Making it harder to evict drives up rents and worsens the housing crisis by restricting supply (why rent out a home or build units if the government can force you to let people live in it for free for well over a year) and by raising the bar for tenant selection (someone with poor credit or unconventional life history is a far greater risk if it will take months on end to get them out for not paying). I'm not a homeowner or a landlord, so I'm not exactly talking my book here.
I have family members that ARE landlords, and your description is totally correct:
1. Family members aren't "rich" by conventional standards, they worked for the government in mid-level jobs their whole lives and are retired.
2. They bought a house they planned to retire to, but then moved when they had issues with it. They planned to sell the house but due to timing issues (construction in the neighborhood) they wanted to wait, so temporarily rented it out.
3. They had bad timing: rented in early 2020, the renter paid 1 month of rent, and never after that. And I looked this guy up, he is a total freeloader, part of the blame is on my family for not better vetting him.
4. But the takeaway for small landlords is the government can basically appropriate your property whenever they want. So we're just left with giant landlords who can manage this risk, and which again leads to less available affordable housing and a further concentration of wealth.
Feel the pain of 2A advocates. Or 14A (P&I) advocates. Or 10A advocates. Or..
The nature of government/authority is they will always creatively push the boundaries of what they can permissibly do. There are amendments that are considered "second-class" and even worse. If nobody defends it, it will not enforce itself.
"[Recent 6th circuit decision against moratorium] deepens the circuit split with the badly flawed DC Circuit decision in favor of the moratorium, and thereby increases the likelihood that the issue will eventually reach the Supreme Court, if the moratorium is extended beyond its current July 31 expiration date. He is also right that the Supreme Court recently signaled that at least five of nine justices believe the moratorium is illegal, even as a narrow 5-4 majority also—for now—refused to block enforcement of the moratorium."
5th amendment bars expropriation except without compensation
I never considered the 3rd amendment to be a protection against that but I can see how soldiers randomly living in your home could be seen as government appropriation
I'm sympathetic to the bad timing, but that's just part of business. If I decided to do a start-up in 2001, right when the market crashed and funding dried up, well, bad timing--that's unfortunately how it goes. Your family members started a business, and running a business comes with risk. COVID (and the resulting rent moratoriums) was a black-swan event as far as risks go, but black-swan events exist. I'm very risk-averse, which is why I don't hang my shingle out there and start a business. I was once a landlord too, and got kind of screwed so I definitely will steer clear of that risky business in the future.
Black-swan events aren't just 'part of business' - they are generational events that upend the established norms of a market.
What happened here is that the government changed the rules (i.e. risk / reward profile) of a well-established market overnight with very little recourse for the players involved. It would be like the government removing FDIC insurance on savings accounts during a bank crisis.
> Your family members started a business, and running a business comes with risk.
My whole point is the government changed the rules in the middle of the game. Certainly bad tenants are always a risk, but not bad tenants that the government forces you to house for over a year.
What you're doing is like telling businesses that get nationalized by corrupt regimes "hey, business comes with risk". But my whole point is, eventually, nobody can accept those risks, so people choose not do to business, which actually makes things worse for everyone.
This seems to be countering the grandparent comment ("yes, but ..."), but I'm not seeing where you address the core point --- real estate has a known risk profile which the government has shown a willingness to upend without any stopgaps to help struggling landlords, and a natural consequence of that increased risk is that smaller landlords will be priced out.
The government also allowed for penalty free mortgage forbearance and has allotted significant amounts of money for rental assistance. They may even allow landlords to apply for that assistance on the behalf of their tenants.
For the above reasons. I struggle to be sympathetic to landlords. They were taken care of. And quite frankly, I think they are the least deserving of the assistance. Rent seekers and speculators should be last in line for help. When you buy an expensive house or a hot stock, things like pandemics, wars, and financial shocks are part of the risk profile.
My friends parents had a house they fixed up, lived in, then moved. They then rented the house out and at the start of the pandemic gave the tenant a few months without having to pay (after she lost her job).
After 6 months she agreed she was going to start paying (September 2020). She had a job, she had stimulus and she was buying nice TVs and stuff.
She never started paying again. The “government said she didn’t need to”.
My friends parents owe taxes, had to make repairs, have to pay insurance. They are out at least ten thousand dollars. At the same time, they are out of work.
What are they supposed to do? Sell to black rock, who are getting free funds from the FED (ie their taxes)?
Landowners are typically nice, small time people who are renting out an old home. They take care of everything the renter doesn’t want to and in return receive a fee. The landlord takes all the risk.
You’re basically saying “bankrupt the grandma and grandpa, because young people would rather buy meme stocks or TVs than pay rent” that’s not all cases, but the government did give out thousands in free money for the unemployed. The dominos by me in a rural community is offering $25/hr + tips and can’t find people to work. There are job openings everywhere and I think people can make it work.
There’s not a great solution, but saying the landlord is on the hook when the government is supposed to represent everyone is not reasonable.
Blame your local state government[1] for not allocating the billions in rental assistance funds they received from the federal government. In many cases they aren't allocating these funds (and once available, landlords refuse to sign up for them) because they come with a "just cause" eviction policy if they are used.
> In many cases they aren't allocating these funds (and once available, landlords refuse to sign up for them) because they come with a "just cause" eviction policy if they are used.
Source? The clause in NY's ERAP says you can't evict them without a good reason, which is really no change to a normal eviction. What's protected against is a landlord collecting the money and then evicting the tenant anyway. Going forward, if the tenant fails to pay, comply with the lease, or anything else that would normally incur an eviction, the landlord is free to start the eviction process.
I don't think 'most landlords' would refuse that deal. Additionally, again, based off of NY's program, this isn't really something the landlords sign up for. It's tenant initiated. A landlord can fill out the application on behalf of the tenant, but the tenant still needs to make attestations and provide information the landlord most likely doesn't have.
The housing market is BOOMING!!! They are probably sitting on a ton of equity. If they don't want to deal with the tenant, they can sell and put a nice chunk of cash in their pocket.
And the eviction moratorium does not remove the financial responsibility for past due rent. They can use threat of eviction after the the moratorium expires to force the tenant to pay past due rent. And if that doesn't work they can take the tenant to court. And as mentioned in my original comment, there will likely be financial assistance.
And to reiterate, I have zero sympathy for landlords who are essentially engaging in rent seeking and speculation (whether they realize it or not). If grandma and grandpa loose all of their money speculating on bitcoin, I will have zero sympathy for them. It is no different if they loose it all speculating on real estate. If they can't handle they downsides they should have put their money in a safer investment.
> And to reiterate, I have zero sympathy for landlords who are essentially engaging in rent seeking and speculation (whether they realize it or not). If grandma and grandpa loose all of their money speculating on bitcoin, I will have zero sympathy for them. It is no different if they loose it all speculating on real estate. If they can't handle they downsides they should have put their money in a safer investment.
