they didn't build enough apartments in the East Village to meet the demand from people who want to live in that area.
>Around these parts, these new housing units are insanely expensive.
So long as the total number of units increases, it really doesn't matter how much they cost, so long as they get filled. Increased supply will bring down rents at the less expensive end of the market.
I lived in exactly that in Liberty Village in Toronto for a period. "Lulu's and Shitzu's" it was often called. How right they were.
New rental-only builds were even going up in the area, not just condos. But they were more expensive to rent than the bloody condos, and about 3/4 the size.
Areas like Alphabet City, that used to be considered "dangerous," are now primo real estate, and well-dressed young couples walk their toy poodles around these neighborhoods.
How awful. The government should do something about this kind of degradation.
and thats the problem. if you watch any of Louis Rossmans videos on NYC real estate he explains the Issue.
Buisness dump invested money into expensive building. If no one rents then it stays vacant.
Why vacant, isnt the landlord going to lose money? well yes but if he rents a lower amount then his valuation goes down and he is suddenly upside down on his loan. So he is compelled to not rent versus renting it.
Add to this governments make more tax yearly if its valued hire and now there is no incentive to fix this.
>I am not personally familiar with the way France is structured, but I have been told that the cities are where the wealthy live, and the suburbs are where the not-wealthy live.
1.5 million housing units != 1.5 million housing units for affordable rent
London literally has tens of thousands of dwellings sitting empty. Many are investment properties and will be sold multiple times without ever being lived in.
It's easy to make money at the high end from rising property values without the hassle of dealing with tenants.
It's easy to make money at the low end by packing as many tenants as possible into small properties and spending as little as possible on maintenance. There's occasionally some legal hassle with evictions, but generally for landlords it's a seller's market, with minimal regulation and enforcement.
There is, indeed, tens of thousands of empty homes in London. In a city with millions of homes. Current statistics show a vacancy rate of 2.2% [1], which is an incredibly low rate, which implies a pathologically supply-constrained market. Additionally, there is no evidence to support that even a statistically relevant proportion of those empty homes are empty for investment purposes; vacancies can happen for a number of reasons, including being between tenants, non-primary homes, etc.
I think a lot of the supply at the low end is irreplaceable, because building codes and regulations have changed significantly over the years. It's effectively illegal to build some of the more affordable buildings in certain jurisdictions.
This is true. I'd estimate at least 70% of all rental unit currently under construction will not be "affordable" for two people working full time for minimum wage. In northern New England it's easily 100% of units.
That said all rental projects that I know of in Maine and New Hampshire are all rented before they even finish construction.
EDIT: I'd also like to make a point about current regulation and zoning. It's not unusual for a developer to pay around $500,000 or more in state fees, environmental review, and layer time to get a new apartment complex approved. This requires insider connections and specialized knowledge of the municipality if you want it completed in a reasonable time frame. Partially this is because national building codes are more complicated then ever but more often building anything at all requires a zoning exception or amendment.
If you pull of the zoning maps for your town or city you'll likely find it riddled with parcels that have been cut out or otherwise exempted from the rest of the zone. This process can be expensive and take years to complete.
"not unusual for a developer to pay around $500,000 or more in state fees, environmental review, and layer time to get a new apartment complex approved"
If a complex had 500 units, thats a negligible cost
That's a nice fiction. This is a bit old (1999) [1], but California's own housing policy administration at one point sifted through the data and found it averaged something like $15k/unit for apartments, and worse for other forms of housing. I'm not sure there's any evidence it's gotten an order of magnitude better since then.
I can't possibly understand how you can be debating in good faith when someone shows your optimism is likely off by a factor of 10x and you try to spin that into some sort of "doesn't explain it away" non-issue. When you set the bar at $1000 a unit and it is $15k+ (in 1999 dollars) per unit, that's kind of a big deal which you disingenuously brush away because it was fantasy. Development fees are just one piece of the regulatory barrier, these expenses add up, and they absolutely help explain the problem.
A house is made up of individual pieces of wood, drywall, bricks that are "under 10% of the cost" individually by the single piece but when stacked up they absolutely help explain the (much greater) cost of the house. It's going to be difficult to point to a single smoking gun; with housing it's death by a thousand cuts (in California development fees are one of the bigger ones).
According to architects who know, it’s the price of mandatory parking, especially in MDUs, that drives up the cost of housing much more than the additional cost of adhering to more stringent building codes.
How many of them are starter homes? Majority of the home constructions I came across is always above 3.5k sqft homes, some are McManison. It is great about 1.5 million housing units, we need starter houses than 4k sqft homes.
Few new starter homes in my (non-trendy) city. However, once builders started working again around '12, they started putting up both McMansions and spectacularly ugly apartment buildings (partially fills the role of the starter home, I guess, in that at least it's a place to live, if not a stepping stone to financial stability, so should take pressure off the market) at a crazy-fast pace. Construction everywhere, constantly. Downtown? New several new or converted high-rise apartment buildings. Just off downtown? Tons of new ugly-ass mid-rise apartment buildings in that new style everyone's using. 'Burbs? New and developing McMansion-filled neighborhoods everywhere, and a ton more of those same ugly apartment buildings.
Doesn't seem to have done much to keep housing prices under control, and houses still sell so fast that you blink and a new listing will be gone. We can't possibly be a major location for internal migration—not like cities in California or Texas or anything of that sort—so IDK what's up with that. My 20ish year old McMansion has increased in value about 30% over the last two years, and was already way up from just a few years earlier. WTF.
The ugly apartment buildings you are seeing are probably one-plus-five buildings (one concrete + five wood floors) that are actually optimized for balancing zoning+codes+affordability for single-family apartments. At least theoretically, they should offer cheaper rent due to their much lower construction costs.
I think of the ugliness of the facades as a bonus that would drive wealthier people to other buildings once options open up a bit.
Yeah, it's those, I just couldn't recall the term for it. Much of the ugliness seems to be a choice, though—lots of weird, haphazard nooks and crannies and bump-outs, and bizarre color schemes that seem designed to dazzle you into not noticing how ugly the unevenly-bumpy exterior is. If they just flattened out the exterior walls a little and cooled it a bit with the crayon-box color scheme, they'd look much better.
In many cases, the superfluous nooks and crannies on 5-over-1's are mandated by local zoning rules that call for "façade articulation" on buildings occupying larger amounts of street frontage (I suppose to conceal the unthinkable horror of a big building existing in a city).
At least in the upstate of SC, I see lots of starter homes, some would say too many. Of course, the average price in the state has risen above $300K and I don't know where people are getting this money from. The starter homes/condos seem to have a sqft of between 1200->2000 (best guess unresearched).
You and me both. Though, the older housing inventory often is 900-1200 sqft, which is a very suitable size for a starter home, but smaller than the modern homes...
I'm in the upper midwest, from what I've seen when traveling in my state it's few and far between. New construction is all MDUs and custom homes in the 5k sqft range.
Fed/State government can issues credits/tax relief for "investors" who build MDUs but somehow starter homes are off the table?
It's not all doom and gloom, Habitat For Humanity appears to be the only outfit that's building affordable houses/starter homes, helps when you get a nice influx of money going into that program (thanks MacKenzie Scott).
