In the United States, the power is almost entirely in the hands of the landlord. Maybe not for things that reach criminal levels of malfeasance but for your average renter with a crappy landlord there is zero leverage, it is particularly bad now because housing is so incredibly broken at the moment.
For a long time, you have needed references from prior landlords to rent another place.
This was especially challenging for mediocre landlords. Where there was nothing worth a court date but they may have ignored real problems and garnished the deposit with no reason.
Rental management companies are practically incentivized to deliver the worst service for the highest price.
It’s like the taxi industry before ratings from Uber and Lyft came to provide some recourse for riders.
Ridesharing’s present outcome isn’t to strive for but neither is the taxi industry of yore.
Most folks who talk up the benefits of renting haven’t done it in a very long time.
Landlords have a lot of power, even in Scandinavia where we highly regulate the renter-landlord “relationship”.
One example of how the regulation isn’t really working as well as intended is in average renting prices. Which despite there being 10.000 empty apartments in my city isn’t coming down. (10.000 is a lot in Denmark). The sister company of my place of work is a landlord, and part of the reason they don’t lower rental prices is because it’s hard to increase it later. So for a period of years it’s better for them to “bet” on the market changing enough to solve our empty apartment challenge. It looked bleak for a couple of years, but thanks to things turning around the strategy has worked out.
You can’t protect the rental market from this sort of thing unless you start limiting how many houses private equity are allowed to build and own. Which isn’t something cities are really interested in currently. It used to be such that co-ownership rental-groups or whatever you call “beboerforeninger” in English, if there is even an English term for it. But they are basically non-profit landlords which are owned collectively by every renter. Anyway it used to be that these organisations could compete with private landlords because private landlords were smaller. They have no chance of competing with the kind of deals we can cut a city now, or the speed at which we can buyout and replace old buildings. Simply because we, and companies like us, represent a literal fuckton of money. This is made worse by international investors, but it’s not exclusively caused by them. Our sister company has 0 foreign capital, and we’re still capable of competing with international capital on an equal level. Leaving almost no room for the non-profit organisations and absolutely no room for small investors on any serious level.
I don’t know about the US, but here in Denmark there is almost zero chance of it changing. There just won’t be enough political interest in it. In fact there is a huge political interest against it. Both from the cities themselves, but also for basically every home owner in our country. Because our high rental prices keep the housing market high as well, as people give up a lot sooner than we do. As seen with how the housing market is now again increasing here in Denmark after a period of almost dying. It’s not just because no cheap rentals became available, but it’s part of it.
That problem you describe is mainly created by low interest rates. In the past with low interest rates it cost them nothing to keep them empty and at the same time the prices of the property appreciated.
Today, with a bit higher interest rates, it becomes more expensive to hold the property empty and the prices do not appreciate or at least not as fast. However, I believe we have not yet seen the effect of these interest rate increases as the landlords typically have long-term fixed borrowing costs which do not need to be renewed until a few years for most of them so unless the interest rates continue to stay at current levels or higher for many years this situation will maybe not improve.
> part of the reason they don’t lower rental prices is because it’s hard to increase it later
At least in the US this happens due to rent control rules. When the landlord knows that once they lock in a renter they won't be able to raise prices much for an undetermined amount of time (what if the renter decides to stay there for 30 years!), they have an incentive to make the starting rent as high as possible.
If they knew they can raise prices when needed, they could afford to lower prices in a downturn knowing they can raise later.
> At least in the US this happens due to rent control rules.
No way, the vast majority of the US has no rent control at all. Landlords can already raise prices whenever they want, it's always been legal. Despite this, most choose to put in 10% to 40% increase, every single year, anyway. - https://www.michiganpublic.org/economy/2023-03-22/as-housing...
> If they knew they can raise prices when needed, they could afford to lower prices in a downturn knowing they can raise later.
The only time a landlord will lower prices, is if a downturn is so severe that the Federal Government prevents landlords from accessing credit to wait out that downturn, and the landlord risks having to actually sell the property. (Which after 2008, it seems unlikely that the Feds would ever let the market correct again)
> Landlords can already raise prices whenever they want
Not sure how to interpret this response. I said "due to rent control rules". So this applies when rent control rules are in place and landlords cannot raise rents more than rent control allows. If you are in a place that doesn't have rent control, well then it doesn't apply.
> most choose to put in 10% to 40% increase, every single year
I suggest you do the math on this one to see if it possible.
