The Victims of the Eviction Moratorium
reason.com
reason.com
I don't see a moral basis, so I don't see how anything that impacts the interests of renters can be unfair. Bad on pragmatic level, perhaps, but not a moral one.
Without it, though, rent is partially a stream of income derived from labor (upkeep, management, construction) and partially a stream of income derived from a state granted monopoly over a parcel of 4 billion year old land.
The moratorium is, in part, tacit recognition of this. Everybody knows that a large slice of rental income is completely unearned - even landlords.
Few would seriously believe that the sky high rental incomes derived from these is really earned, for instance - it's an entitlement: https://www.savingadvice.com/articles/2019/08/06/1067844_10-...
No, it's quite simple. Being a landlord is being a business owner. You are providing a service and in exchange you get paid enough to make construction of housing worthwhile. Except, most landlords break even and only get paid in the form of building equity. It'll take decades to pay the mortgage off.
>The moratorium is, in part, tacit recognition of this. Everybody knows that a large slice of rental income is completely unearned - even landlords.
>Few would seriously believe that the sky high rental incomes derived from these is really earned, for instance
If nobody is paying for the house then there will be no house for you to live in. It's that simple.
With that comes a moral responsibility to make sure that everyone can obtain reasonable shelter. On the other side, for the person that owns the land, they provide access to what they own (as per the legal system that society has agreed upon -- private transfer of property, the banking system, etc). Not only do they provide access, they also provide the service of upkeep to the dwelling, upkeep of fixtures and security (locks, access control, etc). So it isn't like they are sitting back and collecting an income from the air that other people breath.
If you dig just a little deeper into precisely how this was done, it gets extremely ugly very fast.
The only real argument for not resetting an inequitable distribution of land ownership is that the owners of unearned privilege have a habit of defending that privilege with extreme violence.
The US invasion of Cuba subsequent to their land redistribution was one example of this.
That’s more of a rationalization than a moral foundation. The land we’re talking about (in North America), in a lot of cases, was stolen by means of violent force from the indigenous people who lived here before the arrival of European settlers. If we’re going to call that a moral basis, then we’re back to arguing the account of Thrasymachus [1] and might makes right. It’s a cynical take on justice, to be sure, but also a difficult one to counter.
But most rents are not executed in that manner. The owner of the property is still responsible for maintaining it, is responsible for repairs if the tenant breaks something and bails, is responsible to the government for the property taxes, is responsible to the bank (or other lender) for the mortgage, is responsible for the safety of the parties inside the house, and so on. It's not a "Hey, fuck you little guy you owe me $1000/month and I don't care that you have no running water and that the lights spark when you flip that switch." situation.
Of course this approach will be met with howls of criticism about market distortion, having something to do with "social(ism)", and removing incentives to work hard.
Where does the right to food or shelter originate?
I want to eat and I want shelter. But how and where am I going to get it? Do I have a right to compel someone else to feed and shelter me?
How does my desire for food and shelter turn into a right?
If food and shelter are a right - does it follow that it is now an obligation on someone else to provide me food and shelter? Society is just a group of individuals. Someone is going to have to build a house and someone is going to have to grow potatoes and apples. Do they have an obligation to share the product of their work with me?
Forget about whether it's a right. Personally, I'd rather live in a society with free, happy people who aren't scared and desperate. I'd prefer it more than being extremely wealthy in a society where large numbers of people are barely able to scrape by. It's just overall a better experience to live in.
But this isn't the way our current political discourse is going. Instead new rights are being created seemingly by the day. Voters are asked by politicians to demand their rights. If housing is a right, then some politician will eventually say that vacation homes are also a right. If employment is a right, then employment at the workplace of your choosing is a right.
Oh come on, slippery slopes aren’t valid arguments.
Any parent would do the same. Who has a right to that bread? The person who bought it? Or the person who fought and "won" it from the other? Didn't I work just as hard to take it from you?
