As I’ve mentioned in prior posts, my husband and I are old. Three years ago, we downsized, as old people are wont to do. We put the three-level house up for sale and considered whether to buy a condominium or move into a rental apartment.
We opted for the rental, in large part because of the less-than-happy experiences friends and families have had with HOAs.
Being solidly middle-class, if we become unhappy with the management of our very nice apartment, we can simply move. (I’m happy to report that we remain quite pleased with that management, and the numerous amenities of our downtown apartment community.)
Rather obviously, that ability–sufficient financial wherewithal to rent an upscale apartment–and to move out and find a satisfactory substitute if we want or need to–distinguishes our situation from that of far too many renters in Indiana. Thanks to our always-retrograde Hoosier legislature, Indiana law massively favors landlords over tenants. The Indiana General Assembly consistently refuses to pass even the most reasonable, minimal protections for tenants–last session, a former student of mine who is now a Democratic state senator proposed a bill that offered renters basic remedies in situations where failure to make needed repairs had compromised habitability–the measure would have allowed the tenant to direct rent payments into an escrow account until the premises were once again suitable for human habitation.
Our legislative overlords were appalled by this proposed mistreatment of landlords. The bill failed.
Unless Indiana’s politics change significantly (unlikely, at least in the short run), Indiana renters whose finances leave them to the not-so-tender mercies of rapacious landlords need to pin their hopes on passage of a national “Renters’ Bill of Rights.”
In the linked article, Fran Quigley begins by explaining the breadth of the problem.
I teach a law school clinic where my students and I represent tenants who face eviction and live in horrible housing conditions. Too often, we see tenants getting railroaded by the fast, cheap, and easy eviction process in US courts. In many states, they can be forced out of their homes for no reason and with just a few days’ notice. We see tenants plunged into homelessness after their price-gouging landlords hike rent by 30 percent and more. We see tenants complaining in vain when their heat and water are not working, when mold builds up, and when rodents scuttle through their bedrooms. Then they are evicted as retaliation for making those complaints.
These struggles are common among the nation’s 114 million renters. Meanwhile, seven million households are behind on their rent and the number of homeless people is reaching record highs.
A new effort called the National Tenants Bill of Rights aims to change all of that, articulating seven basic renters’ rights that ought to be enshrined in policy. Created by the Tenant Union Federation, the National Housing Law Project, and the National Low Income Housing Coalition, the Bill of Rights confronts the enormous power imbalance between renters and their landlords. The purpose of the document is to lay out a single comprehensive policy agenda that lawmakers, advocacy groups, and tenants themselves can endorse and use as a movement resource.
The proposal addresses a relatively new reality: corporate landlords and private equity currently have the national rental market in what the National Housing Law Project describes as “a chokehold.” Among other things, the bill would require just-cause evictions, and enforceable requirements for decent housing conditions for the one-third of US rental units whose owners benefit from federally backed mortgages.
The rental market has changed dramatically from the days when grandma and grandpa owned a double, lived in one side and rented out the other. Today, private equity and corporate landlords dominate the nation’s rental market.
These mega-landlords own the majority of all US rental units, including 80 percent–plus of the properties with twenty-five or more units, all while gobbling up single-family homes too. That market dominance and the use of rent-setting algorithms that are under federal investigation for price-fixing sets the stage for shameless price-gouging. Bob Nicolls, CEO of one of America’s top corporate landlords, Monarch Investment and Management Group, gleefully told investors in the middle of the COVID pandemic that big rent hikes were coming. “We have an unprecedented opportunity . . . to really press rents,” Nicolls said. “Where are people going to go? They can’t go anywhere.”
Nationally, rents have risen nearly 30 percent since early 2020. One in every five renters fell behind on their rent at some point last year. Far too often, paying the rent means skipping prescriptions, utility payments, and meals.
At the very least, the law should require landlords to provide livable units before pocketing those rental payments.
“Bob Nicolls, CEO of one of America’s top corporate landlords, Monarch Investment and Management Group, gleefully told investors in the middle of the COVID pandemic that big rent hikes were coming. “We have an unprecedented opportunity . . . to really press rents,” Nicolls said. “Where are people going to go? They can’t go anywhere.”’
Greed, anger, and ignorance are the three poisons that cause suffering in this world.
Our two-dimensional mixed economy is even more complex to manage than the old single-dimensional ones of the last century. Of course, many other countries have managed it, so it is not impossible. It becomes much more complex, though, when we have extreme counteracting political forces at war here and now.
