Shadow credit score could decide whether you get an apartment
propublica.org
propublica.org
I had a family member rent to someone in Feb of 2020. He paid one month of rent, and then nothing until the government finally let the eviction go through in Dec 2021. I don't entirely blame.the government, in that if my family member did even basic due diligence they would have seen how much of a grifter this guy was, with previous bankruptcies and other recent evictions. Still, in the past, when you made a mistake and got a bad tenant, the option was eviction. And while the government largely paid most.of this grifter's rent, my family member was still out over 15k in lost rent and legal fees.
As a consequence of this, nobody in my family would ever consider renting a property as a long term rental again - there is just too much risk, which means you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.
I will never again take a chance on a renter in this city. If you have anything wrong with your credit or income history -- I'm sorry, but I can't take a chance on anyone anymore. Good luck finding a place to live. Don't blame me, blame the city government.
The other thing that's happening: people like me rarely advertise our units. Instead we look through trusted networks -- friends, family, and co-workers. If you don't have a connection, you can't find these units at all.
I would point out that if people in your position stopped buying rental units and invested your money elsewhere, there would be more housing on the market for renters looking to own their own home.
Not "the government". Taxpayers. Taxpayers bailed out rent seekers.
> you'll see a lot of small, private landlords get out, only to leave large corporate landlords who will have much stricter rental policies.
If this were to happen, it would be a good thing. Consolidation erodes the electoral base of rent seekers, which makes Georgist policies much easier to implement.
But it won't happen, because...
> long term rental
https://www.pewresearch.org/fact-tank/2021/08/02/as-national...
What really happened was that taxpayers (read: People who earn and save money and hold some property) bailed out the people who took an opportunity to skip out on paying rent, and took a hit anyway, while their renters were getting all kinds of other free handouts in taxpayer subsidies. Great. So maybe we need some wealth redistribution. But cheering the consolidation of the rental market in the hands of corporations is like snickering evil. You're advocating for the destruction of the middle class. I guess it would make revolution an easier sell. But you know what else could make you happy? Joining the middle class, buckling up and saving money, taking the hard part of it without feeling like a constant victim, and stop wasting your time trying to destroying the wealth people spend their lives working for. Harming other people to bring them down really isn't going to elevate anyone, and you know it. Rooting for the middle class to be destroyed for your own personal satisfaction is greedy, indolent and ultimately self destructive.
[edit: It's sad to see you channeling your grievance into something that will only keep you down.]
There are only two classes comrade
The idea behind workers owning the means of production is that everyone should be equally prosperous.
Sorry bub, that's China.
> (American success) via market capitalism
Via Europeans enslaving everyone else on earth then nearly destroying themselves in WWII
> great pains your forebears went to to make sure you weren't a slave peasant
If you mean lobbing off Old Louis and Marie's fat gourds then yeah, you're right
Anyone born between 1940-70 was born on third base and thought they hit a triple.
> If this were to happen, it would be a good thing.
Doubtful. For one thing, renting from individuals is far more pleasant than renting from giant housing conglomerates. With an individual landlord everything is negotiable and flexible, it's a person you can talk to. When renting from a corporation, there are strict rules enforced by teams of lawyers and zero flexibility.
> Consolidation erodes the electoral base of rent seekers
You got that exactly backwards. Yes, there are more individuals renting out their single properties each, but those are ordinary people who have no lawyers and no lobbyists and they don't have any coordinated voice and no influence with politicians.
The more rental properties are consolidated to giant corporations, the more outsized their influence in congress becomes as they can afford an army of lobbyists to bend the laws ever more in their favor.
I've had the exact opposite experience.
> You got that exactly backwards. Yes, there are more individuals renting out their single properties each, but those are ordinary people who have no lawyers and no lobbyists and they don't have any coordinated voice and no influence with politicians.
This is just blatantly false.
After randomly running into his ex-wife at a party and hearing that it was all done on purpose, we started to put together a class action with all of his past tenants. Then we moved to the EU instead.
> Rent seeking (or rent-seeking) is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity.
Landlords produce nothing. They don't provide housing; builders do. All landlords do is hoard housing and get other people to pay their mortgages. They literally want to get paid for owning stuff.
Some landlords rehab a completely unlivable structure into something livable. That's something too.
I am a renter and I hesitate to own my home because of the upkeep costs and responsibility. So I subscribe to shelter-as-a-service.
The point is that "landlords maintain housing," along with "landlords pay property taxes" and other such statements are at best a wash. Those things would happen anyway, no matter who owned the housing.
Or are you saying they shouldn't be 'competing' with homeowners at all? In my experience a landlord is not willing to buy at the same price point as an owner occupier, as they are less emotional about the property.
I used to be a landlord and didn't enjoy it much, so nowadays I own paper (stocks, notes) and literally do nothing.
To be clear, I am saying landlords should not exist, at least not as they do now. They're the equivalent of scalpers for housing.
If you read past the first sentence of the article it explains this quite clearly.
And I can say this as someone who is a homeowner. I hate owning a house, and I loved renting. There is a ton of work to do maintaining a house, and it's not really a job I want - I've got a job, and I don't want another one. With renting, if anything is broken, anything needs maintenance - not my problem. Also, if I want to move, I just leave when my lease is up. No need to go through the entire house sales process (which, obviously is quite easy these days, but obviously it's not always like that, and it's rarely like that everywhere - plenty of people have been "locked" into their homes by declining neighborhood values).
I'm certainly not saying my approach fits for everyone, but saying "Landlords produce nothing" is just false. While land may be an appreciating asset, homes themselves fall apart over time and need lots of upkeep and maintenance.
There's a trivial way to check whether or not a landlord is a rent seeker: offer to pay the bill for a mutually agreeable all-inclusive property management service in lieu of rent.
Landlords rent seek.
Personally I think large corporate landlords in combination with sensible nationwide renters rights are preferable. There are tradeoffs of course, but the protection of the private/small rentier class has had many more bad effects than good for housing policy generally IMO -- Prop 13 being a good example. I think the way that you're describing your relationship with your property in terms of ownership and how you feel about the government intervening in that is shared by most small landlords with investment properties, and gets to the core of a lot of the problems inherent in the small landlord paradigm. Too much skin in the game (lack of diversification) and a dependency on turning a steady profit from a speculative investment in what is a basic human need. There are a lot of things that got us here in the U.S. and unfortunately the reality will likely be a continuance of the status quo.
And having Amazon rent you an apartment is somehow preferable?
How about we do the critical thinking, fix zoning laws where necessary, allow tenants to be kicked out for…being shitty tenants, and make an effort to put laws in place that make it easier for people to make a living wage and pay their rent.
Yes actually. Well, in part at least. I would put it in the non-reformist reform category. It opens up the possibility of actually doing something about renting in this country, unlike the status quo where people speculating on property demand law change whenever governments choose to keep people in homes instead of protecting their investment income. Of course, folks can own land if they want. But we should absolutely discourage treating what is at its core a shared resource critical to human existence as an investment vehicle.
> And having Amazon rent you an apartment is somehow preferable?
Yes. Regulating Amazon and regulating Ms. Jones who rents out her second floor are much different propositions for the average voter.
> How about we do the critical thinking, fix zoning laws where necessary, allow tenants to be kicked out for…being shitty tenants, and make an effort to put laws in place that make it easier for people to make a living wage and pay their rent.
It is interesting that in your formulation, critical thinking can only lead to a conclusion where the makeup of the rentier class and how we regulate housing investment are irrelevant. Are you a landlord?
By which I mean that being a landlord is a business, and it takes time and experience to learn the ins and outs of any business, and ultimately experience improves performance.
By extension the landlord with one property, gets little overall experience (maybe one lease a year or so) so they encounter all the rental-business-challenges, one at a time over a long period of time.
It may take years to get a bad tenant, or years to figure out what is the correct amount to spend on maintainence, or discover what kind of garden works best, and so on.
With only one property under management, there is also magnification of the effect of individual events. One property, and one bad tenant, is a big deal. One property and the need for a new kitchen, of bathroom etc is a big deal.
A portfolio of multiple properties helps to spread the load. 1 bad tenant is only 10% of income and so on. Plus with 10 properties you can have a regular plumber, electrician, handyman etc, and so you get good rates, and good service, because you become important to them.
