
Covid-19: Landlords will kill our economy - drenginian
https://www.smartcompany.com.au/coronavirus/covid19-landlords-economy/
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kadonoishi
So stop all payments. Nobody pays rent, landowners don’t pay their mortgages,
banks don’t pay interest. Companies don’t pay dividends, bonds don’t pay
interest. Just stop using money to organize productive activity for a few
months until the coronavirus curve flattens.

If all payments are stopped for three months, then it’s simply hitting the
“Pause” button on the whole money system. There are no economic data for that
quarter. GDP is meaningless, unemployment is meaningless. That quarter is a
big fat missing data point.

Three months later everyone comes out of their houses and goes back to work.
Paychecks resume, rents resume, landlords resume paying their mortgages, and
no one ever catches up on any payments from the missing period. Just pretend
we skipped three months ahead via a sci-fi time knot.

~~~
sschueller
This doesn't work because not every one has stopped working.

The best solution would be for the government to pay the bottom and have the
payments "trickle up".

~~~
kadonoishi
The government prints money and sends out those $1000 monthly checks so as to
continue using money to organize transactions, and the people working
essential jobs continue to get paychecks.

Make the distinction between financial capital and money. Money as medium of
exchange continues to be used. Money as financial capital assets is paused for
the duration of the crisis.

What’s the function of capital? To allocate labor to the highest-value uses.
We can’t be bothered with that during a pandemic.

Capital allocation is important, and it is long-term. The pandemic is about
short-term physical survival. Providing food water medicine electricity is
straightforward enough that it can be done through command, and through the
sheer momentum of our existing systems.

We need to drop back to a simpler version of our physical economy for awhile,
where people sit in their houses and only use basic necessities. Once it’s all
clear we can come out and resume the previous activities; but how exactly do
we effectively pause the non-essential activities?

This article is pointing out, rightly, that landlords and rents are non-
essential. So pause them along with the rest of the non-essential activities.

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taleodor
> We need legislation to ban rents for COVID-19-affected businesses.

This only works if the government mandates full moratorium on both rents and
mortgages. That also means that no interest on mortgage is accrued during this
time.

Otherwise, landlords are screwed in the same way as tenants - they can't pay
mortgage and the property may turn into foreclosure. More so, frequently
landlords are screwed even more - because it may be hard to get rid of non-
paying tenant especially during this time. So tenant may get sort of temporary
free pass by just not paying rent.

Bottom line - Landlords are not the right target of this rage. Appeal to
Governments, not to Landlords.

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Scoundreller
But who should the government punish? Everyone equally? The richest X%? The
poorest X%? Particular industr[y,ies]?

If everyone says “not us, somebody else!” there will be no redistribution.

~~~
hellisothers
The parent comment is proposing a system where nobody is punished, everything
is deferred. Not all landlords are fat cats in a mansion, if you remove the
flow of cash to only some people, those people will be crushed if they depend
on that flow to send it further upstream.

~~~
nybble41
Deferring payment without interest _is_ punishment. Goods in the future are
worth less than the same goods in the present.

~~~
Scoundreller
And where's someone unemployed going to get 3 month's of rent if they only
work in 0 or 1 of the next 3 months?

~~~
marcofatica
That's why you're supposed to have savings, but it seems these days people
prefer to spend frivolously

~~~
6510
But we've increased rent to rule out savings.

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LatteLazy
It's really concerning here that so many comments basically amount to let's
ban all landlords. It's really dumb, people clearly have not thought it
through.

~~~
6510
Lets make everyone the owner of the place they live in right now. It is our
country and we can do what we like? no?

~~~
LatteLazy
I mean, you get why this is a terrible idea right?

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Veen
> Ban rent for COVID-19-affected businesses

Landlords have mortgages and a host of other associated costs. If this were
made a policy in the UK, you'd have a huge number of small-time buy-to-let
landlords going bankrupt and losing their nest-egg to the bank.