Moving McRichPeople out of normal housing and into McMansions can open up housing availability downstream though. The homes they are moving out of are an upgrade for those in starter homes and then those starter homes become available.
That is the case from what I have seen. We've put so much playdo money in the hands of young McRich who worked at a FAANG and there are so many of them. Also Chinese investors are buying up properties and locking them up for a few years to resell. We may get to a point where we have to actually change the law to fight homelessness and rising housing costs.
> There are 1.5 million housing units under construction, which is an all-time record.
No, it isn't. Back in the early 1970s, the US was averaging about 2.4 million housing units started per year [0]. And at the time US population was only about 210 million, compared to 330 million today...
How many of these will be snatched up by scalpers looking to rent them out? It doesn't matter if they build 1.5 million houses if they all end up as rentals anyway.
Housing bought by landlords looking to rent is the most relevent, as it increases competition among landlords putting pressure on them to be less selective.
> An estimated 870,000 Mexican migrants came to the U.S. between 2013 and 2018, while an estimated 710,000 left the U.S. for Mexico during that period. That translates to net migration of about 160,000 people from Mexico to the U.S., according to government data from both countries.
> it's well known bankruptcies stay on your credit report for 10 years.
That isn't exactly true!
Chapter 7 bankruptcy remains on your report for up to 10 years, and Chapter 13 stays there for up to seven years. [1]
Chapter 7, which is known as liquidation bankruptcy, involves selling some or all of your property to pay off your debts. This is often the choice if you don't own a home and have a limited income.
Chapter 13, also known as a reorganization bankruptcy, gives you the chance to keep your property (including secured assets like your home and car) if you successfully complete a court-mandated repayment plan that lasts between three and five years.
Because you lack empathy and perspective? People can be forced into bankruptcy for all sorts of reasons that are largely beyond their control (such as the example you are implicitly referring to in the article). Doesn't mean they should be homeless (or limited to the most marginal of housing conditions) for the rest of their life. Especially if they have nursed their score back to a reasonable state of health.
A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state.
This seems overdrawn (i.e. out of synch with reality). In the one state for which I am intimately familiar with these proceedings (and another certain very large blue state that I did a fair amount of research on at one point), a properly executed eviction proceeding should take no more than 120 days or so, even assuming delays in the court calendar (except in weird outlier cases like the city can't determine the zoning or protection status of the property, etc).
I can imagine there a few states with as grossly dysfunctional (general case) eviction proceeding standards like you describe, but not ... all that many states.
Oh, I've been through two evictions, but I can also see landlords aren't charities.
If you have a bankruptcy on your credit report, no landlord in their right mind is going to want to rent to you.
It's very easy to stretch out an eviction for a very long time, it's not fun, but it's doable.
Here's the rub, a mom and pop landlord can't have half their tenants not pay rent for 6 months, but Greystone can. And big corporate landlords are more likely to be strict when it comes to renters.
If you go bankrupt you are essentially proven to be bad with money. Why would I rent to you? If you don't like it, buy some property like the landlords did.
Not my (a landlord's) problem. Plenty of people didn't have that happen to them. Do you presume that I should have no say on who I allow to live in the home I bought? It's my property
Do you presume that I should have no say on who I allow to live in the home I bought?
No -- you do not have "no" say. But but the law says there are limits in the criteria you can use to reject candidates.
Of which you (as a landlord) are presumably already perfectly aware. As you are of the fact that minute you move out (and establish another legal residence) -- it's no longer your "home".
It's my property.
Sorry, but this isn't an Ayn Rand novel. In real life, property ownership does not give you 100 percent freedom to do what ever you want with your property. It is a social contract, with obligations and limits.
Okay. I prefer to vote for people who make it so, and live in places where, that social contract has better terms for me. We've seen what the opposite policies lead to: Seattle, LA, Portland. I would never step foot in those cities again, and everyone knows why.
Seattle and Portland will find themselves in a Detroit situation in the coming decades. Remote work means people start to realize they don't need to step over human feces in their city to earn a wage. I don't foresee this decay being stopped.
> it's well known bankruptcies stay on your credit report for 10 years.
But it's less well-known that Chapter 13 bankruptcies stay on your credit report for 7 years, which had already passed. Chapter 13 represents about one-third of all bankruptcies.
Chapter 13 is less common, because it's more difficult to go through, and takes longer, but it has substantial benefits.
The article doesn't say what chapter she filed under, but it's easily plausible that it was Chapter 13, and the bankruptcy had already fallen off her credit report.
the US is doing a much shadowier version of china's social credit system. At least with china, its up front and in your face, with this it is much more background and insidious.
Most leases are written for 12 months. There is AFAIK no evicition protection once the lease expires, or am I wrong? It seems to me that 12 months is the limit of the landlord's risk.
Around here (Maryland), landlords are required to offer leases up to 2 years (this might be a county law), although I suspect 12 month leases are still common.
At the end of a lease, MD law requires the lease to default into a month-to-month lease. To kick a tenent out without cause, a landlord need only provide 30 days notice.
However, if the tenent refuses to vacate, the landlord still needs to go through the eviction process.
Yep, easy come easy go. The quickest way to get landlords to become less selective would be to let them toss freeloaders on their ass on day one of delinquency.
Which would result in more improper evictions. As it is we have already seen multiple examples of landlords losing checks so they can evict and rent to someone else at a higher rate.
I've wondered about taking a different approach: The landlord is free to evict on the day of delinquency, but must move the possessions to a storage facility (paying a month's rent at that time) and they must post a substantial bond. If the tenant shows the eviction was improper they get the bond + costs. (And I would apply the same thing to foreclosures.)
Instead of a long process of showing that they are acting properly they are putting up a substantial financial promise that they are acting properly. Make improper actions a costly mistake and there will be few of them.
Somewhat of an aside, but as a non-American, I find it quite weird that it seems to be common to pay rent with a monthly check. Every place I've rented, I've paid automatically by standing order. (Oh, except in a couple of third-world countries, where cash was the norm.)
The building I live in has an online payment option, but the only payment option that the organization doing the collection takes is PayPal. Fuck PayPal, I can go to the bank and get a check (I haven't personally written a check for decades).
> The quickest way to get landlords to become less selective would be to let them toss freeloaders on their ass on day one of delinquency.
The quickest way to get landlords to become less selective is to say "any vacant apartment/home not occupied by at least one fulltime resident can be claimed by someone homeless as of [date]." You'd have landlords begging people to sign leases (and people would because then they would get a sure nice apartment as opposed to a lottery for one of the few ones left).
Now, that produces bad other results, but so does allowing people's homes to be ripped away from them at a moments notice.
> quickest way to get landlords to become less selective is to say "any vacant apartment/home not occupied by at least one fulltime resident can be claimed by someone homeless as of [date]."
This is basically extreme squatter's rights. Places which have those produce some combination of people paying guards, those who can't afford guards taking matters into their own hands, people demolishing perfectly-good housing to avoid risking the land, et cetera.
I actually meant via a lottery system, not armed competition. Paying the guards when the city says someone else gets the house is not a real thing. And demolishing housing could be fixed by going off zoning.