Your family member has learned an expensive lesson about vetting tenants, that lesson will cause some to exit the market, and others how to "understand the landlord business better."
Typically it makes landlords more risk-adverse, and this has knock-on effects for those who are indeed bad tenants. (for starters the only ones who will rent to bad tenants are inexperienced (bad?) landlords.
The spill over of this are folks who have flags (previous bankruptcies) who may be perfectly OK now, but are victim then to landlords that aren't prepared to take on that risk.
Some larger landlords can take on some percentage of "medium risk" - small landlords will learn (the hard way) to only take on "no risk".
And I don't see how modern property law is geared toward the interest of small landlords. In every major city—i.e. the places with affordability problems—the laws are extremely friendly to tenants and hostile to landlords. Sure, there's the peculiarity of Prop 13 in California, but I don't see how you can generalize that to any other part of the country.
There are a lot of things that are profitable but not good for society as a whole. Land as an investment vehicle is one of them.
> And I don't see how modern property law is geared toward the interest of small landlords. In every major city—i.e. the places with affordability problems—the laws are extremely friendly to tenants and hostile to landlords. Sure, there's the peculiarity of Prop 13 in California, but I don't see how you can generalize that to any other part of the country.
These policy wars are happening constantly in most densely populated parts of the US. Here's an article covering one example outside of California: https://crosscut.com/opinion/2021/06/do-renter-protections-r.... I disagree with the characterization of status quo renters rights in the average American city as being hostile to landlords and friendly to renters -- what would be an example of a policy that you classify as being in this category?
Many cities will give free attorneys to tenants being evicted. So now the landlord has a bunch of factually dubious and difficult to dispute allegations made against them.
Eviction is a legal proceeding for a lot of good reasons for both tenant and rentier. You could say the process could be faster, but it is fair.
> Many cities will give free attorneys to tenants being evicted. So now the landlord has a bunch of factually dubious to difficult to dispute allegations made against them.
This sounds oddly specific.
And when you have a free attorney and have no good case because you're just not paying your rent, your best bet is to throw spaghetti at the wall and see what sticks. Have you ever worked with lawyers. That's how every single lawsuit works. The initial complaint and counter-complaint has a bunch of claims, almost all of them legally or factually dubious, and they get whittled down over the course of motion practice. The whole point is that it's expensive and time-consuming and intimidating for the other side.
Yeah, at the expense of everyone lower on the financial ladder than they are. Personally, I'd be ok with it being straight up illegal to own a residence you do not live in. A bunch of rich people might cry about it, but compared to the suffering of people living on the street or just struggling to pay outrageously inflated cost of basic shelter, I don't give a shit.
The individual landlords I have rented from were always much more flexible and accommodating. When I call them they are responsive. They treat you like another person instead of a number on a spreadsheet. They actually cared about their property and would do even preventative maintenance.
Do you have a source for this claim? I can't find that in the article.
As for the second statement see this image from the article.
https://img.assets-d.propublica.org/v5/images/20220328-Final...
The fifth box says "No Landlord Tenant Court records in the last 7 years".
The fact its a basic human need is also something of a red herring. So is food but we dont have abusive amateurs running that market. It functions.
The problem with this market is that you can own largely untaxed land. Ownership of land inhibits competition in the rental market and drives dysfunction. It lets amateurs play in the same market as professionals and it richly rewards those with extra capital to spare to buy ever more desirable locations rather than rewarding those who simply do a better job at providing housing.
I think a lot of landlords see renting as easy money and then when they do have an issue like this they are looking for anyone to blame when they really never did their due diligence. There was relief for landlords during the pandemic for landlords as well, especially those that still had a mortgage on properties.
Geniune poverty should be taken care of by the welfare system, not by random landlords who may be in a precarious situation themselves. Not everyone who owns an extra property is rich and it does not make sense to treat a small local businessperson exactly the same as Amazon.
You say "in the past" but you really mean "when there isn't a global pandemic". Events change things. It's simply a risk of renting property to people that very few landlords bothered to consider.
There is absolutely no reason why landlords should be immune to circumstances that affect everyone. Complaining about it, and tacitly suggesting that your rental income should be prioritized over a disease that eventually killed hundreds of thousands of people, is silly.
It's the same in France.. some basically end up paying gypsies to forcefully remove tenants that dont' pay
As a permanent policy, sure. That wouldn't work.
However, a society that allows landlords to force people to move when everyone is meant to be quarantined will have significantly bigger problems than a temporary block on evictions even if that hurts landlords.
This was the government attempting to usurp part of the economy without much timely recourse for those on the losing end.
Why would grocery stores and gas stations have to give their products away in order to maintain a quarantine? I don't understand that point.
The previous comment is pointing out that this could be a problem if you've been sued by an unscrupulous landlord in the past. That problem exists for fixed income people as well.
A landlord reviewing 50 applications for a place isn't going to go into the particulars. Depending on the landlord's approach, anything with a yes won't make the short list.
Credit reports should not have suspicious stains whose meaning could be that there is in fact nothing wrong (there was a dispute which was caused by someone else, and resolved in the applicant's favor).
1. Bad tenants will have no incentive not to harm the property and the neighborhood.
2. Landlords will be forced to pay for insurance to cover all the bad things that tenants are now free to do.
3. Rents will rise to cover the costs of the insurance. Conscientious tenants will be penalized.
4. Even otherwise conscientious tenants will start to cut corners since they are having to pay for the insurance anyway and it’s clearly unfair.
What a nasty situation for conscientious tenants landlords and neighbors you are advocating.
Only the least conscientious people win.
The entirely predictable result is some very rich landlords and some very homeless people.
>1. Bad tenants will have no incentive not to harm the property and the neighborhood.
Of course they will: they may lose the security deposit, may be evicted, may be sued, and may even be arrested.
>2. Landlords will be forced to pay for insurance to cover all the bad things that tenants are now free to do.
They already pay for insurance.
>3. Rents will rise to cover the costs of the insurance. Conscientious tenants will be penalized.
Building more housing will make housing more expensive?
>4. Even otherwise conscientious tenants will start to cut corners since they are having to pay for the insurance anyway and it’s clearly unfair.
No, for the same reasons I gave before they still have an incentive to behave well.
This is so silly.
Who's going to build these hypothetical housing units? So many that there are more houses than applicants.
For that matter, just ask your parents. It was national policy of the U.S. to build an overabundance of housing for the 50 years after the Great Depression, which is why landlords' income as a fraction of the national economy hit an all-time low in the mid 1980s. It has since rebounded to all-time highs, which is why nobody can find a place to live.
During this time, the world population has more than quadrupled.
Can you explain what you mean in more detail?
Can you point out exactly where they said that?
Growing by less than 40% in 100 years is slow. Austrians hardly had to scramble to provide housing for themselves.
(Now this line of reasoning is simplified quite a bit, because housing is area dependent. Even if the population in some country remains constant, say that everyone suddenly decides that a very tiny area of the country is the only worthwhile place to live. They all concentrate there and now there is a housing problem now. Well, not everywhere, just in that spot! In other spots there are empty, cheap houses.)
What? How? Real estate prices to income ratio in Austria is one of the worst in the EU. Few people can afford to buy without inheritance. Austrian real estate market is broken AF.
While I sympathize with the logic, there is no reason to expect that.
1. That implies that home owners would not be permitted to rent only to family members (or friends), because that constitutes picking and choosing tenants.
2. Not being able to pick and choose tenants literally means you cannot evict existing tenants for any reason, like years of non-payment of rent, or damage to the unit or whatever. Such a move can be interpreted as trying to replace tenants with a better choice of tenants; i.e. picking and choosing tenants.
3. Only a complete fool or someone desperate would rent their home out under such a rule. (Even in a housing market in which you can screen tenants, you can still get awful tenants. Imagine if you had tenants foisted upon you by some rules. Yikes!) The result would be fewer rental units on the market.
4. But, in this imaginary world, banks would likewise not be allowed to pick and choose to whom they give money to buy a house, so there would be a lot less renting.
Do you leave your domicile unlocked for anyone to visit, while you are elsewhere? No? A landlord doesn't want to do that, either.
General prices would drop, but renters would end up paying for something they are not using or even have access to...
Having a liquid supply of decent rental apartments on the market is important for a dynamic economy.
It's not a majority yet, but it's been slowly eating it's way into these sectors for the past couple decades.
