Single homes ought to be owned, and multi-tenant apartment buildings ought to be rented.
Why? One case you are observing in the article. Renters of home don't care about keeping up their house. Spending any kind of money on it is just not their priority. The only one who can keep up the house is owner, but as you can see in this case they'll just choose to pocket the rent.
But there's a different angle. Imagine an apartment building where every apartment is owned. Some of them by elderly, some of them by poor. Now the common areas and house territory would deteriorate, because apartment owners don't have incentive to spend on either one. You could try to roll these charges into their utilities bill, but they will fight tooth and nail. Poor will say "we don't have money for this", elderly will say "we don't care and also don't have money", the rest will say "we're not paying for the aforementioned if they're not".
This is becoming a problem in countries where owned apartments are a thing. The city has to pay from its pocket for the upkeep of territories around such apartment blocks.
Naturally when apartments are rented out, landlord is interested in its state because they have to maintain steady number of new tenants to replace people moving out. Bad upkeep = no more tenants = lost money.
In the UK, it's normal for apartment buildings where people buy the apartments to have what's called ground rent. This is an additional charge that is specifically for the upkeep of the buildings shared areas and grounds. I don't know if perhaps that's missing in other places, but it seems to work ok here.
In the US, owner-occupied flats are called condominiums. And ground rent exists as "condo fees".
In my area, condo fees are often high enough to make buying a condo a strange proposition - you really must want to live in a multi-unit building because mortgage+fees > mortgage for a detached dwelling.
Some places have the worst of both worlds in the form of HOA dues. You pay yearly for the upkeep of common areas that are so far away from your front door that you never even see them unless you make a special effort.
Oh yeah, I know all about those! I live in Reston, VA, one of the early planned communities. I live in small townhome development, with it's own "cluster" dues (paid quarterly), then I have the Reston Association fees (paid annually), special district real estate taxes, and county real estate taxes. Quadruple whammy of taxes/fees! And four levels of incompetence to deal with!
Maintaining your detached building isn't free, and condos are typically a feature of denser, closer-in land where a similar quality detached house would cost considerably more.
The local high-rise has condo fees in the range of $1000/month on a $800,000 unit. Even adjusting for amenities, it would be hard to get to $1000/month on a detached.
With a household income in excess of $250k to afford that $800k condo, the labor you’d spend mowing the lawn, gardening, coordinating repairs, etc. could easily be worth that much.
Obviously there will be (a) pressure from flat owners to keep ground rent down, and (b) inefficiency in how ground rent is spent, compared to how building owner would spend it. The dynamics for both things are exactly as described.
This is slowly evolving story, at some point most apartment are no longer used by original buyers but by their children or grandchildren.
The only one who can keep up the house is owner, but as you can see in this case they'll just choose to pocket the rent.
I don't think it's just a profit thing. If you're a small time landlord, it's probably incredibly expensive to retain a gardener/landscaper for such a tiny job. On the other hand, unless you live down the street it's awfully difficult to mow the grass every week, shovel the sidewalk after snow, water the plants, and so forth.
A small time landlord has no economies of scale for professional services, but doesn't make enough money to quit their day job either. (which would give them time to do all this themselves)
I think renting homes can be just fine, but there needs to be savage, almost draconian punishments for not acting as a good landlord. Do 3 strikes: On the 3rd strike for not fixing things up, you straight up lose the property to the tenant.
Condos exist and charge HOA fees to maintain the structure and common spaces. The fee is a condition of moving in; if you don’t want to pay it, you don’t buy that condo.
How would you introduce such fees if they never existed and now people are already owning that property, being used for certain monthly utilities bill?
I don't think condo's exist without HOA fees, otherwise the whole building would just collapse. That's kinda how former Soviet apartment buildings function and they look like meth houses in the public areas
I'm referring to this case exactly. They don't always collapse, but they're not a pretty sight and their residents can't be bothered. As far as they go, somebody else should probably make it look nice, without touching their wallet.
Pity that pre-Soviet buildings are also affected.
Thing is, from game theory perspective, it's a totally expected outcome.
Residents elect an HOA or coop board, which can vote to levy fees according to its bylaws. Not uncommon to get stuck with increased/extra fees when the building decides to do major work.
Single homes ought to be owned, and multi-tenant apartment buildings ought to be rented.
Why? One case you are observing in the article. Renters of home don't care about keeping up their house. Spending any kind of money on it is just not their priority. The only one who can keep up the house is owner, but as you can see in this case they'll just choose to pocket the rent.
But there's a different angle. Imagine an apartment building where every apartment is owned. Some of them by elderly, some of them by poor. Now the common areas and house territory would deteriorate, because apartment owners don't have incentive to spend on either one. You could try to roll these charges into their utilities bill, but they will fight tooth and nail. Poor will say "we don't have money for this", elderly will say "we don't care and also don't have money", the rest will say "we're not paying for the aforementioned if they're not".
This is becoming a problem in countries where owned apartments are a thing. The city has to pay from its pocket for the upkeep of territories around such apartment blocks.
Naturally when apartments are rented out, landlord is interested in its state because they have to maintain steady number of new tenants to replace people moving out. Bad upkeep = no more tenants = lost money.