Originally published at: Landlord appears to back off predatory harassment when tenants go to the city and media | Boing Boing
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The fundamental problem that we need to address is this idea that housing is an investment that is expected to grow at the same kind of rate-of-return as other investments like stocks, bonds, mutual funds, etc. that problem has only gotten worse with private equity funds diving into the market with both feet.
It’s incredibly obvious that renters cannot possibly sustain 10% rent increases year after year after year. Yet that is what landlords expect and belief in that expectation regardless of its human impact is psychotic.
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Good for them. Every landlord I had in LA was a predatory dick.
For anyone living and renting in Los Angeles, remember that LAHD is on your side. They are terrific! A real human answers the phone, will answer all your questions, tell you exactly what your landlord can and cannot do, and will send you relevant sections of the code to give to your landlord. They helped me a lot with one particularly nasty landlord I had. Every few months or so, she would try to do another illegal thing (transfer the utilities into my name, raise the rent 10%, limit how many people I could have over at once, etc) and LAHD would set her straight. She lied to everyone else, too. She tried to sell the house out from under us, but didn’t tell the buyers that there were tenants and that the property was rent controlled. The sale was quietly cancelled and the sign disappeared off the lawn, but I can only imagine those conversations. 
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As an accidental landlord myself, I feel bad for tenants who have to put up with predatory owners looking to exploit their renters. But like it or not, property is an investment whether you live in it or rent it out to others.
Not all of landlords are looking to screw people over though and with the one rental unit I own, I actually lose money on it every month by renting it out at below market value. My tenants are a nice, elderly couple and their rent payments goes directly to my lender (my mom) to fund her retirement. I legally own and manage the property and will eventually benefit from the long term appreciation of the asset that will hopefully fund my retirement in 15-20 years when I sell it. For now though it’s a win-win-win for everyone involved.
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You say that like it’s a law of physics, like it’s F=ma, but it’s not. And no one who benefits from that dynamic has any right to complain about houseless people.
I get that your property acts as income for a retired family member. There’s nothing wrong with that at all. But your actions and situation are by far the minority. Even most small landlords act with total ruthlessness when it comes to their tenants. I’ve personally observed otherwise “good people” act like total dicks when it comes to their rental propertie(s).
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what you’re describing is still a world apart from wall st investment firms snapping up everything from single rentals to whole neighborhoods.
rental property has it’s place. wall st should have no part in it
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I’m open to alternatives but in the US at least, home ownership has been cemented as a fundamental pillar of the American Dream™ and the bedrock of financial security for the middle class for more than a century. Owning property assets comes with an expectation of appreciating value over time.
Renting out a property you own is both a strategy for generating income and also a long term investment decision. Maybe I’m in the minority with how I treat my tenants but I don’t feel any guilt about being a landlord because I know my situation is beneficial to all the parties involved even though I could very easily rent my unit out for 20-30% more than what I charge. It’s actually quite stressful managing a rental at times and it and comes with many responsibilities that’s not everybody’s cup of tea.
I think the crux of the issue here is what regulations exist that protects tenants from the slumlords looking to exploit the out of control market increases. I’ve had to raise rents every year by 5-7% just to keep up with my expenses and I still don’t make any profit.
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None of that contradicts what I’ve pointed out above. Where it can conflict is when people misunderstand the fundamental balance between risk and return. Home ownership is a stable investment within that concept of the American Dream™. Anyone who tells you stable and high rate of return coexist is lying. Real estate can reasinable be expected to be a solid hedge against inflation and roughly track to inflation or slightly above. Every time housing has temoprarily and widely increased well over inflation for ROI, there has been speculation and a resulting bubble and crash. It’s dumb and unhealthy, and a lose-lose proposition unless you are a predatory lender/hedge fund manager.
All of the above goes for rental properties. If rent increases faster than wages, it’s unsustainable on both the micro- and macroeconomic scales.