If you feel that way, you should also be opposed to the moratorium. Those people were speculating they’d still have jobs (according to the fed, people’s greatest single asset). And they lost it. There should be no sympathy?
I’m in agreement there. Let’s just let individuals figure it out and I think all would be better off. At least better than the law not being applied evenly.
You can't sell if you can't evict the squatter. I know someone looking to buy a house in our area and they've had to pass on a number of the houses for this reason - a renter squatting in the house rent free with no end in sight. The sellers were desparate for almost any offer, but who would buy under those circumstances?
So, why aren't these people investing in such an obvious gold rush as you are making it to be.
The devil is in details. There is a some underlying theme in your comments that people just wake up one day and realize they're magically owning home, which they can rent. Wisdom is in understanding that this is just another business, you pay for what you use. The provider takes a profit.
If you don't want things this way there are other systems to try(communism), your country doesn't seem to like them. In fact you guys have fought wars over the last century against it.
You got what you asked for. What are you complaining about now?
Rent-seeking is nevertheless what landlords are doing via the collection of rent on a leased house, in the cast majority of cases.
If the rent being charged is in excess of market value, there is indisputably a surplus profit being pocketed by the owner, which thereby cancels any contribution back to society (quite the opposite, in fact, since the profit is directly off of the backs of tenants, who are typically not land / property owners).
However - even if the landlord is charging market rate, rent-seeking is still going on when the value of the property has appreciated (say, the whole neighborhood’s property values have gone up) and the owner is charging tenants in excess of what the owner is actually paying (which was negotiated at the time of purchase, when the value was lower) in order to make a profit where the owner has not contributed at least the same amount of value.
Since both of these tend to be the typical case in the landlord-tenant relationship - property value goes up, landlord accordingly raises rent in order to profit off of unearned income (which it is, at least according to US tax law), landlords are absolutely rent-seeking rent-seekers.
And while I sympathize with the plight of the retired granny and grampa landlords whose fatal flaw was trusting their no good, criminal-minded tenants too much - that does not hold a candle to the plight of the millions of working class Americans who will be sleeping in their cars because they didn’t have the foresight to become homeowners.
Making it harder to evict drives up incidents of bias. The equation is simple. If they pay, they stay. If they don't and I can get them out in 2 weeks and flip the unit, then whatever. Their security covers the month and it's in with the next tenant.
When it's harder to evict people start making judgement calls based on their perceptions. Some of those will be will be good judgment calls, but most won't be based on real data and good tenants will get passed up for bad reasons.
Oddly, AirBnb may be a winner in this. In many jurisdictions, short-term rentals (<30 days) do not afford the same tenant protections as long-term. I know a few small landlords who are switching their rentals to short-term so that they don't get screwed over again. Long-term rentals in desirable markets are likely to get even more expensive as supply is further reduced.
This literally happened in Argentina with the new renting law.
# of properties for sale went way up, # of properties for rent is way down, and to get approved for a rent you more or less have to agree to give out your first born son.
Then find them or build them housing, or distribute compensation to landlords temporarily. The government tried to distribute money but the poor implementation of that effort killed it before it started.
Laying the burden on landlords for more than a few weeks is unconscionable and inequitable. I wonder how many small landlords sold or lost previously profitable properties due to their cash flow being decimated.
The long term rental market is damaged; landlords will now be hesitant to rent long term without significant protection like larger deposit requirements or even rent for less time to avoid being susceptible to some of these government actions.
Will they? I've hardly noticed any changes in my rental market, now that things are normalizing.
I agree, government transferring the wealth indirectly would be better, but it's politically infeasible. Barring that, I'd rather help renters and hurt landlords than the other way around, since the latter are generally more stable.
Also, I don't think the effort to distribute money was really a failure, I think some states squandered it because they didn't want to give handouts, but it was likely one of the largest disburtions of direct aid in the history of the United States and coupled with other programs avoided an economic disaster that would have dwarfed 2008.
This takes time and wouldn’t be done in time for the pandemic
> or distribute compensation to landlords temporarily.
Millions of people lost income during the pandemic. Including the tenants were talking about who are at risk of eviction. Why should landlord income be any more sacred than any other income?
> Making it harder to evict drives up rents and worsens the housing crisis by restricting supply
Restrictive zoning and bespoke, political hurdles against development do far more to restrict supply. I'm not understanding how housing that is in use can be considered supply available for others. Say we make it easier to evict and change nothing else: one family is evicted so another can take the unit. I don't see how that improves anything if the goal is to get both families housed. All it seems to do is enable landlords to play arbitrage and charge the highest possible price.
> I'm not understanding how housing that is in use can be considered supply available for others.
Well, look at what's happening in Vancouver (and a few other places, but Vancouver is just the most obvious example), and it will easily explain your confusion.
When it becomes too costly and problematic to deal with renting out your property to someone else, people who bought it as an investment will just hold onto it and let it sit empty[0]. It got bad enough, Vancouver ended up introducing a vacant property tax.
>people who bought it as an investment will just hold onto it and let it sit empty
Exactly. We are starting to recognize that, as a society, buying a house as an investment and letting it sit empty is anti-social, violent behavior that should be shunned, discouraged and punished to the fullest extent.
I'm mostly thinking about construction or the introduction of vacant homes to the rental market. Maybe "new supply" makes more sense here. Obviously if you had a choice between two jurisdictions to build apartments, all other things being equal you would choose the one that will let you start eviction proceedings after six weeks of non-payment instead of six months. I agree it's not the biggest factor, but there is probably also some interaction between zoning restrictions and tenant-friendly laws: tenant-friendly laws might reduce the political power of multi-family developers by lowering their income and leaving them at the mercy of local courts, making them less able to influence zoning and development hurdles in their favor.
That would matter if it were possible to introduce more new homes to the market. In many if not all large American cities the government restricts new housing construction to the point that practically speaking the rental market could crash 10% and still support a doubling of the amount of new construction.
> I'm not understanding how housing that is in use can be considered supply available for others.
Have you been to the US?
From the amount of homeless and people living in tents and cars, AFAICT the expectation from this society is that people that can't afford rent for whatever reason should just live on the street.
>From the amount of homeless and people living in tents and cars, AFAICT the expectation from this society is that people that can't afford rent for whatever reason should just live on the street.
Have you ever been to the US other than the west coast?
There's the occasional tent in a discreet spot in a vacant lot or under a bridge and the occasional car being lived out of at a truck stop. Maybe if you got every person living on the streets (vs a shelter) in a city to pick the same spot you'd have enough to be described as a "camp". It's nothing like you see on the west coast where the homeless are practically everywhere.
I commute from Jersey City to NYC every day, and there are plenty of homeless on both sides of the river -- on the streets, under the highway, in the train stations, even standing on highways begging. Some of the homeless appear to be mentally ill; many others look like they would rather not be homeless but cannot seem to find a way out of poverty.
