Eviction Moratorium Poses Nightmare Scenario for Small Landlord
Landlords are often portrayed as mutton-gobbling land barons both in the media and the comment section on Hacker News. I know a little bit about both UK and US rental markets and have a slightly different perspective.<p>The common threads are that any economic harm which befalls a landlord is something they should have been prepared for, and that they&#x27;re better off than most people because they have a second property.[1] The frequent corollary of this is that tenants are justified in taking advantage of landlords wherever possible, because the system is somehow unfair on them.[2]<p>In part this is because rental units are an asset class leveraged by both sophisticated and unsophisticated investors. Multi-family home operators with huge balance sheets and economic resilience are one part of the equation, but a lot of rental stock is in the hands of folks like us.<p>Which is to say: they&#x27;re consumers. They certainly understand risk and cashflow through the simplistic lens of voids and arrears, but what we&#x27;re seeing here is analogous to the suspension of trading on a stock market, or a massive breach of MMMR in calling a short. It&#x27;s not a simple case of &quot;you may lose a little profit&quot;, it&#x27;s &quot;the rules of the game have been changed in a way nobody could have predicted.&quot;<p>If you don&#x27;t believe tenants ought to have seen this coming, then there&#x27;s really no reason to believe landlords should have, either.<p>It&#x27;s forgivable that policymakers have screwed this up, but it should be simple to correct: banks have sufficient liquidity (and the hope of a bailout if they don&#x27;t) to withstand the immediate shock. Therefore renters who can demonstrate that they are affected by coronavirus should receive clemency from their landlords, who should receive clemency from their lender, who should receive clemency from the government if required.<p>(There is an uncomfortable reality that keeping folks in unproductive jobs is not all that useful, so furlough schemes and other economic relief for those impacted by coronavirus must end in order to force the affected portion of the workforce into productivity, but that&#x27;s another conversation for another time.)<p>The ire directed at landlords also often supposes that they are responsible for high rents, and usually this is based on the premise that if they sold their non-owner occupied properties, the excess liquidity would reduce house prices and enable more people to move from renting to home ownership. I have never seen a single study which supports the view that landlords do anything other than provide a necessary service at a price the market bears. Responsibility rests with local authorities and the federal government to create affordable homes and combat the fact that, for example, the United Kingdom has set targets for the creation of new houses for more than 40 years, and has failed to hit them each year for the last 40. They acknowledge the solution to the problem (introducing affordable homes into the market, rather than forcing landlords to sell - a carrot, not a stick which benefits some consumers and hurts others), but do not deliver.<p>I&#x27;ll nope out of this thread if someone mentions rent controls.<p>[1] <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=24079791" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=24079791</a>
[2] <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;user?id=throwaway2245" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;user?id=throwaway2245</a>