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sadiesayit's avatar

"Without landlords/rental properties, more people would be homeless." True or false?

Asked by sadiesayit (1329points) 1 month ago

Please explain the rationale (and ideally data/evidence) behind your answer…I’m not looking merely for opinions, I’m wanting to understand how this would actually play out.

Someone I was talking to said that landlords and rental properties offer a more affordable housing option for people, and offer better incentives for builders to build, and without that, more people would be homeless.

It didn’t seem quite right to me, but I’m no expert on how economics play out. Is that what would happen? Or would the market adjust in some other way?

I guess what I’m asking, really, is: To what extent are landlords a necessary component to how the housing market works?

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22 Answers

Zaku's avatar

Not true.

There is no one way it “would actually play out”. The person you were talking to was acting like there was only one valid way to think about housing (and about the imaginary idea of rental housing not existing for some unexplained reason), and they knew both what it was, and what would happen, and that’s a bullshit argument.

For example, one thing that actually is happening in some US communities, is that housing prices rise toward what SOME people are willing to pay for housing… and when/where there are enough people with particularly high incomes, rents rise to the point that there are very few available rentals that are affordable by people with low incomes, and that causes and/or perpetuates homelessness. And in those cases, people who care, look for ways to create affordable housing, sometimes to be offered to homeless people as part of a program.

Now, you haven’t really said whether you would count charitable low-income housing managed by the government or other not-so-landlord-like organizations to be what you’re talking about, or not.

If you mean “zero landlords of any kind”, then you’re going to have to look to a very different sort of situation, and may have a hard time finding one in a modern economy.

My own utopian solution would involve gradual rent control measures, then phasing out rental arrangements, and also phasing out property taxes, in favor of the idea that everyone should have a right to live someplace, and that for-maximum-profit rental and real estate deals are antithetical, because they lead to ever-rising prices and pervasive scarcity and homelessness. But to support that would require an economic revolution of one sort or another.

flutherother's avatar

Builders build houses to sell and make a profit. It doesn’t matter to them if the owners live in them or rent them out though I don’t think many newly built houses are rented out. Privately rented properties here in the UK are usually older houses. Landlords buy them in order to let them out and make a profit and so rents tend to be high. Younger people especially can’t afford to buy as they haven’t saved enough for the deposit and can be forced into expensive rental properties with little security.

Housing associations help this situation by building and renting out properties that are affordable and offer more security that private rentals. They are landlords too but their purpose is to help people rather than to make a profit.

ragingloli's avatar

“Without horses, no one could get anywhere.”

JLeslie's avatar

It’s not that simple. Nothing ever is.

When a housing market has a lot of investors it tends to drive the prices up. It’s a problem. The average person can’t buy a home because the prices are so high. It causes bubbles in the market. There would be less need for rentals if prices were reasonable.

There is always a need for rentals through, so either you have private owners or a public entity supplying housing. Private can be non-profit or for profit.

In America there are tax laws that encourage real estate investment. Some of the best tax loopholes are in real estate. It helps the rich get richer.

Also in America, the government will pay rent for a poor person through section 8 housing. Lots of landlords have made a lot of money providing housing for section 8. The government always pays, almost no worry the rent won’t come in. Maybe it would be better to help pay a mortgage for the poor.

Plus, some people who are homeless need more help than just shelter, and America at least doesn’t do a good job at addressing that.

stanleybmanly's avatar

False. It is the rental properties that are essential. The number of landlords is irrelevant. It wouldn’t matter if one or a million of them owned them all. There is a shortage of housing, never a shortage of landlords.

hello321's avatar

@stanleybmanly: “There is a shortage of housing”

Technically, there is not a shortage of housing. There are always far more empty homes than people without a home.

KNOWITALL's avatar

For the poor, it’s absolutely true. Bad credit, felony convictions, etc..they desperately need affordable rentals. We have several nightly and weekly stay motels always sold out and often shelter families, not just crackheads.
In my small city, nothing stays on the market more than a few days. Due to the lack of rentals, slumlords are the only option for the poor here and its horrible. One developer now building duplexes was up against major opposition, as residents believe renters are a detriment to our community. Sigh.

stanleybmanly's avatar

@hello321 excuse me. There is a shortage of “affordable” housing. Which is simply another way of saying more people cannot earn enough to house themselves and their families.

Strauss's avatar

The Denver area has had an affordable housing crisis for many years now. Part of the problem is gentrification. This is a result of real estate investors purchasing large tracts of formerly industrial or commercial properties, and developing high end condominium neighborhoods. This practice has displaced a lot of low-income renters in surrounding neighborhoods, and caused rents to soar, even in less desirable areas. Rent becomes unaffordable and homelessness ensues.