People living on the streets are not apparently more numerous in NYC, Boston, DC and the litany of other east coast and Midwest cities I have lived in or gone to for business than they are in London, Belfast and Antwerp (my limited first hand experience with western europe). You'll get the occasional tent somewhere, a car being lived out of in a parking lot, but it is by no means rampant. Heck, places that are known for being dumps, Chicago, Gary, Baltimore, Newark, etc. have far, far less homeless people on the streets than Seattle does.
Now, if you has said "Seattle, LA, San Fransisco" I would agree with you. Other than a few wealthy suburbs that actively kick out the homeless you'd have a hard time finding a park without a tent in it. But to frame rampant homelessness as a US problem or a liberal cities problem when it is almost purely a west coast problem is pure falsehood.
I'm comparing with Germany, Italy and Spain, which is where I've lived in Europe.
A group of 5 homeless people in each of the cities i've lived there would have been a huge group.
I've continuously encountered groups of 20-50 homeless people living in Boston, NYC, Miami, etc.
That's an order of magnitude more than what I consider "normal".
The west coast is another order of magnitude higher, with groups of 100s of homeless people around seattle, san francisco, san diego, LA, etc.
But that not makes the situation in the east coast cities i've visited "good". I consider the situation in the east coast "horrible", and in the west coast "war-zone like", when compared with the cities where I've lived in europe (madrid, barcelona, milan, munich, stuttgart, etc.).
>A group of 5 homeless people in each of the cities i've lived there would have been a huge group.
>I've continuously encountered groups of 20-50 homeless people living in Boston, NYC, Miami, etc.
This just just not true.
About the only way to get 5+ homeless people in one spot in any of those cities is to do something that specifically encourages them to show up, like a church giving out free lunches on a Sunday.
I can't speak to Miami but I've commuted into (like train and walking, not just the highway) NYC and Boston, the latter more recently, and the most I've ever encountered with any regularity is groups of two (usually a pair of dudes who seem to look after each other's stuff). There are some panhandling points on the subways but any one point won't be occupied every day. The density of homeless is low enough that doesn't happen.
Your description of Germany fits with my observation of NYC, Boston, Newark, New Haven, Baltimore, basically the Boston-DC corridor.
AFAICT the statistics for WA and MA are about the same as are CA and NY state after doubling the rate. I think the east coast has a very long history of aggressive policing policy that prevents most congregations of homeless people in most important/visible parts of cities.
Is exactly the implication of market-based housing.
I was hoping that my explanation would help to illustrate how facilitating eviction won't help with rising homelessness. How it alone can actually foster the growth of homelessness. "Supply" created by evicting tenants is only supply for the people that can afford the new price.
Many poor have the option (depending on location and availability) to live in homeless shleters. Even when given the option many choose to not live there. My understanding is the shelters often require no drugs or alchol and that is a deal breaker for some homeless people.
> My understanding is the shelters often require no drugs or alchol and that is a deal breaker for some homeless people.
My understanding is that many do not consider homless shelters a dignifying place to live in: no private space, no private room, etc.
They'd rather live in their care or their tent where they have some "me" space, than in a shelter.
In Germany, for example, the government would pay for your rent before letting you sleep on the street, car, or tent. They don't consider shelters a dignifying place to live either, and having a sane place to live is pretty much a pre-requisite for being able to turn your life around.
This seems like just another "America bad" post. When's the last time you walked the streets of Berlin at night? People sleeping on the streets all over.
> When's the last time you walked the streets of Berlin at night?
Half a decade ago, at least where I was there wasn't many homeless there, but the rents in Berlin have exploded since, so the situation might have changed there.
I think you're both right. Homeless shelters are are rough places. No privacy, hard to get good sleep, and your shit gets stolen.
But well over half of homeless people are addicts, and a lot of these folks will bail out of much nicer arrangements simply because they're not allowed to drink or do drugs.
Um... no? But there is a significant portion of the indigent population who are so resistant to change that they're effectively not treatable. Anyone who's worked with addicts knows this in their bones.
I know there are folks who say out loud that addicts "deserve" their fate, and by that they mean society has a prerogative to ignore or punish them.
I'm certainly not one of those, and I appreciate that you're not either, but I also wouldn't say that society is obligated to expend unlimited resources to accommodate people that refuse to take care of themselves.
Ensuring everyone is adequately housed is not an “expense of unlimited resources” in fact it is cheaper[1] than providing all the piecemeal, deliberately insufficient programs and enforcement schemes they are currently subjected to.
Just that easy huh? Housing-first programs work well for people who are willing to be housed and treated. But if the housing comes with any rules regarding substance abuse, many of these people will refuse it. Some others will agree but then destroy whatever housing they're given, or they revert to crime. These aren't exceptional cases; like I said before, somewhere around half of homeless people are addicts, and a signifanct proportion have severe mental health issues. We can throw as many resources as we want at trying to treat people who refuse treatment, and house people who continually sabotage themselves, and still end up in a situation where the streets (or prison) remains the end game.
I've seen a lot of this first hand. I can see you have strong opinions, but I would encourage you to actually learn a bit about it, maybe volunteer at a shelter or with a treatment and placement organization.
Supportive housing reduces even extremely high risk, chronically homeless people's dependence on emergency services[1]. Your characterization of addicts as people inherently prone to crime and destruction and your continued hyperbole about "throwing as many resources as we want" is not grounded in reality. You are carrying a line of thinking "the streets (or prison) remains the end game" that closes off any opportunity for us to actually address the root causes of these problems. Of course interventions will not work in every individual case. What is at issue here is that we live in a system (market-based housing) that is structurally dependent on the existence of homelessness for growing profit.
Nowhere did I say or imply that homeless people are "inherently" anything, and I never said or implied that a problem "cannot be solved". Quite the opposite, I'll assert that housing-first plus treatment is in fact a permanent solution for many indigent people, and I wholeheartedly support it.
In your apparent lack of experience, you're strawmanning any argument that doesn't align with your opinions.
And you also apparently forgot to read the study you cited, because it supports exactly what I've been saying: fourteen percent of their participants could not be kept in their intensive housing+treatment program. Fourteen percent is a hell of a lot better than the usual two-thirds, but that's still a whole lot of people that we don't know how to help, no matter how many resources we throw at them. I know people just like that, even if you refuse to acknowledge their existence, and I don't pretend to have the answers. It's a hard, hard problem.
How about this: since you seem to have this figured out, write up your proposal for a permanent, humane solution for that fourteen percent. I'm sure the folks who've spent careers trying to figure it out would love to know what you think they're doing wrong. Go get em tiger!
You can and should avoid personal attacks and assumptions about my experience. You have failed to provide evidence to support your ancedotes.
>I know people just like that, even if you refuse to acknowledge their existence, and I don't pretend to have the answers.
I am not refusing to acknowledge the existence of that cohort. You are moving the goalposts: saying that if we can not find a solution for those people specifically, then we can not address the structural deficiencies that lead to the movement of more people into homelessness. The data shows "the streets (or prison)" is not "the endgame" for the 86% that actually benefit from supportive housing.
