Rolling US Economy Into The Shitbin Thread

the whole reason most states have to write that "self-help" evictions (ie, changing the locks on the 3rd of the month, deliberately shutting power off to a delinquent renter's house) are illegal in their statutes is because of the sheer volume of landlords doing illegal shit like that.

Landlords are 99% total shit.

Last place I lived had black mold, ancient baseboard heating that drove electric costs up to $350/month for a 1/br if we wanted to keep it relatively warm in winter, and leaks that ruined part of my record collection. None of this was visible on tour of the apartment.

We raised the issues with documentation numerous times. No response, or "Yeah, we'll get that fixed," and then nothing.

Eventually, we just said fuck it, put a down payment on a place, and told that landlord to keep the security deposit, but we were not paying three months worth of rent because of his negligence. Included pictures, documentation of our documentation, etc. Got an email back saying, "okay!" and never heard from them again...

Turns out (surprise!) they're total slumlords and have been renting out nearly uninhabitable properties for years and years. One of the other properties they rent had an *entire bathroom* fall through a rotting ceiling.

But this is all to say: I have had one kind landlord in my entire life. The crisis of evictions that this country is going to see in the coming months is desperate and despicable and could easily be mitigated by rent cancellation.

I had one fantastic landlord and the reason I left is because a) the traffic in that area was bad, b) I wanted my own place

I miss that landlord so much, because as stated above, that's an anomaly.

The crisis of evictions that this country is going to see in the coming months is desperate and despicable and could easily be mitigated by rent cancellation.

agreed! I think that is why we, er, at least I, am thinking about this "landlord bailout" idea ... not as a "oh poor landlords" but as a "what can we do realistically to keep landlords from evicting tenants" ... the key word here is "realistically".

forbid them from evicting their tenants

Aren't those houses either going to be purchased and put back on the rental market or purchased by people who otherwise couldn't buy/drive down house prices overall opening the market to people who were renting, which then frees up rental stock?

hahah ... ok i will stop laughing ... it probably is different in parts of the country that aren't NYC or the SF Bay Area or similarly expensive areas with an already existing lack of affordable housing (and some would argue housing in general) --

besides the delays that man alive mentions (where the property is vacant for a significant period of time), oftentimes these houses end up purchased by investment companies and remain vacant for even longer because the companies don't see the house as a "house" they see it as an asset in their portfolio, much like shares of stock, they can hold or sell or use whenever, they don't have the same economic incentive to rent it or sell it the way a small investor would ... this was the whole set up for the Oakland "Moms 4 Housing" incident (I think there was a version in LA too) where homeless families commandeered a vacant house.

Yeah, if we didn't have corruption and manipulation of the housing market, prices would've gone down... but of course not. I read a report that said it actually took 18 months for the 2008 crash to actually see prices lower.

lovin how they keep bringing up these poor widdle old ladies losing income from their rental property

They are the real estate equivalent of the "family farm"--a dwindling and economically endangered species, but so politically useful to distract from the national and multinational corporations that control these sectors and play legislators like sock puppets.

My landlord replaced my water heater himself and did such an unsafe job (no way to let an overheating heater vent rather than explode) I paid someone to come out and redo it.

good lord! ... I have seen these ... it's one of those things where, once you explain how it works and what can happen if you don't do it properly ... the person who did it wrong tends to be like ... oh shit, uh ... yeah, fix that.

Fewer than 50% of landlords are mom’n’pop landlords*... and waaaaay fewer than 50% or units are administered by them, even before you consider the fact that a lot of the mom and pops* employ for-profit commercial management companies.

so we're all on board with guillotining the landlords, great

yeah, I tried to devil's advocate some kind of way it would be bad for the larger housing or financial system, but I don't really see it.

so we're all on board with guillotining the landlords, great

oh fuck off

no!

it probably is different in parts of the country that aren't NYC or the SF Bay Area

...yes

which is also why we have the horrible government we do rn ...