One example is the balance on the capitalist side between workers and investors.
The power of investment banking has upset the balance between those who create our wealth through work and those who either contribute to owning the means of production or are passive investors betting on stock price direction. They add nothing, but demand an ever-growing share of the total cost of goods to pay for their gambling habit.
The housing market employs workers for construction and maintenance, but those are small contributors to the total cost of a rental property. However, the dysfunction of split and extreme politics impact complexity, too. Renter rights are minimized, and landlord power is large and dysfunctional.
The question is, are we smart enough to fix these problems? I don’t know.
“The Indiana General Assembly consistently refuses to pass even the most reasonable, minimal protections for tenants…” Of course, because many of them own rental properties, and tenants protections would conflict with their greedy interests. And there you have it: conflicts of interests, which is rampant in our “legislature”. Those hooligans are posing as lawmakers solely for their own enrichment, not for the benefit of constituents.
My personal circumstances are a solid relief and source of stability to my aging self. Strata councils, while rarely a boon, can be worked with…at least owners can learn together about being good neighbours as they make shared decisions for mutually preserving property values.
The above is a total statement of priviledge…For which gift I am deeply and perpetually grateful.
As housing gets crazier and uglier and scarcer around the globe, marching in step with income mis…distribution, effective solutions become increasingly elusive. Learning something of San Diego from Sheila in a previous blog was a dim beacon of hope…some actions can help. Though, in these days, one’s country can not provide a reliable safety net, giving up is not an option.
A potential remedy is voting – that would be PAYING ATTENTION and VOTING. Aside from the heaps of information available from those participating herein, encouragement to vote seems an invaluable shared benefit of this continuing discussion.
At least one ‘pundit’ – Rachel Madow – has described her very plausible concerns that the cancerous cult currently inhibiting our better natures will not be accepting defeat in any way. The window for effective preventative action so far remains barely cracked, but still open.
Vote indeed.
NVL, so well put with content to match!
Let’s stay out of civil war and use the ballot box instead. We have an authoritarian minority that growls loudly on entertainment (social) media but they are toothless if enough who live real lives, rather than media lives, just march to the polls and do what’s necessary here and now.
Indiana’s Republican legislators are “business friendly,” effectively meaning little government involvement in anything a business doesn’t like. However, as Ball State’s Michael Hicks often points out, an active government can make our daily lives so much better. Here’s a quote from Heather Cox Richardson’s blog that makes that point perfectly:
On Sunday, CNN’s Jake Tapper listed some of (Governor of Minnesota) Walz’s policies—he passed background checks for guns, expanded LGBTQ protections, instituted free breakfast and lunch for school kids—and asked if they made Walz vulnerable to Trump calling him a “big government liberal.” Walz joked that he was, indeed, a “monster.”
“Kids are eating and having full bellies so they can go learn, and women are making their own health care decisions, and we’re a top five business state, and we also rank in the top three of happiness…. The fact of the matter is,” where Democratic policies are implemented, “quality of life is higher, the economies are better…educational attainment is better. So yeah, my kids are going to eat here, and you’re going to have a chance to go to college, and you’re going to have an opportunity to live where we’re working on reducing carbon emissions. Oh, and by the way, you’re going to have personal incomes that are higher, and you’re going to have health insurance. So if that’s where they want to label me, I’m more than happy to take the label.”
Half of the houses sold in my neighborhood are being bought by investors. It’s not good for the community! I worry about future. How many rentals does it take to ruin a neighborhood? I have no idea, but I’m not going to be here tha long. Most of us are glad we’re old.
VOTE BLUE!
Concerning greed, it is disgusting to know that billionaires twist the law and exploit other people’s weaknesses to wring even more money out of the system for themselves. Whether they are acting as individuals or as the heads of huge corporations gobbling up small competitors, they have proven that they must be constrained by laws and regulations or they will shamelessly inflict suffering to swell their own egos and wallets. Those who complain about government regulations should keep this in mind. By all means, favor reasonable, balanced, properly enforced regulations but never believe that simply sweeping away regulations will do anything to improve our lives.
For reference, I checked Monarch Investments’ political donations on Open Secret, and they are all Republican. Not a penny to Democrats.
However, BlackRock, which buys up many single and multi-family homes for its funds, donates 75% to Democrats.