Similar "scores" are being silently enacted for such trivial things like returning merchandise to retail stores. Stores now share information and will outright reject returns if you are deemed to have done too many returns in the past at a totally unrelated business.
Leave town with a $2 bank balance and forget to close the account out? Good luck getting a new bank account for the next 7 years with the "minimum account balance" fees drawing it into the negative regardless of fixing the oversight when notified.
Same for chargebacks on your credit card - chargeback more than then the calculated long-term EV of your account and you will find the process all of a sudden becomes very difficult and your account is likely closed shortly thereafter.
Same goes with Amazon - have a high value account that does $50k/yr in purchases? Returns are always granted no questions asked. Low value? You will start seeing pushback from customer service very quickly and account closure regardless of the validity or reasons for return.
The above are all examples I've personally experienced or witnessed.
Airline mileage programs that turned into revenue programs are likely where most of this ends up. Companies simply will stop servicing low EV customers altogether on an individual vs. the group basis as it's done now.
Of course, tenants being afraid to assert their rights is in the unethical self-interest of a landlord. A society that's attempting to be just should not want that.
Yes, I'm sure that is the point.
Don't be a serf.
If you can't afford to buy a property, burn the system down.
Personally, I certainly don't like this practice as a prospective tenant, but it would nonetheless be tempting to consider using it were I a landlord.
Of course it would. I still don't like this practice.
> is there any protected status in the US for "people that make use of the court system" that would bar such discrimination?
There are certain laws that protect people who use the court system in some ways, but there is not (to my knowledge) a general protection. But whistleblowers, litigants in harassment claims, etc. have anti-retaliatory protections.
But this would be hard to demonstrate in most circumstances.
Later, there was interview with her and she said she had huge problem to find a new job for years. Employers really did not like that she exposed someone else.
I won that case and got my towing fees back but I guess there's a stain on my record now even though this is really the landlord's fault for picking a shitty towing company who can't even follow state non-consent towing laws.
Having been both landlord and tenant at various stages of my life, my first law of landlording is that trouble from tenants varies inversely with the square of the rent.
As a renter I wouldn't like it too, I would think why does the landlord need to know when I go/come to the house. But as a landlord I use smart lock and the need is different, its useful because I don't have to change locks every time a get a new renter, I just change the codes (specially if I consider doing short term rentals/airbnb at some point/season) and I don't have to worry about any spare copies of the keys made by the renters.
Generally smart locks, in my experience, need internet to change codes without having to be physically present, not for lock/unlock functionality.
Is that something that people generally worry about? I’m pretty sure none of the rentals I’ve lived in over the past decade had the locks changed between tenants.
Knowing what I know now, I’d actually leave a city if I saw that term in a contract.
That would be horrifying news to many women.
To immediately see why this is important, think what the answers would be when you tell your daughter or spouse that the locks weren't changed before you moved-in.
As a former renter I find it dystopian.
About finding smart locks dystopian, I feel like a lock that notifies lock/unlock is far better than say a device like nest cam/door bell with abilities to capture video/pictures and for whatever reason are more widely accepted than smart locks.
People want the landlord to implicitly need the tenant to do things in order to enter their private house, or to otherwise to leave physical evidence via a break & entering if they did so. A smart lock can very easily remove all evidence that the landlord entered your house without you knowing, and that feels violating.
Basically anything that could be used by some creepy panty sniffing pervert to help them be a more effective creepy pervert, don't put that on your units. Smart locks help this hypothetical person.
You're missing the big difference here. A Ring doorbell is both trivial to remove when someone moves out, and generally under the control of the tenant. Smart locks are neither.
Exactly for that reason I did not want this in my last (and hopefully final) rented home.
Wait until you have to replace batteries every 2 months and constantly be worried about when it runs out of power and get locked out of your house.
It's economically inefficient for Grandma to continue living in Palo Alto in a $4 million home when that land could instead have a multi-family housing complex to support the demand for workers in the region. It'd be the same story for someone who's in rent-controlled housing for $400/mo but the equivalent market rate is $3500. It's inefficient.
If we're saying rent control has externalities, we need to acknowledge that any scheme that fixes your housing cost has the same effect.
Get back in the Faraday cage, drone!
I agree that efficiency of use should not be the driving factor around property use and ownership.
I don't think newcomers should be considered more important than incumbents, but currently the pendulum has swung way too far in the other direction; often newcomers just cannot enter many housing markets, and that's not fair or healthy either. There's nothing inherently "right" about being lucky to be born at a particular time and in the right place and right financial situation to buy housing in a region that just happens to become highly desirable decades later.
Why should people be forced to give up their homes just because someone else desires them?
By this logic, if newcomers seize granny’s house they should expect to immediately be forced out by the next group who has desire.
There is no coherent argument about fairness or luck here.
The only argument here is a new group of relatively rich people looking for a way to seize desirable properties for themselves without.
Why should a tech-bro who just sits at a keyboard all day be able to force out granny and grandpa who worked as a secretary and an auto-mechanic? Does the tech-bro ‘deserve’ it more?
If they succeed in forcing granny out it will be at least as unfair as it was before.
Why should some people have to give up their homes, but not others, is the more interesting question to ask. If nobody should ever have to give up their living arrangement due to exogenous factors (like a trillion dollar industry popping up in your backyard-- which, to be fair, isn't what happens to most neighborhoods), then we should be doubling down Prop 13 and rent control.
Not everything is about economic efficiency and maximizing investments.
For most people a house is not an investment to be maximized, it is home. Particularly for someone elderdly who has lived there most of their life.
You cant pick and chose what to be outraged about when its those very policies causing the problem
That is not at all how California Prop 13 works, although it is an often repeated myth.
Under prop13, the property tax goes up 2% every year (technically up to 2%, but unless you're in an economically depressed area it's always 2%).
So it is a damping function, essentially equivalent to rent control, to smooth out the swings in market price and replace it with a fixed yearly increase you can predict.
In practice, however, the property tax goes up more than 2% per year because counties and cities are allowed to attach all kinds of fees under the umbrella of property taxes and those don't count towards the 2% increase limit.
I still believe that to be mostly the case, but I think a) tough luck, communities have housing problems that rarely have easy fixes, and rent control can help, and b) rent control, if implemented in a certain way, is probably something that is generally good.
By "certain way", I mean removing the problem you state: all units in a city should be subject to rent control. In addition, rent increase caps should be indexed with wage growth, or some sort of wage growth + CPI blend that ensures housing costs don't rise faster than wages, but that landlords can still remain financially solvent as their own costs go up. And finally, tenants moving out and new tenants moving in shouldn't be a trigger for a landlord to "reset" the rent to "market" rate.
Change those things, and I think rent control will work much better. And I think it will also serve as downward pressure on purchase prices, because prospective landlords won't want to buy rental properties if their rental income can't cover a high monthly mortgage payment. It might push down on non-rental property prices too, since if they get too high, people will prefer to rent instead of buy.
Of course, all of this needs to be accompanied by building new housing all the time. Affordable rental pricing is great, but it still sucks if you end up unable to rent something because you're competing with 100 other people for 1 unit. Supply must rise in response to demand, and that alone will serve as a powerful check on rent and purchase prices. (Then again, arguably in an place where supply and demand are in equilibrium, you don't need rent control in the first place!)
I'm not an economist or housing expert, so I know this won't fix everything, and there are probably problems with my (overly simple) proposal above. But I agree that the current implementation of rent control in many places (in the US, at least) offers pretty bad trade offs.
However as long as rent increases are capped at the maintenance cost increases I don’t see the negative effect, because the landlord still captures the cash flow at the time the lease begins. Yes it has a negative effect on equity compared to if the landlord could raise rents as much as they want, but I don’t see that as an objective good nor does it affect many people besides the landlord.
Rent control does create perverse incentives regarding subletting, evictions due to factors other than the nonpayment of rent, and fulfilling tenant maintenance requests though. But in terms of market participants besides the tenant and landlord I really think only the lack of liquidity is a problem.
I'm not using your phrasing, "artificially constrained supply", because it seems like artificial could have a very squishy definition. A lot of economists these days are saying that rent control leads to lower supply, but they seem to mean it as more of a natural consequence (i.e. without necessarily needing the kind of NIMBYism and red tape that gets blamed for low supply in the largest cities with rent control).
