Read on Twitter
This guy seems like a nice dude, but he’s horribly out of his depth. After a long and relatively pointless fight I don’t think we’ve progressed very far beyond renting bad/landlords evil.
So here is a
on why anger at landlords & renting is well intentioned but misguided. https://twitter.com/phattonez/status/1345900277728071680
So here is a
on why anger at landlords & renting is well intentioned but misguided. https://twitter.com/phattonez/status/1345900277728071680
Midway through the discussion (brought to my attention by @aeb082917) he sums up his position well in the above tweet. Basically it’s unfair that landlords JUST OWN the property but get all the benefits, while renters pay all the money but share none of the returns.
This criticism dovetails with wider concerns about wealth inequality & concentration. Basically the ability to own and finance passive investments allows the growth of a rentier class that doesn’t have to work but whose wealth compounds. This is most obvious in the rental market
The rental market situation is highly tangible and the high cost of renting is the result of multiple factors working in tandem. The revitalization of urban centres, the growth of progressive NIMBYism and the stagnation of middle class incomes to paint with some broad strokes.
Starting with the last issue first, stagnating incomes have forced people to become more active with their equity. Investing & leveraging equity within homes for that purpose has led to a burgeoning class of home owners who have bought secondary properties for any No. of reasons
It could have been to help their kids get in the property ladder, it could be that investing in the stock market seemed to volatile compared to the steady growth of cities. Whatever it was the early interest in owning property has yielded sizeable returns and started mini-empires
It’s been substantially aided by bank lending policies (especially in Canada) and the growth of Airbnb, turning condos into hotels. It’s also made existing homeowners resolute in their belief that home values must be protected and new densification resisted.
Given the stagnant wages, most increases in wealth have come in the form of higher property values in Western nations. That has made politicians co-conspirators with NIMBY home owners who have sought to protect existing neighbourhoods from new, high density living.
These factors have created exactly the wrong environment for urban growth at the precise moment that interest in urban centres exploded, rapidly gentrifying long ignored neighbourhoods where property prices had been stagnant for much of the 80s and 90s.
Okay, so what does this mean? Well for one thing, we are unintentionally creating the foundations for some of our wealth disparities. More development and less fear of new density would help boost the number of available places to live and would making renting more appealing.
As the pandemic has shown, rents have fallen almost everywhere once living in a city centre no longer held any promise of fun or nice restaurants. Stories now abound of competitive rental markets with two months paid rent, or other enticements for a 12 month lease.
Cities also bear a heavy responsibility for allowing in constrained growth in the short term rental market and not treating these investment properties like hotels at the outset, complete with regulations and taxes.
There are other culprits, but the long and short of it is that the rental market isn’t sufficiently competitive in many places, but....
...that still doesn’t mean your landlord is evil.
...that still doesn’t mean your landlord is evil.
Renters may feel put out that they don’t net any of the benefits that come with ownership, and may find that their major corporate landlords are unsympathetic, but renting is still often cheaper and preferable to owning in many cases.
1st renting provides flexibility and reduces financial commitments - very advantageous when you’re young. It may also provide low cost amenities that would be higher priced if they had to be done individually. Lastly, renting may also let you live someplace to expensive to buy in
Renters also don’t have to worry about maintenance, insurance, roof repairs, liability, a bevy of utility bills and a host of other creeping costs that go with ownership. These things tend to be overlooked when people do back of the napkin cost calculations.
Meanwhile landlords, especially those carrying multiple properties may be benefiting in aggregate, but have lots of carrying costs and work to get that monthly benefit. Too often people assume that THE WHOLE RENT CHEQUE just gets pocketed, but forget all the costs that come first
So in short, a more competitive rental landscape will improve renter’s experience with renting, but even under current scenarios, renters still have lots of benefits, and shouldn’t assume that being a landlord means lighting your cigar with $100 bills!
Anyhow, I found myself in this rent conversation because I follow @TheRocsWorld and @aeb082917, and you should too.