Let's take the middle of your range, 25%. If a landlord raised rents 25% "every single year", a $2K rent would be $15k in just ten years. So, no, no landlord is doing that.
> Federal Government prevents landlords from accessing credit to wait out that downturn
Tell me more about this program where the government gives landlords credit to wait out the downturn? Not familiar with it.
I'm curious what is the exact definition of an empty apartment here. Because whenever I see similar figures from Finland, "empty" invariably means "nobody has registered this as their primary address".
At least a couple of percent of apartments are always "empty", because there is often a gap between tenants. Many people have second homes, but those are technically "empty". Airbnbs are "empty". And so on.
It’s our industry association numbers so it can pretty much be described as “this apartment has nobody paying rent for it”. We call it “tomgang” which directly translates to “emptywalk” but I think the English word is vacancy.
I’m not sure how many apartments would be considered “empty” by official numbers but probably something similar.
> part of the reason they don’t lower rental prices is because it’s hard to increase it later
This is a text book example of the problem with rental price controls. The law benefits current renters, but fucks over future/potential renters (because landlords are unwilling to take the risk of renting out a property unless the situation is ideal). Eventually the harm of the law outweighs the benefit.
It’s not so much about risk as it’s about balancing the books. With equity money involved the way you build these buildings is with a combination of private investor money, your own company money and bank loans. The way you balance the budgets is on potential profits, and that requires a certain amount of expected rent. If you lower the rent, you also change the budget forecasting. You can do it, but you can also not do it and bet on things changing before it becomes more expensive to not having lowered the rent. Which is like 5-7 years for most projects. There are a few high risk projects and they tend to go bankrupt, but with property it’s usually not necessary to take on much risk because it’s one of those commodities people will always pay for… like electricity or water.
It’s much more complicated than that of course, but that’s the general essence of it.
The harm of the laws by no way outweighs the benefits. We would absolutely tear tenants asunder without those laws. They are, however, outdated. Probably because they were created long before private equity funds basically took over every major city. The “easy” fix would be to tax apartments which are kept empty, but again, there isn’t much of a political interest in this because the housing market sort of relies on the high rent.
> In the United States, the power is almost entirely in the hands of the landlord. Maybe not for things that reach criminal levels of malfeasance but for your average renter with a crappy landlord there is zero leverage, it is particularly bad now because housing is so incredibly broken at the moment.
In the USA renting is largely a state law matter. Some states are very landlord friendly, but others, such as California, are considerably more tenant friendly. For example late fees are illegal in California and you can basically get a pro se judgment easy peasy if a landlord even attempts to get you to sign a lease with a late fee clause, let alone collect one. You can also withhold rent to pay for services the landlord should have provided, and so on. Anyhow I'm not a lawyer and this isn't legal advice, but if you're in California learn your rights.
> For example late fees are illegal in California and you can basically get a pro se judgment easy peasy if a landlord even attempts to get you to sign a lease with a late fee clause, let alone collect one.
Having actually gone through this process in small claims court in California, I will say that your miles may vary. I completely won my case except for recovering the fifty dollar late fee (written into the lease) that I paid because rent was once a day late. The judge said it seemed "reasonable" and didn't listen to me talk about California "liquidated damages" language on the subject, which is the supposed law that makes late fees illegal.
Fact is, most places I've rented from have had late fees, and recovering them sounds like a huge crapshoot at best.
> late fees are illegal in California and you can basically get a pro se judgment easy peasy if a landlord even attempts to get you to sign a lease with a late fee clause
That's how laws are supposed to work. If a landlord is foolish enough to put an illegal punitive clause in a lease, they should be punished.
This is quite unfair. A landlord has dues to pay as well and they get charged by their mortgage company if the mortgage payment is late or insurance payment is late.
If a landlord has a mortgage on the property and can't afford to pay it without the tenant's money, they can't afford to be a landlord. Otherwise, they're doing arbitrage and there's no reason this shouldn't come with risk.
Why do we treat landlords as a business type that simply isn't allowed to take a loss?
That doesn't make sense. Renting is a business transaction and not charity. Why should a tenant get to pay late just because the other party is an individual and not a corporation? If you own a home and are late to pay the mortgage, you don't get to say sorry, I will pay when I want.
Because landlords are a business providing a service, and doing business has risk. Part of the risk around having a tenant is that they may have financial issues and may not be able to pay you on time. If you can't handle that risk, because you rely on the tenant to pay your mortgage, then your business isn't viable. Any business that relied on accounts receivable to be timely would almost certainly be out of business in a short time period.