~~~
pornel
It's a get-rich-quick scheme that has inflated house prices. These landlords
aren't providing any value — they're literally rent-seeking.

~~~
6510
Someone has to pull the short straw.

If I put a plastic egg in your nest, does that by natural law make me the
owner of your eggs?

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appleiigs
The article is dumb. If the statement "Landlords don’t employ anyone; their
benefit to society is frankly pretty marginal" was true, why did the author
willingly sign his rent or lease contract (which binds him to pay a large
regular payments for a long period)... Why would he do it if there is no
benefit!?

~~~
jlokier
The "benefit" obtained by rent is, mainly, permission.

When the authoer says landlords don't provide much benefit to society, I think
they are comparing against a society in which landlords don't exist.

The author pays rent because they have no choice if they want permission to
use a property; all available properties are owned by landlords.

(You can tell it's more about permission than service provided, because there
are so many empty buildings, and many people would be delighted to be
permitted to just go ahead and use them.)

In the alternative society where landlords don't exist, the author would not
need to pay for permission. The "marginal" benefit is other things of value,
such as making a nice place, and upkeep and repairs, which many landlords
don't do much of.

~~~
appleiigs
The benefit of rent is that they are allowing you to use the property for
$1,000 per month instead of having you buy the property upfront for
$1,000,000.

~~~
viklove
What universe do you live in that a $1,000,000 property leases for $1,000/mo?

~~~
6510
It had me read a bit and 1% is kinda normal for a normal home. If that pushes
it to far above what people can pay or to far above what rents are paid for
similar properties one would usually lower it.

If there is enough inequality in the area the 0.1% rent could be realistic.

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ianlevesque
Well, there’s a reason the Plague ended feudalism.

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pouty-gazelle
Placing the burden on landlords will unintentionally lead to greater
concentration of wealth. Property owners with mortgages will be forced to sell
(at a loss, if there is a glut of properties on the market). The buyers will
be those who already have a lot of cash, or who are otherwise in a strong
enough financial position to wait out the crisis.

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vearwhershuh
Proposal: set an immediate 3% interest rate ceiling on all credit cards. This
eliminates the immediate cash crunch that everyone is feeling. If a cc company
complains, nationalize them.

Then take six months to put together a comprehensive debt-forgiveness program
that looks at income, family situation, etc. Forgive things like food, rent,
etc. Slowly increase the interest rate cap as the economy recovers.

We need ongoing money in peoples hands now to put everyone at ease that they
aren't going to be out on the streets in a week with their kids, not a
piddling one-time payment in a month.

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justaguyhere
This makes a lot of sense. Rentiers are among the worst. My rental contract is
so strict that it is insane. For example, I have to give 60 day notice, but
those 60 days _have_ to begin on the 1st of a month. It can't be 2nd or the
last day of the previous month, it _has to be_ the 1st.

Rentiers deserve no protection, especially when everyone else is bleeding

~~~
t-writescode
I’ve never seen a contract so strict. There might be a lawsuit in there. If
not, there’s definitely a complaint you can raise.

They probably don’t accept the first of the month if it’s a Sunday, either,
right?

~~~
mrguyorama
Plenty of states in America give tenants nearly zero protections

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t-writescode
Honestly sounds like measures that could get pushed at local levels by local
people, successfully

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Ancalagon
No because the local governments are owned by homeowners

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t-writescode
That’s a quitting attitude. This is possible.

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drenginian
I think most landlords are wealthy people who are easily placed to weather
this financial crisis.

By definition if you are wealthy enough to own property beyond one house then
you’re wealthy enough to survive this.

And if you can’t afford to, then sell it and suffer like all the other real
business owners are suffering.

Why should landlords be a protected species in all this?

~~~
t-writescode
You can’t sell if no one is buying and if it’s anything like some stories I’ve
heard, some people are doing interest only loans on houses

If you sell it for less than your mortgage, you’re still on the hook for that
loan, too.

The situation is complicated and ‘just sell it’ comes with other problems.

~~~
drenginian
Being bankrupted by a landlord also comes with other problems.

The biggest expense renters typically have is ..... rent. And for many
businesses it’s a major expense too.

Governments are desperately coming up with financial support packages for
what? To give to landlords?

~~~
t-writescode
This doesn’t contradict anything I said