You’re proposing to reassign millions of dollars of property based on various levels of evidence for whether someone was physically present? That’s basically the 90s in Russia.
It’s certainly a neat fictional universe. I imagine everyone who can afford to would live in a hotel, leaving the scramble of defending your property to those who can’t. Also, fraud. Lots of fraud.
Simple, comrade. 15 years you work on potato farm and trade ration-booklet for wood and drywall. You pay for and possibly build with your own two hands nice home for hard working fellow comrade to live in, and you ask in return they pay you some amount to help you recoup your investment.
After a couple years, nice family leaves, so you spend long time to find another nice family to fit into the house you worked hard to provide. Instead Kommisar come along, give house to homeless in name of proletariat. Social welfare bureau hold lottery, and the neighborhood violent drunk under the bridge is ecstatic his number came up, as he was very sad he no longer has home to beat wife in. Much vodka is drunk while copper piping is gutted and appliances scrapped to dealers in nearby Ossetia.
Sit back and cry: I work on potato farm for 15 years to build nice second home to house hard working families! Instead government create lottery and hands to drunk who destroys house in only 15 days. Decide to stop trying. Start drinking everyday. Become a drunk yourself, enter the lottery, now you gut houses of others to survive. Process repeats -- now all units look like Grozny in the late 90s.
The point is that, if you want to incentivize landlords to rent out places, this does this. Other people hear your story and rent it out to a responsible person instead of waiting for a "nice family". Or they auction it off in the time they have and pocket the money.
Responsible people who don't rip up housing are sought after and pay a reasonable rental rate. People who buy and sit on property are taken out of the system. A new equilibrium is reached and most people take reasonable care of their rental properties they are given because they don't want to have to enter lotteries that will likely end them up in a slum. Homeless people end up in better than the street.
Either I'm being far less clear than I think or you're being deliberately obtuse.
Everyone has a primary residence. I'm saying, if the only goal is to force landlords to rent out houses, simply have any residential property without at least one person identifying it as their primary residence given away by the state, ideally in a lottery. It would only change things for landlords. And I don't know what "fraud" would be engaged in. I suppose a couple could rent two apartments only needing one, but I don't see why a landlord would do that as opposed to renting to someone who presumably wants it and would pay money.
> don't see why a landlord would do that as opposed to renting to someone who presumably wants it and would pay money
You’re not sure they will pay the money or not trash the place. Same reason landlords are hesitant about renting in the real world.
In any case, this would be defeated by enlisting family members as back-up primary residents. (As in the old world, when property rights were enforced at sword point, sucks to be someone without a dependable family.) Though, again, the wealthy would likely opt out of renting and favour not owning or just own a single massive house and opt out of renting.
The fraud would be in people lying about their primary residences. Also, people lying about others’ lack of primary residence to appropriate their homes for their cronies. The injured family would be homeless while fighting for their property back, which somewhat compromises their ability to engage.
> this would be defeated by enlisting family members as back-up primary residents
I don't see how. The family members still have to live somewhere. Oh no, the person rents to their kid as opposed to a stranger! It still means that wherever that kid was going to live otherwise isn't rented out to them and is on the market.
> fraud would be in people lying about their primary residences.
Yeah, I don't see how. Everyone gets one. So, if you don't need a home and are responsible maybe you get hired to rent out an empty place? It doesn't scale.
> people lying about others’ lack of primary residence to appropriate their homes for their cronies.
That's stupid. It seems just as possible as people lying to get your bank account. There are all kinds of ways that people have to let the government know where their primary residence is.
> wherever that kid was going to live otherwise isn't rented out to them and is on the market
The kid could have been living at home. One spouse in one house, one spouse in the other. Et cetera.
> just as possible as people lying to get your bank account
You're proposing an ad hoc centralized mechanism for expropriating and re-assigning a multi-trillion dollar asset class. This has clear and one-way precedence in history.
> he kid could have been living at home. One spouse in one house, one spouse in the other.
Yes. If the "super-fraud" is that 18 year olds move out to unclaimed apartments or that couples can have a vacation house, I am remarkably okay with that.
> You're proposing an ad hoc centralized mechanism for expropriating and re-assigning a multi-trillion dollar asset class. This has clear and one-way precedence in history.
Except for the ad-hoc nature, the fact that property records and ownership (as well as lists of people's primary residences) are already centralized, that centralization and decentralization of real estate have precedence within the same society at different times, I totally agree. So I guess that's "multi-trillion dollar asset class" I agree with.
>Now, that produces bad other results, but so does allowing people's homes to be ripped away from them at a moments notice.
What an entitled viewpoint. It's not their home; an entirely different person owns it and they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it. The person having their home ripped away at a moment's notice is the landlord.
> It's not their home; an entirely different person owns it
It's not their house. It certainly is their home. I would prefer those be the same person as often as possible to align incentives.
> they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it
Tenants, like many contract participants, have legal rights that cannot be waived (see also minimum wage.) They also have contractual rights due to the contract.
It's not uncommon for landlords to be the first party to breach the contract either intentionally (e.g. losing checks to move a tenant at below market rates out), neglectfully (e.g. ignoring upkeep or repairs) or unintentionally (e.g. entering at will).
Certainly, withholding rent from a breaching landlord is appropriate while the breach is resolved.
> The person having their home ripped away at a moment's notice is the landlord.
Unless the landlord lives there, the landlord's home is unrelated to the property.
>It's not their house. It certainly is their home. I would prefer those be the same person as often as possible to align incentives.
If you take something you're obliged to pay for without paying for it, it isn't "yours."
>Tenants, like many contract participants, have legal rights that cannot be waived (see also minimum wage.) They also have contractual rights due to the contract.
Minimum wage is another thing that crushes the poor, as do eviction protections. Both serve to make jobs/housing (respectively) more difficult for the poor to acquire via regulatory barriers.
>Certainly, withholding rent from a breaching landlord is appropriate while the breach is resolved.
Conversely, withholding housing from a breaching tenant is appropriate.
>Unless the landlord lives there, the landlord's home is unrelated to the property.
In the US, "Home" can simply mean a house [1]. My apologies if you're using a different dialect of English and I misunderstood; I was using home as it's used in one common interpretation of the word in English in my country.
'Home' and 'house' are perhaps synonymous when preceded by the indefinite article. In the abstract, a house and a home can be considered the same thing. A house is, at least in principle, a home for somebody. But you can't call a rental property the landlord's home, since the key characteristic of somebody's home is that it's the place they live.
Nearly every landlord I have interacted with when renting single family housing has referred to the house he is renting as a 'home' even when no one was living in it. I understand local dialects may be differ.
That would probably be one of the terms. Which meets the stated goal of ensuring the housing is being used.
Although I don't see how that clause would be enforceable. A tenant almost certainly doesn't have enough assets to go after to make up for a building. Otherwise they could have bought the home for their own use.
That would very quickly escalate the already very bad homelessness crisis in many parts of the country. Some levels of tenant protection are a way society can help their citizens get back on feet after a difficult time, which almost every person will encounter. Freeloaders will eventually get kicked out.
