He's retired now. Built a small time, local only 1-800-GOT-JUNK style business. He's a millionaire now. I'd be surprised if he'd finished high school.
At least where I live, you can't really do that these days. Property is way too expensive and well-meaning building codes make basic things essentially out of reach. I'm not talking about things like circuit breakers or child-safing banisters and railings, I'm talking about the long tail of regulations that don't really help anyone.
The rich and the poor keep getting more and more disconnected and I understand the raw rage coming from the other end of the income spectrum. We need to help them.
For example, in California, all new homes must have solar power, with the requirement that [1]:
> The solar panel system needs to be large enough to meet the annual electricity usage of the building
> builders can decrease the size requirement of a system on a property by incorporating battery storage ... <and> ... by incorporating energy efficiency measures or other demand-responsive measures
1. https://news.energysage.com/an-overview-of-the-california-so...
This is the key point. It's the same with rent control. It's governments dodging its responsibilities, then pushing the costs to the private sector unevenly. If you really want these programs, send the people subsidy checks. It's more fair to renters, it's more transparent, and it makes it easier to track the true cost. Don't want to send out those checks? Maybe you shouldn't volunteer landlords to subsidize your social program.
I suggest a ban on all SFH rentals. The reason why it seems unviable to have everybody buy a home is because there is so much demand created from people owning multiple homes and bidding up prices in the name of making a profit. If we eliminate at least SFH rentals it becomes much more viable. There are at least 16 million SFH rentals and that number is just growing.
This would solve two problems at once: reduce sprawl by encouraging the building of non-SFH for profit seekers, and reduce demand for SFH which is currently being driven up by profit seekers.
"Drive until you can buy" then drive some more. Enjoy the wear and tear on your mandatory vehicle.
I theorize this is infeasible in the US at the national level because there are probably regions in the US with insufficient manpower to do this manual review (though someone might correct me on this). It's easier to throw money at the problem by giving money to those who don't need it than it is to hire and maintain headcount.
I suspect this because this is far from a new problem. People have long abused welfare in the US who don't actually need it because the review process is incredibly lax (which in turn perpetuates the idea among the American right that government welfare is a waste of resources).
Though aside, I'm always wary of believing stories I read on the internet that paint the political situation in a certain light even if they're allegedly from individuals. But I've personally known people in real life who bragged about abusing welfare before, so I know that's a thing (though I don't recommend you take my word for it).
At the Federal level there is a Section 8 housing.
At the state level there are various rent assistance programs.
Most people are also W2 employees so their income is tied to their SSN so a lot of this can be automated by simply looking at your actual monthly income.
The fact that you'd need to apply for this would also discourage some people from abusing the system.
Lastly, I don't really care if the system isn't perfect and some people get assistance they don't need. It doesn't have to be perfect. It just has to be "good enough". At an ethical level, I'd rather give people the benefit of the doubt and not make them homeless than worry about them abusing welfare some of the time.
> People have long abused welfare in the US who don't actually need it
I'm always skeptical of claims like this because they're used as a political tool to attack poor people for being poor. OMB's estimate [1] put this at "5.6 to 7.2%". In a country that spends a trillion dollars a year on the military, that's a literal rounding error that I don't care about at all.
[1]: https://www.whitehouse.gov/omb/briefing-room/2021/12/30/upda....
The question is, did the government have the manpower to do a case-by-case assessment. One of the issues faced in Canada was getting employment insurance money out to people in a timely manner. Their approach was very much loosen the criteria and take claims at near face value until they had time to sort things out. Fortunately, the government can sort-of do that in that scenario. Unfortunately for evictions, things have to be sorted out before a person ends up homeless.
As for "f*ck landlords", I never quite understood it. Then again, I've always dealt with small landlords and usually had some form of reference for them before signing the lease.
The closest we could come was the stimulus checks that went to anybody with a prior-year's income below a certain threshold (IRS has that info).
None of these ideas are particularly popular amongst land-owners.
Or non-landowners. Turns out, the state isn't particularly interested in constructing nice housing, or doing so in adequate numbers. So people end up living in communal spaces while sitting on a decade-long waitlist for something to open up.
