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Comment by claudeganon | Hacker News Reader

The idea that landlords should be bailed out in any fashion seems folly to the extreme and I’m glad to see it argued against here. Collecting rents from people without the capital to own housing, in addition to increases in land value, is about as textbook an example of parasitism as one could imagine. Let them all take a bath and keep people housed.

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For rental properties in Australia landlords can 'negative gear' the losses against other income (salary for example). So a common ploy is to buy a house where the mortgage payments are greater than the income (rent) and claim a deduction from salary. The argument made for its validity is that property owners are taking a risk by buying property - property can go down in value, however everything is being done by the govt at the moment to keep rent being paid, so the risk isn't real.

Not only that by having a large number of people buying rental properties it pushes out first home buyers who are forced to rent. Its effectively a wealth transfer from the young to the old who were lucky enough to be around when house prices were cheaper. Not only that, foreign investors (mainly chinese) are forcing up entry level apartment prices, and extracting rent from them.

As well, because a lot of business owners have a mortgage on their house to keep their business going, house prices can't be allowed to drop because it will have a knock on effect, and drag the businesses down with it.

The whole system has been propped up by increased immigration creating demand on housing, this has been government policy for some time. Now there are no immigrants and all the tourists are leaving, its just a matter of time.

The problem is that it’s not folly to those who own the land, who are also typically in a better position to influence this kind of policy.

Is your definition of landlord also includes mom and pop who only own 1 property (on which they rent some of the rooms out)?

Yes?

Can you explain why this is fair? I might misunderstood your point.

Yes.

That sounds reasonable, but even this little bit causes wealth transfer by setting home ownership just a little bit more off limits to the majority by increasing the supply of slightly too cheap rooms. Thus creating an incentive to the wider more moneyed classes to increase demand on the stock of housing. So while the language used is evokative, the reality is, at scale, all those mom's and pops end up being a very large and powerful group with aligned interests, whose actions also enable even bigger players.

I’m not sure I understand. If I were in their situation I won’t want that to be applied to me. What about you?

Of course people want money, everyone else does. But it doesn't matter what they feel, and it doesn't matter what I would feel, nor how you would feel. What matters is how those who are most vulnerable are treated. It's not fair to say, well those mom's and pops would be worse off, when the people who were already poor would be even worse off otherwise. When rent becomes involved, the system becomes pretty close to zero sum.

This is stale discussion already, but going by that logic, why would you sacrifice the majority mom and pop (average person who also lives paycheck to paycheck) for the minority poor? For example right now in NYC, most people find it really hard to buy their first home (not everyone is SWE in FAANG). It isn't like they have spare money to buy bigger toys. Once they worked hard for that why take that away?

I'm not saying not help the poor. We should treat our most vulnerable people, but economically I think it doesn't work out. The poor will always be there, the sick will always be there, the unemployed will always be there no matter what. Even if you help them, they will always be there.

Well, the poor need the most government handouts, and if you make the people who need the most government handouts have to give away most of their income in this manner, you've essentially just taken government debt and given it to the landlords. That doesn't make economic sense either.

As for discussion being stale, I have children, my ability to monitor threads is impaired. It might not be much of a discussion easily visible to outsiders, but we are both continuing to engage. Or will up to a point.

We are renting a small flat in London. We would barely afford a mortgage on it despite my income being twice of a nation average.My landlord bought it in 2001 for a price that is less than a half of its today's value,adjusted to inflation. So back then,you could buy it even with a modest income,while now you need to either own a business or be a director to be able to do so.

Due to lack of supply, a lot of such folks are in on the joke.

It's not the supply. It's not that London wasn't packed then and everyone not needed somewhere to live. All the craziness started when banks were allowed to jump on a mortgage bandwagon.It used to be only building societies before that. I'm commenting the UK situation,but I think it's similar in other countries too.

It is supply—restrictions on development, investors and AirBNB snapping up units, which increase vacancy rates.

Yes, low interest rates are also a big factor. Not sure if they have a mortgage tax deduction over there.

More folks want to live in the city these days as well, suburbs have lost some of their appeal. All these factors => very expensive housing.

But that’s not their fault to blame?

Who would you suggest should own the property instead of landlords? Should all housing be state owned instead?

Without bail outs we have the potential to see many more properties bought by the largest companies, who are often far harsher on tenants then small mom-and-pop owners.

>> Collecting rents from people without the capital to own housing, in addition to increases in land value, is about as textbook an example of parasitism as one could imagine. Let [the landlords] take a bath and keep people housed.

> Who would you suggest should own the property instead of landlords? Should all housing be state owned instead?

Why would state ownership be their first choice? There are obviously other, more moderate options that solve the landlord issue, such as having housing units owned by their occupants.

Where do new houses come from, if occupants aren't paying their share of the labor and material cost that went into them? There are always popular areas without enough space for everyone, who decides who gets to live there? Why single out my landlord to lose everything for choosing a different asset class than I did?

> Where do new houses come from, if occupants aren't paying their share of the labor and material cost that went into them?