Is it right that a three year old die, if it could be avoided?
There was a time land was basically first come first serve claim any parcel you want and live off the toil of your labors. Lots of today's land owners I'm sure are predecessors of those first land-lords.
You feel you have a right to "peace" and that the police will protect you from crime.
If you're walking home with a bunch of junk food, and warm bread - you might see one family that salivates, maybe you can outrun them. What happens when 90% of society are those people?
Every year more people are getting pushed down into the dumps. Society is just one big social contract, I won't hurt you because I'm okay, things are good. I got food, water, heat, electric, I can't complain. I'm also too busy playing on my android phone to worry about what you have, or want to take it -- the incentive to commit a crime just isn't there...
Take away all my things, my home, my clothes, and make my kids starve and you'll see a very different version of me, probably a version I never knew existed. A lot of society is the same.
Society functions when everyone is at least "comfortable" and it degrades into anarchy and gotham city-like when everyone is relegated to squalor. If you don't believe me, consult the history books on the French Revolution and see how well it turned out for Marie Antoinette and her compadres.
We are not talking about naive buyers anymore who are blindsided by rent control.
Rent Control might be the only reason some middle class investors can afford to become landlords? Most rich guys don’t want the hassle of an Ellis Act eviction.
They just build luxury condos that only rich people can afford. (My world is San Francisco. In a more fair world, no one should tell a man what he can do with his property, but the world is not fair. Poor people don’t get many breaks.)
While I’m on my box—Sausalito is feverishly trying trying to rid Richardson Bay of Anchor-outs using underhanded tactics. They are targeting the poor people as usual. The only bright side is the victims moved to Dunphy Park because they didn’t know where to go. Sausalito tried to remove them, but someone filed a temporary restraining order with the courts.)
The worst part about rent control is that there is zero accountability. Politicians pat themselves on the back for "lowering" prices without actually solving the underlying problem. The problem will only get worse over time until it becomes unbearable.
[edit: to be clear, this is tongue in cheek, though the circumstances where a bank made this loan seem unusual to me]
You’re referring to Gao, I’m referring to Won. Different people.
Let us closely examine the text.
>Take Won, a Chinese immigrant landlord who asked that we only use her last name. She owns a two-family house in Queens and works as a home health aide caring for an elderly couple. Her husband is a waiter at a restaurant in Manhattan's Chinatown, though he's barely been able to work since the pandemic began. Won says her tenant owes her more than $80,000 in back rent. "I just want the government to open the court," she tells Reason.
She owns a house in New York City. To put it mildly, NYC real estate is not cheap. How did she do it? Cash transaction? Is it mortgaged? Those are two very different types of ownership... but Reason makes no distinction between the two. Why? If she was on the hook for a mortgage payment, surely they would have brought it up, since it would have made her case much better. But they didn't.
The tenants owe $80,000 over a year? $6,666 a month? How big is this house? When did Won buy it? How much did she pay?
It would be two very different stories if Won had bought the place in 1970 for ten grand, versus a $2 million straw buy for a PRC upper party member. Reason doesn't want to tell us which, because it is an explicitly ideological publication, funded to promote a specific view of the world. I don't blame Reason for wanting to be the NYT of Libertarianism, but you do need to apply a degree of critical thinking to what they say.
There is absolutely zero chance a home health aide bought a house in New York City by "being frugal" any time in the 21st century. Either she bought it many decades ago, or the money came from somewhere else.
A few years ago I was visiting Vancouver and living in an AirBnB (private room in a house) when prices were dropping, and the owner (a school teacher) was crying about how over-leveraged she was with her million-dollar-plus house, and how she was trying to get sell it, even at a loss.
You don't get handed a random job by the job fairy and then that's the only thing you ever get to do for the rest of your life.
One reason why the housing market is such a shitshow is that there is antagonism between both sides. Tenants hate landlords, landlords hate tenants. Nobody will ever consider doing favors because the other side betrayed them.
