The American Eviction Crisis: Countdown to Doomsday

[San Lumen]

How are we just going to give people houses and apartments? How long will they have no mortgage and no rent?

What do you mean, "How"? You just give them they key. Don't you own anything in your life that you were just given and didn't have to pay for? What the fuck is there to understand?

What would you have done if you were executive? Honestly with what's coming it would have been better to have done nothing at all.

If you had done nothing then very obviously you would be in the exact same situation, you'd just be there months earlier. All these people who are going to be evicted because they can't make the rent, do you think that if they had never been protected from eviction before now that they would somehow have been able to pay the rent? Do you think that people who rely on unemployment payments to pay the rent would somehow have been fine if they'd never gotten those payments?

They wouldnt be needing unemployment because nothing would have been shutdown. We'd be behind this already and wouldnt be worrying about a total economic collapse.

[Ifreann]

What do you mean, "How"? You just give them they key. Don't you own anything in your life that you were just given and didn't have to pay for? What the fuck is there to understand?


If you had done nothing then very obviously you would be in the exact same situation, you'd just be there months earlier. All these people who are going to be evicted because they can't make the rent, do you think that if they had never been protected from eviction before now that they would somehow have been able to pay the rent? Do you think that people who rely on unemployment payments to pay the rent would somehow have been fine if they'd never gotten those payments?

They wouldnt be needing unemployment because nothing would have been shutdown. We'd be behind this already and wouldnt be worrying about a total economic collapse.

That's not true and you've heard the explanations as to why probably hundreds of times over the last five months, so I won't explain it to you again.

[Galloism]

How are we just going to give people houses and apartments? How long will they have no mortgage and no rent?

What do you mean, "How"? You just give them they key. Don't you own anything in your life that you were just given and didn't have to pay for? What the fuck is there to understand?

When I was a child maybe?

[95X]

95X saw this article the other day that details how some landlords are ordinary people that own rental housing (emphasis added by me in a few places):

While tenants struggle, some landlords say they are worse off than their renters. One property owner actually became homeless and another works two jobs to make ends meet.

When Brandon Leyritz bought a duplex in Auburn, it seemed like the perfect investment. One side was already occupied by tenants and he moved into the other half. It started off well but quickly went south.

“Really the last payment I received from them was in January and at that point they were thousands and thousands of dollars past due,” Leyritz said.

In an effort to cover his mortgage, Leyrich offered to forgive all of their back rent if they would just leave but the family wasn't interested. Leyritz was desperate.

“I had to move out of the unit I was living in and rent that out so I could get some income,” he said.

Leyritz said he might still be homeless, but an accidental fire made the house uninhabitable. A few weeks ago the tenants moved out.

On average, only nine percent of rent goes into a landlord's pocket. The rest covers the mortgage, repairs, property taxes, insurance and other expenses.

Another landlord named Amie, who didn’t want her last name used, said she was forced to take a second job when her tenant - who also works - stopped paying.

We also need to remember that renting a housing unit is just one possible use of a property. For example, there are former houses that are converted to offices. An apartment building can be converted into condos (for a famous example, see Hawthorne Blvd. in Portland, OR). An older building can be torn down and replaced with new higher-density, higher-profit construction. And then there's property owners that decide to turn their properties to short-term rentals using lodging apps.

Also, in response to the comments that the mortgages on rental properties should be forgiven, banks make loans for one reason: to make money. Canceling such mortgages would require banks to take a huge write-down and financial loss as well as lose their right to any stake in the collateral. The result would be they would be very unwilling at best to ever approve a loan for such collateral ever again. This would further shrink the rental market because very few, if anybody, would be able to buy said properties.

[Ifreann]

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

[Greed and Death]

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

That also means if a Landlord has a vacancy rate over 9% they lose money.

[State of Turelisa]

Look, all I'm saying is landlords should get a real job like real Americans.

If your income is "passive" you're pretty much either being compensated for something or you're stealing from someone.

Income that is taxable as ordinary income is 'stealing from someone[sic]'? Is it really apt to describe as passive to use one's property to provide shelter?
Surely 'passive' is an apter description of recipients of welfare cheques?

[Major-Tom]

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

Kind of, in the US at least, it depends in terms of the lease agreement. Some are structured in such a way that other expenses (IE utilities, repairs, taxes) aren't billed to the renter either through rent payments or additional fees.

Either way, this trope I'm seeing on this thread that landlords are somehow "parasites" is kind of annoying (not singling you out at all, just making an observation).

[Cisairse]

If your income is "passive" you're pretty much either being compensated for something or you're stealing from someone.

Income that is taxable as ordinary income is 'stealing from someone[sic]'?

Yes.