If the rent increase (and thus profit) is capped, but the market price isn't then it soon becomes rational to sell your rental apartments, stop being a landlord and invest in something with better returns. You see this a lot in Sweden. More and more rental apartments are being turned into owned apartments, sold off and removed from the rental markets since it's simply the most profitable thing to do.
nor does it affect many people besides the landlord.
It affects people who need an apartment and who want/have to rent instead of buying. Make being a landlord too hard and risky and you get fewer landlords and fewer apartments to rent on the market. When I got a job in Norway (no rent control) it took me two phone calls and less than a week to find a rental apartment in the part of town I wanted to live. When I got a job in Sweden (strict rent control) it took me months to find a place and it was a short term contract for a place way out in a shitty suburb far from where I wanted to live.
100 years ago if you wanted to open a store all you needed was a building and a door. Now if you want to open a store, you need a parking lot bigger than the building itself to serve the same number of people.
You used to be able to house thousands of people in what is now a suburb that houses just a hundred.
It's a crippled land-use philosophy which forces a land shortage in any city more populated than a village.
Renting as a whole should really be much more restricted as a short-term thing though - build more houses for people to own, and lower the deposit requirements so people can start a mortgage earlier.
Every professional worker should be able to own their own home - so they have security, can decorate it, etc. and aren't losing tens of thousands just to a landlord every year.
Eventually you're going to want or need to move, and the landlord is going to be pissed to discover on move-out inspection that you haven't been keeping them apprised of the condition of the property.
A simple "hey, this happened; I'm not worried about it if you're not" email suffices.
As a landlord:
1. I insist any small problems are brought to my attentions ASAP. Early repairs cost less and dealing with it promptly creates good will
2. I get the place professionally cleaned before move in. It only costs me $150 (a hard working cleaner can clean an empty unit in a three/four hours)
3. I provide a full set of cleaning supplies when tenants move in. The supplies are already there so use them ;)
4. I give a $50 gift card to Target midway through the contract. What are you going to buy at Target? Hopefully, cleaning supplies ;)
A decent landlord won't mind if you break a lease if you've stayed there long enough (more than eight months). Even if you do, it should not be more than two month's rent.
I charge a bit below market rate to ensure the unit is always rented (divide a month by 12. An empty unit costs money). However, I target professionals to avoid problems (students), but not rich professionals - I once rented the two bedroom unit to a pair of recently graduated nurses.
I'm not in the business of making friends. I'm in the business of having a cordial relationship with a client who is satisfied and keeps renewing. A missed renewal costs me a lot of money. My goal is that my tenants move out only if they move out of the city or decide to buy a place.
Can you go into more detail here? I've heard this before that having too high of an income can count against you as a tenant - presumably because the tenant has the wherewithal to make the landlord's life unpleasant if they really felt like it.
My biggest concern with them was that they'd only want to rent for a few months to get to know the city before buying a place of their own. A missed renewal is very expensive (lost income) and time consuming.
I also live in a screaming hot rental market, (North Seattle) and the last apartment complex I lived in raised the rent like clockwork by 10% every six months. Where I live now I haven't seen a rent increase in three years, which makes me rather overdue for one.
I was using "a dripping faucet" in the sense of the prototypically trivial home repair. (Shut off water, replace twenty dollar faucet cartridge, turn water back on) I wouldn't call the landlord for that in the same way I don't call the landlord to replace smoke detector batteries, change light bulbs, replace furnace filters, do yearly water heater sediment flushes, oil squeaky door hinges, or to clean my toilet.
If, like, the refrigerator failed, then I would be calling the landlord.
Letting the landlord replace it a year later than they otherwise would have saves them money!
This is similar to the observation that larger species live longer, but larger individuals of a given species live shorter lives.
The guy who rents the house next door to mine decided that lawn care was too much work, so he spread and wet leaves for the express purpose of killing the lawn. Winter is over and he is now surprised that his surgeon tenant doesn’t want to live in a house that appears derlict.
Keep in mind this was in a non-trendy neighborhood in Chicago, not NYC or SF. We are clearly not building enough housing.
Here's where American consumers stand as of the most recent (April 2017) data: [1]
FICO score range % of U.S. consumers
800-850 20.7%
750-799 19%
700-749 17.1%
650-699 13.2%
600-649 10%
550-599 8.5%
500-549 6.8%
300-499 4.7%
Trouble from landlords varies inversely with the square of well-crafted (and robustly enforced) tenant protection legislation.
With the recent rent moratoriums, I expect landlords to get even harsher. A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state .
If this person went and filed for a second bankruptcy, they could then delay the eviction by years.
The bigger issue of course is we haven't built up enough new housing over the last 40 years, you want there to be so much available housing landlords can't be selective. They have to take the risk of losing a bit of money, because they're going to lose an absolute ton if they let their units remain vacant.
I've wondered about taking a different approach: The landlord is free to evict on the day of delinquency, but must move the possessions to a storage facility (paying a month's rent at that time) and they must post a substantial bond. If the tenant shows the eviction was improper they get the bond + costs. (And I would apply the same thing to foreclosures.)
Instead of a long process of showing that they are acting properly they are putting up a substantial financial promise that they are acting properly. Make improper actions a costly mistake and there will be few of them.
Unfortunately, temporarily homeless people have a habit of turning into chronic homeless people. And living in a city that's full of chronic homeless people, I don't think we need more.
Your comfort and convenience as a landlord does not rank higher than my desire to not step over human shit on my way to work.
Your comfort and convenience to have the option not to pay a landlord does not rank higher than the desire of homeless to have better access to housing. Places with homeless problems badly need to remove these protections from renters.
Eviction protections are incredibly helpful at preventing people on the margin from ending up homeless, by increasing the friction of evictions for landlords. This is absolutely necessary, because the cost to the tenant of getting kicked out of where they live is enormous - doubly and triply so if you are the kind of marginal person that gets kicked out of their home. It is incredibly disruptive to their life - much moreso than for someone in a stable situation not being able to find a different place to live.
Remove friction from evictions, and everyone on the margins is constantly at risk of losing their home - and once you do so, your ability to stay afloat becomes incredibly precarious.
If, on one extreme, tenancies were for life, and you had no way to kick someone out of a unit, you'd have an 'unfair' but stable distribution of housing. There would be very few life disruptions to people's lives, at the cost of housing being stuck in a local optimum.
If, on the other extreme, tenancies were day to day, and you constantly had to outbid other contenders for your apartment, you'd have a 'fair' but incredibly unstable distribution of housing. Between the incredibly high pain of moving/looking for a new place to live, anyone on the margins would suffer incredibly from this.
Economists rage against a stable but 'suboptimal' distribution of goods. But people whose lives constantly get upended from the instabilities of an 'optimal' distribution of goods are the ones who will suffer.
Harm minimization is exactly why there is more friction to throwing someone out of their house than 'the landlord feels like it'.
These protections determine that quality of tenant preferred is higher, thus vulnerably are forced away during a shortage. For those who are accepted, risks mean increased housing costs and thus lower access to the poor.
>Eviction protections are incredibly helpful at preventing people on the margin from ending up homeless, by increasing the friction of evictions for landlords. This is absolutely necessary, because the cost to the tenant of getting kicked out of where they live is enormous. It is incredibly disruptive to their life - much moreso than not being able to find a different place to live.
Eviction protections are incredibly _harmful_ at allowing those on the margin to avoid homelessness, by increasing the friction of becoming a tenant. This is absolutely unnecessary, because the cost of a tenant refusing to leave after non-payment can be _enormous_. It is incredibly disruptive to the housing market -- much more so than not being able to find a different tenant to rent to.
>Remove friction from evictions, and everyone on the margins is constantly at risk of losing their home - and once you do so, your ability to stay afloat becomes incredibly precarious.
I'd argue the opposite, those at the margins who are able to meet their commitment but otherwise look bad at paper are at incredibly higher likelihood to gain a home -- and once you gain a home, your ability to stay afloat becomes much less precarious.
>If, on one extreme, tenancies were for life, and you had no way to kick someone out of a unit, you'd have an 'unfair' but stable distribution of housing. There would be very few life disruptions to people's lives, at the cost of housing being stuck in a local optimum.
This is achievable via something close to the 99-year leases available in many nations, where you prepay the lease up-front. You can negotiate for one of these if you can find a voluntary counterparty.