I'd argue the effect may be the opposite. Tenant protections lead to homelessness by forcing landlords to be selective against vulnerable peoples, making it harder to get back on their feet after difficult times. Risk in renting to these people is greatly reduced if you can toss them out as soon as they stop paying.
Either way, you’re making someone homeless, which is an intractable problem as long as the housing demand exceeds supply. The only change being made is the criteria for who gets to suffer.
If you're looking to increase the number of temporarily homeless people, this sounds like a great approach.
Unfortunately, temporarily homeless people have a habit of turning into chronic homeless people. And living in a city that's full of chronic homeless people, I don't think we need more.
Your comfort and convenience as a landlord does not rank higher than my desire to not step over human shit on my way to work.
Raising regulatory barriers increases cost of housing. Increased cost of housing disproportionately effects those who have less money. Eviction protections are incredibly harmful to homeless as it makes it can make it risky (costly) to rent to homeless, taking housing even further out of reach. Homeless become even less competitive renters.
Your comfort and convenience to have the option not to pay a landlord does not rank higher than the desire of homeless to have better access to housing. Places with homeless problems badly need to remove these protections from renters.
Except it doesn't work the way you describe, because all it does is determine the quality of tenant that gets to stay in a housing unit in a shortage.
Eviction protections are incredibly helpful at preventing people on the margin from ending up homeless, by increasing the friction of evictions for landlords. This is absolutely necessary, because the cost to the tenant of getting kicked out of where they live is enormous - doubly and triply so if you are the kind of marginal person that gets kicked out of their home. It is incredibly disruptive to their life - much moreso than for someone in a stable situation not being able to find a different place to live.
Remove friction from evictions, and everyone on the margins is constantly at risk of losing their home - and once you do so, your ability to stay afloat becomes incredibly precarious.
If, on one extreme, tenancies were for life, and you had no way to kick someone out of a unit, you'd have an 'unfair' but stable distribution of housing. There would be very few life disruptions to people's lives, at the cost of housing being stuck in a local optimum.
If, on the other extreme, tenancies were day to day, and you constantly had to outbid other contenders for your apartment, you'd have a 'fair' but incredibly unstable distribution of housing. Between the incredibly high pain of moving/looking for a new place to live, anyone on the margins would suffer incredibly from this.
Economists rage against a stable but 'suboptimal' distribution of goods. But people whose lives constantly get upended from the instabilities of an 'optimal' distribution of goods are the ones who will suffer.
Harm minimization is exactly why there is more friction to throwing someone out of their house than 'the landlord feels like it'.
>Except it doesn't work the way you describe, because all it does is determine the quality of tenant that gets to stay in a housing unit in a shortage.
These protections determine that quality of tenant preferred is higher, thus vulnerably are forced away during a shortage. For those who are accepted, risks mean increased housing costs and thus lower access to the poor.
>Eviction protections are incredibly helpful at preventing people on the margin from ending up homeless, by increasing the friction of evictions for landlords. This is absolutely necessary, because the cost to the tenant of getting kicked out of where they live is enormous. It is incredibly disruptive to their life - much moreso than not being able to find a different place to live.
Eviction protections are incredibly _harmful_ at allowing those on the margin to avoid homelessness, by increasing the friction of becoming a tenant. This is absolutely unnecessary, because the cost of a tenant refusing to leave after non-payment can be _enormous_. It is incredibly disruptive to the housing market -- much more so than not being able to find a different tenant to rent to.
>Remove friction from evictions, and everyone on the margins is constantly at risk of losing their home - and once you do so, your ability to stay afloat becomes incredibly precarious.
I'd argue the opposite, those at the margins who are able to meet their commitment but otherwise look bad at paper are at incredibly higher likelihood to gain a home -- and once you gain a home, your ability to stay afloat becomes much less precarious.
>If, on one extreme, tenancies were for life, and you had no way to kick someone out of a unit, you'd have an 'unfair' but stable distribution of housing. There would be very few life disruptions to people's lives, at the cost of housing being stuck in a local optimum.
This is achievable via something close to the 99-year leases available in many nations, where you prepay the lease up-front. You can negotiate for one of these if you can find a voluntary counterparty.
>If, on the other extreme, tenancies were day to day, and you constantly had to outbid other contenders for your apartment, you'd have a 'fair' but incredibly unstable distribution of housing. Between the incredibly high pain of moving/looking for a new place to live, anyone on the margins would suffer incredibly from this.
That's basically what a hotel is, which those on the margins often end up in due to renter protections that introduce risk for landlords to take in those on the margins.
>Economists rage against a stable but 'suboptimal' distribution of goods. But people whose lives constantly get upended from the instabilities of an 'optimal' distribution of goods are the ones who will suffer.
Renter protections make it look more 'optimal' to rent to the rich and stable. We're actually in a suboptimal state that disfavors the homeless, and allowing a freer market would give better opportunities to the homeless.
>Harm minimization is exactly why there is more friction to throwing someone out of their house than 'the landlord feels like it'.
Increasing regulatory barriers to homeless gaining housing is harm maximization, and should be eliminated. These renter protections maximize harm.
"Increasing regulatory barriers to homeless gaining housing is harm maximization, and should be eliminated. These renter protections maximize harm."
I am sirry but this sounds like youve never seen the bottomn of the housing market and what actually goes on there, and basically live in cloud coocooland.
I know a landlord who should be in jail for abusing student tenants, commiting fraud on deposits, renting out houses with mold, rats and leaking riofs, without working heating. Safety railing on stairs sre attached with hot glue. After years of criminality she got a RangeRover and a small fine.
Proving the point further. The regulations fail to protect the intended individuals, only serving to make housing even further out of the reach of the vulnerable.
>I am sirry but this sounds like youve never seen the bottomn of the housing market and what actually goes on there, and basically live in cloud coocooland.
Well at one point (and not so long ago) I lived in a closet in a basement for ~$100 a month in a relatively nice part of Oregon, and frankly I was damn happy someone was willing to look beyond the "formal" means available. Had only the "legitimate" means been available to me, I definitely would have been homeless. Renter protections would have eliminated the only housing available to me. I'm definitely no stranger to "substandard" housing.
>I know a landlord who should be in jail for abusing student tenants, commiting fraud on deposits, renting out houses with mold, rats and leaking riofs, without working heating.
Agree that elimination of renter protections should go hand in hand with elimination of landlord protections: that is, if someone moves out because the landlord hasn't held up to his end of the contract (provide habitable housing), then there should be no protection for that landlord in the courts to force the tenant to continue paying.
A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state .
Wow that's insane. If I was renting out a property I owned I'd expect to be able to throw someone out within a day after an active refusal to pay rent.
What I don’t like about this type of journalism is how they use one instance to set up a boogeyman that they want to scare all of society with. The woman had a 632 credit score in 2021. The average American FICO score was 714 at the same time. She was well below average at a time when housing demands are at all time highs.
Fresh out of college it probably took me several years to reach 700. You have no credit history. I applied for a card in college and coupled with no income, all I qualified for was a secured card. Got denied from the usual suspects of cash back cards for a while. Then once I got cards my limit would only be like $500 per card so you would max it frequently if you used it as a normal person would unless you remembered to pay it off every week. It probably took four or five years for a credit card company to give me a reasonable limit in the thousands, and that came from the bank that I had an account with for 15 years prior.