I definitely understand that rentals can be profit seeking tools that are harmful (ex: slum lords) - but I don't think removing the ability to rent actually solves that problem.
If you can't rent - there are wide swathes of my city that just wouldn't be developed at all. It would remain the private estate of the family that owned it. Instead those plots are sold or developed into apartments/condos/townhomes.
Basically - land is a revenue generating asset. If rent is illegal, folks will use it for the next best revenue they can make. They won't just suddenly dump it on the market for sale.
Further - renting can be a valuable tool. I moved very often right out of school seeking to live as close as possible to my current job. That was insanely helpful to me, and not something that would be financially feasible if I had to purchase and re-sell for each (near-yearly) move - even if the house I was buying only cost 100k, and not 500k.
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Basically - I understand the sentiment, but I think this argument glosses over far too many likely consequences of removing the ability to rent (ex - I promise you you'll just end up with a lot of company towns where "Room & board" is free, but only if you work the company job.)
Plus, in the most unaffordable places in the world, rental prices are dirt cheap compared to purchase prices. In a lot of these places, rental income is so inconsequential, that places sit empty because owners don't want to deal with renters, since most of their return comes from appreciation. Which suggests that rental prices are completely detached from purchase prices.
I'd much rather be in position backing mortgage on 100k house, backed by mortgage insurance, than risking someone I don't trust with that same 100k having full custody of my house worth 700k.
Mind you, many people do cause significant damage to the spaces they rent. This being among the most frequent complaints by landlords.
At equal level of negligence risk (which for most people, yes, is quite low), the monetary expected loss through negligence or crime on 700k home should be greater than that on 100k home, all else equal (same person, location, etc).
And all of this fails to account for the greater personal incentive one has to pay for their own house and take care of their own house than for someone else's they're just renting.
If you don't pay rent you are (supposed to be) evicted in short order and replaced with someone who does pay rent, specifically to avoid damaging the landlord as you describe.
> the monetary expected loss through negligence or crime on 700k home should be greater than that on 100k home
But that's not what we're talking about. The risk of significant damage through negligence by a tenant on a 700k home is much lower than the risk that same tenant would default on a 100k mortgage. That's the whole point.
Precisely! Not paying rent is a damage to the landlord. You're destroying value. So we can't say you aren't damaging anything if you just don't damage the house.
>The main differentiating factor between a landlord and a tenant is risk of default. If you are appraised to have a risk low enough for a bank to tolerate, you get a mortgage. If not, you don't. What's wrong with this process?
Nothing. I'm pointing out how idiotic it is for someone to be trusted with a 700k house who can't be trusted with 100k mortgage.
>But that's not what we're talking about. The risk of significant damage through negligence by a tenant on a 700k home is much lower than the risk that same tenant would default on a 100k mortgage. That's the whole point.
That's not the entire calculus. The risk to the landlord is that the tenant won't pay or that the tenant will destroy the house. The difference is a land owner has even less incentive to destroy their own house and even less incentive to fail to pay up his/her own mortgage. The risk to the bank is that both you won't pay AND after they seize the property they can't recoup all the damages of non-repayment / lost interest and the principle. This is even more magnified when comparing a 700k rental property to a 100k mortgage. You can't just compare risk of damage to rental house to risk of default.
Having collateral is a much more enviable position IMO and the fact that someone who owns a house has a real interest in protecting it just doubles down on this tipping of the balance to preferring to be a mortgage provider over a landlord in dealing with potential tenant/mortgagee of equal risk.
>The risk of significant damage through negligence by a tenant on a 700k home is much lower than the risk that same tenant would default on a 100k mortgage. That's the whole point.
How much damage does the bank really have on someone who holds mortgage on 100k house, defaults, and then the bank takes the house and flips it for now even more money? It can't be that much more than the landlord who rather than having something to seize just outright loses the rent on a 700k house and now can't pay their own mortgage. I'd much rather be in the bank's position here.
If you can make rent on a 700k house, you can make mortgage on a 100k home. If you don't pay, the home will be taken away (and probably sold for more than you bought it for in this economy), while if you don't pay rent the landlord is out mortgage payments with quite possibly no asset he can seize from you.
This all goes back to my point. "Someone who can't be trusted with 100k [sic: mortgage] shouldn't be entrusted to inhabit a house worth 700k."