The US does have some experience giving housing. There are various programs to help poor people get free / heavily subsidized housing. In some (all?) places in the US you need an address in order to qualify for such a program. Homeless shelters are supposed to be the short term solution to deal with that. It is not ideal, but they could stay in a homelss shelter for a a while and get an id, ssn card, address, etc. This allows them to qualify for low income housing.
There is also a shortage, in some areas, of low income housing. I am not sure what it is like in Germany but developers don't want to create low income housing since it tends to be treated poorly and increases crime in the area. How does Germany deal with that or are the German homeless better stewards of the place they live?
In Germany you just find an appartment to rent - any appartment - and the government foots the rent, heating, electricity, water, health insurance, etc. and gives you 400$ or so for food, booze, whatever (which is enough to live "safe").
It does not have to be an special "low income housing".
Wait so I could go to Germany, find an apartment that costs €10000 a month and the government would pay for it? Surely there is some kind of limit?
Also, in the US it is my understanding you don't have to go to low income housing, but non low income housing can reject you. Since people receiving money for housing do not tend to treat the housing well most landlords reject them. Why rent to somebody who is at an increased likelihood of damaging your place and won't have enough money to cover the damage?
> ince people receiving money for housing do not tend to treat the housing well most landlords reject them. Why rent to somebody who is at an increased likelihood of damaging your place and won't have enough money to cover the damage?
In Germany the government gives you the money, and you to the landlord. The landlord doesn't need to know where you got the money.
Having said that, many landlords will reject based on looks, which can be tough.
> Wait so I could go to Germany, find an apartment that costs €10000 a month and the government would pay for it? Surely there is some kind of limit?
The government collects the rent prices of the last 4 years on each area, and uses them to create tables per region / city, of the upper limits.
Depending on the city, that might allow you to live downtown, or force you into the suburbs.
There are single rooms < 50m2 for less than 680 EUR/month in munich. Not downtown, but not too far in the suburbs either. The prices there look ok for somebody without any assets nor income. Its not going to be luxurious, but it won't be crappy either. A university student might be living in worse conditions, which isn't bad for someone without income nor assets.
I think that article is accurate. Those are 2014 numbers, which is when Germany took 1 million of refugees, which are counted as "homeless" since they have no "home".
Refugees were initially moved into refugee camps, so you didn't see them in cities, and then they were and still are being slowly integrated.
Refugee camps are no place to for people to live, but if you are escaping from a war zone, they are better than staying in the war zone.
Requesting it isn't hard. I know many highly educated people that suddenly had no income or were evicted, e.g., due to loosing all "student benefits" right the same day they finished university, including housing, being evicted a couple of days later. They got Hartz IV benefits in a matter of hours, which paid for an apartment and gave them 400 EUR or so per month for food and basic stuff (you can live an ok-ish life with that if housing is covered).
But most homeless I saw in the streets in Germany, which you can actually just go and talk to, didn't want to receive any help from the state, had psychological problems, didn't want to receive medical attention, etc.
Due to how the German system for this works, it is actually super hard to help these people. Still, in a sense, the people that are homeless in Germany, is because at least in some way, they want to. Since not being homeless - with the exception of refugees - is as easy as going by an office, signing a sheet of paper, and the government pays for your rent, heating, water, electricity, internet, clothes, work training, healthcare and on top gives you 400 EUR that you can spend however you want (food, or just booze, etc.).
For the refugees... Germany is tight on housing, and new developments are slow, so being 1 million houses short (for 1% of the population), and then taking 1 million refugees on top, their access to housing is improving very slowly. I'd say they are free to apply for asylum somewhere else, but pretty much everywhere else the conditions are much worse for them.
---
For context, relative to Germany's population, the 1 million of refugees Germany took per capita would be similar to the US taking 4-5 million refugees, in a very short period of time. IIRC, the US took less than 20k refugees from a war-zone they are very responsible for. At least they are consistent: they don't care about their homeless, and they don't care about the homeless they create everywhere else in the world. Then they are surprised when the homeless that end up growing up in ISIS camps end up flying planes into their skyscrapers.
> Many poor have the option (depending on location and availability) to live in homeless shleters.
Homeless people don't "live" in shelters, they temporarily occupy them. Every morning the shelter kicks out the people that slept there and every evening people must queue to re-enter the shelter. Night-to-night, no one is guaranteed a bed.
This is not an "option" that enables meaningful participation in our economy and society nor does it facilitate the health and growth that is necessary for escaping poverty.
For example, it appears California is maintaining around 20% capacity utilization in shelters statewide on average.
Talk to the workers, and they'll tell you the main struggle is not running out of space, but getting homeless people in the door, because as you point out, shelter life sucks. You're absolutely right, one doesn't "live" in a shelter in any meaningful sense. They're not a permanent solution, and hardly even a temporary one.
I don't know why you're being downvoted for this, since that is exactly how the homeless shelters in LA's Skid Row operate: beds are night-to-night, and generally individuals must leave the shelters during the day (though some shelters make exceptions for families with children).
It isn't that clean cut of an option. Think of it more like a hostel, except you can't get a spot for a certain amount of time, you just need to show up on time and hope each night. Oh, and in addition to being dry, you have to worry about violence and theft.
Put another way, I don't think you would choose to stay in a shelter if you thought you'd be safe sleeping out doors instead.
Yeah, that’s the economics 101 answer. The same textbook will mention, in a footnote, that solving their system of equations will show that, at equilibrium, no company makes a profit.
To be slightly more specific in my criticism, there are plenty of economies with far more protections for tenants, even non-paying ones, and they tend to have similar or lower rates of homelessness.
The effect on tenant selection would also not manifest in the current situation, where it’s a measure used once for a rather rare situation. And even if landlords were to try to avoid such risks, it isn’t clear how that would differ from the status quo? Presumably, they have always chosen the more financially secure tenant when given a choice.
I just don't understand how the government postponed evictions without paying landlords. Can you just tell people they don't have to work while forcing companies to pay employees? Etc it's just bizarre. I feel for the people who needed these protections, but also recognize the people on the other side of the coin who have mortgages, utilities, etc.
It's much worse than you realize.
Most of these rentals are cash flows that pay the debt service on a loan. Which most of the time is securitized.
Those securities are packaged up (sound familiar...?) and sold to investors. Who are these investors you ask? Mostly institutional investors who are responsible for.. your retirement, pensions, etc. So it's not the "rich landlord" that doesn't get his rent money, it's your next door neighbor who is a retired teacher living off the teachers pension.
How are school districts going to escape their contractual obligations to unions? By going into bankruptcy? Where are you getting this information that school districts may seriously renege on pension contracts?
>>Where are you getting this information that school districts may seriously renege on pension contracts?
Pensions are either from taxes(Now who is going to pay that on properties where people stay for free?), or from profits made in investments in larger economy. Where do the profits come from? People who borrow money to run businesses(which now have no profits, and are running on losses because people stay for free).
Read that all in reverse. The effects will be felt all over the economy.
