Being a small-time landlord is unreasonably risky due to tenant friendly laws and backed up courts.
Similarly, I've found renting from small-time landlords to be a worse experience. They tend to do things that a large corporation would eventually face lawsuits over - discrimination, demanding more money up front, keeping deposits, poor upkeep of units, etc.
So I'm not even sure I want to encourage small time landlording anyway.
Some things maybe really are better managed by big, lawsuit-averse, emotionless companies.
The problem is that in cities that have regulated apartments out of existence it's the only existing place for renters to live, so we should be mindful of things that will squeeze its availability before enough apartments can be built to take up the demand.
In expensive Brooklyn all the dense, high-rise new construction is along the water front .. 15 minutes walk from the trains. The buildings are so far from the trains, that many of them advertise private shuttle services to entice buyers/renters.
Meanwhile the subway stations that the shuttle take you to are surrounded by blocks and blocks of 3 story buildings.
Its all completely backwards, except that there was no existing constituency living on the water front to protest & block new development.
Completely disagree. Every poor experience I had renting was with a big emotionless company. I have never had a poor experience with a small time landlord.
Just like landlord vet their prospective tenants, you should be vetting your prospective landlords. Someone with a few units is pretty easy to track down folks for references.
The problematic ones tended to be the ones in the "midrange" - between small time and big company. Using horrible management companies as contractors to farm out the dirty work, and generally getting away with it since they were big enough to throw their weight around - but not big enough to care about being squeaky clean to the letter of the law.
I'd rent out my basement mother in law unit, but due to tenant rights in my city there is not a single chance I will ever do so. From direct personal experience I know how difficult it is to remove a problematic tenant from a living situation no matter how much impact they may have on your life.
The outcome is that there is one less extremely affordable unit in the area for living in.
The solution is to make the rules different for small landlords.
How do you quantify small - number of units or dollar value? What is small - 1 unit? 2? 5?.
What stops a larger landlord setting up 1000 LLCs each managing 3 unit?
As soon as you get into "different laws apply to different people" you run into problems.
But when you don't do that, you run into different problems, which is what we have run into already.
Every time US tax code gets more complicated, it usually doesn't help the bottom 50%.
Actually funded court system?
Having to wait months to evict a tenant for legitimate reasons is a huge issue if it's affecting >50% of your rental units.
The problem is that for large corporate landlords this is a statistical risk that can be priced in and accounted for across hundreds of units.
For small mom-and-pop landlords renting out their basement, it's a roll of the dice on whether any given tenant will completely ruin their life and be impossible to get rid of.
Of course many people will respond to this by saying that the rights of people to have a place to live are more important than the rights of homeowners to have a bit of side income, but if the law makes it too risky to rent out a second suite, nobody will want to do it -- which makes the housing crisis even worse for renters as there will be fewer places available to rent.