California to pay off unpaid rent accrued during Covid-19 pandemic | Hacker News Reader

California to pay off unpaid rent accrued during Covid-19 pandemic

apnews.com

18 pointshbcondo71415 comments

This in conjunction with the context that Big Banks are rapidly taking over as land lords [1] is truly absurd. Directionally, tax payers are transferring their wealth to Big Banks.

[1]https://news.ycombinator.com/item?id=27448175

I've read that Big Banks are still a tiny minority of landlords. The numbers I got for the 2012-2014 market (which was the peak of investor interest after the last bust) were that 20% of homes were sold to investors, and of those only 1-2% were large institutional investors (with the other 18-19% being mom & pop households who want to own a rental property) [1]. This is also consistent with anecdotal reports I've heard from realtors for the post-pandemic market; about 3-4% of their sales are to corporations, and the bulk are wealthy Millennial tech workers or folks moving out of HCOL areas.

[1] https://www.federalreserve.gov/econresdata/feds/2015/files/2...

What do banks have to do with Covid, did they create it?

I get it people don't like banks. Banks print money, banks can have shady business in addition to plain old banking...

And if I recall correctly, most landlords are not multi-building owners.

> California has $5.2 billion to pay off people’s rent, money from multiple aid packages approved by Congress. That appears to be more than enough to cover all of the unpaid rent in the state, according to Jason Elliott, senior counselor to Newsom on housing and homelessness.

If my math works out, that's only $130 per person in the state.

Assuming $1,000/month for 12 months, that's $12,000 for a year of back rent. If every renter had the same debt, that would total 430,000 households.

The article doesn't mention how landlords will demonstrate eligibility to receive the money.

5.2 billion?

That's just one month in a studio in San Fran.

Kidding.

We had a similar program in New Orleans and the money dried up real fast. My tenant try to get it and couldn't.

It's kind of a virtue signal thing.

This rewards people who had the money to pay rent during the pandemic but chose not to, knowing there was an eviction moratorium. Many government policies are rewarding people for doing the wrong thing.

Food stamps are similar.

There's people who abuse the program and people who actually need the help and it's a question if the needy people outweigh the abusers.

The government literally disallowed people who WANTED to work...to support themselves or their families for over a year.

The real solution is for this to never have happened.

How does this reward them specifically?

The point they are making is that many others made other sacrifices to keep making their rent, when it turns out they didn't have to

Some didn't sacrifice anything and just invested/consumed their money or nothing instead of paying rent, this group has accurately predicted that there would not be consequences, some people find that annoying

Regardless, its good that landlords are being made whole as that is a core element of the economy that had been neglected in a lot of the calculus

Bob was laid off. He couldn't pay his rent, but knew that he had to pay this eventually. So he scoured craiglist for part time jobs to put together as much rent as he could. He did his best to minimize the amount of back-rent he owes.

Joe was also laid off. But he didn't look for extra work, and just let back-rent accumulate.

Jack was in the same boat. He took part time jobs, but pocketed all his money and lived rent free even though he could have paid as much of his rent as Bob.

Now all of them are having their owed rent absolved. That rewards Joe and Jack over Bob. It's better to either not work, or continue working but cease paying rent.

Josh kept working the whole time and stopped paying rent and is better off than Joe and Jack.

Not just that, Tom reduced his expenses, consumed only essentials in order to pay his rent, when if he known this was going to happen, he didn't need to had he known. This is effectively giving Joe and Jack extra income, while giving little extra income to Bob and none to Tom.

This is the same issue with forgiving student loans...

At the very least, CA should consider the forgiven rent as income paid to the renters whose rent was forgiven.

Even worse, it rewards landlords who bought into the property bubble with an overoptimistic model of risk. We need some debt repudiation to raise interest rates and stop this debt spiral. A law that nullified these debts would be much better - paying them off is just dumping more gas on the fire.

> This rewards people who had the money to pay rent during the pandemic but chose not to

There are always jerks who do things like this, but they're normally quite in the minority. I don't base my decisions on the few exceptional cases if there is a large cohort who gets helped.

If you want "means testing" how about we "means test" the landlords. If the net worth of the landlord is above $25 million (or $10 million, or whatever, pick a useful number for cutoff), you don't get any assistance--losing 12 months of rent is a rounding error to you.

This will help avoid the "feeding the landlord banks" problem.

Please please let there be an unemployment test for individuals receiving this benefit, and a means test for the companies receiving it.

There is no reason for individuals who were employed throughout covid to receive this. Same for multinational rental companies who operated in the green throughout the pandemic.

I don't think my sliver of hope in public policy could handle it otherwise.

Meanwhile, most of the fully employed people I know with student debt are skipping payments in anticipation of federal loan forgiveness

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