[Shofercia]

So let me get this straight: the US Government was actually dumb enough to require landlords to provide housing to tenants, while not providing any compensation or relief for the landlords, but also while bailing out the stock market with trillions of dollars?

I gotta ask, is "oppress everyone as equally as possible" the new hit on the block? I'm actually thankful that Sacramento's inept leadership took action, or rather inaction, which ended up with Proposition 15 being placed on the ballot, which prevented me from becoming a landlord. Two wrongs, two very idiotic wrongs, apparently made a right for my pocket. I'll admit, I didn't see that one coming.

[Plzen]

[...] but also while bailing out the stock market with trillions of dollars?

But you see, the people who hold great influence in the stock market also tend to be the same people who are good friends with the chaps who wrote the stimulus package bills.

Honestly, I think maybe the US should’ve just covered wages and leave it at that. Company no longer needs its employees? Keep them on the payroll - the State will cover the expense.

[Shofercia]

[...] but also while bailing out the stock market with trillions of dollars?

But you see, the people who hold great influence in the stock market also tend to be the same people who are good friends with the chaps who wrote the stimulus package bills.

Honestly, I think maybe the US should’ve just covered wages and leave it at that. Company no longer needs its employees? Keep them on the payroll - the State will cover the expense.

What about small business owners? In my neighborhood there's a store that rehabilitates dogs and cats who were abused but aren't violent, and then charges people a certain amount to play with them, or to adopt them. They're quite well taken care of and the store had no incidents outside of idiots being idiots, (a 31 year old, who probably should've known better, decided to stomp on a tail, was bitten as a result, and ended up going to jail for lying under perjury because he didn't realize his actions were recorded, was the most "violent" incident, and brought much mirth to my community,) functioned perfectly for over five decades, and then COVID-19 hit, and it's going out of business unless it gets more funds. Shouldn't stores like that also receive a bailout?

I completely agree with what you're saying. I just think that we should have programs that help keep businesses that would've thrived had COVID-19 not shown up, up and running, in addition to your proposal.

[Nobel Hobos 2]

What do you mean, "How"? You just give them they key. Don't you own anything in your life that you were just given and didn't have to pay for? What the fuck is there to understand?

When I was a child maybe?

A few weeks ago I received in the mail a colon cancer test kit. There's a sheet of biodegradable paper, which goes in the toilet before you poop. There's a tiny spatula to take a sample of poop, which goes into some gel in a little vial. That goes in the reply-paid envelope and you mail it. In a few weeks you get told you probably don't have colon cancer. This happens every 5 years after the age of 50. It costs nothing, it's free.

Maybe you don't get such gifts from your government. Unless you consider the right to vote to be a thing of value ...

And I'm pretty sure you would have been given things for free, from private enterprise.

[Kowani]

So let me get this straight: the US Government was actually dumb enough to require landlords to provide housing to tenants, while not providing any compensation or relief for the landlords, but also while bailing out the stock market with trillions of dollars?

To be fair, much of the stuff for the stock market comes from the Fed, which doesn’t create money in the same way Congress does. It seems a bit unfair to blame Congress for their (admittedly terrible) idea by lumping them in with the Fed.


Then again, much of the coronavirus bills was just corporate bailouts, so blaming them for that is entirely reasonable.

[Nobel Hobos 2]

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

"The mortgage" would be the lion's share of expenses. Landlords who don't have one (ie own the house) would get a much higher return, assuming they charged the same market rent. For owning property.

With a mortgage, a lot of that money is going to the bank. For part-owning property.

Really what it comes down to is that having money, makes money. That a fraction of that is earned by the work of being middleman, does not make a whole lot of difference.

[Plzen]

Really what it comes down to is that having money, makes money. That a fraction of that is earned by the work of being middleman, does not make a whole lot of difference.

I believe that this is exactly the problem being pointed out.

If the rate of return on investment is higher than the rate of growth in the compensation of labour, or so the theory goes, capitalism is in crisis.

[Nobel Hobos 2]

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

That also means if a Landlord has a vacancy rate over 9% they lose money.

No. The large part played by mortgage costs there, is not money the landlord is "losing". It's money they're spending to pay off the mortgage.

[Nobel Hobos 2]

Really what it comes down to is that having money, makes money. That a fraction of that is earned by the work of being middleman, does not make a whole lot of difference.

I believe that this is exactly the problem being pointed out.

If the rate of return on investment is higher than the rate of growth in the compensation of labour, or so the theory goes, capitalism is in crisis.

So I'm guessing it's been in crisis for a while ...

[Plzen]

So I'm guessing it's been in crisis for a while ...

Social inequality has spiked quite sharply after the postwar consensus started to fall apart in the 1970s/80s...

The aftermath of the Industrial Revolution was, historically speaking, a period of unusually rapid economic growth but unusually depressed return on investment. Arguably this is why the 20th Century was the age of mass politics, powerful labour movements, and relatively high social equity.