I was denied a secured credit card when I had a job paying $65k/yr. A secured credit card. How can you be denied for that? I don’t know but I managed. I had 0 credit history btw. Literally none.
When I finally got to $110k/yr I was able to get a $300 credit limit card.
It's crazy how everyone has a different experience. I was given a $300 non-secured credit card while I was in college with no income. They automatically raised it to 12.5k over time without even asking me.
When I was first building my credit I did a bunch of research and found a credit union that would let me take out a 12 month secured loan and then used the proceeds from the loan to open a secured credit card. I immediately paid off all but one payment on the loan pushing out my due date to the 12th month and scheduled an autopay for the final payment (this way I only had to pay a trivial amount of interest). This particular credit union has their secured cards "graduate" to unsecured cards after 1 year of on-time payments. Right before the card "graduated" I dumped all the savings I had into the card. They returned my security when the card "graduated" and I was left with a 12 month on time installment history and a significant unsecured credit line. After that I didn't have any problems getting approved for other cards with limits sometimes even eclipsing my annual income. I figured all this out just by reading web forums.
I've never missed a payment, have over 6 years of on time payments, never even carried a balance on a card, and never been denied an application, yet my score has dipped as low as 640 just because of a "high" amount of credit checks, because I like to take advantage of "spend $1000 on our card and get $200" promotions that come in the mail. 630 doesn't necessarily mean anything bad at all.
That’s not the typical credit card user behavior. It’s a well known risk of churning. You trade the rewards of credit card signup bonus with the lowering of credit score. It tends to rebound quickly though.
I didn’t use the word bad. I said below average. It’s a quantitative observation. When housing demand is at all time highs apartments can be as selective as they want. If they have 20 applications for a single open unit who are they picking?
And that's why I think average kinda sucks here. Who is the average person renting? Maybe they are low income, maybe they are fresh out of college with no credit history at all, but in either case its probably a different makeup of financial backgrounds than what you see in homeowners and therefore the population on aggregate. Lumping these groups into the general population which includes homeowners who have been paying off credit cards for decades makes no sense. Consider the context when determining what these numbers should be, otherwise you are misrepresenting the shape of your data.
The boogeyman is real. I recently moved to a new place and the things I had to submit:
1. Driving license
2. Bank Account statements
3. Credit report (which you can provide or they can pull for a fee)
4. Employment letters / 3 recent paystubs
5. Tax documents for the last year
6. Reference of previous landlord
Ohh and on top of providing these, the lease is provisional and can be terminated based on the results of the background check they do for you. Yeah no, the boogeyman is real and is worse than the credit score boogeyman.
Is that a result of shadow credit score or was it because there was a nationwide moratorium on evictions for 18 months due to covid?
If I’m an apartment manager and I know I can’t evict anyone for an indefinite time, it makes sense to verify every piece of evidence I can that applicants will pay, because if they stop paying there’s nothing I can do and I’m losing money every month.
coincidentally, as far as I know, US Court precedent works exactly the same way, in that a single, real world case is the setting for deciding the applicability, reasonableness and effectiveness of laws on the books, not the "spirit and principle in general" .. IANL
Most court cases do not set any precedent. If you think the judge made a legal mistake in your case, you can appeal regarding that specific legal question.
The appalete court can then issue a ruling on that specific question of law. If they find the lower court was in error, they would typically send it back to the lower court to redo under the new guidance.
Sometimes the specifics of the case do interfere with the appelet court's judgement, but the entire system is set up to minimize that.
> experts warn that algorithms could introduce racial or other illegal biases
There was literally no expert quoted in the article who asserted such a thing.
> “It’s kind of chaos,” said Ariel Nelson, a staff attorney at the National Consumer Law Center. “It’s really hard to figure out if you were rejected, why was it rejected. If it’s something you can fix or if it’s an error.”
The rightful criticism is that these systems are opaque and Kafkaesque. One of the few benefits of them is that they are going to be less biased than human review. But I guess it's too boring to assert that something is just generally unfair when you can lazily shoehorn in that it must be racist.
> One of the few benefits of them is that they are going to be less biased than human review.
This isn't necessarily true. The factors used to drive the algorithms are selected by humans. And from those factors it's not always clear if they end up discriminatory. This is exactly why the systems remain opaque.
>> experts warn that algorithms could introduce racial or other illegal biases
> There was literally no expert quoted in the article who asserted such a thing.
This is exceedingly harsh. Look at regulation on the credit card industry on what data you can and cannot use to make credit decisions. Algorithms can certainly have bias - that's not a disputed fact - and without careful screening of the data and the models you will quite likely have biases. So the article isn't unfair in making that statement.
(1) Do they have more or less bias than the humans performing the current review process?
(2) Is there a way to make their decision making process less opaque than it is now, to reduce the level of bias in their decision making process? - I know there has been some work done in this area (a) though it isn't as fast as many would like to see.
When you put machine learning into the picture sometimes the computer learns things you didn't intend it to. (For example, the presence of a ruler is a sign of skin cancer.) Much evidence of "racism" in this country is actually socioeconomic, but the computer is even more vulnerable than a human to drawing the false conclusion that race is relevant.
There's well-known problems with algorithms introducing racial biases, and renting notably has a number of problems with these already. Calling this out is not a stretch.
Many rejections are opaque to the rejectee, deliberately. Is there any evidence here the system is opaque to the folks who run it? On the surface it seems to be rejecting folks with low credit scores, criminal records, evictions.
if (creditScore < X || criminalRecord || eviction) return REJECT
Which is the same process most landlords go through in their head when they don't have a system.
And, it's life. Didn't get a job? Opaque. Didn't get an apartment? Opaque. Didn't get a yes to a request for a date? Opaque.
My auto+homeowner insurance recently increased because they said my credit score was lower this renewal. I pay my auto insurance for the whole year in advance, so why do they give a shit what my credit score is?
It's just another gimmick excuse to charge more money. I'm guessing the excuse is necessary to bypass insurance regulations or something.
Given the risk-taking activities of the poor vs. the rich, I don't doubt that some actuarial table shows that lower credit scores correlate with high risk profiles for liability insurance. Whether or not that's moral is another matter.
This has actually nothing to do with your premium payment, it's an underwriting risk factor. Research has shown that people with high credit scores make less insurance claims. People who make less insurance claims pay less for insurance.
In other words, credit score is a proxy for conscientiousness. Some people don't like that so a few states have outlawed using credit score in underwriting. Hawaii and Massachusetts specifically IIRC.
Unfortunately any individual company is not in a position to stop using credit, the only way to stop that practice is for the state regulators to step in due to public pressure. Do your civic duty as you see fit.
A company cannot unilaterally drop credit as it will open them up to adverse section.
>Dunn said some of the scoring models he’s seen while litigating cases on behalf of tenants are crude, giving so much weight to factors like eviction, criminal history or debt that a person whose record includes even one of those things would get a negative recommendation.
I agree with the issues of transparency, but not with the models themselves. I absolutely would not rent property to someone who has a recent criminal record, a recent eviction, or a risky credit profile.