Landlords are out to make a profit, so renters are obviously already "paying their share" of the cost of their unit in rent. If they weren't, their landlord would be broke.

> Why single out my landlord to lose everything for choosing a different asset class than I did?

Call it "creative destruction." Like the buggy-whip makers of old, maybe he made a bad choice about what business to get into?

I was replying to "housing units owned by their occupants". From then on who's paying who for what?

Buggy whips are obsolete, it doesn't matter if nobody makes more. Housing is not, and it's important to compensate people that provide it because that's very expensive.

> I was replying to "housing units owned by their occupants". From then on who's paying who for what?

Obviously their (perhaps new) owners, their occupants. It'd be exactly the same situation as owner-occupied housing today.

I don't know what's so hard about this to understand.

You need a reasonable financial buffer (or at least good credit) to be a homeowner to cover the large expenses that invariably come up. If you're not handy and need to call professionals for every minor repair--well, though service calls will add up quick.

Sometimes people need to change their housing circumstances in a hurry (e.g. bad break up or bad neighbor) and negotiating two real-estate transactions would be time consuming.

In short, there are lots of good reasons people don't want the burden of being a home-owner, but still need a place to live. Someone has to own and be responsible for those places.

Wait, I'm stuck with the mortgage indefinitely in your scenario? That's not a solution, that is the problem that landlords solve.

Because many people don't want the responsibilities of home ownership, or to be exposed to the risk. Also makes relocation a lot more complicated.

There's no particular guarantee that land value will continue to increase either, or that market rates for rentals will continue to increase.

Hacker news loves landlords. No faster way to get downvoted on here.

You do realize that many property owners would be rendered homeless if we did as you’re suggesting, right? Why should the owners lose everything they have so that their renters don’t (at least in the short term, until the property gets foreclosed on and everyone is homeless)?

It’s a pretty simple calculus. The damage caused by kicking everyone out of their homes far exceeds the landlords losing out, from both an individual and public health perspective.

> The political damage caused

Renters outnumber landlords. Easy peasy.

What part of this is calculus?

Maybe they should get a job?

They have a job. They rent property.

They should get a second job then. There's no excuse.

That’s not a job. That’s collecting money from someone else who has a job because you own something.

My parents own a small apartment building in a rural area - about 10 units. They’re there several times a week, and when someone moves out it can be days of work. Not to mention paperwork, collecting, occasionally needing to go to court, etc.

Don’t get me wrong, it’s decent money for the time they put in to it, but it also took a large investment and is absolutely a job. That deserves a payoff, just like any other.

Property Management (not the ownership part, but the operations part) is very much a job. And how much of a job depends upon the pool of properties, their level of maintenance/upkeep, and the tenants. Managing repairs, proactive maintenance, the finding and of vetting tenants, accounting, landscaping (if applicable) etc ... all add up.

They'll only lose the rental properties if they cannot afford them, sorry, but everyone will suffer. I'd rather have a landlord lose a property than the family inside being forced to the street. A landlord who cannot afford their own primary home because of this should not have been been so leveraged.

But you’re OK with the landlord being out on the street?

I think it's a moral essential for landlords to be homeless.

Why all landlords? Business arguably is also ruining the world and people’s lives, should all business owners also give their assets away for free in these trying times?

It’s a pure numbers game. There are less landlords than renters, so even if every landlord became homeless (unlikely), the consequences would still be orders of magnitude less damaging than if everyone was evicted.

A landlord who is 'out on the street' because they are no longer getting the rent from their investment property is in no different or worse a position than a worker who becomes homeless because they no longer have a job. A landlord with no back-up plan when rent doesn't come in is someone who made a very large and risky investment but did not consider the possible downside to that investment, and should be punished for their poor investment no differently than someone who takes out a loan to buy a risky stock.

I don't think that tenants have an indelible right to live where they are forever, and a land owner has the right to charge what they see fit for rent, but in these types of extenuating circumstances it would be shameful if landlords did not carry some if not the majority of the burden for their risky decisions.

That isn’t at all how it works much of the time. A lot of people rent their basements out because they can’t afford not to. And what do you think happens to the tenant when the landlord fails, regardless of circumstances, and loses their property? If you help the landlord in these extenuating circumstances, both landlord and tenant may keep their homes. If you favor the tenant at the expense of the landlord then both are likely to end up homeless, which makes no sense.

> A lot of people rent their basements out because they can’t afford not to.

Why do they have a mortgage they can’t afford?

Is this question rhetorical? You can’t imagine a situation where one can’t afford their mortgage? Job losses, life changes, catastrophe?

I'm not okay with anyone being on the street. Lots of people are losing their jobs and homes, and landlords shouldn't have any special protection from that effect than anyone else does.

yes

I think it's in the landowner's interest to not have a bunch of people with nothing to lose on the streets.

What does your property value look like after riots, looting, and societal breakdown? How much is your house worth burned down to the ground?

There’s plenty of steady states between looting and universal abundance in which the landlords have abused their power to trick tenants into accepting to remain in a parasitical relationship.

Yes that's right, they destroy the houses when landlords have to sell up. And then they remove the land. It's just a void.

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