>If, on the other extreme, tenancies were day to day, and you constantly had to outbid other contenders for your apartment, you'd have a 'fair' but incredibly unstable distribution of housing. Between the incredibly high pain of moving/looking for a new place to live, anyone on the margins would suffer incredibly from this.
That's basically what a hotel is, which those on the margins often end up in due to renter protections that introduce risk for landlords to take in those on the margins.
>Economists rage against a stable but 'suboptimal' distribution of goods. But people whose lives constantly get upended from the instabilities of an 'optimal' distribution of goods are the ones who will suffer.
Renter protections make it look more 'optimal' to rent to the rich and stable. We're actually in a suboptimal state that disfavors the homeless, and allowing a freer market would give better opportunities to the homeless.
>Harm minimization is exactly why there is more friction to throwing someone out of their house than 'the landlord feels like it'.
Increasing regulatory barriers to homeless gaining housing is harm maximization, and should be eliminated. These renter protections maximize harm.
I am sirry but this sounds like youve never seen the bottomn of the housing market and what actually goes on there, and basically live in cloud coocooland.
I know a landlord who should be in jail for abusing student tenants, commiting fraud on deposits, renting out houses with mold, rats and leaking riofs, without working heating. Safety railing on stairs sre attached with hot glue. After years of criminality she got a RangeRover and a small fine.
>I am sirry but this sounds like youve never seen the bottomn of the housing market and what actually goes on there, and basically live in cloud coocooland.
Well at one point (and not so long ago) I lived in a closet in a basement for ~$100 a month in a relatively nice part of Oregon, and frankly I was damn happy someone was willing to look beyond the "formal" means available. Had only the "legitimate" means been available to me, I definitely would have been homeless. Renter protections would have eliminated the only housing available to me. I'm definitely no stranger to "substandard" housing.
>I know a landlord who should be in jail for abusing student tenants, commiting fraud on deposits, renting out houses with mold, rats and leaking riofs, without working heating.
Agree that elimination of renter protections should go hand in hand with elimination of landlord protections: that is, if someone moves out because the landlord hasn't held up to his end of the contract (provide habitable housing), then there should be no protection for that landlord in the courts to force the tenant to continue paying.
The quickest way to get landlords to become less selective is to say "any vacant apartment/home not occupied by at least one fulltime resident can be claimed by someone homeless as of [date]." You'd have landlords begging people to sign leases (and people would because then they would get a sure nice apartment as opposed to a lottery for one of the few ones left).
Now, that produces bad other results, but so does allowing people's homes to be ripped away from them at a moments notice.
What an entitled viewpoint. It's not their home; an entirely different person owns it and they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it. The person having their home ripped away at a moment's notice is the landlord.
It's not their house. It certainly is their home. I would prefer those be the same person as often as possible to align incentives.
> they failed to hold up to their end of the contract for the terms under which the owner agreed to let them occupy it
Tenants, like many contract participants, have legal rights that cannot be waived (see also minimum wage.) They also have contractual rights due to the contract.
It's not uncommon for landlords to be the first party to breach the contract either intentionally (e.g. losing checks to move a tenant at below market rates out), neglectfully (e.g. ignoring upkeep or repairs) or unintentionally (e.g. entering at will).
Certainly, withholding rent from a breaching landlord is appropriate while the breach is resolved.
> The person having their home ripped away at a moment's notice is the landlord.
Unless the landlord lives there, the landlord's home is unrelated to the property.
If you take something you're obliged to pay for without paying for it, it isn't "yours."
>Tenants, like many contract participants, have legal rights that cannot be waived (see also minimum wage.) They also have contractual rights due to the contract.
Minimum wage is another thing that crushes the poor, as do eviction protections. Both serve to make jobs/housing (respectively) more difficult for the poor to acquire via regulatory barriers.
>Certainly, withholding rent from a breaching landlord is appropriate while the breach is resolved.
Conversely, withholding housing from a breaching tenant is appropriate.
>Unless the landlord lives there, the landlord's home is unrelated to the property.
In the US, "Home" can simply mean a house [1]. My apologies if you're using a different dialect of English and I misunderstood; I was using home as it's used in one common interpretation of the word in English in my country.
[1] https://www.merriam-webster.com/dictionary/home : refer to 1b
Although I don't see how that clause would be enforceable. A tenant almost certainly doesn't have enough assets to go after to make up for a building. Otherwise they could have bought the home for their own use.
This is basically extreme squatter's rights. Places which have those produce some combination of people paying guards, those who can't afford guards taking matters into their own hands, people demolishing perfectly-good housing to avoid risking the land, et cetera.
You’re proposing to reassign millions of dollars of property based on various levels of evidence for whether someone was physically present? That’s basically the 90s in Russia.
It’s certainly a neat fictional universe. I imagine everyone who can afford to would live in a hotel, leaving the scramble of defending your property to those who can’t. Also, fraud. Lots of fraud.
After a couple years, nice family leaves, so you spend long time to find another nice family to fit into the house you worked hard to provide. Instead Kommisar come along, give house to homeless in name of proletariat. Social welfare bureau hold lottery, and the neighborhood violent drunk under the bridge is ecstatic his number came up, as he was very sad he no longer has home to beat wife in. Much vodka is drunk while copper piping is gutted and appliances scrapped to dealers in nearby Ossetia.
Sit back and cry: I work on potato farm for 15 years to build nice second home to house hard working families! Instead government create lottery and hands to drunk who destroys house in only 15 days. Decide to stop trying. Start drinking everyday. Become a drunk yourself, enter the lottery, now you gut houses of others to survive. Process repeats -- now all units look like Grozny in the late 90s.
Mission accomplished.
Responsible people who don't rip up housing are sought after and pay a reasonable rental rate. People who buy and sit on property are taken out of the system. A new equilibrium is reached and most people take reasonable care of their rental properties they are given because they don't want to have to enter lotteries that will likely end them up in a slum. Homeless people end up in better than the street.
Everyone has a primary residence. I'm saying, if the only goal is to force landlords to rent out houses, simply have any residential property without at least one person identifying it as their primary residence given away by the state, ideally in a lottery. It would only change things for landlords. And I don't know what "fraud" would be engaged in. I suppose a couple could rent two apartments only needing one, but I don't see why a landlord would do that as opposed to renting to someone who presumably wants it and would pay money.
You’re not sure they will pay the money or not trash the place. Same reason landlords are hesitant about renting in the real world.
In any case, this would be defeated by enlisting family members as back-up primary residents. (As in the old world, when property rights were enforced at sword point, sucks to be someone without a dependable family.) Though, again, the wealthy would likely opt out of renting and favour not owning or just own a single massive house and opt out of renting.
The fraud would be in people lying about their primary residences. Also, people lying about others’ lack of primary residence to appropriate their homes for their cronies. The injured family would be homeless while fighting for their property back, which somewhat compromises their ability to engage.
I don't see how. The family members still have to live somewhere. Oh no, the person rents to their kid as opposed to a stranger! It still means that wherever that kid was going to live otherwise isn't rented out to them and is on the market.
> fraud would be in people lying about their primary residences.
Yeah, I don't see how. Everyone gets one. So, if you don't need a home and are responsible maybe you get hired to rent out an empty place? It doesn't scale.
> people lying about others’ lack of primary residence to appropriate their homes for their cronies.
That's stupid. It seems just as possible as people lying to get your bank account. There are all kinds of ways that people have to let the government know where their primary residence is.
The kid could have been living at home. One spouse in one house, one spouse in the other. Et cetera.
> just as possible as people lying to get your bank account
You're proposing an ad hoc centralized mechanism for expropriating and re-assigning a multi-trillion dollar asset class. This has clear and one-way precedence in history.
Yes. If the "super-fraud" is that 18 year olds move out to unclaimed apartments or that couples can have a vacation house, I am remarkably okay with that.
> You're proposing an ad hoc centralized mechanism for expropriating and re-assigning a multi-trillion dollar asset class. This has clear and one-way precedence in history.
Except for the ad-hoc nature, the fact that property records and ownership (as well as lists of people's primary residences) are already centralized, that centralization and decentralization of real estate have precedence within the same society at different times, I totally agree. So I guess that's "multi-trillion dollar asset class" I agree with.