Tough eviction laws make it too risky to select the wrong tenant. It could take months to remove a non-paying tenant in some cities.
>I absolutely would not rent property to someone who has a recent criminal record
This include ANY record, or just the violent ones? Curious how you would interpret a "disorderly conduct" charge/conviction, considering it's an umbrella term used by police to slap on any individual they deem difficult.
For example, I had a conviction of disorderly conduct which resulted in a fine. All because I refused to ID myself to a LEO that demanded I comply even though I was under no suspicion of a crime or that I was about to commit one. Additionally I do not reside in a stop & identify state.
How would you interpret that if I were to submit a rental application and my other prerequisites were in line (mid tier job, mid 700 credit score)?
I'm not the person you are replying to, but I would definitely interpret that negatively. First of all, I'm not going to take your word for it on the details. I don't know you and everyone convicted of a a crime insists they are innocent or otherwise in the right. I'd actually feel better about someone who expressed remorse over the situation. Even if I believed you, you are still telling me that you are a generally difficult person to deal with. I would not want to rent to a tenant who goes out of their way to unnecessarily flex their rights because in my state a tenant can make their landlord's life hell that way. I'd want reasonable tenants who I can be sure will pay their rent and leave when their lease is up.
While I wouldn't think much of "disorderly conduct", with the amount of tenants around and it being, you know, my property, why should I take a risk on someone with a criminal past when I may have a dozen competing applicants many of whom may come in clean and have good credit? It's on the applicant to make a compelling case for themselves.
I am completely at a loss to what your referring to then.
I know of eviction moratoriums that occurred after covid. It was sold as a way to avoid a massive surge in displaced people from job loss.
At the time I thought it was strange that this was the best solution because as you said it put the cost on landlords which in my opinion hurts smaller landlords the most.
I don't really see what else could have been the cause but I guess I will rephrase:
- Why do you think this tool was used if not for Covid? (It was as least sold to the public that way right)
- Do you think now that it's been done once that it will happen again?
He's simply pointing out that Covid was a just a BS excuse for politicians to transfer money from landlords to deadbeat tenants (thereby inducing people to become deadbeats).
Exactly. Government policies created an economic crisis. Then government policies exacerbated the economic crisis by doing things like eviction moratoriums.
Not OP but now that’s it’s happened, it will happen again. I would personally not be surprised to see some cities and states clamp down on evictions during the next recession, heat wave, drought, or similar.
These politicians are quick to take new powers and slow to give them back.
TIL credit score is a real thing in a Western country - I always figured it was some thing hypothetical. Looks scarily too familiar to the Social score from some Black Mirror episode, or the alleged Chinese system if you ask me.
Regular credit scores existing isn't dystopian at all (though there are some issues with exactly how they're implemented). In principle, they're just a formalization of the concept that if you've broken promises to pay people in the past, they're less likely to trust you to keep your promises going forward.
The entire credit score industry is completely dystopian.
If the court system worked at all, you could just pull court records checking for judgments saying the applicant defaulted on a loan.
That won't work because courts are too expensive, and also because it's less profitable than extortion via debt collection.
Also, it would prevent the banks from creating protection rackets (no house for you unless you have and use credit cards!), or being "accidentally" racist/classist/etc (oops! The algorithm says your type need not apply. Our hands are tied.)
If the court system worked at all, you would be able to sue credit reporting agencies for libel when they lie to others about a credit line that you never took out.
Especially when the only reason that credit line was taken out was because they leaked your SSN and DOB during a period when their CISO was a music major.
But the FCRA protects these liars from consequences, so here we are.
Such reports say nothing about circumstances. It has nothing to do with your "trustworthiness." It typically reflects economic precariousness. Did you not pay because you lost your job? Or maybe you incurred a huge medical bill which required you to skip out on some bills...etc.
Cold ideological dismissals like this that ignore what is actually happening to people are making me increasingly bitter. It's almost like you're saying "Let them eat cake."
It's the "thrift" argument all over again. You're projecting systematic economic problems onto the poor. Wages have been stagnant for many years. Inflation and cost of living is rising incredibly.
Can we at least make the government take a financially literacy class first? It is the biggest debtor in the world.
HN posters are mostly corporate workers, or institutionalized in some way. The individual is always wrong in their eyes, institutions are always right.
If an individual goes broke wracking up medical debt, "Too bad. You should have been more economically useful." If the government goes broke, "Uh, it's no problem."
I get it. They were trained to despise individuals and worship institutions. They stop singing this song when they get edged out of the system though. I've met many middle aged programmers that gave up all hope in life because they lost their economic value.
In the old days, if you wanted a mortgage, you and the wife put on your Sunday best and went down to talk to the banker in person. If he didn't already know you, he'd grill you. You better have a good job and a good reputation, mister. Should have thought ahead and got yourself some good standing in the Rotary Club or Elks. Have you been seen in church lately? Etc, etc. Credit scores replaced all that crap.
We get regular HN threads about "company X auto-terminated my account and there's no way to get a human involved". Is that really a better way to run society?
Maybe local bank managers having connections to the local community, and actually knowing their customers, rather than sitting behind opaque algorithms and data brokers, wasn't entirely a bad thing after all.
Historically, the "human" way could certainly bad thing for you if your skin color, religion, etc. didn't match the local bank manager... As I understand it, that's why the government pressured banks to move away from that system.
No they haven't. Rent an apartment. You need paystubs to prove your income. You need two references to vouch for your moral character or whatever references are supposed to do for a landlord. You have to throw down a security deposit equal to x months rent. Then you also get that credit check hit. The credit check is saving you from none of that crap, it is just more crap on top of all that other crap that hasn't gone anywhere.
As someone from a Western country, what replaces it?
How do you buy a car on a loan for example?
It's not perfect but unlike both your examples it isn't based on things that could be consider political. You can't lower your credit score by attending a protest for example. Or posting things for or against causes on the internet.
I am just honestly wondering what else is our there? It has always seemed like a tool that can be used by both individuals and lenders.
At my home the approach is a central registry of defaults that can be accessed with your permission (which is required by some but not all lenders to evaluate you). It's kind of an extreme version of a credit score, where everyone who has never defaulted - or where the cause of default wasn't their fault e.g. identity fraud - has a perfect "credit score".
The key values used by banks is essentially two ratios, loan vs collateral, and monthly loan payments vs monthly income; so the question isn't about whether to grant a loan but what is the maximum amount they are willing to risk given your income.
Doesn't this system also require a central registry of outstanding debt per individual? Otherwise if the bank ratio calculations say they're comfortable lending you $1000, what prevents you from going to 100 banks and getting 100x that amount (which, presumedly, would be beyond each individual bank's risk tolerance)?
When the stock price dropped and started to make margin calls on the loans, some of the banks had to take a loss as there wasn't enough liquidity to sell into.
banks don't like to be in this sort of situation - in this particular case, the banks just didn't do enough due diligence presumably.
As far as I understand, people in USA with zero credit history get a poor credit score, which is a major difference from zero history being as good as it gets.
The cost of repossessing a car isn’t zero, and even finding the car can be hard. What if the car is trashed when you repossess it? Say they wrecked it and don’t have insurance? This isn’t an uncommon scenario.