Try doing consulting work and see how long it takes businesses to pay out your invoices. Be a B2B company, and see how long it takes businesses to pay out your invoices. Are they going to be willing to pay a late payment fee? Ask your accounting team what their average payout time is for accounts receivable.
The difference between these cases is power dynamic. Landlords have extreme levels of power over tenants. If it's legal to charge a fee for a late payment, the tenant either has a choice of paying a fee or having no home. It's an unfair balance, and the government shouldn't allow this to exist.
> In the United States, the power is almost entirely in the hands of the landlord.
Very much this. The current outcome of any tenant complaint is a private warning not to make a fuss, with an auto-served eviction notice if the tenant makes a fuss anyway.
This situation can only be improved by legislating away at-will evictions (no, less demand would not help fix this, see pandemic). No chance of that in most of the U.S., though.
Uber/Lyft improved upon taxis because there were a lot of people who wanted to supply the service, but it was illegal for them to do so until Uber/Lyft punched a hole on the legal system. The rental market does not have this problem, in some sense the opposite.
Believe it or not, California no longer allows blanket at-will evictions as part of it's recent rent control law. Landlords still have more leverage than tenants but it's a bit better.
My last lease in California consisted of 24 documents and addendums totaling 63 pages of dense legalese. Some of those were disclosures required by California law, but most were putting obligations on me (sometimes overlapping and contradictory). I might have been the only tenant there to actually read them every year (they changed every time). If a landlord can find any breach of those terms they can give you just 3 days to fix it before they give you a notice to vacate (giving you just another 3 days to move out). For a professional with a full-time job, some problems just cannot be fixed in 3 days.
Sure, it's not "at-will" and you can fight it, but it sure does feel lopsided if you can be told at any moment to find another place to live in one week for any one of a host of reasons you "agreed" to that change constantly.
Current rent control and just plain tenant law is going to preempt something outrageous (you write as the lease makes outrageous demands but don't give details - California limits what can be considered a nuisance[1]). There's a reason most leases in California follow a boiler plate format. A lease that isn't legal isn't going to go well during an eviction attempt. And remember, an eviction has to be ordered by a court and can always be challenged there.
Contracts just generally can't preempt rights. Of course, the type of contract is important. Ordinary residential tenants have rights. If you're a commercial tenant, any imaginable conditions are possible.
It is less about any of the terms being individually outrageous, the point is more that there are sixty-three pages of them.
They were clearly boilerplate forms, from several sources (hence the overlap and contradictions), "If any terms of this Addendum conflict with the Lease, the terms of this Addendum shall be controlling," etc., 6 documents and 20 pages after some other terms on the same subject. I claim to have read it, but I make no claims about having understood it.
There is an asymmetry of resources here that gives a large property management company a lot of ability to make your life unpleasant (and rent control gives them a good reason to want to). By the time you end up in court you have already lost.
You still have to move. It's the same effect as evicting someone. It often takes months to find and get into a rental in my area. Then you get hit with first, last, and deposit which takes time to save up for. Moving costs are also on top of that.
Well from the perspective of a residential landlord all the laws are stacked against us, to the point where I can't risk renting to a very large segment of the population that (especially now) needs rental units desperately. So we shift investment from residential to commercial, or only have very high-priced units for high-income families. The narative is always faceless corporations and rich fat-cats, but that's not always true.
I was looking at the prospect of renting out a second house that I have. The risks with a bad tenant are too high for me. I fully understand why a large number of people are not rented too. The risk is staggering unless you are well funded. I can't afford six months of mortgage payments to evict someone or the potential of the tenant to trash the place. My mortgage payment is quite low comparatively speaking, but there isn't enough gross profit to take the risk. Income subsidized units in this area leave too little in the incomes of most people to be anything other than teetering on the edge of financial ruin. The housing market is fundamentally broken. (I am speaking from Southeastern US perspective).
If you're relying on the tenant to pay the mortgage, you can't afford to be a landlord and you should sell the unit to free up housing stock.
The housing market is broken because in most markets there's a company helping landlords price fix the market. Landlords in most of the US have considerably more power than the tenant and this is especially true in the south eastern part of the US where most major cities allow evictions without cause with sufficient notice (usually 2-3 month notice) and extremely fast evictions with cause (~10-15 day notice). Rent control is effectively non-existent.