Double 3/1 duplexes in Queens go for about $1M; the monthly payments on this are about $5200/month [1]. Each unit will rent for about $2700/month [2][3], so you're making a profit of about $200/month and paying down the principal steadily. You just need to cover a $200K down-payment. Minimum wage in NYC is $15/hour, so a two-earner couple working 40-hour weeks makes about $60K/year; it could be up to $90K if they each have work 12 hour days, as many Chinese immigrants do. Live in a 1BR apartment and you're spending about $15K/year on rent, maybe $25-30K/year on all expenses. You can save up for that down payment in about 4 years.
I don't have too much sympathy for them because the risk of being unable to find a tenant and hence unable to make your mortgage payment is precisely why not everybody levers up as much as possible to buy a rental property. But that's how the numbers work out. Most people on HN could probably do it, if they had the savings habits and risk tolerance of that couple.
[1] https://www.zillow.com/homedetails/17520-Baisley-Blvd-Jamaic...
[2] https://www.zillow.com/homedetails/131-19-134th-St-South-Ozo...
[3] https://www.zillow.com/homedetails/180-05-90th-Ave-FLOOR-1-J...
[1] https://www.washingtonpost.com/us-policy/2019/02/06/people-l...
If the government wants to house people in rental properties indefinitely, then the government can pay to do so at the prevailing market rates.
Do the banks want to be in the situation of being landlords (even temporarily) of a huge number of tenants who are not or cannot pay rent? Doubtful. Does that mean they're a little less likely to foreclose on a rental property when there are lots of small landlords in this situation? Probably. Would I want to gamble a rental property on a banks reluctance to foreclose owing to the widespread nature of the problem? Absolutely not.
Too-big-to-fail banks eat some temporary losses, small landlords don't lose their shirts, and rent still gets effectively canceled.
I thought the eviction moratoriums were more to avoid adding a giant homelessness crisis on top of the already-existing pandemic crisis. It was a secondary benefit that they would also help those people socially distance to help control the pandemic.
Ideally the government would have stepped in with effective programs to support existing financial relationships to avoid disruption (e.g. paying employers to keep employees on the payroll, which I think Germany did), but some people strongly believe we shouldn't have nice things like that.
I don't want to be "systematically analyzed" to determine if wrongs done to me are "acceptable".
That sort of thought is a path that leads straight to tyranny.
Eviction moratoriums in 2021 - a full year after the start of the crisis are nonsensical. Individual owners such in the article will eventually lose their properties to deeper pockets - further entrenching wealth disparity.
How do we know that’s not the actual goal of those policies?
It is all kind of sad, really.
There is a word that describes this kind of merger of corporate and government power, I just don't seem to remember it.
The US economy is still heavily impacted by the pandemic, and entire sectors are dead or heavily damaged ( e.g. tourism, airlines, etc.). Unemployment is at 6.3%, which is significantly more than pre-pandemic (3.5%). Not to mention all the employed with reduced income ( e.g. restaurant staff, cab drivers etc.).
What do you propose should happen to all those that are still un or underemployed ? What is the bigger problem, millions of people on the streets driven to crime, or millions of property owners losing property and/or money?
The CDC issued a moratorium?
"Won says her tenant owes her more than $80,000 in back rent. ... But we did find that the father in the family is currently employed in the construction industry, and that the tenants are renting a second apartment in a house in Queens Village, where they've also stopped paying rent and owe $12,000 to the couple that owns the house, who are also Chinese immigrants."
So they're renting two apartments and not paying for either?
It's weird that Reason didn't manage to contact any of the renters. I wonder how much effort they put in? Or I wonder if it is a hit-piece?
No they aren't. Landlords want to at least cover their costs. If they lose out on rental income they are forced to raise rents to compensate their loss. This will mean higher rents and a subsidy for dishonest squatters. The idea that you can make housing cheaper by making it a bad investment is hilarious. If constructing new housing is a bad investment for landlords then nobody will provide housing as a service. Everyone will have to buy their own house or condo.