I live in a 100 year old fourplex. My landlord makes $70k per year in rent off my building and pays $5500/yr in taxes.

— Scott Frazier (@safrazie) July 29, 2020

My landlord is literally who city council is talking about when they talk "Mom and Pop" landlords except it's bullshit. She owns property all over LA and even internationally.

— Scott Frazier (@safrazie) July 29, 2020

She is receiving huge amounts of passive income on investments she has basically no expenses for, and California's Reaganite tax system lets her keep huge profits while starving the state of the ability to fund services for everyone else.

— Scott Frazier (@safrazie) July 29, 2020

Then City Council cries about the crisis Covid is imposing on landlords. It's outrageous.

— Scott Frazier (@safrazie) July 29, 2020

are we pasting an entire thread's worth of tweets into ilx now

It’s fine there’s room

Seems to me if you cancel rents for people, you should also freeze mortgage payments for the landlords. Seems simpler than trying to determine who is worthy of the relief.

or maybe we could freeze landlords...cryogenically

the fourplex in that tweet is either not representative if the landlord owns it outright or else he's leaving out the mortgage his landlord pays, which I'm sure is a lot more than $5500/year. Depending on when he bought it, how much he paid and the terms of his mortgage, the landlord could be breaking even, could be clearing $10k a year, or could be clearing $40k a year, or really almost any other possibility. If landlords could make that kind of profit on investments ($5500/year outlay and $64,000/year in profit) you'd see a lot more people becoming landlords.

You... do, though? Problem is having the capital to purchase. There are rentseekers a'plenty in the USA.

If she’s paying $5500 in property tax, it was frozen decades ago so I think it’s safe to assume that it’s owned outright.

Or if she’s borrowed against it, she turned the equity into more properties for the same result.

I guess that's possible. IDK how it works in LA -- there are places that reassess the second a property changes hands and places that don't.

You... do, though? Problem is having the capital to purchase. There are rentseekers a'plenty in the USA.

― Nhex, Wednesday, July 29, 2020 4:13 PM (twenty-five minutes ago) bookmarkflaglink

Typical ROI is nothing like what is described in that scenario.

if she paid any interest in the mortgage and the $5500 is property tax, could be that she has something like $700,000 in this investment property. So the return is like 10%. But then she can probably make hundreds of thousands more when she sells the property later. There's really so much unknown here.

https://www.youtube.com/watch?v=MEnmjDD_fTE

Maybe not typical but I don't think it's uncommon either. I spent years doing maintenance and handyman shit for people who owned du/tri/quadplexes - the only way they didn't own outright was if they'd taken equity to buy more property.

Any way you cut it, she's a leech on society of course.

DJI
Posted: 29 July 2020 at 21:39:13
Seems to me if you cancel rents for people, you should also freeze mortgage payments for the landlords. Seems simpler than trying to determine who is worthy of the relief.

yes this is it. it’s not complicated. is there a mortgage “holiday” in the us at all? in the uk there is until end of october i think (was extended from july)

the fourplex in that tweet is either not representative if the landlord owns it outright or else he's leaving out the mortgage his landlord pays, which I'm sure is a lot more than $5500/year. Depending on when he bought it, how much he paid and the terms of his mortgage, the landlord could be breaking even, could be clearing $10k a year, or could be clearing $40k a year, or really almost any other possibility. If landlords could make that kind of profit on investments ($5500/year outlay and $64,000/year in profit) you'd see a lot more people becoming landlords.

― longtime caller, first time listener (man alive), Wednesday, July 29, 2020 4:43 PM (one hour ago) bookmarkflaglink

california tax code dude.

If landlords could make that kind of profit on investments ($5500/year outlay and $64,000/year in profit) you'd see a lot more people becoming landlords.

haha what?