That's a pretty serious offense and it's extremely uncommon over here.
Sure, repossession can be costly but debt collection agencies will make your life hell very quickly, it's not something you can drag for years without big consequences.
My Uber rider rating is abysmal because I used Uber in developing countries a lot and kept noping out of the ride when the seatbelts were absent, were broken, the driver was texting on the highway, the driver was drunk, etc
Drivers don't like passengers like me, who want to get into a car, put on a seatbelt, and have the driver keep their eyes on the road until the destination.
one of these days, we are going to look back on the absurdity of this current system. Just like we looked back on slavery.
Very basic housing should be free. Single payer healthcare should be the standard. Basic income should be provided. As we move towards a more automated society, there are going to be a ton of angry unemployed people with nothing to do but focus their anger on something else.
I mean your are assuming that with free housing you retain a right to live where you want to live.
I am NOT saying we should build this free housing in one area and stick people there: (see the many failed public housing attempts)
But there are more options available than everyone getting free housing in the bay area, CA.
It’s called social housing and is available in many countries, such as UK. It’s often not literally free, but several times cheaper than market prices.
"Free" housing isn't charity or magic. It's a public service paid for by society for the benefit of society. Feel free to criticize the core value proposition, but please don't paint it as some impossible fantasy.
> "Free" housing isn't charity or magic. It's a public service paid for by society for the benefit of society. Feel free to criticize the core value proposition, but please don't paint it as some impossible fantasy.
I understand it's a service paid for by society. I think it's great that you think that too! A service provided by society is not a right though. I'm all for creating a lot of affordable housing, as soon as we define what "basic" means, and agree to who will pay for it (likely us citizens through taxes) and what sort of requirements there will be to be allotted some of this "free" housing.
If we take "basic housing is a right" off the table and replace it with "as a wealthy society, we should levy taxes to provide housing to everyone that wants housing," that's something I can get behind.
Stop calling it free. Stop calling it a right. Then I'm on board
Another problem that only exists due to lack of competition. Landlords hold the upper hand and can afford to be picky. We could collectively decide to solve this, but probably will not.
Want to know how to never have to deal with a landlord? Own your own property!
Also if you are concerned about affordable housing, I hope you paid attention to the line in the article that talked about big business moving into the rental scene buying up properties and charging more for rent than mom and pop landlords. Want to know what caused the largest shift of property ownership from small landlords to big conglomerates? All the COVID evection restrictions. We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come.
> Want to know how to never have to deal with a landlord? Own your own property!
I feel sympathetic with the folks who are trying to buy into the housing market now. I could not reasonably afford my own house if I were buying it today, and I make pretty good money. There will be a reckoning at some point, this obviously cannot continue indefinitely.
> We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come.
Yet another example of the road to hell being paved with good intentions. "Seemed like a good idea at the time!"
There will be a reckoning, the question is how long the market can stay irrational. I want to purchase a property to raise children in, but unfortunately my partner and I don’t necessarily have the luxury of waiting a long time to have kids for obvious biological reasons.
In my country the majority (~60%) of citizens own their own home so the majority of people are riding the gravy train of skyrocketing prices while the others get priced out of home ownership. The reckoning may not happen until a sizeable majority is priced out of home ownership, and that may not happen for a decade.
On the global stage I know I am very lucky when it comes to my lifestyle, but it is hard not to feel animosity for the generations which came before you and had it so easy when it comes to property ownership. The same owners who are now benefiting from your inability to afford a stable place to raise a family.
I firmly believe that the new Singapore model for taxing non-primary residences is necessary to level the playing field between those who just want to have somewhere to raise a family and those who have billions in their pockets. I don’t believe my country has the will to enact such drastic changes so I am assuming the unaffordability crisis will go on for much longer than necessary.
Your argument is that in order to bring down rent prices, prospective tenants should travel backwards in time and push for more evictions?
Even if I believed your pedestrian summary of the state of things, I fail to see any substance in this post aside from “Bad things happen because of policies that I don’t like. Fixing anything for anybody is not interesting to me because I haven’t yet attained heartfelt apologies from people who don’t share my politics.”
They do right now because of supply/demand. The didn't 10 years ago, and they probably won't again in 10 years. The US didn't build enough houses for about 12 years in a row, and now they are building a lot. If it continues, it will be too many and we'll repeat the 2000s
The Headline is in Germany with the "Schufa" literally already the case. What makes it worse, is that you cant even open a Bankaccount with a bad Score.
It’s proprietary, cost money, is almost impossible to avoid if you want to rent an apartment in Germany. And they have been found to have A LOT of incomplete, outdated, or wrong data.
The problem is that these guys aren't covered by the FCRA.
That's what we really need to do--extend the FCRA to cover all companies that gather external data to make decisions that are important to the person. Apply the same standards to all forms of background check--it waddles and quacks, the FCRA applies.
I would also change the once-a-year check to say once-a-day.
The fundamental problem is that the economics of all background-check companies are skewed towards false denials. The companies are happy to have dodged a bullet (bad renter, bad job applicant etc), nothing tells them that the bullet wasn't real. (And what of those of us whose backgrounds aren't exactly verifiable? I have more than 20 years of employment at companies that no longer exist.)
>Background screening reports provided by your company are covered by the FCRA if they’re used to help decide eligibility for housing and include information “bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.”
I'm not sure what it has to do with your question, which was "The FCRA was designed to prevent this kind of thing. I wonder how they get around it?".
Landlords have permissible purpose to check your credit report, so they aren't "getting around it".
So here in Oregon, and more so in Portland, there have been some really radical laws passed in the last couple years. You can no longer evict people for cause without offering up to $4k in "relocation cost", and you can no longer see nor use history of felonies including sex offenses outside the past 7 or 8 years to screen tenants. You have to announce the listing publicly and take anyone who says they can pay on a first come, first served basis. And instead of showing 3x the rent as income, you can now only exclude them if they show less than 2x.
So essentially the first meth addicted child molester who scraped by 2x your rental price in the last month can move in and never be evicted.
It's really great how NPR and ProPublica keep banging on about how unfair it is for anyone who owns anything to request anything of the people they rent to. What about how unfair it is to people like me who worked their asses off to buy a house and want to take care of it? It took me 25 years of work to afford a home. No 22 year old anarchist, bless your soul because I was one, is going to explain to me why I don't deserve it. It's the only property I own. This is why I'm just allowing a friend to live for free in my house while I'm out of the country for the next year, and soaking up the lost rent rather than soaking up potential legal bills and damage. But if things continue this way, I'll sell it to a willing idiot, and everyone here who advocated for this communist shit can enjoy the hell hole they've created for themselves.
I've heard so many landlord horror stories, I can understand why landlords want something like this. I can also understand why big business is becoming more and more common as landlords; when an individual rents out one or two properties the risk of a bad tenant is far too high.
FWIW: I always preferred to rent from professional landlords who owned a 4-5 complexes. Small-time landlords were always too amateur; and large corporate landlords delivered poor value. (IE, I lived in a corporate "luxury" apartment that had junky appliances.)