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I live in an odd market but I suspect one could buy and rent out a place at a loss for 5 years then turn around and sell it a a reasonable return over all. It feels like the prices have some sort of ratcheting mechanism. They may slow but are unlikely to go down even as they do elsewhere.
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We rent from a woman who owns a few rentals (stand-alone houses) and I know that she has owned our house free and clear for over 15 years. She began raising our rent after five years, so we are still paying under market. I feel like these mom & pop landlords have accountants or financial advisors who tell them to do this because reasons.
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I’ve been forced to raise rents on my tenants because of increasing costs just to break even. My HOA fees have gone up 30% in the last 5 years along with insurance, utilities and taxes. I’ve already been warned to expect an almost 50% jump in my property taxes next year due to the crazy increases in valuations across the entire state.
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While I disagree with that premise, the things about investments is there are safe, low yielding investments, and risky, high yielding investments. Real estate is a high risk investment if it is treated as an income generating asset.
Real estate is a home, a place to live, and if you break even at the end of the day, good for you. The most intrinsic value of real estate is that eventually you stop paying for it. Once the mortgage is paid off, all you have are taxes and operating expenses (utilities and repairs). Timed right, this allows retirement saving at the peak of a person’s earning potential, and minimizes expenses during retirement.
But once it becomes a revenue stream, it becomes a very risky investment. Will your tenants pay on time? Can you legally evict them if they don’t? Will they trash or otherwise damage your property? Will their use of your property amortize it faster than if you hadn’t rented it out. Will it appreciate in value? Was it over priced when you bought it? Will the area it is located in still be desirable in 30 years, or will resale value fall below purchase price, interest, and maintenance? Are you prepared to take a loss on the property, up to several $100K?
I’m a former banker, and financed purchase of properties for rent and B&Bs (in Kazakhstan, Russia, Ukraine, And Uzbekistan) and these were all scenarios we ran and questions we asked when financing purchases of real estate.
Of themselves, homes are an investment in your future self having a place to live.
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Her insurance may have gone up, but no HOA fees. She does employ a landscaper, but they do minimal work twice a month with one tree requiring once/year major cutting. She did repaint the house last year, but now the screens don’t fit correctly having been bent by the painters.
I think we’ve had her call the plumber out maybe four times (new garbage disposal, new kitchen faucet and two snakings) over 11 years, and she had to fix our heater once and replace the water heater. We paid to have our neighbor build two beautiful screen doors after the POS screen doors began falling apart. We will take them with us when we leave and put back on the others that were ineffective with mosquitoes, bees and wasps.
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Please, everyone, anytime you start a sentence like this (not all men, not all white people, not all cops, not all Republicans, not all Martians, not all Wookies), please go back and look to see if anyone was accusing all of that category of people of being a certain way. If not (and it’s almost always not), then that thing does not apply to you. You do not need to try to defend yourself, because it’s not about you.
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I didn’t say you were looking for sympathy. This post, however, is about predatory landlords. If you are not a predatory landlord, then it’s not about you. Your comment, to me, came across very much like someone saying, “Not all men…” in response to many “Me Too” blog posts and stories from a couple of years ago. You’re right, this is a forum for open discussion, and I am just offering my perspective as well.
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Being a renter in Houston has me convinced there’s only one solution for this psychotic patasite class.
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I was going to suggest guillotines, but getting the materials to build those can be difficult. Better to ‘borrow’ an industrial wood chipper from an equipment rental place for a few hours…
:whistles innocently:
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Although not endemic to California, it seems to be a common problem in Los Angeles. We received our full deposit from every property we rented, less reasonable costs to restore the property to its original condition beyond normal wear and tear, in San Diego, but every landlord in Los Angeles has tried to nickel and dime us for every little petty charge that could easily be classified as normal wear and tear. With all the energy I used to claw back some of those petty charges, I could have made a helluva complaint to LAHD and let them do some of the heavy lifting.
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And later, we marched through the streets of DC.
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