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Comment by galleywest200 | Hacker News Reader

I think its important to distinguish the types of landlords. I rent my house, and the owner is just an old couple across the street. Those two are not part of the problem.

Now the property management company doing the lease paperwork for the couple, now they are part of the problem.

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Individual landlords can be moral, upstanding people, and the incentive structure around deriving your income from rents can systemically produce inhumane outcomes. They are not mutually exclusive.

>> the incentive structure around deriving your income from rents can systemically produce inhumane outcomes

It's also the only thing that produces new construction. Properly regulated and harnessed, the incentives are necessary to draw capital to building.

Exactly! And also the rest of the benefits of speculation apply to housing just as much as anything https://en.wikipedia.org/wiki/Speculation#Economic_benefits

Namely, real estate investors provide liquidity to the market, bringing price stability and absorbing risk from developers and homeowners.

From that same section, though:

> On the other hand, as more speculators participate in a market, underlying real demand and supply can diminish compared to trading volume, and prices may become distorted.[8]

Note that I said "properly regulated and harnessed". The creation of bubbles is a temptation for both speculators and governments.

Specifically, derivatives and futures based on real estate should be treated by governments as toxic / illegal speculation. In fact, banning bad money from bubble-making practices amplifies the incentive for small landlords to improve and build living space on property.

Yup. Your comment seemed to present advantages of speculation without saying it’s a pure good. The comment I replied to seemed more pure market.

> It's also the only thing that produces new construction

It's not, though. People constructed housing for thousands of years without landlords. There are plenty of ways to fund constructions without markets. We have built a society that prefers to organize it that way, but that is also a society with more vacant units than there are homeless, where it is _normal_ to spend 50% or more of one's income on rent. Those outcomes, I argue, are inhumane, but also, maybe more controversially, avoidable in a system organized around something other than profit.

I'm just starting being a landlord and I am one bad tenant away from copying the inhumane practices associated with companies that deal with a plethora of bad tenants. I purchase my home last year and I am renting below cost.

If everyone behaves nicely, it works out well for everyone. But if a party doesn't follow the agreement, everyone is in for a world of hurt.

If the landlord wasn’t part of the problem, they wouldn’t wouldn’t be delegating management to a management firm that is (there may or may not be management firms that aren’t, but there are definitely landlords that manage properties themselves that aren’t.)

your landlord across the street isnt the strongest counterargument actually

those are the local forces gambling on the highest possible rent - which they could have done anytime whether richer people were in town or not - , and attention should be directed at them to alleviate price pressures

>> attention should be directed at them to alleviate price pressures

Why is that the responsibility of small landlords who rent out a spare bedroom or second house? That's like saying it should be on independent gas stations to alleviate high oil prices.

Its not the responsibility, its an observation that they are more susceptible to peer pressure while having been largely overlooked as a contributor to housing price pressure

>> more susceptible to peer pressure

This implies that one should pressure people to the degree that you can pressure them, rather than to the degree that they're in the wrong. Which is pretty unjust.

I'm not familiar with that reading of it, and I have no opinion on the existence of that side effect.

My observation is that they have an outsized influence on housing price pressure, while they currently fly under the radar from local disdain about the influences on housing price pressure.

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