If we take it as given that housing will remain a market oriented investment opportunity, we might desire for it to be owned by a broad swath of society. “Mom and pop” landlords may even be the ideal type – people making big investments relative to their capital, with some risk, but who can leverage these investments to create a better life for their families. One landlord I was speaking with was clear to point out that under these circumstances he can not afford to be highly flexible with the timing and/or forgiveness of rent. He has to pay his mortgage and if he gets into a pinch because he is not getting the rent, he is both penalized by the bank through late fees etc and takes a hit on his credit score. The inability for tenants to pay the rent, therefore, has real upstream impacts on small to medium sized business owners. [To be clear, I am NOT suggesting this impact has any equivalency to that of being evicted. Rather, I’m simply describing a true fact.]
This point is very difficult for me to write about because I spend much of my professional and personal life trying to dispel stereotypes about low-income people. That said, every landlord I’ve ever spoken with has several stories about tenants that trash their property, skip rent while also spending on luxury items, or skip rent and “call a landlords bluff” on the threat of eviction. To be clear, this behavior is not only associated with low-income tenants. One might say it’s just part of the cost of doing business as a landlord. That said, tenants are getting a huge service from landlords and ought to come to the table in good faith. Responsibility should flow in both directions. One landlord I talked with said that if a tenant takes pride in the space and pays on time he doesn’t raise the rent at all. In my own experience renting in Silicon Valley I’ve received rent increases from my landlords, but mostly in line with cost of living increases. For many mom and pop landlords not wishing to incur expenses related to vacancy and turnover, it is simply in their interest to keep a good tenant over the long term. The landlord I spoke to was appalled by stories of rent increases in the hundreds of dollars let alone thousands.
But, it seems to me, that tenants and small-time landlords could get together to design policies they can agree on.
- Create clearer standard leases that would split responsibility between tenants and landlords- I’d love to understand my landlord’s financial constraints and find a middle ground where she gets a good return on her investment and I know how long I can expect to stay and how much I can expect my rent to increase over time. This process would build solidarity among the parties rather than feeling like we are being used in a purely market based transaction – a feeling landlords repeatedly conveyed to me on the occasions of dealing with difficult tenants.
- Some kind of loan or bank reform that would approach housing loans as different from other types of lending. I don’t know much about this field and would love comments and ideas, but we need to approach all parts of the housing market with equity. It strikes me that just as a renter should have some kind of safety net when times are tough, so should a small-time landlord have some incentive not to have to choose between evicting someone and keeping the business solvent. Until we implement more equitable and secure income sources for low-income people, we should value the service some landlords provide in helping to house them.
- Of course, incentivize alternative forms of property ownership so that investment and habitation are aligned. What I mean is, could we convert or buyout corporate owners that are often living far from our communities and create mixed income coops so that home ownership may be within reach for middle and lower income people? This model, again, would spread the benefits of property ownership and wealth creation more widely
*hoping my totally cheesy subheadings didn’t turn you off 😉