I Don’t Hate Landlords—Or Telegraph Companies

I have fielded the question for as long as I have been advocating for tenants in courtrooms and in articles and books. Sometimes the question comes from frustrated rental property owners, sometimes from readers. Once it came from a childhood friend whose family rents out homes.

Why do you hate landlords?

I don’t. As far as I know, most landlords are decent people who treat their tenants with respect and maintain their properties well.

The other kinds of landlords are probably rare, although they are disproportionately represented in the eviction courts where we work. These are usually corporate entities that leave our clients living in dirty, dangerous settings that have caved-in ceilings, rampant leaks that cause mold, rodents, doors that can’t be locked to prevent intruders, and unsafe electrical problems.

I also personally like the attorneys for landlords who we see in court. They are our opponents in an adversarial process, so we regularly have to argue out cases. More often, though, they are the ones who work with our clients and other tenants to make arrangements to pay back rent and stay in the home, or to move out on terms that avoid a formal eviction record. I’ve never met a landlord attorney who enjoyed seeing a person be displaced from their home.

So, no, I don’t hate landlords. But I do hope they become obsolete. I look forward to the day when being a landlord is like owning a telegraph company: a once-robust moneymaking business that has become a relic from a bygone era.

Because if housing is a human right, no one should not be able to make a profit selling access to that right.

This is not a new perspective. In his legendary The Wealth of Nations in 1776, Adam Smith expressed scorn for landlords: “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for [the Earth’s] natural produce.”

A half-century later, John Stuart Mill wrote, “Landlords grow rich in their sleep without working, risking or economizing.”

More recently, LA Tenants Union co-founders Tracy Rosenthal and Leonardo Vilchis questioned the entire for-profit renting model. “Why do tenants wake up every month and have to pay rent?” they ask in Abolish Rent: How Tenants Can End the Housing Crisis. “The entire real estate industry relies on privatizing a common resource (land), hoarding a human need (housing), blocking public intervention or competition, and maintaining a captive market of tenants to exploit and dominate.”

Image by Nick Youngson CC BY-SA 3.0 Pix4free.org

Samuel Stein, a housing policy analyst and author of Capital City, Gentrification and the Real Estate State, delivers a similar critique of the passive foundation of landlord wealth-building. “What is rent?” Stein asked in a February Shelterforce discussion. “For economists, it’s the “unearned increment” above the actual cost of goods and services, charged by an owner because they have inordinate market power.”

In that same Shelterforce discussion, Susanne Schindler, an architect, urban historian, and research fellow at Harvard's Joint Center for Housing Studies, points out that for-profit renting is not inevitable. “What if housing were provided as a public service, just like education or roads?” Schindler asked. “We never talk about public schools being ‘subsidized’; an education is something we (as a society) have decided is required to keep a democracy and an economy functioning. Everyone can attend a school.”

In a housing system like that, there is no room for a wealthy corporation or individual to build further wealth by forcing poorer people to pay a cost for the shelter they need to survive.

“I Am Making Money Without Having to Do a Thing”

Now, many landlords will say that they need to charge rent in order to pay off their mortgage on the property they rent out. The National Apartment Association claims that nearly half of the average rent charged goes to mortgage payments.

But that mortgage payment is not just a bill that needs to be paid every month. It is an investment that is almost invariably building substantial wealth for the landlords—and none for the tenant—as property values rise dramatically for both multifamily buildings and single family homes. The advantages for landlords are so pronounced that renting out residential real estate is perhaps the most widely-promoted wealth-building strategy.

Some landlords admit it. “364 days of the year I am making money without having to do a thing. I rarely even think about the fact that I own rental properties until my tenants drop off their rent payments on the first of the month. How much more passive can generating income get?” writes one landlord, who happily acknowledges the long-term benefits of his renters paying off his mortgage. “Renters create wealth for YOU.”

Beyond building lasting wealth for the landlord, even corporate landlord lobbyists admit that the price of rent includes a healthy immediate profit, one that is boosted by the industry leaders using a shared pricing algorithm and intentionally keeping units vacant to generate scarcity. I have an article coming out soon that explores whether these conditions mean that housing rent meets the legal and economic definition of price gouging.

This kind of wealth building perpetuates our country’s already enormous gap between the rich and the poor. Even so, maybe it would not be so damaging if renters could afford the inflated prices. But they cannot, as evidenced by the scenes we observe every week in eviction court, the 3.6 million households facing eviction each year nationally, and record levels of homelessness.

This kind of widespread suffering is unheard of in the nations that prioritize social housing—owned by governments or nonprofits—over the housing profiteering that dominates here in the U.S.

So, for the most part, I am hating the game here, not the players. But I definitely hope the game fades away to irrelevance. And don’t worry: when that happens, landlords will be OK. After telegraphs stopped being a going enterprise, even Western Union found something else to do.