> Tenant screening companies compile information beyond what’s in renters’ credit reports, including criminal and eviction filings. They say this data helps give landlords a better idea of who will pay on time and who will be a good tenant. The firms typically assign applicants scores or provide landlords a yes-or-no recommendation.
> A ProPublica review found that such ratings have come to serve as shadow credit scores for renters. But compared to credit reporting, tenant screening is less regulated and offers fewer consumer protections — which can have dire consequences for applicants trying to secure housing.
These tenant protections come up because governments want their cake and eat it too. If you live in a functional housing market the need for tenant protections also decrease, because more people can afford to rent places!
But we could have it both ways pretty easily (if political will is there). Meaning, protect both parties from abusive people on the other side.
US is doing somethign similar to this, except its being done by companies rather than the government.
That said all rental projects that I know of in Maine and New Hampshire are all rented before they even finish construction.
EDIT: I'd also like to make a point about current regulation and zoning. It's not unusual for a developer to pay around $500,000 or more in state fees, environmental review, and layer time to get a new apartment complex approved. This requires insider connections and specialized knowledge of the municipality if you want it completed in a reasonable time frame. Partially this is because national building codes are more complicated then ever but more often building anything at all requires a zoning exception or amendment.
If you pull of the zoning maps for your town or city you'll likely find it riddled with parcels that have been cut out or otherwise exempted from the rest of the zone. This process can be expensive and take years to complete.
If a complex had 500 units, thats a negligible cost
[1] https://www.hcd.ca.gov/policy-research/plans-reports/docs/pa...
A house is made up of individual pieces of wood, drywall, bricks that are "under 10% of the cost" individually by the single piece but when stacked up they absolutely help explain the (much greater) cost of the house. It's going to be difficult to point to a single smoking gun; with housing it's death by a thousand cuts (in California development fees are one of the bigger ones).
See, e.g., https://www.accessmagazine.org/wp-content/uploads/sites/7/20...
Doesn't seem to have done much to keep housing prices under control, and houses still sell so fast that you blink and a new listing will be gone. We can't possibly be a major location for internal migration—not like cities in California or Texas or anything of that sort—so IDK what's up with that. My 20ish year old McMansion has increased in value about 30% over the last two years, and was already way up from just a few years earlier. WTF.
I think of the ugliness of the facades as a bonus that would drive wealthier people to other buildings once options open up a bit.
See e.g. Portland, Oregon's façade articulation guidelines: https://www.portland.gov/sites/default/files/2020/lu_buildin...
Fed/State government can issues credits/tax relief for "investors" who build MDUs but somehow starter homes are off the table?
It's not all doom and gloom, Habitat For Humanity appears to be the only outfit that's building affordable houses/starter homes, helps when you get a nice influx of money going into that program (thanks MacKenzie Scott).
Brooklyn and Queens; formerly "affordable" places to live in New York, are now getting $4,000 (or more)/mo for 1-bedroom cribs. I've seen it with my own eyes, in Manhattan. Areas like Alphabet City, that used to be considered "dangerous," are now primo real estate, and well-dressed young couples walk their toy poodles around these neighborhoods.
It's only a matter of time, before NYC becomes an East Coast San Francisco. Manhattan is pretty much there.
I am not personally familiar with the way France is structured, but I have been told that the cities are where the wealthy live, and the suburbs are where the not-wealthy live.
From what I have seen, Seattle is becoming that way. I was pretty surprised, when I visited some friends, down in the suburbs south of Seattle, and saw that it was actually a rather scruffy area. I had gotten used to Bellevue and Redmond.
Supply is supply, and there's only so much real estate in NYC.
Buisness dump invested money into expensive building. If no one rents then it stays vacant. Why vacant, isnt the landlord going to lose money? well yes but if he rents a lower amount then his valuation goes down and he is suddenly upside down on his loan. So he is compelled to not rent versus renting it.
Add to this governments make more tax yearly if its valued hire and now there is no incentive to fix this.
More about the tax: https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy...
https://vancouversun.com/business/real-estate/three-years-in...
I hear Italy is the same way. Source: Gomorrah
Unless there have been major changes in the last few years, many of those buildings will not, in fact, be filled with yuppies. They'll sit vacant, parking the money of the world's ultrarich in a low-tax investment.
How awful. The government should do something about this kind of degradation.
New rental-only builds were even going up in the area, not just condos. But they were more expensive to rent than the bloody condos, and about 3/4 the size.
So long as the total number of units increases, it really doesn't matter how much they cost, so long as they get filled. Increased supply will bring down rents at the less expensive end of the market.
If you don't build new housing, then the people who can afford it will just end up driving up the price of older homes. Alphabet City is expensive now because they didn't build enough apartments in the East Village to meet the demand from people who want to live in that area.
Want to talk about trickle down effects!
https://www.pewresearch.org/fact-tank/2021/07/09/before-covi...
160,000 / 5 years / 12 months = 2,666 per month = negligible compared to US population growth of ~0.6% (167,500).
It's almost as if there's another thing to blame beside Mexican Boogeymen...
London literally has tens of thousands of dwellings sitting empty. Many are investment properties and will be sold multiple times without ever being lived in.
It's easy to make money at the high end from rising property values without the hassle of dealing with tenants.
It's easy to make money at the low end by packing as many tenants as possible into small properties and spending as little as possible on maintenance. There's occasionally some legal hassle with evictions, but generally for landlords it's a seller's market, with minimal regulation and enforcement.
There is, indeed, tens of thousands of empty homes in London. In a city with millions of homes. Current statistics show a vacancy rate of 2.2% [1], which is an incredibly low rate, which implies a pathologically supply-constrained market. Additionally, there is no evidence to support that even a statistically relevant proportion of those empty homes are empty for investment purposes; vacancies can happen for a number of reasons, including being between tenants, non-primary homes, etc.
No, it isn't. Back in the early 1970s, the US was averaging about 2.4 million housing units started per year [0]. And at the time US population was only about 210 million, compared to 330 million today...
Around here (Maryland), landlords are required to offer leases up to 2 years (this might be a county law), although I suspect 12 month leases are still common.
At the end of a lease, MD law requires the lease to default into a month-to-month lease. To kick a tenent out without cause, a landlord need only provide 30 days notice.
However, if the tenent refuses to vacate, the landlord still needs to go through the eviction process.
Wow that's insane. If I was renting out a property I owned I'd expect to be able to throw someone out within a day after an active refusal to pay rent.
Because you lack empathy and perspective? People can be forced into bankruptcy for all sorts of reasons that are largely beyond their control (such as the example you are implicitly referring to in the article). Doesn't mean they should be homeless (or limited to the most marginal of housing conditions) for the rest of their life. Especially if they have nursed their score back to a reasonable state of health.
A tenant can easily pay rent two or three times, and then stretch out the eviction proceedings for 6 to 18 months depending on the state.
This seems overdrawn (i.e. out of synch with reality). In the one state for which I am intimately familiar with these proceedings (and another certain very large blue state that I did a fair amount of research on at one point), a properly executed eviction proceeding should take no more than 120 days or so, even assuming delays in the court calendar (except in weird outlier cases like the city can't determine the zoning or protection status of the property, etc).
I can imagine there a few states with as grossly dysfunctional (general case) eviction proceeding standards like you describe, but not ... all that many states.
If you have a bankruptcy on your credit report, no landlord in their right mind is going to want to rent to you.
It's very easy to stretch out an eviction for a very long time, it's not fun, but it's doable.
Here's the rub, a mom and pop landlord can't have half their tenants not pay rent for 6 months, but Greystone can. And big corporate landlords are more likely to be strict when it comes to renters.
In other words, that "6 to 18 months" number was just basically made up.
What's their to debate, COVID had 2 year long eviction moratoriums in some parts
No - per the example in the article, you are proven to have the misfortune of living in a country with a corrupt and dysfunctional healthcare system.
No -- you do not have "no" say. But but the law says there are limits in the criteria you can use to reject candidates.
Of which you (as a landlord) are presumably already perfectly aware. As you are of the fact that minute you move out (and establish another legal residence) -- it's no longer your "home".
It's my property.
Sorry, but this isn't an Ayn Rand novel. In real life, property ownership does not give you 100 percent freedom to do what ever you want with your property. It is a social contract, with obligations and limits.