I sympathize a bit with small landlords in California or New York, but things are rigged in your favor most other places.
I’ll add folks with a history of causing damage. It seems to be a habit with a few, but it can be impossible (or unclear if possible) to even ask the question under some new regulations.
Some landlords solve this by making the tenant pay the insurance on the rental. That way high risk groups get higher effective rent without the landlord having to look discriminatory.
People with a criminal record and/or history of nonpayment of rent (aka squatting) who you're forced to rent to under first come first serve ordinances.
We can definitely shift the narrative to it just being a matter of individual malfeasance and exploitation if you'd prefer. In that model the fact that this is so widespread and routine reflects even worse on landlords, and justifies much more extreme action against them.
I disagree, i think it's worse in every way except that you can hail one with an app now. It's certainly more expensive and the driver makes less than ever, but now there's a kafkaesque middleman that doesn't appear to provide any value but can fuck with both of you at will with little recourse available for either party. Pricing is only reliable in the sense of feeling gouged by a party that has provided no value.
But yea, slick app. I hear the drivers are sometimes less racist, too.
San Francisco is an instructive example. Prior to Uber, calling a taxi in SF gave you a 50% chance of one showing up in some functionally unknowable amount of time. 50% is not an exaggeration, it was sometimes below that, and you would have no idea if you should expect your cab in five minutes or fifty. Then you would be charged some amount of money you could in theory anticipate but in practice could not. Should the driver misbehave in some manner, there was theoretical but in practice missing accountability.
The drivers were then exploited ruthlessly by medallion-owners.
Uber became very popular very quickly because it addressed a number of those consumer pain points up front. You could know for sure if a car was going to come, have a quite good idea of how long it would be, and get a price in advance. Sure, your complaints would likely be ignored, but nothing new there.
Having lived in SF before Uber, I firmly believe their success was accelerated by just how bad taxis in SF were. Sometimes I would call dispatch and hear interminable muzak (really, tens of minutes with nobody picking up). But that was at least better than getting through but then never actually having a cab arrive. Never experienced a worse taxi system. The sus black cars that randomly solicited rides were almost appealing in that environment.
I still don't think Uber was a good outcome, even if it was better in many ways.
Not SF but I recall the accepted manner of doing business in my city, should you want a taxi on the big party holidays, was to gather your group and war dial taxi companies until somebody actually arrived. All of them. They would swear they’d show up, and you would swear you’d wait for them to show up, and everybody knew they were lying.
Then when you wanted to go home you’d do the same thing except out on the street and you’d steal the first unattended cab, regardless of who’d called them.
In midsize cities it's an improvement that you can get a ride at all. Last time I tried to use the legacy service they told me they don't do pickup requests on Friday evenings and to try again tomorrow. Lyft got me to my flight and I never called that dispatcher again.
This is extremely true. I know a family who recently got out of a terrible situation where their landlord
- Regularly stole food from their kitchen
- Turned off their hot water for several weeks
- Verbally harassed their elementary school aged daughter
All of these things are illegal but in the city where they lived there isn't much practical recourse for a poor family. The only option the city lists on their website is to hire a lawyer and take the landlord to court. There's supposed to be a fine for every day the hot water is off, but guess who you can call to enforce that? Nobody. This is true of many laws that supposedly protect ordinary people (e.g. labor laws). Once you go to avail yourself of the protection you find there's actually no functioning mechanism and often that's by design.
landlords are much worse in the uk, since they're pretty much the politicians or people setting policy. i'm not making this up, my landlord is a tory politician and him and his friends own a bunch of property. I don't think party affiliatin matters - but point stands.
no incentive to improve housing at all.
whereas in the U.S, if you stay at a corporate owned apartment -- you're guaranteed things will be functional, repairs done on time etc. In, the U.K the repairs are done wheneveer the landlord feels like it. In london, you see some apartments get on the market without any repairs done to them at all
> In, the U.K the repairs are done wheneveer the landlord feels like it. In london, you see some apartments get on the market without any repairs done to them at all
> In the United States, the power is almost entirely in the hands of the landlord.
This is a wild generalization because every state has different rules and cities have their own different rules as well.
There are indeed places in the US where the landlord has all the power and the renter has zero rights and it can get ugly.
There are also places in the US where renters hold so much power that they can get away with everything and the hands of the landlord are tied and it can get ugly.
The best places are those where there is a balance, where the laws acknowledge that both the landlord and the renter need to act reasonably and not try to screw over the other party.
