
Eviction Moratorium Poses Nightmare Scenario for Small Landlord - jelliclesfarm
https://sanfrancisco.cbslocal.com/2020/08/06/eviction-moratorium-poses-nightmare-scenario-for-small-landlord/
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marcus_holmes
Sorry, but if you're renting out a second property then you're not doing it
hard. If you're highly leveraged then you knowingly took this huge risk, and
something like COVID will sink you. If you're not highly leveraged then you
can take a loan to survive the COVID measures.

So many people got into property investing under the assumption it was safe.
It's not.

~~~
bestnameever
A landlord should not be prevented from evicting a tenant deceptively renting
out a unit for the purpose of reselling it on AirBnB.

This unit could be made available to a family who needs a place to live.
Preventing it from going on to the open market also reduces supply and places
upwards pressure on rents.

~~~
marcus_holmes
This is a tiny, tiny problem. If this is used as a reason to allow evictions,
then that'll be the thin end of the wedge to justify more, and soon people in
real need will be evicted.

~~~
bestnameever
Can you please clarify whether what you are claiming is factual or
speculative?

~~~
marcus_holmes
I would say that the "this is a tiny problem" is factual, and "it'll be used
as a wedge to justify evicting ordinary tenants in arrears" is speculative.

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twelve40
Just like delaying salaries is forcing your employees to provide free credit
to your business, a moratorium is: forcing a group of people to finance
another group of people out of nowhere, out of contract, on a whim. There
could be other solutions, like rearranging taxes etc, but the most convenient
is just to fuck the small landlords with an emergency decree because they have
nowhere to go and can't do anything about this.

~~~
vanusa
Yes there are side effects (and we should do something to ameliorate these
side effects) -- but it's done with a broader purpose in mind: to avoid a
humanitarian catastrophe -- which, even if you don't particular care about the
people directly affected -- has the further effect of prolonging the pandemic.
Or in other words: to prevent the boat from tipping over completely.

So while there are side effects -- it's not like you can say it's being done
"on a whim"

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throwaway2245
“It’s not somebody who is impacted by COVID, but somebody who is taking
advantage of the situation”

Taking advantage here is an interesting choice. It seems to mean: Reducing
your profits that you usually get as a landlord taking advantage of the
situation.

~~~
bestnameever
Did you read the article?

The tenant was leasing the unit for the purpose of reselling the unit on
AirBnB which was against the terms of the lease, and also used the pandemic to
seek lower rent which the landlord sympathetically gave prior to them becoming
aware that they were being deceived by the tenant.

I would say that being dismissive of the tenant taking advantage of the
landlord in this situation is also an interesting choice.

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ncr100
Terrifying confluence - will AirBnB take action? The anti-eviction law seems
to be being taken advantage of.

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georgespencer
Landlords are often portrayed as mutton-gobbling land barons both in the media
and the comment section on Hacker News. I know a little bit about both UK and
US rental markets and have a slightly different perspective.

The common threads are that any economic harm which befalls a landlord is
something they should have been prepared for, and that they're better off than
most people because they have a second property.[1] The frequent corollary of
this is that tenants are justified in taking advantage of landlords wherever
possible, because the system is somehow unfair on them.[2]

In part this is because rental units are an asset class leveraged by both
sophisticated and unsophisticated investors. Multi-family home operators with
huge balance sheets and economic resilience are one part of the equation, but
a lot of rental stock is in the hands of folks like us.

Which is to say: they're consumers. They certainly understand risk and
cashflow through the simplistic lens of voids and arrears, but what we're
seeing here is analogous to the suspension of trading on a stock market, or a
massive breach of MMMR in calling a short. It's not a simple case of "you may
lose a little profit", it's "the rules of the game have been changed in a way
nobody could have predicted."

If you don't believe tenants ought to have seen this coming, then there's
really no reason to believe landlords should have, either.

It's forgivable that policymakers have screwed this up, but it should be
simple to correct: banks have sufficient liquidity (and the hope of a bailout
if they don't) to withstand the immediate shock. Therefore renters who can
demonstrate that they are affected by coronavirus should receive clemency from
their landlords, who should receive clemency from their lender, who should
receive clemency from the government if required.

(There is an uncomfortable reality that keeping folks in unproductive jobs is
not all that useful, so furlough schemes and other economic relief for those
impacted by coronavirus must end in order to force the affected portion of the
workforce into productivity, but that's another conversation for another
time.)

The ire directed at landlords also often supposes that they are responsible
for high rents, and usually this is based on the premise that if they sold
their non-owner occupied properties, the excess liquidity would reduce house
prices and enable more people to move from renting to home ownership. I have
never seen a single study which supports the view that landlords do anything
other than provide a necessary service at a price the market bears.
Responsibility rests with local authorities and the federal government to
create affordable homes and combat the fact that, for example, the United
Kingdom has set targets for the creation of new houses for more than 40 years,
and has failed to hit them each year for the last 40. They acknowledge the
solution to the problem (introducing affordable homes into the market, rather
than forcing landlords to sell - a carrot, not a stick which benefits some
consumers and hurts others), but do not deliver.

I'll nope out of this thread if someone mentions rent controls.

