What do you think about Tenant Unions?

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Here's an article: https://www.wsj.com/articles/t...

With rent rates increasing dramatically, a housing shortage around the country, and new generations that feel entitled, I suspect we'll see more of these.

I find it interesting that the go on "rent strikes" and stop paying rent. How is that successful? In my state, a tenant can only withhold rent if the Landlord fails to maintain the rental. Even then, the tenant has to follow strict guidelines. If my tenants just stopped paying rent because they disagree with the market rates, I would evict them. Unless you're investing in a liberal area like NY or LA or Portland, I just don't see how this would be effective.

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Sean McKee

Rental Property Investor · Chicago, IL · Member since 2017 · 268 posts · 188 votes

I'm all for tenants having reasonable protections against bad landlords. However a lot of the tenant unions have a very different interpretation of "reasonable" than most property owners. Because of this I don't think there will be much middle ground in the fight over housing.

In my opinion tenant unions often have misplaced objectives. Most of their efforts don't actually focus on the actual problem of a lack of affordable housing. Rather, many of their objectives are aimed at creating restrictive and punitive laws on current property owners. The sad thing is many of these new laws make it much harder for smaller landlords to do business. They are less inclined to give second chances. Since smaller landlords provide a lot of the affordable housing units, this makes even harder for the tenants the laws seek to protect to find housing.

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Sean McKee
Rental Property Investor · Chicago, IL · Member since 2017 · 268 posts · 188 votes
4y
I'm all for tenants having reasonable protections against bad landlords. However a lot of the tenant unions have a very different interpretation of "reasonable" than most property owners. Because of this I don't think there will be much middle ground in the fight over housing.
In my opinion tenant unions often have misplaced objectives. Most of their efforts don't actually focus on the actual problem of a lack of affordable housing. Rather, many of their objectives are aimed at creating restrictive and punitive laws on current property owners. The sad thing is many of these new laws make it much harder for smaller landlords to do business. They are less inclined to give second chances. Since smaller landlords provide a lot of the affordable housing units, this makes even harder for the tenants the laws seek to protect to find housing.
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Adam Martin
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
4y
I don’t have wsj to read the article but it sounds interesting. I wonder if there is any liability if the tenants union suggests a rent strike because I would just start handing out term notices to everyone I could who participated. There would be no cure and I would evict if necessary to make them think twice about doing it again. The tenants union could essentially be responsible for making them homeless since it is extremely difficult to find housing with an eviction.
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Joe FunariBusiness Member
Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
4y
@Nathan Gesner Interesting read from WSJ. I agree with you though. Here in Texas, similar to Wyoming, laws generally favor the landlord and evictions are the kiss of death to a tenant. Which is why eviction rates for most PM's here is 1% on average. But there are laws in certain municipalities, city of Dallas comes to mind, where the city code inspectors have to inspect the property to ensure its habitable. If not, they won't issue the occupancy certificate. Which is needed in order for the tenant to place the utilities in their name. Thus, landlords are motivated to address any issues from the inspection in order to get the occupancy certificate. If your managing your property it usually is not an issue. IMO, its an additional revenue stream for these cities as landlords have to pay an annual "registration" fee of approximately $200 each year too.
Also, Texas is a right to work state. Thus, laws here don't favor labor unions. Which I feel all that tenant unions are. But it doesn't mean that unions don't exist here. But you typically see them in the auto plants and other skills trades we investors deal with. In my corporate America days I worked in a unionized shop with teamsters. But it was fairly laid back environment compared to what I experienced living in Detroit for a few years. There unions are very strong.

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Andrew B.
Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
4y
In a world where large investment syndicates and massive corporations are buying up large amounts of housing, the tenant will see lower and lower negotiating power. You can't be surprised when the tenants get desperate and try to grab some of that negotiating power back.
When the majority of rentals were owned by small investors, tenants had the bargaining power to just "go rent somewhere else." When 75% of rentals are all owned by a small group of people, tenants dont have that same bargaining power.
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Quote from @Adam Martin:

I don’t have wsj to read the article but it sounds interesting. I wonder if there is any liability if the tenants union suggests a rent strike because I would just start handing out term notices to everyone I could who participated. There would be no cure and I would evict if necessary to make them think twice about doing it again. The tenants union could essentially be responsible for making them homeless since it is extremely difficult to find housing with an eviction.
That's exactly what I would do. Protesting that market rates are too high is like protesting the price of beef, milk, gas, or tickets to a Barbara Streisland concert.
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Mary M.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
4y
I think that it i easy to say "i will evict them all" and probably quite different to have all your units not paying rent.... how many LLs can handle this kind of situation? Plus think of all the bad publicity. So IMHO LLs will negotiate.