California decided to pay peoples' back rent recently. I'd guess the people that made sacrifices to keep paying rent instead of YOLOing it on call options are a bit miffed that they kept paying, but at least the California government is using some of its Fed pandemic money to pay the landlords that were forced to provide free housing.
Yeah, I wish the government would stop pumping up the moral hazard. Basically responsible action is punished and YOLOing is rewarded… until some unknown date when it suddenly isn’t.
Of the people who couldn't afford, how many do you think were YOLOing as opposed to just plain old screwed? Basically, why focus on fictional people that are living in a way you find morally dubious, instead of the very real people living below the poverty line and struggling to keep a roof over their head?
Anecdotally I've heard from plenty of people that they have strategies like putting minimum down on a house so they can walk away from it if the market crashes, as a lesson from 06-07. I suspect plenty of people learned lessons from the last crash about moral hazard and are doing whatever they can, for example not paying rent as long as possible just because they can, and then when the crash happens they'll buy a house or meanwhile it might be in Robinhood.
The poor aren't stupid. They can figure out schemes and strategies just as well as Wall Street, they just have less opportunity in most circumstances.
You're talking to people who can put a down payment on a house. I question if we're talking about the same groups of people. That wouldn't fit my own internal standard for 'poor', you know?
> how dare somebody be happy without working harder than I do
I'm all for people being happy and especially for people being more successful while working less, as long as the "less work" means higher effective productivity per hour, or a choice to be happy by some other means.
The problem is when policy transfers wealth from people who do work to people who don't. Then the person isn't happy because of their own choices or more effective or better chosen efforts, it's just a transfer of happiness from a responsible person to someone who may or may not be.
> The problem is when policy transfers wealth from people who do work to people who don't.
Why is it that this line is brought up when it might be a poor person getting a hand out but never when it is a rich person being given a hand out? You'd think the focus would be on stopping the ultra-wealthy from draining the rest of society with their out-sized influence, not weighing the hearts of the poor against a feather.
Oh I'm all for the rich not getting handouts either. I'm equally or more bothered by that.
Both have the effect of harming the professional, responsible, hard working, broader middle class.
And even hurting the professional, responsible, hard working, working poor. Because if you're working really hard for $10/hr and someone else is getting a handout, that means you have nothing extra to show for your efforts except exhaustion at the end of your day.
Its clear to me that you don't really have an idea about the scales involved here, one, because you seem ambivalent about which group bothers you more (hint, it should be the people causing the most harm, no this isn't the poor people on assistance), and two because you seem to think that the working poor are typically making as much as $10/hr. Got some real "how much does a banana cost" vibes here.
To be less acrimonious and more specific, when the people that Jimmy Johns employs require public assistance to make ends meet, who do you accuse of accepting hand outs? If it is the people in poverty I think you've gotten tricked into forgetting the people with the power to change things.
We funded the military to the tune of $800B but can't be bothered to keep people from falling into poverty due to inability to work (tenants) or bankruptcy (landlords).
Most other nations had much stronger safety nets than a few one-time payments of a few hundred dollars.
Military is one of the few jobs the federal government is Constitutionally obligated to perform. As another reply said, we spend more on welfare programs. Programs which the federal government is not Constitutionally permitted to do.
Taking from the populace and giving to specific individuals is not what was meant by that phrase. General welfare in the Constitution has never meant singling out individuals or groups and providing for them with public funds.
Alas, this argument is as old as the Constitution itself. "Madison asserted it amounted to no more than a reference to the other powers enumerated in the subsequent clauses of the same section; that, as the United States is a government of limited and enumerated powers, the grant of power to tax and spend for the general national welfare must be confined to the enumerated legislative fields committed to the Congress. In this view the phrase is mere tautology, for taxation and appropriation are or may be necessary incidents of the exercise of any of the enumerated legislative powers. Hamilton, on the other hand, maintained the clause confers a power separate and distinct from those later enumerated, is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States."[1]
Congress has the power to spend federal revenue. The responsibilities of Congress are explicitly defined in Section 8 of the Constitution. The first clause of Section 8 does include "provide for the common Defence and general Welfare of the United States". That is for the welfare of the Union, not the individual residents of states. None of the powers of Congress are to distribute funds to individuals with charity programs. In fact, for much of the nations history using public funds for charity was an abhorrent idea.
The US gov also has tons of equipment and is decades behind on infrastructure maintenance. It might not be for everyone but the US government could easily employ millions - as they do with the military.
If they had paid do the tenants still owe? If they do does the land lord get double the money if they pay or do they owe it back?
As a tenant what would stop me from not paying knowing my landlord still gets the check or work out a deal with them that I “don’t pay” and slide them 50% my rent in cash. It’s a tricky thing to tackle!
Lots of people lost income. The government also did things like postponement on mortgages and foreclosure. Are there cases of landlords losing their properties because they couldn’t evict someone during a (hopefully) once in a lifetime public health crisis?
The federal government has broad emergency powers to prevent the spread of infectious diseases, and for other kinds of emergencies like civil defense etc. The powers are extremely broad with language like "such actions as may be appropriate". You should note that the federal eviction orders side-step some legal issues because they don't absolve tenants of their rents, they just delayed their evictions if they don't pay them. So, technically the order hasn't impaired the rents owed to the landlords.
> The federal government has broad emergency powers to prevent the spread of infectious diseases
The supreme court said the CDC exceeded their statutory authority [0]:
> As he often does, Kavanaugh wrote to explain why he voted to allow the moratorium to remain in place. On the one hand, he said he agreed with the District Court that the CDC exceeded its statutory authority by issuing a nationwide moratorium.
> But, he said, because the CDC has said it will end the moratorium in a few weeks he would allow it to remain in place. He said the extra weeks will "allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds."
> Kavanaugh made clear however, that if the government were to extend the moratorium past July 31, it would need "specific congressional authorization."
So it sounds like the eviction moratorium was illegal.
> So, technically the order hasn't impaired the rents owed to the landlords.
It hasn't impaired them? Owning an obligation is much worse than owning the cash. If someone didn't pay rent for 9 months, landlords might never see that money. When they could evict, they might only eat 3 months of losses, now they will have 9-12 months of losses. The owners are basically paying "rent" (debt service), so freeloaders can live there.
If anything, a chunk of relief money to renters should have been debt vouchers to their landlords that can redeem them for cash from the gov't. The gov't can then get repaid through federal tax returns. (or forgive them as a benefit)
All over the Internet you'll see these predictions of doom and gloom as the moratorium on evictions and foreclosures ends. I honestly just don't buy it.
For one you have a certain number of actors who haven't paid their rent or mortgage simply because they haven't had to. This doesn't erase previous obligations but such people may be willing to walk away for other reasons or may attempt to negotiate with the owner or bank for a lower overall payment because that's better than the alternative.
For another, people still have to live somewhere. If anything you'll see the effect of this as a lowering of rents, which have otherwise soared. Residential landlords are generally less willing than commercial property owners to keep property vacant for extended periods to maintain the illusion of "market rate".