>"In public housing, people are paying 30 percent of their income," Weaver told Reason. "What I am envisioning is a world in which housing is owned by a collective and people are paying 30 percent of their income in order to live in their housing. If your income is zero, you pay zero. If your income is $500,000 a year, you're paying 30 percent of that."
What makes her think that rich people can't afford to hide their income? It wouldn't surprise me if they could just start a company and simply keep the funds inside the company and only pay out as much as necessary. This is way too easy to game and the ROI is insane. If you earn 500k you would end up with 350k so by engaging in tax shenanigans you could increase your income by 40%. Who's insane enough to not do that?
>When asked how the federal government could afford such a program, Weaver told Reason that it could "print" the money.
No, the way the federal government will be able to afford such a program is by providing housing at cost. Subsidies aren't the right answer and outright printing money isn't it either. If you really wanted such a program you would spin it as a jobs program first with the additional housing as a bonus. By lowering unemployment you increase the number of people who can afford to pay rent. So it's a win win situation. The slow acting benefit of additional housing would take years to have an effect.
Costs don't dictate prices, the market dictates prices.
Nobody is going to pay $50 for a quart of milk just because it cost you that much to produce it.
I feel like the stimulus cheques should have been made out exclusively to people who:
1. lost a job
2. suffered a wage cut
3. suffered a significant loss of revenue
Number 3 would include landlords and freelancers. I'm one of the lucky people for whom the pandemic increased savings (by decreasing spending), so I don't think it's appropriate that I received two (!) stimulus cheques. I've donated one to Wikipedia and the other to a couple of local charities, but I'm sure there's a smarter way to redistribute that money...
Why should banks expect payments to continue as if nothing happened when large parts of the economy have been forced to close?
Or would those people still be thrown out onto the street with no housing?
Because if there's anything we need to be doing in the United States, particularly on the West Coast, it's bringing more people to homelessness.
I don't mean that as an argument in favor of rent control or eviction moratoriums, it is an argument in favor of using the best basis for policy decisions.
I'd rather see the government just hand landlords money vs throwing people who may just be getting back on their feet into disarray. There has to be some point where things go back to normal, but we are at a point where 2 months from now is basically certain to be a better time to do it than right away.
What "working class" person owns investment property in NYC? They amount of capital required to do that is so enormous that the article calling them "working class" is deeply misleading. They certainly aren't working class in the way that most NYC tenants are.
Have enough money to invest in property? No longer working class.
It’s attitudes like this that prevent the working class from participating in the generation of wealth through capital. As soon as they dip their toe in, they’re now “rich” and get the rug pulled from under them.
A landlord's wealth derives from being a middleman between the tenants and the property, not from the landlord's own labor. That wealth is quite literally the whole point of being a landlord in the first place; if the income from rent didn't significantly exceed the value of the labor your FIL performs as "maintenance", then why would he bother with dealing with all the headaches of property ownership if he could instead just be an employee of the tenants themselves (said tenants forming e.g. a housing cooperative)?
That is: there's nothing a landlord does that the tenants couldn't do themselves (whether directly or by hiring someone to do it on their behalf). It is therefore not labor alone that defines the relationship between a landlord and one's tenants. Your FIL may be "the hardest working person [you] know", but he's still a middleman in the ownership class.
Transitioning from land prices to land rental values - i.e. gradually moving toward a 100% land value tax - would address both high prices and scarcity by taxing land consumption - and, accordingly, encouraging urban density in order to amortize that tax, thus alleviating scarcity and reducing residential expenses. Same market at play (a land value tax definitionally taxes the market value of land); vastly improved outcome.
People act like renting is some sort of evil forced upon people, but don't realize there is a big market for renting. People don't always want to own their own housing.