I do agree that for some things people dont really understand how the economics of housing works.... so many of the policies they put in place make things WORSE for tenants, not better.

On the other hand, BP shows us that there are terrible LLs out there screwing tenants on the daily. So I dot blame tenants for fighting back.
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Mary M.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
4y
I want to add a policy that got put into place here in Portland that hurts tenants.... LLs can no longer raise rent more than apprx 9% a year., New builds are exempt for 15 years. This means that while we dont see LLs booting people , renoing and quadrupling rents, we also wont see the old stock get renovated so they swill continue to crumble. This just adds to the lack of good housing for tenants. It also means higher prices for those looking for housing now and it also means LL will raise rent every year when they may not of before. All this adds up to higher rent for new renters.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
Most places have a tenancy board that protects both landlords and tenants-to what degree depends on the area. People need to educate themselves to know what their rights are. Tenants have the freedom to move if they aren't happy with the landlord. There are some bad landlords (and some bad tenants), but most are good.
With housing prices going up, more landlords are selling rather than keeping rentals especially if they've had a bad experience with tenants.
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Mary M.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
4y
I am pretty sure tenants unions and rent strikes really only work in multi fam., and while a owner may sell the new owner will still be renting the units......
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
My opinion of unions in general is pretty low. However it's a free country...let them try and see what the consequences are. I suspect they will change their minds after a while. Except as @Nathan Gesner said, in liberal areas where they might get some support (rent control, etc) from the local Govt.
In the end they will probably just end up hurting the very groups that they think they are trying to help. As usual.
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Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
4y
Most folks have their support groups...............I belong to the Wa LL Association, they provide networking, all forms, Credit and BG checks, legal help etc. And I belong to BP!
Unlike Tenants Unions we don't agitate, protest and mobilize. The media does not help either; they promote the tenant vs LL theme, and it would seem there are some really bad LLs out there; just like there are bad tenants.
I live in a state that may never allow evictions again. So I put in extra steps in my screening process and that is working. Fingers crossed.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Originally posted by @Bjorn Ahlblad:
I live in a state that may never allow evictions again. So I put in extra steps in my screening process and that is working.
When you live under a Govt that literally has a good deal of control over your business and potential prosperity, isn't it sometimes better to just liquidate and move elsewhere? Not aimed at you so much as just asking rhetorically.....?

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Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
4y
Originally posted by @Bruce Woodruff:
Originally posted by @Bjorn Ahlblad:
I live in a state that may never allow evictions again. So I put in extra steps in my screening process and that is working.
When you live under a Govt that literally has a good deal of control over your business and potential prosperity, isn't it sometimes better to just liquidate and move elsewhere? Not aimed at you so much as just asking rhetorically.....?

Bruce, If I had any problems I would consider it. But we self manage and we stick to our process. Most tenants are just interested in a good place to live.

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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Well as long as you have a bullet-proof process, I guess that ought to work. I certainly hope it does!
I guess it would affect the new investors without an established process in place a lot more....
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Originally posted by @Bjorn Ahlblad:
Originally posted by @Bruce Woodruff:
Originally posted by @Bjorn Ahlblad:
I live in a state that may never allow evictions again. So I put in extra steps in my screening process and that is working.
When you live under a Govt that literally has a good deal of control over your business and potential prosperity, isn't it sometimes better to just liquidate and move elsewhere? Not aimed at you so much as just asking rhetorically.....?

Bruce, If I had any problems I would consider it. But we self manage and we stick to our process. Most tenants are just interested in a good place to live.