[1]
[https://news.ycombinator.com/item?id=24079791](https://news.ycombinator.com/item?id=24079791)
[2]
[https://news.ycombinator.com/user?id=throwaway2245](https://news.ycombinator.com/user?id=throwaway2245)

~~~
salawat
>I have never seen a single study which supports the view that landlords do
anything other than provide a necessary service at a price the market bears.

s/market bears/landlord demands and tenants rearchitect their life, dreams,
and expectations to accommodate.

I hate this 'market bearing' weasel word. It isn't some intangible super
entity. It's everybody. Everybody is out to get a chunk out of everyone else,
and someone ends up on the bottom of it all, and right now, the people getting
dog piled are a shrinking demographic expected to fuel the same growth metrics
as a population cohort that for the majority of their lives were in a state of
perpetual economic growth. At least til people started screwing with the rules
of the game in the 80's, and wage stagnation/theft went through the roof. The
nest eggs getting cashed in are valued against the expectation they still do
have value to the rest of society at large, but most of the rest of society
aren't even savvy or vested enough to absorb that except through employment
based policy collusion to ensure that some chunk of compensation re-nters the
market in the form of investment through 401k. Every payday a company writes
another company a check out of their employees payroll, and thanks to wage
theft/stagnation, that's even gotten vanishingly small. Home ownership is down
as a result, and becoming an increasingly removed dream due to real estate
being seen as a speculation vehicle.

I can buy hoping out on Rent Controls, but for God sake, your landlords are as
much a symptom of the prevailing ills of an economic system dependent on
extracting blood from a stone and returning as little as possible as anything
else.

~~~
georgespencer
> s/market bears/landlord demands and tenants rearchitect their life, dreams,
> and expectations to accommodate

I think what you're suggesting here is that housing is such a fundamental
requirement that people make life-deranging decisions in order to have it,
which creates a distorted view of what the market will sustain. Perhaps
similar to healthcare in the US. Is that right?

> I hate this 'market bearing' weasel word. It isn't some intangible super
> entity. It's everybody.

It sounds like it's a really emotive term for you, but it's also the precise
economic term. There are of course human and societal costs of market
corrections, but that doesn't mean that this is not a market.

The rest of that thought you expressed seemed to stray into some generalised
views of the state of the market. I'll just address this point:

> Home ownership is down as a result, and becoming an increasingly removed
> dream due to real estate being seen as a speculation vehicle.

When we segment homeownership levels by year of birth, there is a really
interesting trend. Here's the peak homeownership rate in the UK for folks born
in four year increments since 1960 onwards:[1]

    
    
      1960-64: 76%
      1965-69: 72%
      1970-74: 66%
      1975-79: 59%
      1980-84: 43%
      1985-89: 26%
    

The first four series appear to be declining (entering care/death) or
flattening, whilst the others continue to grow. The shape of the curve is
shallower for each successive year since 1965-69.

We treat the decline of homeownership as if it's a relatively new problem, but
the warnings have been around us for decades. Consider the United Kingdom: a
relatively small set of islands. In 1960 (a year of birth which the data
suggests has a ~76% homeownership rate in the UK) there were 52m inhabitants
of this island. In 2020 that number is 67m. In the next ten years it'll likely
grow to 70 million according to the ONS.

One contributing factor is that people are living longer, healthier lives.
Average life expectancy for a UK national born in 1960: 70 years. Born today?
81. For most of the census data available it was <50[2]. Decisions have been
taken on many, many things, with a misunderstanding of how long it's possible
for people to live for.

This is not a market which will simply "clear" if the right economic tweaks
are made. There are not enough houses. London has 9m people living in ~4m
houses. Portals here list 70k-80k units per month and I suspect the average
tenancy agreement is c. 15 months, implying ~1.3m rental units. There are
around 4m people in inner London, and 5m people in outer London. Looking at
some reasonable-seeming data for age demographics[3], if we exclude everyone
under the age of 19, there's 6.7m adults living in London who need to live
somewhere. Redistributing the rental stock isn't going to help.

Reliance on the private sector solving housing issues, particularly in
affluent cities and overcrowded countries, is a total misunderstanding of the
problems we need to solve. In London in 2020 if you are not intent on building
housing stock targeting the affluent, then you're going to be outbid and not
get the land to build at all. Space is a premium (even more so because of
protected views in central London, and institutional resistance to building
up/out into green belt land), meaning prices are high. So housing projects
must optimise for margin. Attempts at affordable micro-living spaces have been
met with resistance from lenders who won't provide mortgages on residential
units below a certain square footage.

When you do nearly _any_ amount of analysis here, you quickly arrive at a
perspective that the failings we have are not solved by the private sector or
by landlords, and mom & pop landlords are arguably doing more to protect the
interests of renters by retaining units at fairly flat rent CAGR rather than
selling plots of land into the hands of developers who build high end
apartments.

There are many solutions to this problem, but it's genuinely difficult to
discuss with folks because the knee-jerk reaction seems to usually be that
landlords are evil and capitalism is part of the problem.

[1] This is taken from an ESRC/IFS briefing note in 2018:
[https://www.ifs.org.uk/uploads/publications/bns/BN224.pdf](https://www.ifs.org.uk/uploads/publications/bns/BN224.pdf)

[2] [https://www.statista.com/statistics/1040159/life-
expectancy-...](https://www.statista.com/statistics/1040159/life-expectancy-
united-kingdom-all-time/)

[3] [https://www.trustforlondon.org.uk/data/population-age-
groups...](https://www.trustforlondon.org.uk/data/population-age-groups/)

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vanusa
But not nearly as much of a "nightmare" as being forced to live on the streets
(or worse, in a homeless shelter) -- with kids in tow.