But it's less well-known that Chapter 13 bankruptcies stay on your credit report for 7 years, which had already passed. Chapter 13 represents about one-third of all bankruptcies.
Chapter 13 is less common, because it's more difficult to go through, and takes longer, but it has substantial benefits.
The article doesn't say what chapter she filed under, but it's easily plausible that it was Chapter 13, and the bankruptcy had already fallen off her credit report.
That isn't exactly true!
Chapter 7 bankruptcy remains on your report for up to 10 years, and Chapter 13 stays there for up to seven years. [1]
Chapter 7, which is known as liquidation bankruptcy, involves selling some or all of your property to pay off your debts. This is often the choice if you don't own a home and have a limited income.
Chapter 13, also known as a reorganization bankruptcy, gives you the chance to keep your property (including secured assets like your home and car) if you successfully complete a court-mandated repayment plan that lasts between three and five years.
[1] https://www.experian.com/blogs/ask-experian/bankruptcy-chapt...
the US is doing a much shadowier version of china's social credit system. At least with china, its up front and in your face, with this it is much more background and insidious.
https://www.experian.com/blogs/ask-experian/what-is-the-aver...
Most court cases do not set any precedent. If you think the judge made a legal mistake in your case, you can appeal regarding that specific legal question.
The appalete court can then issue a ruling on that specific question of law. If they find the lower court was in error, they would typically send it back to the lower court to redo under the new guidance.
Sometimes the specifics of the case do interfere with the appelet court's judgement, but the entire system is set up to minimize that.
Neither of those statements justifies the system as morallly right or even logical
When I finally got to $110k/yr I was able to get a $300 credit limit card.
Ohh and on top of providing these, the lease is provisional and can be terminated based on the results of the background check they do for you. Yeah no, the boogeyman is real and is worse than the credit score boogeyman.
If I’m an apartment manager and I know I can’t evict anyone for an indefinite time, it makes sense to verify every piece of evidence I can that applicants will pay, because if they stop paying there’s nothing I can do and I’m losing money every month.
There was literally no expert quoted in the article who asserted such a thing.
> “It’s kind of chaos,” said Ariel Nelson, a staff attorney at the National Consumer Law Center. “It’s really hard to figure out if you were rejected, why was it rejected. If it’s something you can fix or if it’s an error.”
The rightful criticism is that these systems are opaque and Kafkaesque. One of the few benefits of them is that they are going to be less biased than human review. But I guess it's too boring to assert that something is just generally unfair when you can lazily shoehorn in that it must be racist.
This isn't necessarily true. The factors used to drive the algorithms are selected by humans. And from those factors it's not always clear if they end up discriminatory. This is exactly why the systems remain opaque.
> There was literally no expert quoted in the article who asserted such a thing.
This is exceedingly harsh. Look at regulation on the credit card industry on what data you can and cannot use to make credit decisions. Algorithms can certainly have bias - that's not a disputed fact - and without careful screening of the data and the models you will quite likely have biases. So the article isn't unfair in making that statement.
(1) Do they have more or less bias than the humans performing the current review process?
(2) Is there a way to make their decision making process less opaque than it is now, to reduce the level of bias in their decision making process? - I know there has been some work done in this area (a) though it isn't as fast as many would like to see.
(a) https://link.springer.com/article/10.1007/s11948-020-00276-4
if (creditScore < X || criminalRecord || eviction) return REJECT
Which is the same process most landlords go through in their head when they don't have a system.
And, it's life. Didn't get a job? Opaque. Didn't get an apartment? Opaque. Didn't get a yes to a request for a date? Opaque.
It's just another gimmick excuse to charge more money. I'm guessing the excuse is necessary to bypass insurance regulations or something.
Which is good for me - my credit score dropped by nearly ~80 points when I bought a home last year, and 10 months later has only recovered 40 points.
A company cannot unilaterally drop credit as it will open them up to adverse section.
In other words, credit score is a proxy for conscientiousness. Some people don't like that so a few states have outlawed using credit score in underwriting. Hawaii and Massachusetts specifically IIRC.
I agree with the issues of transparency, but not with the models themselves. I absolutely would not rent property to someone who has a recent criminal record, a recent eviction, or a risky credit profile.
Tough eviction laws make it too risky to select the wrong tenant. It could take months to remove a non-paying tenant in some cities.
I know of eviction moratoriums that occurred after covid. It was sold as a way to avoid a massive surge in displaced people from job loss.
At the time I thought it was strange that this was the best solution because as you said it put the cost on landlords which in my opinion hurts smaller landlords the most.
I don't really see what else could have been the cause but I guess I will rephrase:
- Why do you think this tool was used if not for Covid? (It was as least sold to the public that way right)
- Do you think now that it's been done once that it will happen again?
These politicians are quick to take new powers and slow to give them back.
This include ANY record, or just the violent ones? Curious how you would interpret a "disorderly conduct" charge/conviction, considering it's an umbrella term used by police to slap on any individual they deem difficult.
For example, I had a conviction of disorderly conduct which resulted in a fine. All because I refused to ID myself to a LEO that demanded I comply even though I was under no suspicion of a crime or that I was about to commit one. Additionally I do not reside in a stop & identify state.
How would you interpret that if I were to submit a rental application and my other prerequisites were in line (mid tier job, mid 700 credit score)?
How do you buy a car on a loan for example?
It's not perfect but unlike both your examples it isn't based on things that could be consider political. You can't lower your credit score by attending a protest for example. Or posting things for or against causes on the internet.
I am just honestly wondering what else is our there? It has always seemed like a tool that can be used by both individuals and lenders.
A car loan is collateralized so I don't really see what's complicated.
That's a pretty serious offense and it's extremely uncommon over here.
Sure, repossession can be costly but debt collection agencies will make your life hell very quickly, it's not something you can drag for years without big consequences.
The key values used by banks is essentially two ratios, loan vs collateral, and monthly loan payments vs monthly income; so the question isn't about whether to grant a loan but what is the maximum amount they are willing to risk given your income.
When the stock price dropped and started to make margin calls on the loans, some of the banks had to take a loss as there wasn't enough liquidity to sell into.
banks don't like to be in this sort of situation - in this particular case, the banks just didn't do enough due diligence presumably.
Maybe local bank managers having connections to the local community, and actually knowing their customers, rather than sitting behind opaque algorithms and data brokers, wasn't entirely a bad thing after all.
It would go a long way.
Can we at least make the government take a financially literacy class first? It is the biggest debtor in the world.
Having debt isn't the problem. Defaulting on it is, and the government doesn't do that.
If an individual goes broke wracking up medical debt, "Too bad. You should have been more economically useful." If the government goes broke, "Uh, it's no problem."
I get it. They were trained to despise individuals and worship institutions. They stop singing this song when they get edged out of the system though. I've met many middle aged programmers that gave up all hope in life because they lost their economic value.
Hope you people aren't one of them.
Cold ideological dismissals like this that ignore what is actually happening to people are making me increasingly bitter. It's almost like you're saying "Let them eat cake."
No sense in getting offended at the idea someone is saying you’re dishonest.
It is offensive when "unforeseen circumstances" is casted as "dishonesty." This kind of thing is routinely done to criminalize the poor.
If the court system worked at all, you could just pull court records checking for judgments saying the applicant defaulted on a loan.
That won't work because courts are too expensive, and also because it's less profitable than extortion via debt collection.
Also, it would prevent the banks from creating protection rackets (no house for you unless you have and use credit cards!), or being "accidentally" racist/classist/etc (oops! The algorithm says your type need not apply. Our hands are tied.)
Especially when the only reason that credit line was taken out was because they leaked your SSN and DOB during a period when their CISO was a music major.
But the FCRA protects these liars from consequences, so here we are.
Drivers don't like passengers like me, who want to get into a car, put on a seatbelt, and have the driver keep their eyes on the road until the destination.
Very basic housing should be free. Single payer healthcare should be the standard. Basic income should be provided. As we move towards a more automated society, there are going to be a ton of angry unemployed people with nothing to do but focus their anger on something else.
Please publish where you have developed and built all this free housing so that everyone that wants to live there can enjoy this right.
I am NOT saying we should build this free housing in one area and stick people there: (see the many failed public housing attempts) But there are more options available than everyone getting free housing in the bay area, CA.
I'm not sure why you think that; I never said that anywhere.
