Who said anything about expectation? I'm not saying that landlords need to lose money in expectation. I am saying that some landlords need to lose money if they are indeed charging a risk premium. Same way we expect insurance companies to make money on average but lose money on some individual policies.
My point is that complaining about rare cases where landlords lose money because they cannot evict a tenant who isn't paying at the drop of a hat is simply ridiculous. It is like complaining that an insurance company occasionally has to pay out for their policies.
I think a problem with this approach is you rid yourself of all small landlords and move towards corporate owned housing. Only those with a large portfolio of homes can afford the statistical averages you’re talking about.
That's not really true. Individual people make all sorts of investments that in expectation grow but still carry risk. A system where renters pay risk premiums to landlords is a fine marketplace. A system where landlords insist on carrying minimal risk while also using risk as an argument for extracting money from their renters is garbage.
The truth is that the price of rent is utterly disconnected from the value of a landlord's labor plus the various premiums you'd pay for risk smoothing, lower transaction overhead, and opportunity cost. Landlords simply charge whatever they can get away with and we should all laugh at attempts by landlords to justify their rent through any argument other than "fuck you, pay me." After all, I've never heard of a landlord reducing the rent when they finish paying off their mortgage.
Once we at least have this shared understanding we can start having a real conversation about the merits and costs of the system we have today, rather than this fake conversation about how landlords are so nice for paying for that new roof.
It’s not about carrying minimum risk. When you carry more risk, you expect a larger return - you increase the rent. Which hurts the people you are trying to help
Is your pay based on market rate for your services? Do you voluntarily make less money than you can?
> It’s not about carrying minimum risk. When you carry more risk, you expect a larger return - you increase the rent. Which hurts the people you are trying to help
I don't believe that rents would actually go down meaningfully if states adopted laws enabling evictions within two weeks. As you say, rent is actually based on market rate and is entirely disconnected from the expenses landlords pay. All of these discussions about landlord expenses are non sequiturs that just hide the real discussion.
> Is your pay based on market rate for your services? Do you voluntarily make less money than you can?
I am performing labor rather than gating access to a scarce and necessary resource. The social damage of charging for labor is not the same as the social damage of charging for housing.
> Your job is enabled by someone at some point taking a financial risk to start the company you are working at.
That's true. The founders of my employer are mega-billionaires though. I'm not worried about them.
> Your pay is also more than likely built on the back of the less privileged.
That's also true. Capitalism is fundamentally unjust. I donate a huge amount of money to anti-poverty charities annually to help mitigate this.
> What’s the alternative?
I am not certain. But we can't even have this conversation until people stop talking about landlords like they are engaged in some essential charity for renters.
Would it be preferable for an individual to build a single family home on the land than a corporation build multi unit housing? Which does more to increase housing supply?