[Libertarians]

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

That doesn't account for any time between renters, or any time when a renter quits paying. Plus, at least ideally, renters are essentially paying to have flexible living and not be tied down to a specific location for years. You pay a bit extra for flexibility. It is unfortunate when that turns into paying to rent a place forever because you don't have the credit to buy a home.

From what I have seen as a CPA outside of rent controlled urban areas, most landlords when you have a steady tenant in the unit often you are just hoping to cash flow even. Very often landlords are kicking in their own money to cover these costs. As long as what you're kicking in is < the principal portion of the note payment then you are still building equity in the real estate (or to say it another way, the landlord only needs the tenant to cover mortgage interest + repairs + taxes etc to be in the black, at least for the months it is rented). Rarely do you make a bunch of cash from operating rentals. You're typically just building equity in the real estate slowly over years.

The idea that a long term solution to the COVID housing problem is just to is just to prevent evictions and force landlords to eat the loss of revenue for months is a fantasy. The idea that these landlords would evict millions of people so that the units could sit empty is also fantasy. They will take something over nothing. The banks are going to have to take a hit on these loans, the landlords are going to have to take a hit, and, yes, the people who are living in rentals are still going to need to find a way to pay something for their housing. We don't need (and can't afford) to spend billions of our grandchildren's future labor to bail out today's banks, landlords, tenants, and homeowners from having to negotiate a way to get through this IMO.

[Plzen]

Plus, at least ideally, renters are essentially paying to have flexible living and not be tied down to a specific location for years. You pay a bit extra for flexibility. It is unfortunate when that turns into paying to rent a place forever because you don't have the credit to buy a home.

I'm not sure what the situation looks like in the US, but at least in the regions I've lived in this "ideal" is mostly a fantasy. People rent because real estate prices in urban areas of developed countries are so high, driven up by investors and landlords-to-be seeking to drain rent from tenants, that a person of modest means can no longer afford to have a place of his or her own.

Rents are high, so people with large sums of idle money buy up houses to extract rent from tenants, which drives up housing prices, which makes renting the only viable housing option for tenants, which increases the amount of rent landlords can squeeze out of their tenants, which, of course, makes rent high, and the cycle repeats. So on and so forth for the past few decades.

Crisis response is crisis response, of course, but in the long run, looking beyond just the coronavirus pandemic, we can start by hammering anyone that owns more than one house with punitive property taxes.

[Libertarians]

Plus, at least ideally, renters are essentially paying to have flexible living and not be tied down to a specific location for years. You pay a bit extra for flexibility. It is unfortunate when that turns into paying to rent a place forever because you don't have the credit to buy a home.

I'm not sure what the situation looks like in the US, but at least in the regions I've lived in this "ideal" is mostly a fantasy. People rent because real estate prices in urban areas of developed countries are so high, driven up by investors and landlords-to-be seeking to drain rent from tenants, that a person of modest means can no longer afford to have a place of his or her own.

Rents are high, so people with large sums of idle money buy up houses to extract rent from tenants, which drives up housing prices, which makes renting the only viable housing option for tenants, which increases the amount of rent landlords can squeeze out of their tenants, which, of course, makes rent high, and the cycle repeats. So on and so forth for the past few decades.

In urban areas in the US, there are definitely more problems. That's not really an accurate way to describe the problem, because if it was true that I could build a complex in an urban area and be paid significantly more in rent than I have to pay in costs like taxes, interest, and maintenance then I would do that and we would be seeing tons of new housing in the cities. We aren't, or at least, we aren't seeing new housing to keep up with urban growth. More accurately, to me, the problem seems to be there are far too much demand from people that insist on living in a big city when there are more available jobs and often far higher cost of living savings than salary cuts to be had moving to a more mid-sized city where I live (70-100k people). It just doesn't seem cost effective to have that many people living on top of each other, especially now that we're seeing a huge chunk of us can work from literally anywhere.

Again though, ultimately if you want to say we need a national program to bail out banks/urban landlords/urban tenants from this housing problem solely because far too many people try to live in 14 small slivers of land, to me that's hardly a great use of our grandchildren's labor either. In urban areas, the landlords and banks are going to have to take a bigger hit, and ideally, we as a society can start to spread out and not live in extremely dense (expensive) areas for honestly no real reason. Throwing cash at people/landlords so that tenants can continue to lease their apartments is about as likely to lead to affordable housing in urban areas as it lead to affordable tuition when we did it for college. It will just lead more people to want to live in the most expensive parts of the country.

[Galloism]

When I was a child maybe?