> But her tenant score was too low for her to rent an apartment without paying an elevated deposit ... never missing a rent payment before moving out early due to the pandemic
I know the article didn't explain if she asked to leave early; but if you have a lease, you can't just "up and leave" when you want. That requires negotiating with the landlord.
You can in every place I have seen. You are just up for any costs involved in getting a new tenant. In the current market that's close to nothing since someone else will be in the week you move out.
I have a lot of rentals and the big things that I look for as a landlord is criminal history and make decisions based mostly on that. Credit score doesnt come into the calculation because you have to assume most renters dont have a great credit score. Making sure the person also has a stable income is also part of it.
How is this even legal? This tenant screening report could easily allow someone to discriminate certain individuals. I'm assuming when you fill out a rental application its in the fine print but who or what regulates what data the use?
Well, in the world of empty houses and homeless people, who cares if some more losers wont get a flat, or pay their whole salary to avoid eviction?
Home and rent prices should go up, and people should work harder and longer to afford luxury of having roof over head.
It should obviously be illegal - preferably criminal - to check a credit score for a place to live, anyway - because a credit score, probably at least half the time - has little to no impact on how reliable of an individual you are financially.
I live in Canada, where health care is covered, but dental isn’t. I had an injury several years ago which effectively destroyed many of my teeth, and ended up more than $15,000 into debt over it. I couldn’t make my payments on time for probably a couple years, and even though I finally managed to pay it off, it’s a black spot on my credit history for years to come - through absolutely no fault of my own.
This is infinitely worse in the USA, where the pathetic government that promises ‘freedom’ somehow doesn’t get that universal health care is a huge part of that.
I have family in the USA who got cancer.
Due to the absolutely bullshit health care system there, they are completely, utterly, financially devastated.
This family member had to be stopped from committing suicide when they found out just how much it would cost to save their life. That they would have to declare bankruptcy. That their credit score, and anything they'd ever need to do with money in the rest of their life - was completely gone.
It’s literally why I don’t live in the USA anymore. Scared me shitless.
You know what’s way - way worse than getting cancer?
Having to pay more than you could ever possibly afford for getting cancer.
Good luck getting a house after that, thanks to this bullshit.
According to credit scores - you should be held personally responsible for the fact that you got that disease.
Literally - how dare you get cancer. Enjoy having a shit credit score for the rest of however long you have to live.
The fact is - people need places to live, and if people have poor credit - especially if it’s of no fault of their own, but due to the bullshit system we live in that has no room for genuine accidents - how the hell are these people ever supposed to find a place to live?
I had to go out of my way - and pretty much pay extra - to find a landlady here in Toronto even willing to give me enough understanding to rent a place - and I make about $100k CDN a year.
I had to explain the whole situation, come up with documents to prove that’s what actually happened, and even then I was lucky to get a place to rent. I can’t imagine what it’s like for people who might have half or less of my income and poor credit through no fault of their own but are looking for a place to live.
Fuck the credit score system. It is an abhorrent human rights issue - is simply disgusting and disturbing - and only serves the rich.
A credit score does not take into account for humanness.
It’s the nuke of weaponized capitalism, yet another tool to keep the rich more rich and the poor more poor.
May the greedy miscreants who developed and enforce this wicked system rot in a special kind of hell.
Contrary to your initial assertion, credit scores are built using real-world models based on historical data that indicate a debtor’s likelihood of repaying debts. Fair, Isaac, and Co. (aka FICO) pioneered this technique in the 1960s; one founder was a mathematician and the other an engineer. This score helped creditors make more accurate decisions based on real data; before that, credit decisions were usually made by individual loan officers whose decisions were often based on how well they knew you personally and your standing in the community (and were frequently racist, often overly so).
Is the credit score system imperfect? Yes. Is it based on a mountain of bullshit? No.
(That said, I’m really sorry to hear about the tragedies that have impacted you and your family. I don’t think it’s fair that we don’t collectively insure one another for accidents, either.)
The issue is that now, credit scores -also- reflect how good a credit -consumer- you are, not just your risk profile. How profitable a customer are you likely to be, etc.
Paying off a loan early can often impact your credit score negatively despite being evidence in favor of your risk profile. In my case paying off my auto loan early gave me a credit score lower than before I had the loan in the first place.
That's not because it measures your value as a consumer, though. It's because the the accuracy of their risk estimation is greater when there are more open accounts to analyze. (And even then, the relative "penalty" is small.)
why does an account have to be open to analyze it? Surely me successfully paying every monthly payment and having money to spare to pay off the loan early would indicate that my risk as a borrower is lower than someone who can barely make payments? If we were talking years down the line it should weigh less than an open account but my score dropped instantly after closing out the loan.
Maybe there is a regulatory aspect I don't understand that restricts analysis of closed accounts or something. Barring that Occam's razor would suggest that it hurts your credit score because paying off a loan early deprives the lender of interest which makes you a less appealing candidate at a given rate. After all, credit scores are a product for lenders, if it didn't do this they might go to another bureau that does.
Fundamentally the opacity of it all is a problem in its own right. We don't have any real insight into how the calculations are made but they dictate huge amounts of our lives.
How about when the only change to your credit profile is paying down multiple accounts, on time and seeing your available credit increase, your credit utilization decrease, your account aging increase...
The subject’s race is not in a credit report. So that’s better, but as long as people look for other clues as to the applicant’s race (such as their name or address history), that’s going to be a problem. That’s not the credit report’s fault, though.
We mustn’t let perfection be the enemy of continuous improvement.
>I had an injury several years ago which effectively destroyed many of my teeth, and ended up more than $15,000 into debt over it. I couldn’t make my payments on time for probably a couple years, and even though I finally managed to pay it off, it’s a black spot on my credit history for years to come - through absolutely no fault of my own.
Medical debt is not weighted the same as consumer debt[1] and is not as ruinous as defaulting on a loan or credit card for many lenders. The newer scoring models also ignore paid collections. So, for many lenders there is no 'black spot' since you have paid it off. Even before the newer models came out, I knew people who ignored massive medical debt/collections when deciding to grant loan and rental approvals or not.
>and only serves the rich.
It serves the people who understand that a loan or credit card needs to be paid back per the terms of the contract. There are also financially educated/knowledgeable 'poor' people who understand this and have a good-excellent credit score, just as there are 'rich' people who never learned financial responsibility and have a terrible credit score. It serves the person with a good+ score.
This includes medical bills that are "absolutely no fault of [their] own", there are services that can help with payments, almost all lenders will work with someone on repayment if an effort is made to care to do so. Also, politics/opinions aside, refusing treatment or medical travel to a cheaper country is an option. Not a great one, but still an option.
I had a family member rent to someone in Feb of 2020. He paid one month of rent, and then nothing until the government finally let the eviction go through in Dec 2021. I don't entirely blame.the government, in that if my family member did even basic due diligence they would have seen how much of a grifter this guy was, with previous bankruptcies and other recent evictions. Still, in the past, when you made a mistake and got a bad tenant, the option was eviction. And while the government largely paid most.of this grifter's rent, my family member was still out over 15k in lost rent and legal fees.
As a consequence of this, nobody in my family would ever consider renting a property as a long term rental again - there is just too much risk, which means you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.