I’ve been in both sides of the relationship, and I want to start with my observation that bad landlords and bad tenants and rare. Most people aren’t predators, aren’t retaliatory, and generally act in reasonable ways. Some don’t, and the best we can do is not let them spoil it for the rest of us.
As a renter, I tried to leave units at least as good as I found them, and as a landlord I find most people do the same. Once out of a dozen places I lived, a landlord acted unscrupulously. And, as a landlord, I’ve had one renter trash a property. That seems like an expected amount of hassle to me. But the risk is very much asymmetric — I lost a week of pay to the landlord, but repairing the damage by the tenant cost me a year of rent.
In the US I don’t have a right to shelter, and while that may be awful in some respects it works for the most part. Hundreds of millions of people get shelter. But to be honest, I’m on the edge of getting out of being a residential landlord because of the increased regulation. While I agree with the ethos, the reality is that it increases my chance of being damaged financially regardless of my ethics/behavior.
Not sure what my real point is other than “don’t be awful”.
On a different note, I find the hypocrisy from some folks in this topic frustrating. They advance exploitative approaches to commercializing SaaS while decrying landlords doing the same. I don’t see a difference. We literally use the term “multi tenant”.
> On a different note, I find the hypocrisy from some folks in this topic frustrating. They advance exploitative approaches to commercializing SaaS while decrying landlords doing the same. I don’t see a difference.
You really don't see the difference? I'll help you out: one is a basic (and at the moment, scarce) necessity, the other is a unnecessary luxury.
So the most basic sufficient shelter delivered in the most cost efficient way is the “need”? No, human dignity needs to be respected - but what does that mean? Does the shelter need to be where people want it, regardless of the cost? That’s where tradeoffs start to happen, and at some point those tradeoffs culminate in a market and that market is made up of tenants and landlords.
Being awful is a problem, be it in housing or SaaS.
The problem with the landlord tenant power dynamic is that an unscrupulous party on either side can easily do great damage to the other.
Look at eviction laws in New York and California. Look at the recent headlines about squatting.
The landlord is actually the party with the greater financial risk by far, but the tenant has the emotional and social vulnerability of having no control over their home.
It is not actually at all clear that the tenant has lower financial risk. If, after being evicted, you fail to find housing, it is very easy to become homeless, and that is a terrible financial prospect for the tenant, as the US is really not set up to support homeless folks. Essentially every service you could want requires an address, and homeless shelters have terribly restrictive policies like separation of couples, pet bans, etc.
They have actual physical vulnerability because it's very dangerous to not be living in a home, and there is no guaranteed short-term fallback if you are forced from your home. Speaks VOLUMES that you consider "financial risk" more valid than this, which you choose to downplay as just a sense of vulnerability rather than the actual fact of it.
The tone of "Speaks VOLUMES" doesn't help the discussion.
Not all people and and places are equal: It's not a universal truth that someone given 30 days notice will find themselves unhoused and in a dangerous situation. Often it is just a sense.
And even where it is true: What then? If landlords are made the social safety-net of last resort, the 'guaranteed fallback', for people who are unable to secure housing then why should anyone be a landlord? It won't be easier to secure housing for people if the conditions are made too unattractive.
Some landlords stink, some tenants stink, sometimes the situation stinks without anyone being at fault. Policy ought to try to do the most good for the most people, but part of that is recognizing that an inability to evict people who don't pay (or worse) can mean that even more go unhoused when people choose to not rent out.
Given the situation that there is no safety net, and knowing that, why would you choose a relationship that is likely to position your financial interests against the physical safety and wellbeing of someone else, even a whole family?
I wouldn't choose it and I don't have respect or sympathy for people who do.
>In the United States, the power is almost entirely in the hands of the landlord. Maybe not for things that reach criminal levels of malfeasance but for your average renter with a crappy landlord there is zero leverage, it is particularly bad now because housing is so incredibly broken at the moment.
In California, the power is almost entirely in the hands of the tenant.
For a long time, you have needed references from prior landlords to rent another place.
This was especially challenging for mediocre landlords. Where there was nothing worth a court date but they may have ignored real problems and garnished the deposit with no reason.
Rental management companies are practically incentivized to deliver the worst service for the highest price.
It’s like the taxi industry before ratings from Uber and Lyft came to provide some recourse for riders.
Ridesharing’s present outcome isn’t to strive for but neither is the taxi industry of yore.
Most folks who talk up the benefits of renting haven’t done it in a very long time.