A few weeks ago I received in the mail a colon cancer test kit. There's a sheet of biodegradable paper, which goes in the toilet before you poop. There's a tiny spatula to take a sample of poop, which goes into some gel in a little vial. That goes in the reply-paid envelope and you mail it. In a few weeks you get told you probably don't have colon cancer. This happens every 5 years after the age of 50. It costs nothing, it's free.

Maybe you don't get such gifts from your government. Unless you consider the right to vote to be a thing of value ...

And I'm pretty sure you would have been given things for free, from private enterprise.

I think I got a toaster from a bank once when I opened a savings account. But I didn’t really consider that “free”, but an up front earning for opening an account.

[Borderlands of Rojava]

Trump is flip flopping again on giving out more benefits. He said he might act with an executive order to aid families but then he recently said the $600 unemployment was making people not wanna work, so he's likely gonna do what comes naturally and maximize cruelty and suffering.

He'll do nothing. And by September millions of people will be living in a cardboard box on the street, and his response will probably be "It is what it is, but look at my economy. I reopened it."

[Ifreann]

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

Kind of, in the US at least, it depends in terms of the lease agreement. Some are structured in such a way that other expenses (IE utilities, repairs, taxes) aren't billed to the renter either through rent payments or additional fees.

Either way, this trope I'm seeing on this thread that landlords are somehow "parasites" is kind of annoying (not singling you out at all, just making an observation).

Landlords provide no useful service to their tenants. This is obvious when you consider that people who are not renting do not hire "landlords". If you own your own house, you wouldn't hire someone to take your mortgage payment and pass it to the bank, you would just make the payment to the bank yourself. You wouldn't hire someone to pass the taxes you owe to the tax man, you'd just pay your taxes. You wouldn't hire someone to go and in turn hire an electrician for you, you would just hire an electrician. Anything that a landlord does for their tenants is something that those tenants could realistically do for themselves without the landlord.

And landlords are different from businesses providing other kinds of rental services. Everything else people rent is something they only want or need for a limited period of time, and the service provider keeps a stock of that available for people to use for a few hours or days or whatever it is. But people who are renting somewhere to live, they're not in town for just a week, they're living in that place for years. They're renting a house, not because they only need to live there temporarily, but because they need to live there for the foreseeable future and can't afford to buy. And one of the reasons they can't afford to buy is that someone who only needed one place to live went and bought two or three or a thousand and is renting out what they're not using.

---

Only 9% of rent goes into a landlord's pockets.

Which is to say, the renters are paying for the mortgage, the taxes, the repairs, the insurance, all the other expenses, and the landlord charges them a 9% fee to be a middleman in all those transactions.

That doesn't account for any time between renters, or any time when a renter quits paying. Plus, at least ideally, renters are essentially paying to have flexible living and not be tied down to a specific location for years. You pay a bit extra for flexibility. It is unfortunate when that turns into paying to rent a place forever because you don't have the credit to buy a home.

I wonder if you would find anyone willing to pay the same kind of money for the same kind of flexibility when they own their home themselves. Pay a monthly fee, indefinitely, for someone who will facilitate you moving out whenever you want. Kind of like a real estate agent, except instead of only hiring them when you want their expertise, you hire them constantly. Doesn't sound like something anyone would sign up for.

From what I have seen as a CPA outside of rent controlled urban areas, most landlords when you have a steady tenant in the unit often you are just hoping to cash flow even. Very often landlords are kicking in their own money to cover these costs. As long as what you're kicking in is < the principal portion of the note payment then you are still building equity in the real estate (or to say it another way, the landlord only needs the tenant to cover mortgage interest + repairs + taxes etc to be in the black, at least for the months it is rented). Rarely do you make a bunch of cash from operating rentals. You're typically just building equity in the real estate slowly over years.

If there's so little money in taking big chunks of other people's wages then maybe they should stop being landlords and get a job of their own.

The idea that a long term solution to the COVID housing problem is just to is just to prevent evictions and force landlords to eat the loss of revenue for months is a fantasy.

It would be silly to just prevent evictions. You should prevent the commodification of housing entirely.

The idea that these landlords would evict millions of people so that the units could sit empty is also fantasy. They will take something over nothing.

There are already more empty homes in the United States than there are homeless people. Objectively, nothing is preferred over something in many cases.

The banks are going to have to take a hit on these loans, the landlords are going to have to take a hit, and, yes, the people who are living in rentals are still going to need to find a way to pay something for their housing. We don't need (and can't afford) to spend billions of our grandchildren's future labor to bail out today's banks, landlords, tenants, and homeowners from having to negotiate a way to get through this IMO.

So don't. Take rental properties away from landlords and give them to the people living in them. Take empty homes away from whoever the hell is leaving them empty and give them to people in need. Cancel all mortgages and let people keep the house they're living in. Now no one gets evicted. Now no one loses their home if they lose their income.