Lastly, unemployment is low and there's a lot of upward pressure on wages. This is not the environment where lots of people suddenly go homeless. This isn't the Great Depression. This isn't even 2008.
There are a lot of people who missed out on the spike in housing prices who are now rationalizing that result as this being a bubble about to burst.
Also, people who haven't been through this before have unrealistic views of the likelihood of actual doom and gloom scenarios. It happens less often than you think. If nothing else, governments have shown themselves more willing to intervene (for better or for worse) to stave off negative outcomes.
All while there is a continuing incentive for news organizations and elements of governments to keep people in a near-constant state of worry and uncertainty about something/anything.
It still seems crazy to me that the CDC has the authority to interfere with contracts between citizens regarding tenancy.
The right way to deal with this issue is via the lawmaking process. If they want to extend the moratorium, they can do it at anytime, they just have to go through the process.
> On Thursday, the White House confirmed it would let the moratorium expire because the supreme court said it would block additional extensions unless they were authorized by Congress.
The Supreme Court did vote 5-4 to leave the moratorium in place, but this NPR article provides more context:
> Justice Brett Kavanaugh, who cast the fifth and deciding vote, wrote in a concurring opinion that he voted not to end the eviction program only because it is set to expire on July 31, "and because those few weeks will allow for additional and more orderly distribution" of the funds that Congress appropriated to provide rental assistance to those in need due to the pandemic. He added, however, that in his view Congress would have to pass new and clearer legislation to extend the moratorium past July 31
Preventing the spread of a deadly disease (basically the job of the CDC) required people to stay home. Evictions stand in direct opposition to that goal; moreover, the economic shock of social distancing requirements would have greatly increased the number of evictions, and thus the moratorium was instated.
This is not rocket science. The question is not, "Did the CDC do the right thing?" or "Did the CDC have the right to do this thing?" but rather, "How long should the CDC be able to impose an emergency mandate like this before we insist on a more democratic approach?"
Like I said, the question that needs to be answered is how long can an emergency power be exercised before Congress or the courts step in.
In the early days of the country we had plenty of exercises of emergency powers. It was common for large numbers of buildings to be demolished in an attempt to prevent fires from spreading across cities, and nobody waited for a judge to rule on the acceptability and compensation requirements of such actions. There was never any doubt that if a foreign army was invading the President could immediately order the US army and state militias to respond, without waiting for Congress to vote on a declaration of war.
It is also worth remembering that when the constitution was drafted the prevailing theory of disease was the "miasma theory," and only a rudimentary understanding of disease containment that included some vague concepts of quarantine. Disease outbreaks would routinely create ghost towns all over the country. I have no doubt that the framers of constitution, had they understood disease as we understand it today, would have had no problem whatsoever with the CDC's emergency powers and would have focused on how Congress could regulate those emergency actions (as they did with the military).
Stay home underscore underscore resonated with the crowds in 2020. Now it's halfway through 2021, and the point many people here seem to be making is that having CDC in any part of the $60 billion dollar 1.5+ year long economic problem that was arbitrarily and forcefully shoved up the ass of one of the free market participants is kind of obscene.
In which case we would have had a wave of evictions and a spike in homelessness during the most difficult phase of the pandemic -- when we had no vaccines, limited testing capacity, and hospitals that were way over capacity with COVID patients. That would have left many more people dead and greatly reduced compliance with social distancing rules as desperate people (facing eviction or already evicted) skirted the rules in an attempt to make enough money to cover their rent. It would also have given people an easy excuse for dismissing the CDC's guidance in general, since the CDC would have been making a completely unreasonable demand ("stay home" is unreasonable if you need to leave your home to show up at work so you have enough money to make rent).
The CDC does not have the ability to pay everyone's rent. If we could have relied on state governments or Congress to bail out rent for people who were unable to make rent otherwise, maybe the moratorium would not have been necessary. Unfortunately, that is not even remotely something we can rely on -- we have spent over a year arguing about whether the "relief" checks, which would not even cover rent in many cities, are too generous.
Emergency powers are not a problem -- in an emergency there is no time for political parties to work out some kind of deal or for judges to review facts / legal arguments, and we allow certain government agencies to take emergency actions in such situations. Look at how long it took for the courts to overrule the CDC; if that is how long it took to react to emergencies we would be at the mercy of every fire, disease outbreak, hurricane, etc. The only relevant question to protecting democracy is, "How long should an emergency order remain in effect before the legislature or judiciary gets involved?"
Emergency powers have a tendency to not reliably get reined in.
For every time there is a functioning court override, there are ten post-9/11 border zone 4a exclusions that never get restored.
Anyone who lived through September 11th in the USA and isn't scared of emergency powers isn't paying attention. The CIA's torture prisons are still operating, for example.
We have boundaries in law for a reason, even in emergencies.
Emergency powers have no such tendency. There is a risk of that happening, but in reality the tendency is that emergency powers exercised in the USA are routinely reined in, often voluntarily by the agency wielding those powers. That is because the use of emergency powers is almost always at the local level, during a short-term local emergency.
We literally watched state and local government scale back their own application of emergency powers (in response to COVID) over the past few weeks.
I lived through 9/11 -- in fact I was in Lower Manhattan that very morning. I know all about the abuses of power that followed, but the fact is that many of those abuses were voted on by Congress and some have been renewed with one vote after another. It is a complete red herring.
The level of distrust in the government these days goes well beyond what the founders had in mind -- as evidenced by the fact that they created a government with an Executive, and gave the Executive powers that can clearly be executed without first consulting Congress or the Courts.
Maybe you're not making enough a distinction between the federal government and state/local governments. I think a lot of people are aggravated with the federal government usurping state voters.
However, the Supreme Court decided to punt and leave the moratorium in place since it is set to expire at the end of the month (https://www.npr.org/2021/06/29/1003268497/the-supreme-court-...) but warned that further extensions would need to go through Congress.
As far as the CDC goes they have pretty extensive powers, but they are limited to extreme situations. Having huge population evicted during a serious pandemic or disaster could make things significantly worse.
It's not like the CDC uses these rules all the time.
CDC has extreme powers to do things like indefinitely detain an infectious person or even do large scale quarantines. The tenancy issue is surprisingly mild by comparison.
> "The Sixth Circuit's ruling represents the sixth time a lower court has struck down the CDC's moratorium, with most decisions similarly criticizing the near-limitless powers the agency was trying to claim for itself."
“Three other federal courts have ruled in favor of the CDC's eviction moratorium, including a U.S. Court of Appeals for the D.C. Circuit ruling in June. That same month, the U.S. Supreme Court refused to take up an emergency petition to hear a challenge to the moratorium, although a majority of five justices did indicate that they considered the policy illegal.”
It’s less clear cut than your suggesting. The Supreme Court left the memorandum in place 5-4 while saying they would reject continuing it without congressional involvement. So, it looks like the CDC could do this on the next pandemic, just not for this one.