But this happens all the time when people rent anything. You can rent a Lambo, doesn't mean you can afford to buy one. Trusting someone not to destroy something while the use it isn't the same as trusting them to pay you the full value of it upfront.
Otherwise it seems like you're suggesting there's a missed opportunity to grant mortgages to financially unstable people. Isn't that what caused the 2008 financial crisis?
> Someone who can't be trusted with 100k [sic: mortgage] shouldn't be entrusted to inhabit a house worth 700k.
But they are and it works just fine.
>Trusting someone not to destroy something while the use it isn't the same as trusting them to pay you the full value of it upfront.
You don't trust them to pay you. If you did, the house wouldn't have a lien on it. You may mostly kind of trust they won't burn it down or destroy it, so you might trust you'll say get 80% of your money back and thus require a 20% down payment or something.
>But they are and it works just fine.
If the market can find a way to price in risk for someone renting a 700k house which entails them usually paying at least interest on the value of house + property tax + maintenance (this is all indirect payment, but basically what a landlord needs to charge to at least break even), the market can find a way to price in risk for that same person buying a 100k house.
If real estate becomes a non-cash producing “asset,” mortgage insurance would become far pricier.
Nothing is ever this efficent at scale. The point of the program was to stop people (and families) from going homeless during a health and economic crisis. The easiest and arguably best solution is a blanket ban.
This is similar to the PPP program. No one checked the credibility of businesses applications until after the money was sent out (the emergency warrants this).
As usual this probably won’t get addressed because most lawmakers are part of the groups that benefit from this state.
There's no easy solution when we've built up such a strong culture of individualism, that's effectively focused on avoiding collective responsibility for individuals who are struggling.
There are simple solutions to slumlords: reporting them and enforcing the habitability laws that are already on the books.
granted, this is a college landlord that is just taking advantage of college students, but I should have more recourse than “sue them eventually” when my landlord charges me a $90 late fee on my $0 balance that requires 6 office visits to resolve.
the other problem with landlords is that they aren’t spending capital to build. they’re spending capital to buy. corporate landlords (say 25+ units) should not be allowed to buy existing single family dwellings imo.
I'm not sure you've fully thought through how complex this would be. There are 40 million rental households in the US. Even if only 1% (400,000) decided to be a part of this program and you could close every case in 1 hour (which is probably wildly low) that's 45 man-years of effort.
Of course, it would take three years to roll out the computer application that they would need in order to make and document the decision, but that's somewhat a separate problem...
Spinning up a 500 person accounting firm wouldn't be snappy.
If this were true, then you would expect an explosion of evictions now that you can do it. I think that avoiding eviction is an important reason to pay rent but there are other, particularly not going into debt, not wrecking your credit score, and keeping your rental in the long term.
I don't disagree that this was dumb as a blanket policy but this was also an emergency no one expected and no one knew how serious it would be in terms of health and impact on the economy.
But yes, there is no doubt that the way this went down is making the moat (between labor and capital, middle class and upper, small business and massive conglomerate, etc) bigger and bigger.
The government saying you can't evict someone is basically telling people they don't have to pay rent anymore regardless of need. Rent control is the same way: you can't raise the rent regardless of need. So these programs don't really help people in need: they help market incumbents.
This is the government foisting welfare onto the private sector rather than doing it properly.
If the government didn't want people evicted due to pandemic circumstances, what they should do is assess this on a case-by-case basis and pay the rent for people in genuine need.
The Internet is full of stories of people who just stopped paying rent because they didn't have to anymore as well as taking government checks intended for the landlord and just cashing them, which is a whole other issue.
But some people justify this because, you know, "f*ck landlords", which always struck me as incredibly backward: the only reason there exist apartments and houses to rent is because someone has provided the capital to build them and rent them to you.
Now you can argue maybe the government should do that. I can respect that.
But no rentals at all? So the only way to have somewhere to live is to buy a house? Really? How is that practical and not a recipe for massive homelessness?
As an aside, we do need to do something about hedge funds running around and buying up all the property, only building ultra-luxury property and the ultra-wealthy just parking money in real estate but none of those issues invalidates the need for a rental market to exist.