> But there are more options available than everyone getting free housing in the bay area, CA.
Cool, are you going to volunteer to leave your hometown and family to live in this free basic housing? Plenty of land in west Texas if you need space.
Ok, cool. Not what we're discussing though.
I understand it's a service paid for by society. I think it's great that you think that too! A service provided by society is not a right though. I'm all for creating a lot of affordable housing, as soon as we define what "basic" means, and agree to who will pay for it (likely us citizens through taxes) and what sort of requirements there will be to be allotted some of this "free" housing.
If we take "basic housing is a right" off the table and replace it with "as a wealthy society, we should levy taxes to provide housing to everyone that wants housing," that's something I can get behind.
Stop calling it free. Stop calling it a right. Then I'm on board
Also if you are concerned about affordable housing, I hope you paid attention to the line in the article that talked about big business moving into the rental scene buying up properties and charging more for rent than mom and pop landlords. Want to know what caused the largest shift of property ownership from small landlords to big conglomerates? All the COVID evection restrictions. We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come.
I feel sympathetic with the folks who are trying to buy into the housing market now. I could not reasonably afford my own house if I were buying it today, and I make pretty good money. There will be a reckoning at some point, this obviously cannot continue indefinitely.
> We will be dealing with the fallout of the mass wealth theft/consolidation from COVID restrictions for decades to come.
Yet another example of the road to hell being paved with good intentions. "Seemed like a good idea at the time!"
In my country the majority (~60%) of citizens own their own home so the majority of people are riding the gravy train of skyrocketing prices while the others get priced out of home ownership. The reckoning may not happen until a sizeable majority is priced out of home ownership, and that may not happen for a decade.
On the global stage I know I am very lucky when it comes to my lifestyle, but it is hard not to feel animosity for the generations which came before you and had it so easy when it comes to property ownership. The same owners who are now benefiting from your inability to afford a stable place to raise a family.
I firmly believe that the new Singapore model for taxing non-primary residences is necessary to level the playing field between those who just want to have somewhere to raise a family and those who have billions in their pockets. I don’t believe my country has the will to enact such drastic changes so I am assuming the unaffordability crisis will go on for much longer than necessary.
Even if I believed your pedestrian summary of the state of things, I fail to see any substance in this post aside from “Bad things happen because of policies that I don’t like. Fixing anything for anybody is not interesting to me because I haven’t yet attained heartfelt apologies from people who don’t share my politics.”
https://en.wikipedia.org/wiki/Schufa
It’s proprietary, cost money, is almost impossible to avoid if you want to rent an apartment in Germany. And they have been found to have A LOT of incomplete, outdated, or wrong data.
That's what we really need to do--extend the FCRA to cover all companies that gather external data to make decisions that are important to the person. Apply the same standards to all forms of background check--it waddles and quacks, the FCRA applies.
I would also change the once-a-year check to say once-a-day.
The fundamental problem is that the economics of all background-check companies are skewed towards false denials. The companies are happy to have dodged a bullet (bad renter, bad job applicant etc), nothing tells them that the bullet wasn't real. (And what of those of us whose backgrounds aren't exactly verifiable? I have more than 20 years of employment at companies that no longer exist.)
https://www.ftc.gov/business-guidance/blog/2016/11/screening...
>Background screening reports provided by your company are covered by the FCRA if they’re used to help decide eligibility for housing and include information “bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.”
So essentially the first meth addicted child molester who scraped by 2x your rental price in the last month can move in and never be evicted.
It's really great how NPR and ProPublica keep banging on about how unfair it is for anyone who owns anything to request anything of the people they rent to. What about how unfair it is to people like me who worked their asses off to buy a house and want to take care of it? It took me 25 years of work to afford a home. No 22 year old anarchist, bless your soul because I was one, is going to explain to me why I don't deserve it. It's the only property I own. This is why I'm just allowing a friend to live for free in my house while I'm out of the country for the next year, and soaking up the lost rent rather than soaking up potential legal bills and damage. But if things continue this way, I'll sell it to a willing idiot, and everyone here who advocated for this communist shit can enjoy the hell hole they've created for themselves.
FWIW: I always preferred to rent from professional landlords who owned a 4-5 complexes. Small-time landlords were always too amateur; and large corporate landlords delivered poor value. (IE, I lived in a corporate "luxury" apartment that had junky appliances.)
I know the article didn't explain if she asked to leave early; but if you have a lease, you can't just "up and leave" when you want. That requires negotiating with the landlord.
I live in Canada, where health care is covered, but dental isn’t. I had an injury several years ago which effectively destroyed many of my teeth, and ended up more than $15,000 into debt over it. I couldn’t make my payments on time for probably a couple years, and even though I finally managed to pay it off, it’s a black spot on my credit history for years to come - through absolutely no fault of my own.
This is infinitely worse in the USA, where the pathetic government that promises ‘freedom’ somehow doesn’t get that universal health care is a huge part of that.
I have family in the USA who got cancer.
Due to the absolutely bullshit health care system there, they are completely, utterly, financially devastated.
This family member had to be stopped from committing suicide when they found out just how much it would cost to save their life. That they would have to declare bankruptcy. That their credit score, and anything they'd ever need to do with money in the rest of their life - was completely gone.
It’s literally why I don’t live in the USA anymore. Scared me shitless.
You know what’s way - way worse than getting cancer?
Having to pay more than you could ever possibly afford for getting cancer.
Good luck getting a house after that, thanks to this bullshit.
According to credit scores - you should be held personally responsible for the fact that you got that disease.
Literally - how dare you get cancer. Enjoy having a shit credit score for the rest of however long you have to live.
The fact is - people need places to live, and if people have poor credit - especially if it’s of no fault of their own, but due to the bullshit system we live in that has no room for genuine accidents - how the hell are these people ever supposed to find a place to live?
I had to go out of my way - and pretty much pay extra - to find a landlady here in Toronto even willing to give me enough understanding to rent a place - and I make about $100k CDN a year.
I had to explain the whole situation, come up with documents to prove that’s what actually happened, and even then I was lucky to get a place to rent. I can’t imagine what it’s like for people who might have half or less of my income and poor credit through no fault of their own but are looking for a place to live.
Fuck the credit score system. It is an abhorrent human rights issue - is simply disgusting and disturbing - and only serves the rich.
A credit score does not take into account for humanness.
It’s the nuke of weaponized capitalism, yet another tool to keep the rich more rich and the poor more poor.
May the greedy miscreants who developed and enforce this wicked system rot in a special kind of hell.
Is the credit score system imperfect? Yes. Is it based on a mountain of bullshit? No.
(That said, I’m really sorry to hear about the tragedies that have impacted you and your family. I don’t think it’s fair that we don’t collectively insure one another for accidents, either.)
Especially, if; as you agree - it has no room for mistakes?
We mustn’t let perfection be the enemy of continuous improvement.
Maybe there is a regulatory aspect I don't understand that restricts analysis of closed accounts or something. Barring that Occam's razor would suggest that it hurts your credit score because paying off a loan early deprives the lender of interest which makes you a less appealing candidate at a given rate. After all, credit scores are a product for lenders, if it didn't do this they might go to another bureau that does.
Fundamentally the opacity of it all is a problem in its own right. We don't have any real insight into how the calculations are made but they dictate huge amounts of our lives.
... and your score goes down by 20 or 40 points?
Medical debt is not weighted the same as consumer debt[1] and is not as ruinous as defaulting on a loan or credit card for many lenders. The newer scoring models also ignore paid collections. So, for many lenders there is no 'black spot' since you have paid it off. Even before the newer models came out, I knew people who ignored massive medical debt/collections when deciding to grant loan and rental approvals or not.
>and only serves the rich.
It serves the people who understand that a loan or credit card needs to be paid back per the terms of the contract. There are also financially educated/knowledgeable 'poor' people who understand this and have a good-excellent credit score, just as there are 'rich' people who never learned financial responsibility and have a terrible credit score. It serves the person with a good+ score.
This includes medical bills that are "absolutely no fault of [their] own", there are services that can help with payments, almost all lenders will work with someone on repayment if an effort is made to care to do so. Also, politics/opinions aside, refusing treatment or medical travel to a cheaper country is an option. Not a great one, but still an option.
[1]:https://www.experian.com/blogs/ask-experian/medical-debt-and...