On an interesting note that makes it difficult to track donations, I read an article about Ted Cruz’s wealth. He has amassed over $40 million in net worth. He was able to buy a $2 million Austin home at an auction for $30,000. That’s one way to donate to a politician off the books.
The Landlord Associations have a grip on the Indiana Republican Party. As folks have mentioned, this is because many of the politicians own real estate. And like Ted Cruz, most of them accumulate portfolios unethically – insider information and “favors.”
Rental markets favor landlords because there is a shortage of rentals in Indiana. Does anybody think that’s intentional? 😉
Also, as Sheila mentioned, the big players pay for market access to an algorithm that sets rates for different markets. It is price-gouging!! However, there are algorithms for many industry sectors today that corporations use to price-gouge.
In the end, the consumers are the ones getting chewed up and spit out. The rule of thumb was to spend no more than 25-30% of your monthly income on housing. Now it’s more like 50%. That doesn’t leave much income for vehicle payments, student loan repayments, utilities, food, etc.
Capitalism is destroying our economy, and once P2025 is implemented for four years, it will get MUCH worse. It will also worsen under Kamala, but Trump’s greed and stupidity will hasten the decline.
Our nation’s debt to GDP is now 130% and getting worse every quarter. China is offloading our debt because we treat them like adversaries. The dollar will be under pressure, putting a lot of pressure on the POTUS for the next four years.
weve allowed this problem. rent was frozen in NYC for decades,until people like trump decided the mayors office was theirs. when a tenant vacated,only then could the owner raise the rent. but the recent issue is forigen owned property. seems theres immediate cash for any house,multi-fam housing ready. alot of it is from overseas investors,who have no problem with hiring a management team to implement any fix,to any issue. i didnt say repair.(thats a tax write off) our own goverment has allowed the investor demestic/foriegn to take charge,and inflate as they wish. most want their money back asap,then reap the rewards. until city,county state finally makes some sort of slow move to appease the renter. I have a friend who went south thru Mexico and Costa rica, seeking a retirement home. you can buy said home,but you can not buy the land its on. your lessing it. countries down south made laws decades,centuries ago chartered into its constitution. they foresaw the issue with the gringo. we should,have had such a protecction here. now, how many poiliticians have direct/indirect investments in such schemes to allow homelessness? im sure slum lord jared can speak volumes,while dealing with our house memebers.
Todd:
those biyers are working for cruz,its a scheme into itself. they are property managements. they hire out their local knowlege,and profit from them. they could care less about homeless people unless their un the way,
hedge funds should have never been allowed to,own anything..
Here’s something to think about. I am a landlord with two units in one house (a double) in Meridian Kessler. The property taxes are outrageous and affect the rents. These are mostly houses close to 100 years old and are maintenance nightmares. Is it because we are supporting private schools with vouchers that our taxes are so high? Also, your taxes are lowered by half if it is your own residence. The fact is that it is a tenants’ residence, not a commercial entity. Why are the tenants cut out of the “homestead” exemption. I think at least part of property taxes should be income based. Also I feel that if the property is a residence, that should also be granted an exemption. I was paying 1/2 my rent in property taxes. It is not sustainable and that does not take into account the maintenance of older properties. Your plumber, plasterer, electrician, etc. are on speed dial.
Marsha. Sounds like one more example of where the big money interests rig the system to drive out smaller competitors. More reasons to vote for Democrats instead of Republicans. At least they care about the middle class. Won’t solve everything, but is a step in the right direction.
“They can’t go anywhere,” except, perhaps into the streets, and then people like Nicolls would call them lazy and shiftless, bastard!
Marsha,
Sharon is on point. Home values continue spiking in Downtown Indy and around the state due to supply and demand. As I said earlier, your competition is BlackRock, which has extremely deep pockets. They won’t be buying 100-year-old homes that are maintenance nightmares, either.
Home value increases cause property taxes to increase. Due to the market, single-family owners and landlords are paying the brunt of the taxes in Indiana right now. Nobody wants to explain why the market is unbalanced right now, but it is badly.
Even in a non-growing community like Muncie, Indiana, because the nonprofit Ball State keeps adding multi-million properties on campus, property values increase by over double digits yearly, prompting gentrification. I have no idea who buys homes at these prices in our community, but there are very few for sale. They get gobbled up fast.
https://fox59.com/indiana-news/property-tax-bills-expected-to-be-much-higher-experts-say-start-planning-now/