A housing cooperative is about as economically efficient as it gets; you and your tenants would only need to pay the bare minimum to keep up with loan payments (and possibly, as I've proposed elsewhere in this thread and others, a land value tax) and maintenance, with no middlemen taking any cut out of your rent.
If I'm some early 20's person just starting out, no money to my name, I need a cheap place to rent. I don't want to own or in fact, I probably can't own.
And it's not just early 20's people. I moved to a new city for 1 year with the intent of returning. I don't want to buy anything, I want to rent.
Landlord's are providing me a service in that case - housing.
Which is exactly why it's handy to be able to pool resources with other people looking to do the same thing, thus spreading the debt (if there is any) - and the risks thereof - across multiple parties. Think of it less like a real estate purchase and more like a startup, because that's what it is.
> I moved to a new city for 1 year with the intent of returning.
In which case a housing cooperative would've served your needs just fine. Again, less like owning a home outright, and more like owning a share in a company (because, well, you would own a share in a company). And when you're done with it you can sell that share.
I've heard stories about cooperatives in NYC and the bureaucracy can be a negative. It sounds like an HOA or condo board.
So some 50 year old blue collar dude who saves just enough to buy a duplex and live in half of it, but can’t stop working or he’ll starve, has suddenly been propelled from the working class into the lazy, cigar-smoking, top hat twirling capital class?
If he wants to not be in that "lazy, cigar-smoking, top hat twirling capital class" (as you put it - because apparently hyperbole and gross misrepresentation of an argument counts as "discussion" on Hacker News nowadays), he is welcome to transition his ownership of that duplex into, say, a housing cooperative consisting of himself and the other half of that duplex (or - more likely - a cooperative for the land and the duplex's exterior, and retain ownership of his own unit while putting the other unit up for sale - effectively forming a COA, but cooperatively owned).
And great, start a cooperative. But for everyone else who wants to rent a place, there are landlords.
>Gao discovered that one of his former tenants had given her keys to a friend who had moved in without permission. Gao has never met the squatter now living in his house and is afraid to contact this person out of fear that he'll be sued for harassment.
So it's not that the tenants were forced to stop paying rent, someone who doesn't even have a rental agreement has simply moved in, so the landlord would have every right to get them evicted, but chooses not to for... reasons?!
At least not at market prices.
This isn’t market risk. This is govt fiat that is causing the financial troubles.
https://www.youtube.com/watch?t=1030&v=MPFPBzr7FgY&feature=y...
> Weaver ... says the eviction moratorium is just a "pause" because it doesn't mean that "the landlord can never collect the rent."
> In practice, though, collecting rent money will be extraordinarily difficult after the moratorium is lifted. The case backlog in housing court could mean that landlords will wait years for their cases to be heard, and recovering large sums of money is difficult under the best of circumstances.
> Owners say that having almost no legal recourse when their tenants don't pay their rent was not part of the deal when investing in real estate. Landlord groups around the country have sued on the grounds that halting the judicial process that allows them to retake their property violates their due process rights.
I think it was reasonble for landlords to assume that, in the worst case, they may not be be able to find a renter but would at least have the ability to live in the house themself. Now they can't even do that.
https://www.huduser.gov/portal/pdredge/pdr_edge_featd_articl...
From multiple angles:
1. Landlords already serve no real market function. They're middlemen - literal rent-seekers that offer no real service to their tenants. And somehow I'm supposed to feel bad for them?
2. The bulk of the housing shortages throughout the US (and other developed nations, for that matter) derives directly from the treatment of real estate as an investment rather than, you know, merely space to live/work/play. People buying homes (particularly low-density ones, mind you!) as "investments" are the perpetrators of that shortage, not somehow the victims; not only do they consume an outsized portion of the housing supply, but they have a vested interest in benefiting from the effects of that constrained housing supply, and therefore will logically do everything in their power to continue to constrain it because it pushes their property values higher.