Sure, for COVID but not a hypothetical SARS-16 in 2046.
It’s a tough balancing act because retroactively judging their response to COVID is one thing, but nobody wants to tie their hands of a vastly worse disease shows up. Biologically a disease could be airborne and more infectious with a 20+% case fatality rate and a 1 month incubation period. At which point just about anything is on the table.
The US always seems to make simple things far FAR more complicated than needed.
They've created this giant eviction logjam that's making a mess of a lot of things.
Don't want folks evicted? Give poor folks money so they can pay their rent or move to a cheaper place and pay rent etc etc. As it is, folks are trapped in their one location, can't look for work elsewhere etc. Landlords are screwed etc. Courts are going to be jammed up. And now there is going to be a huge and complicated bureaucracy, filled with fraud to try to get money to landlords etc.
But that's what you get when one party uses extremist methods to prevent the US .gov from spending any money. And then the failure of government to achieve efficient action only further reinforces the extremist philosophy. It's really not hard to see the connection.
We aren't really borrowing. The debt will never be "paid back" as it's not really debt, it is a dilution of value. The more dollars we create and spend, the less each dollar is worth.
Whether it is borrowing or dilution is a petty point to quibble about. The government already consumes 42% of what the people create. The questions are:
Are you OK with you and your descendants being made more poor by government dilution?
How much of your earnings are you comfortable forking over to government under threat of force?
It's not just quibbling. Government spending spending on social programs is the exact same taking/dilution that occurs when the Federal Reserve gives a bunch of new money to the banks by declaring that interest rates shall be lower. The former receives intense scrutiny, while the latter is politically uncontested. Furthermore, government spending at least creates direct price inflation, whereas finance industry infusion mainly causes asset inflation and thus doesn't trigger the Fed's criteria to ever slow down.
If the government spent within its means of collected revenue on social programs there is no dilution only local price increases where funds are distributed due to increased demand of goods.
To say that Federal Reserve (a private entity) actions are politically uncontested is dishonest. There have been plenty of voices against the Fed in the minority. Kennedy tried to end the Fed and there have been numerous congressional proposals to audit the Fed. None have ever achieved a majority.
Right, the system is a weird hybrid that isn't funded by government. It is funded by profits of their actions like a private entity. I'm not sure what else to call an entity that is funded by its own profits if not a private entity.
It is governed by the presidentially appointed board of governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately owned commercial banks.
The federal government sets the salaries of the board's seven governors, and it receives all the system's annual profits, after dividends on member banks' capital investments are paid, and an account surplus is maintained. In 2015, the Federal Reserve earned a net income of $100.2 billion and transferred $97.7 billion to the U.S. Treasury.[24] Although an instrument of the US Government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms."
> It is funded by profits of their actions like a private entity.
The USPS is an independent agency of the federal government receiving no taxpayer funding (except for services like postage purchased by other government agencies) that is funded by its own operational revenues.
The parts of the Fed that aren't the Board of Governors aren't really like that, either, though.
> an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms.
The first and third are the typical things that define “independent” federal agencies, the second is true of some of them (e.g., USPS).
The structure and composition of the Fed is special though, even in that context, but “private” seems to be misleading behind a false dichotomy.
It is kind of (though this term is charged because of the role corporatism played in the fascist public ideology, though the term is much older and not generally associated with authoritarianism), something of a corporatist institution in and by which state and private power are aligned.
Obviously there exist minority opinions on the Federal Reserve, including my comment right here. The point is between the mainstream of Democrats vs Republicans, neither one is calling to reign in the Fed with the vigor that Republicans harp on "government spending". Pointing out that the mainstream discourse completely ignores dilution done by Federal Reserve is not dishonest.
What is dishonest is framing congressional spending in terms like "within its means" while also ignoring the Federal Reserve's ongoing dilution. Rather, monetary creation by the Fed and the Federal Government needs to be judged by the same standard. The pro-spending crowd calls this MMT, and the anti-dilution crowd calls this Austrian economics.
I personally would prefer the libertarian philosophy of more sound money, less (centralized) spending, and growing distributed wealth. But since that seems to be off the table, MMT is the remaining consistent approach. It makes more sense than profligate welfare to banks while turning the screws on everyone else. And with the way the Fed's feedback cycle is set up, it will actually cause less inflation than what we're currently getting.
There is plenty of money if you raise taxes so that you can afford do most of your borrowing during crises like this one to actually fund the necessary mandates.
The federal government has full control over its own money supply. It has an infinite supply of money, constrained only by inflation. It can, and regularly does, borrow money from itself.
Budget surpluses are extremely harmful -- they shrink the money supply, forcing industry into deficit.
We didn’t have any trouble borrowing absurd amounts of money in the past to fight wars and build border walls. WWII was paid for in large part with US government debt. Debt can be a useful tool for getting out of a bad situation. The only difference I see here is that we’re unwilling to borrow to make life easier for the 95% of people who live tenuously within the bounds of ordinary life. And when we stop helping them everyone suffers.
One major political party campaigns around delivering tax cuts and minimizing collections, and this can result in economic distortions.
A relevant example is that the last big tax cuts package in 2017 created lots of 'opportunity zones' which exempted people from paying capital gains on many real estate transactions. This was ostensibly to encourage investment in poor neighborhoods, but I live on the edge of one such opportunity zone and I can assure you it was already a red hot real estate market before that tax cut.
Everyone in this area gets junk mail from real estate agents on an almost daily basis because property prices have risen stratospherically and those agents get a 3% cut of any transaction they handle.
Because the alternative (the government fulfills the actual healthcare or housing) would be considered Socialism, which apparently is a really bad thing (according to all the corporate owned opinion).
This is because of a separation of powers. The executive branch can do things now but they do not have the power of the purse: thus the eviction moratorium. Emergency rental assistance money has to come from Congress which is inherently slower.
You're suggestions might make sense if US politics was optimized to help poor people, or people most in need - or if this is what Americans in general care about.
But why make folks already dealing with a lot of complexity in their lives go through long court processes, do lots of paperwork etc. Poor folks have to be in a database somewhere - give them money and get out of the way?
It's not that simple. A lot of those poor folks in your database won't have a bank account, or won't have stable contact information, or will have other financial priorities with the money. I'm generally a huge fan of cash grant based welfare, but if you're trying to do immediate emergency relief to ensure people don't get evicted during a pandemic, it's not up to the task.
Yeah it’s impossible to get any government aid without a permanent address that is not General Delivery at a post office. Housing is not just about keeping a roof over your head. For people who are already reliant on welfare and unemployment it’s the difference between being on the dole and losing everything.
We are incredibly creative and ingenious people. That's not "the best we can do". Why hope that a solution being discussed over on hundred years ago[1] will spontaneously start working? Identify who stands to benefit from those solutions, how it divides the the populace, and find a better solution. Self-defeatism is a mind killer.