The problem is not the existence or not of landlords; it is the lack of affordable rental housing.

RedDeerGuy1's avatar

I view landlords of apartments as training grounds for renters. They help with repairs and upkeep. When a family is sufficiently trained in home ownership of then it would be cost effective to move into a house.

sadiesayit's avatar

Thanks, all!

@Zaku—in your utopian solution, do you have an idea in mind for how everyone would have access to someplace to live? Just curious.

@flutherother—thanks for sharing. What kind of organizations are the housing associations? Are they private nonprofits?

@ragingloli—by that, do you mean we’d find another way (another mode of transportation)? Or that horses aren’t necessary (i.e., humans have legs).

@JLeslie—if the US government were to help pay for mortgages instead of rent, do you think that would dramatically change the rental market?

@hello321—that’s what my intuition was saying, but I didn’t know why (or if it was correct). Can you explain why you think it’s a false statement?

@stanleybmanly—what in your estimation makes rental properties essential?

@KNOWITALL—thanks for sharing. Do you think the duplex development will help (to the extent it can) the rental shortage/situation in your area?

@Strauss—also thanks for sharing. Do you think there’s a way to stop that process or ameliorate the consequences of it?

@RedDeerGuy1—is that how you would describe an ideal version of how property works, or is it how apartments function in the area you live?

@anyone—if there’s not technically a “housing shortage” but there are “affordable housing shortages” in various places—what causes that? Where are the houses that are sitting unoccupied, and why isn’t that land being converted into a housing situation that can be afforded by the people who still need roofs over their heads?

stanleybmanly's avatar

What makes rentals essential? The rather blatant fact that most people can’t afford to buy.

JLeslie's avatar

@sadiesayit Singapore had government subsidized housing and home ownership there is extremely high. Now, their real estate is very expensive, I don’t think that is necessarily a good thing, but for many years it seemed to be working well. Here is an article and here is a wikipedia

Zaku's avatar

@sadiesayit Yes. There is already an abundance of housing. All you need to do is let the people who have a place to live keep living there, and let the people who don’t have a place, into some of the available places. The main obstacle in the USA is the barbaric scarcity game almost everyone suffers from, but so few are willing to question. It should be done gradually and with fairness in mind.

flutherother's avatar

@sadiesayit They are private organisations that don’t make a profit. Any budget surplus is used to maintain the properties they own or to finance new homes.

hello321's avatar

@sadiesayit: “Can you explain why you think it’s a false statement?”

Because it just doesn’t make any sense.

“Without landlords/rental properties, more people would be homeless.”

Can really be translated as….

“Without a system where housing is a commodity, more people would be homeless.”

It’s a statement where the implicit values of homelessness as acceptable are baked in. There is no legitimate reason why there are people without a home. We have decided that it should be this way.

sadiesayit's avatar

@JLeslie thanks for the article. Do you know what happens for the current occupant of a flat at the end of a 99-year lease? Or how the subsidized prices are set?

@flutherother—thanks, I’m curious to learn more about how that works now.

@Zaku—how would you want the available houses to be distributed? Do you know what who currently owns the available houses—what circumstances lead to homes being available but empty? I’m thinking that’s something I need to better understand…

@hello321—how do you think we should we decide it be instead?

hello321's avatar

@sadiesayit: “how do you think we should we decide it be instead?”

I am not stuck on any particular way. But for starters, any society/government worth saving should consider housing a right. I’m anti-capitalist, but even within the context of a capitalist economy, there are things we deem too important to be commodified (roads, fire department, k-12 education, etc). If a society is willing to tolerate people with mansions while more than a half million people are without a home should be immediately changed or destroyed.

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Strauss's avatar

@sadiesayit Do you think there’s a way to stop that process or ameliorate the consequences of it?

I think part of the solution might be to expand the “Section 8” housing that @JLeslie mentioned. Another part might be a rent control program similar to that in New York City.
A third option might be some sort of mortgage assistance or subsidy program.

dabbler's avatar

“Landlords” is too ambiguous.
Mom-and-Pop landlords are an asset to society IMHO. They typically take more care of their property and are far more likely to actually care about the people renting from them.

REIT Real Estate Investment Trusts, have been buying up houses like crazy in the past decade. They do superficial ‘renovations’ and charge as much as possible to contribute to the insatiable bottom line for their owners. These REIT are very unlikely to do anything that helps homeless people get off the street.

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