3. If real estate is to be treated as an investment, then the risks of that investment must be acknowledged. Why should I feel differently about landlords who burned their savings on rental properties than I would about people who burned their savings on, say, GameStop stocks or some cryptocurrency pump-and-dump?
Like, if anything the renter demanding $12k from the landlord has a point. The very notion of land ownership externalizes opportunity costs on everyone else in a given area, specifically because land is finite / in fixed supply and therefore land ownership is definitionally zero-sum (one person's ownership of land is at the exclusion of others). Landlords are long overdue to internalize these externalized opportunity costs - specifically, through a land value tax (possibly supplemented with a flat income tax starting above some threshold; Milton Friedman was a proponent of this combined tax scheme), the proceeds of which would fund programs like UBI and single-payer healthcare to make up for those opportunity costs.
I feel for these landlords only in the sense that they're newcomers to this country hoping to find opportunities to better themselves and secure their financial future, and I hope they - alongside the rest of their fellow Americans - can get some much-needed financial support. That doesn't mean they're somehow the "good guys" in this story just because they're poor immigrants.
----
And to be clear, the delinquent renters/squatters certainly ain't the "good guys" in this story, either. Refusing to pay anything for the space one inhabits - especially when one has the means to do so - also externalizes opportunity costs onto other renters (who are now excluded from that unit despite their willingness and ability to pay for it). I might disagree strongly with the morality of a landlord extracting rent, but refusing to pay rent entirely is not the way to go about fixing that. Rather, the fix is in actually correcting the circumstances that led to this situation - namely, by forcing the internalization of externalized opportunity costs, and by replacing landlords with housing cooperatives.
Were it not for the eviction moratorium my friend's family would have to up-end two decades of their life during a pandemic when none of them are vaccinated and one is immunocompromised, while juggling kids and trying to find a job. I understand there are some people taking advantage of these circumstances by not paying rent, but the fact is a lot of people are in pretty dire circumstances right now without many options.
Obviously this situation is also terrible for the people highlighted in this piece too and I feel for them - they worked hard and built something from nothing, and highlighting their story is important. I'm of two minds about what to feel about the broader context though, as non-residence real estate is ultimately an investment which carries risks, including unforeseen risks like pandemics. We learned quite recently in the 2008 recession that over-leveraged real estate is a systematic risk, and whether its a pandemic or a financial crisis, it's prudent that investors be able to manage a shock of at least 12 months without rent. Even absent external circumstances, a pipe could burst or another maintenance nightmare could emerge that would make an investment property uninhabitable for a long time.
Its very unfortunate that the US has such an investment-oriented view of residential real estate. In times like these, that approach pits people against each other rather than brings us together to better manage the crisis. Housing insecurity is an awful thing to have to deal with, and if everything is simultaneously quantified into 'how much am I going to make/lose', the fabric of society is going to tear.
Also Carroll Quigley, mentor of Bill Clinton, expressed shocking disdain toward the bourgeoisie in Tragedy and Hope. https://www.amazon.com/Tragedy-Hope-History-World-Time/dp/09...
Is it much exaggeration to say the message from the far left and from the establishment to those who staked all their capital on one or two rental properties is tough sh!t?
> Emergency policies enacted in times of crisis are prone to becoming permanent, which some members of the #CancelRent movement say is the goal.
This is a good thing. The COVID crisis has exacerbated the huge inequalities in housing in the US, and now is a better time than ever to fix things.
So, if I own an apartment / house / room, I can't go and have a contract with another person willing to take on that contract and live in my place by the agreed rules beforehand?
Could I "enter in a contract" to lease "land that I own" in a national park? No, because national parks are a public good that everyone shares in their ownership and right to access. Housing should be the same way.
> working-class landlords
lol
If they own property in New York City and were able to qualify for any sort of mortgage on a working class dual-income, then it's highly unlikely that they bought that property at any point within the last 30 years, in which case - if there was a mortgage - it should be long paid-for by now.