Comment by bmmayer1 | Hacker News Reader

Comment by bmmayer1 | Hacker News Reader

Parent Full thread

This comment doesn't stand up to scrutiny. There aren't a lot of available statistics on how wealthy landlords are, but for instance, according to a San Francisco property owners survey[1], median income for landlords is $90k, only 15% higher than the overall San Francisco median income ($77k). And of course a software engineer's median income in San Francisco is higher ($92k). Either way, there is little evidence that in one of the hottest real estate markets in the country, landlords would be 'substantially' richer than tenants on average.

Of course, income is only a component of wealth--no doubt the property owned is worth quite a bit--but, according to the same report, at least 75% of these landlords are still paying mortgages on their properties, and over 10% spend more than their rental income on their mortgages!

Since most landlords borrow money to buy property, then attempt to sell access to that property profitably over time, they are more like entrepreneurs than the land baron 'monopolists' portrayed by the Churchill quote above.

This isn't wealth redistribution in any direction. It's a trade. Renters get access to property without having to own it. Owners, if they are smart and/or lucky, can profit from property, but of course take a substantially larger up front risk.

And, I would be remiss if I didn't point out that Winston Churchill was from one of the wealthiest British aristocratic (read: rentier landowning) families and was born in the family home, this palace[2].

[1] http://sfrb.org/sites/default/files/FileCenter/Documents/188... [2] https://en.wikipedia.org/wiki/Blenheim_Palace

You didn't challenge the statement to GP made, but one he didn't make. He didn't say that landlords are vastly richer than workers. He said that landlords make little or no contribution to the general welfare.

Your own comment points out that in SF, the median landlord makes roughly what the median software developer makes. But a software developer in the Bay Area is one of the most productive workers on the planet, with a literally unparalleled opportunity to generate value, both for the company he works for, and for global society/consumers in general. In contrast, the landlord does not produce anything.

Renting is a service, of course they don't produce anything. If they weren't providing a service people found valuable (i.e. improving their general welfare) much fewer people would be renting.

The landlord produces a place for people to stay. Why is that "nothing"? I've rented. I didn't like paying rent every month, but it beat sleeping in my car.

Do you think the landlord should provide apartments for free?

Returning to Churchill's statement: Every one of those improvements improves every landowner, whether a landlord or a homeowner. For every one of them, they have done nothing - except pay taxes. (But note that the landlords pay taxes too.) So why single out the landlords?

You're ignoring the economic choices not taken.

The investor capitalized the builder, and the builder constructed the housing, and the lender capitalized the landlord, and the landlord bought the building, all because they knew that people need to have a place to exist, and that the spot they picked was a likely spot.

If renting were somehow not allowed, none of them would have any use for that spot. There would not be that same building there, but there is the possibility that there would be a 12 bed + 1 outhouse shanty/bunkhouse there instead, which would also be better than sleeping in your car, but only just barely. And the cost of your kip would be much less.

There is also the possibility that instead of just one 3200 sq.ft. house with grass-covered yard, there would be a low-rise tenement-style condo-plex with 8 units at 1600 sq.ft. each, with limited covered parking and no lawn. With enough of those on the same street, there might also be a bus stop nearby, and competition among local utilities.

But by defining that plot as one place for one family to live, the landlord and his financiers has ensured that no matter how big it is, it is too expensive for the renter to easily buy it. If the landlord did not exist, that plot would have to be divided into as many places as is necessary to bring the price down to what those who will be occupying those places can afford to pay each other to stay out of someone else's spot.

Why are landlords under some special obligation to make a contribution to the general welfare any more than a plumber is, or a software engineer?

That said, surely renting a property that is unaffordable to own by the renter provides social utility though?

Because the community has agreed to honor their exclusive real property claim, even if another person might have made better use of it.

Property owners do occasionally have their property seized by the community that it may be used more appropriately to the community's desires. It may be by eminent domain, or civil forfeiture, or adverse possession, or by regulatory taking, or some other means, but it is more likely to happen to those that do not actively demonstrate value to their community (perhaps in the form of financially supporting the local lawyering economy, if nothing else) than those who do not.

It's a fact of existence from the Pauli Exclusion Principle all the way up to "wherever you go, there you are" that everything has to have a place to be. You can't have a general welfare without a place to put it, and wherever you put it has to be adjacent to other places.

So that special obligation is basically to not abuse the inevitability of adjacency and the tyranny of distance in a way that is too obviously selfish.

I'm having trouble understanding your comment. The entire principle of private property ownership on which (arguably) our entire civil society and economy is based is that one may use said property as one wishes. It doesn't really matter if another person might have made "better use of it". The only opinion that matters on how the property might best be used is the person who owns it. It's not a community decision, excepting the narrow cases you outlined.

Yes, if only history could stop in 1776. Then we can all make overarching general comments on how things are and will forever be. 240 years are a joke.

Private individual ownership has never been absolute for anyone, except for those despots and monarchs with a large and loyal military. There have always been ways for a large group of people to strip an intransigent and selfish person of his property, and some of those ways don't involve murdering him in a public and humiliating way. If nothing else, a series of successful civil suits can force the transfer of real property to the plaintiffs.

Eminent domain is one establishment-sanctioned way in the US, wherein the owner is forced to sell to the government. The purpose is supposedly to enable construction of public infrastructure such that private owners cannot obstruct for personal profit, but the controversial Kelo v. New London case involved the use of eminent domain to transfer property from one private party to another.

If your style of ownership is a clear burden on the surrounding community, they will eventually strip you of your property. But the bar is set rather low, even for the minorities in a racist community. As long as you pay your property taxes, obey the most literal interpretation of the law, and don't allow the property to look too bad from the curb, people will generally leave you alone.

So the duty of the landlord is to not be such an enormous ass that the community notices it, and comes after them. It isn't difficult, let some people can't even manage that.

The point is that the landlord becomes wealthier through improvements to the area, for which s/he is not responsible. i.e. they are capturing public investment.

Put concretely, my taxes go towards upgrading the Overground Line which improves the area I live in which increases my rent. I have paid for this improvement twice, my landlord, zero times (their get back their taxes through uplift in property value).

Solution - as others have pointed out - is Land Value Tax.

My landlord takes care of their properties and the area around them increases in value partially due to that. Surely they have some responsibility?

The landlord has to pay higher property taxes as their property becomes more valuable, which often go in turn to paying for those improvements. It's not a one-way transfer, there's a quid pro quo. Now you may argue landlords get more than they give, but that's an entirely different point.

True in most places. California's prop 13 caps property value increases for tax purposes to 2% per year. This includes land held by corporations, not just grandma.

I don't think medians are the right thing to look at here. The majority of individual landlords will be small-time, but it's the behavior and impact of the largest landlords that is important.

Reply on news.ycombinator.com