"if hedge fund really can make billions (which i highly doubt!) you'd see a lot more people starting hedge funds."

if the argument for bailing out landlords is that if we don't then wider society will suffer, then here is an industry i would bail out before landlords.

https://www.washingtonpost.com/opinions/child-care-centers-have-already-been-reopening-the-results-are-troubling/2020/07/13/3ce91a00-c53b-11ea-b037-f9711f89ee46_story.html

Some 40 percent of the child-care providers that existed pre-pandemic expect to close permanently unless they get additional public assistance soon, according to a National Association for the Education of Young Children survey of more than 5,000 child-care providers released on Monday.

I guess that's possible. IDK how it works in LA -- there are places that reassess the second a property changes hands and places that don't.

― longtime caller, first time listener (man alive), Wednesday, July 29, 2020 2:38 PM (eleven minutes ago)

it depends on the terms of the transfer -- you see this in California (because of Prop 13, which people keep valiantly trying to repeal and failing because there are still enough Reagan-era conservatives in this state) a bunch where property is transferred to family members and are not reassessed.

In terms of this hypothetical fourplex, the landlord is probably paying for water, garbage service, and potentially some of the electric bill on the common areas -- that's probably another couple thousand. There is insurance -- add at least $1k to that. They probably also (at least they are supposed to) pay City business tax on the rental -- different cities tax rental property way more than other types of business income. We don't know about the mortgage or maintenance costs. It is possible that the landlord has some mortgage/debt on the property from capital improvements made that isn't acquisition debt. Considering this is the LA area, the fourplex is potentially a soft-story building that could require/have required a retrofit that isn't/wasn't cheap.

i don't think the implication of that tweet is that the landlord is that it's $70k - $5.5k of pure profit.

the point is that the rhetoric around "mom and pop landlords" used to tug at the hearstrings is bullshit.

my City Councilperson uses that rhetoric all the fucking time tbh -- there is also (at least here) a racial component because the "mom and pop landlords" of District 3 represent a bulwark against the whitening of the district.

Yeah same down here.

I’ll try to dig up the stats but I feel like I remember reading that a majority of LA politicians and the California state assembly are landlords, which is 1) how they end up thinking of landlords as people who are mostly “regular people” doing it as a side hustle 2) also why they are super into transferring wealth to property owners at every opportunity, even if it means us being like 47 in the nation for fundings public education, because it personally benefits them.

there was a lot of discussion on this accounting professionals group I'm in about whether landlords qualified for PPP loans. It was fairly simple in the case of individuals, but a lot of real estate is held in Partnerships or S-Corps and those are more complicated.

btw

Man allegedly decapitated landlord with samurai sword over rent dispute https://t.co/jFALU3HsUM pic.twitter.com/jMLUhrAH8u

— New York Post (@nypost) July 29, 2020

ah yes! that memetic content!

damn, all those bridge points gone to waste

lol "master points"

I got to say, there seems to have been a handful of samurai sword killings in the past few years.

I guess the classics never really go away.

In the early 2000s our (mom sans pop) landlord kept our security deposit when we moved out and after a year or three of telling us she was having problems and would get us the money, we finally took her to small claims court. She never showed, so we got a default judgment and luckily got a lien on the property. We then had to wait another year or two until her property was sold and were able to enforce the lien (with interest). If she had just returned our calls and been straight with us, we would have been more than happy to work out a payment plan (yeah right).

don't want this to get buried because it is otm and has been previously discussed in some recent thread

DJI
Posted: 29 July 2020 at 21:39:13
Seems to me if you cancel rents for people, you should also freeze mortgage payments for the landlords. Seems simpler than trying to determine who is worthy of the relief.

yes this is it. it’s not complicated. is there a mortgage “holiday” in the us at all? in the uk there is until end of october i think (was extended from july)

― Li'l Brexit (Tracer Hand), Wednesday, July 29, 2020 2:46 PM

but bitter sad LOLs at the idea of the US doing anything as sensible as a "mortgage holiday", easier to dump 28 million people out on the streets