[1] William Jennings Bryan described the concept using the metaphor of a "leak" in his Cross of Gold speech
As it relates to evictions due to non-payment, i think this is overstated. There are plenty of programs specific to Covid alone, there was the federal money, expanded and extended unemployment, and programs to pay back rent. The NY one, for example, comes with a condition you can't evict due to non-payment for a year.
That's all on top of 'the usual' government assistance, HUD, HEAP, etc.
Some tenants leveraged these programs and they won't be evicted. The ones who saw this as 'free money' and an opportunity to 'fuck those evil landlords' will be.
The article mentioned how difficult it is for minimum wage workers to find rentals. I wish it had also included the percentages of workers making minimum wage or less over the last 10 years.
A common counter argument is that people should simply make more but I’d like to see the amounts of those opportunities relative to the people who need them. Also, given today’s rental background checking, I’d claim that the landlords would simply charge more.
It's oddly hard to get these statistics. The federal minimum wage doesn't apply to many states*. 18 states have no minimum wage or have it set as the federal (only $7.25). Georgia and Wyoming set it LOWER than the federal (only $5.15). Some states are a little over in the $8 range. Both federal and states have different minimums for tipped workers. For example, the federal minimum for tipped workers is $2.13. In NY state it is $8.35. It's $9.35/hr in Nassau, Suffolk, and Westchester county. And it's $10/hr for tipped workers in NYC.
So "what is minimum wage and how many people make it?" is an annoyingly complex question. One interesting stat is that about 28% of the US workforce makes under $15 an hour.
*EDIT: I meant this as some states have a higher minimum wage than the federal minimum wage, so they don't show up in stats like "how many Americans make the federal minimum wage". Sorry for the poor original phrasing.
Yes and no. I thought that too, however there are some exceptions still to the federal minimum wage that permits states to set a lower pay. [0] goes into some of the details.
However, the vast majority of workers will be paid at least federal minimum wage as I understand it.
I meant more because those states have a higher minimum wage. Citizens in those states can't legally make the federal minimum wage, so they're excluded from statistics on "what percent of Americans make the federal minimum wage". I've edited the post to clarify.
Additionally, Wyoming and Georgia have a lower state minimum wage. Employers in the state that are subject to the Fair Labor Standards Act must pay the federal minimum wage. Here's who that covers: https://www.dol.gov/agencies/whd/compliance-assistance/handy...
Because you can't evict folks landlords are setting totally ridiculous standards to rent from them or not renting.
It's seen as better than getting stuck with someone not paying who you can't evict.
What happened is landords renting to well off people did fine - white collar workers actually did OK during COVID, and folks with money by and large kept paying. Landlords on lower end got screwed by and large (this includes more immigrant / minority landords). Then if you had some property managers etc on payroll you got all sorts of bailout money - so rich got richer.
One group that actually I think was happy was section 8 landlords because section 8 kept paying - so good on them.
In times like these you can see that some things are just fundamentally wrong with our economic system. On the one hand upper incomes have done extremely well during COVID with stock market and housing going up like crazy. And on the other hand you have a lot of lower income people lose jobs and now also places to live through no fault of their own. 2008 with it a bailouts has already taught me that the upper class will twist the rules to their advantage and COVID repeats the same thing.
Reminds me a little of 2003. The big defense companies had posters in the metro touting their patriotism while taking in record profits, paying 30 million dollar CEO paychecks and receiving big tax cuts. And that while in Iraq low paid soldiers were injured and dying for an ill conceived war.
I guess the old saying to never let a good crisis go to waste is very true.
To be fair, it's not quite as clear cut as that, either. There are people in the upper incomes with a $500,000 mortgage and suddenly no jobs to pay it.
If you have tenants that are not paying: approach them. Explain to them (not in writing) that you can no longer make payments due to lack of rent - and the bank could foreclose and seize the home. Offer to pay them 2X monthly rent cash to sign a contract to leave the place clean in 30 days plus free rent. Have a lawyer draw up paperwork (~$500/2hrs) and explain you and the tenant agreed to the terms.
Once the place is vacant sell the property or re-rent with short term rentals.
They wont get the money - and you are in the same position. So you lost nothing. It wont work all the time. But it is hard for tenants to resist all that cash.
Say I'm renting out some units and folks are many months behind... but they can pay for this month, and they are working and so on? Is it worth my time to evict them and get 0? or work something out?
I'm sure plenty of places would go for eviction but we'll see.
You already don't have the money they are behind so that is essentially a sunk cost.
If they are paying now, I'd try to work out that they pay something extra towards the delinquency. If they can't, they can't. If you evict, that's probably another few months of process time minimum and they'll probably stop paying again once you serve notice.
Owning rental property is an investment, not a guaranteed income. There is investment risk. This is one of the times that the risk became reality.
Bottom line (I say this as a small-time landlord) if they are back to making payments I'd let them finish their lease. At renewal time both parties can decide if they want to continue. Write off any losses; it was a bad year and nobody is really at fault.
Just remember this if in the future it's revealed people are letting their homes sit empty instead of renting them out. (when waiting for the right time to sell or any other reason)
Renting is often risky even in good years, one bad tenant can't lose years of profit simply by not paying rent and leaving. If they don't trash the place, it'll need emptied before the next tenant moves in (cost). Then it's possible they do trash the place. And then it's possible they get mad and truly destroy the place (run the pipes). Generally people in these situations don't have money, so good luck getting it back in court. And there's countless stories before covid of people who knew how to play the game in certain areas and delay evictions for months.
Now on top of all those normal risks, you have to worry about the government handing out a year of free rent and not allowing you to evict someone.
Unless I find a renter who is literally a family friend, I don't believe I'd ever rent out a property I own.
Letting the property remain empty is a guarantee of no income. Why would that be preferable to a risk? If the property is truly investment, it would still make sense to rent it or sell it. Both are good for the market.
On the other hand, I own my house and I’m very hesitant to rent out any space in it due to forfeiting control. I haven’t done much reading, but I think there may be some exceptions that make it easier to evict if someone is sharing your space vs renting an entire unit. That’s a different story but I don’t imagine this type of case having a significant impact on the market
If you think the housing market will go up 5% a year, even sitting empty, you'll still make 5% a year (minus property tax). So the expected return is not necessarily 0 in this case for an empty property.
If the market goes up, you’d still have that increase in value rented or not, but you wouldn’t have the recurring income if you don’t rent. You’re still forfeiting that by keeping it vacant.
The nature of the current economic recovery incentivizes evictions, as there has been a very strong split between winners and losers (often through no fault of the losers -- reopening has not been evenly distributed across industries). Someone who is not making rent right now is likely to be on the losing ride of the reopening, and any landlord would prefer to get one of the winners as a tenant.
Not saying this is a great thing for a society, but without some form of tenant protection that is probably what landlords will do.
I think some cities are going to get ugly. Like I wouldn't be surprised LA will have a big rise in crime or a riot or two. I think without a social safety net on rentals (both sides to be honest) we're going to see Hoovervilles at a scale not seen in a long time. Probably worse imo.
