LogFAQs > #966660406

streamofthesky posted...

For single family homes, I'm all for massive property tax increases that get waived if it's your primary residency, to push scumbag landlords out of the market and lower house prices for people to buy them to own w/ a mortgage.

The problem with any cost-increasing approach is that it tends to disproportionately punish good landlords, who aren't nickel-and-diming their tenants enough to absorb the extra costs in their larger margins. That means it's overwhelmingly them who end up selling, either to slumlords who are much less reluctant to jack rent up as far as they need to cover the new taxes (and then some, while also spending less on upkeep), or to developers that also buy up the rest of the neighbourhood to demolish it and build a complex that avoids the new tax while also being able to take advantage of the higher rents the new tax has generated across the market. The renting class - by virtue of having parasites clinging to them for most of their adult lives - generally doesn't have the capital required to take advantage of small housing crashes like that, so most of the buying opportunities that do show up will be snatched up by those that do have the spare capital to win bidding wars.

Any attempt to control rent needs to be comprehensive, not just increasing taxes or putting caps on how much rent can be increased. Every landlord needs to be required to have some percentage of their properties qualify as "affordable," which should in turn be defined based on median local income and not median local rent (my city defines it as 30% less than median rent, which isn't much help when median rent is more than double what median income can afford). Maintenance and livability standards need to be strictly enforced to keep affordable apartments from turning into slums (combined with assistance programs for landlords that genuinely can't afford to maintain their properties without making them unaffordable). Insurance costs and property taxes for rentals need to be based on rent currently being paid, to prevent market fluctuations from forcing rent increases (or forcing landlords who don't want to hurt their tenants to take a loss).

As much as it'd be nice to stamp out landlords altogether, there is in fact a need for renting, and they do provide an essential service. No matter how accessible the housing market is, there's still going to have to be a transitional period between reaching adulthood and having the necessary capital to buy a house, because merely being able to make mortgage payments isn't enough to cover other costs and risks. Landlords effectively provide insurance: By paying a premium over the actual cost of the property, they take responsibility for whatever goes wrong in the house to keep the tenant from having to deal with large, unexpected expenses. As a stepping stone to ownership, that's pretty unavoidable. The problem is that the market has been inflated by overzealous investors such that the capital needed to buy a house is very difficult to attain, made worse by greedy investors driving rent costs so high that amassing any capital is a challenge.

Muscles posted...

and she's not rich at all so she got really f***ed when she had a bad renter, luckily she's had mostly good renters.

This is what really bugs me, because it's something so many landlords use to justify charging high rents, and it's actually a legitimate excuse for many (especially those that generally don't try for excessively high margins and therefore don't have a huge safety net), but it's also really easy to fix:

• Mandate video walkthroughs with the tenants and landlord at the beginning and end of each lease, with both parties having a copy, to provide concrete evidence of who's responsible for any damages if a dispute arises. If the landlord doesn't do this, side with the tenant by default. If there is evidence of the tenant refusing to allow the walkthrough, side with the landlord by default
• If the tenant is found liable for damages and/or missed rent, the government pays the landlord the amount owing (receipts and some manner of common sense check needed, of course, to avoid paying $400 for a can of paint and 20 minutes of labour)
• The government negotiates a repayment plan with the ex-tenant, including garnisheeing wages if necessary

A lot of people will look at this and jump to "why should taxpayers pay for bad tenants?", but it makes a lot more sense to have taxpayers collectively pay for them than to have them subsidized entirely by good tenants (who are almost always going to be less capable of providing that subsidy than the average taxpayer), which is what "I need to keep rent this high in case I get bad tenants." It also ultimately won't end up being that much of a subsidy, because if there's one thing everyone can agree the government is actually capable of doing, it's taking money it believes it's owed from lower-middle class people.

The system as it stands doesn't do anywhere close to enough to protect good tenants (the vast majority of tenants) from bad landlords, nor good landlords (a decidedly smaller proportion of landlords, but still more significant than many might like to believe) from bad tenants, and the result is a market that keeps giving more and more power to bad landlords who fall back on their lack of protections as an excuse for needing that power. Install some proper protections, and you can start making real progress on controlling rent.

Of course, the fact that most politicians who have the power to change these things also own investment properties means getting anything done is a challenge. Pretty much none of them are willing to do anything that will lower their own rental income, so the rest of us suffer.