Tends to be pretty regional .. I dont have a lot of these types of investments but did have years ago.. I find if you buy quality assets and use the 3X or more and higher credit requirements this is just not an issue.. so if your rent is 2k a month and your tenant has a 680 plus they just tend to ( as described) just want a good place to live so as long as your maintaining your property.
Where is see this having leggs is in lower rental price points where 3X is maybe under 2k a month and finding anyone who has a 680 is next to impossible.. different mentality. And this lower priced rent the tenant is under much more stress if you take out 1/3rd of their income they have less than 1200 a month to live on total.. you take out the rent of a 2k renter and they have 4k a month to live on.. Big difference

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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
I am fine with a tenants rights group, provided they are just a lobbying group advocating for fair treatment. I take issue when they withhold rent, which is fraud or theft, depending on how you look at it. Fraud because you broke a contract and theft because you consume goods without paying for them. This would be no different than a landlord turning off utilities or locking a tenant out, without legal eviction. We all have to play fair and follow the law. If you don't like the law, get it changed. People have a right to disagree, but they do not have a right to steal or destroy other peoples property.
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Jill F.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
4y
@Mary M.
Here it takes 5-6 weeks to evict and there is already a rent escrow process for withholding rent to make repairs. Withholding rent outside that process is strictly in prohibited. I think most landlords could hold out. They specifically mentioned Akron in the article, and both properties where tenant unions were formed here were just sold by amha (Akron metro housing authority) to redwood in February because, they said they felt it was the best shot they had for getting renovations done for the residents. The new owners have been out there renovating hard core since purchase. The properties had been under maintained for years; the tenants likely had some legit complaints but it seems likely the problems should have been laid in the lap of the city housing authority, the former owner. I wonder if the apartments will remain a hap project moving forward or if they'll start accepting non low income tenants. The new siding and windows look real nice.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Originally posted by @Jill F.:
@Mary M.
Here it takes 5-6 weeks to evict and there is already a rent escrow process for withholding rent to make repairs. Withholding rent outside that process is strictly in prohibited. I think most landlords could hold out. They specifically mentioned Akron in the article, and both properties where tenant unions were formed here were just sold by amha (Akron metro housing authority) to redwood in February because, they said they felt it was the best shot they had for getting renovations done for the residents. The new owners have been out there renovating hard core since purchase. The properties had been under maintained for years; the tenants likely had some legit complaints but it seems likely the problems should have been laid in the lap of the city housing authority, the former owner. I wonder if the apartments will remain a hap project moving forward or if they'll start accepting non low income tenants. The new siding and windows look real nice.

Classic the city is the slumlord !!!
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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
Nothing can ever beat the law of supply and demand in the long run. The only action that would fix the housing shortage is an increase in supply. They should be petitioning the cities to support and push for new development.
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Andrew B.
Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
4y
Originally posted by @Theresa Harris:
Most places have a tenancy board that protects both landlords and tenants-to what degree depends on the area. People need to educate themselves to know what their rights are. Tenants have the freedom to move if they aren't happy with the landlord. There are some bad landlords (and some bad tenants), but most are good.
With housing prices going up, more landlords are selling rather than keeping rentals especially if they've had a bad experience with tenants.

Can you point to an example of a tenancy board that would help a landlord? I'm not going to call you a liar, but I've never heard of these organizations helping a landlord. Would your local group help landlords?
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Eric Bilderback
Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
4y
Jay is right it is all about screening, screening, screening. Good people you can always work with.

I disagree with most folks here in that they are not cynical enough. It is naive for people to think these unions are about getting fair treatment, it is about forcing landlords to not make money (at least as much) in order for tenants to pay less than market rates. There are already laws on the books to stop bad people screwing tenants. To @Joe Splitrock point I do think the government will put in price controls for things such as milk and meat assuming inflation continues to run as hot as its been.

You can hardly blame tenants things are depending less and less on market forces and more on more on raw political power. And there are a lot more tenants than landlords. I might need to start working overtime on my doomsday bunker! LOL
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Michael Deering
Rental Property Investor · Lehigh Valley, PA · Member since 2017 · 200 posts · 191 votes
4y
Not good, these groups tend to use the actions of the worst landlords and apply them broadly against all landlords. Tenants already have protections, including their feet. If you have a bad landlord, move. The market regulates these matter.
Only during the "new world order" do we see the high demand side expect the low supply side to cater to them
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
Originally posted by @Andrew B.:
Originally posted by @Theresa Harris:
Most places have a tenancy board that protects both landlords and tenants-to what degree depends on the area. People need to educate themselves to know what their rights are. Tenants have the freedom to move if they aren't happy with the landlord. There are some bad landlords (and some bad tenants), but most are good.
With housing prices going up, more landlords are selling rather than keeping rentals especially if they've had a bad experience with tenants.

Can you point to an example of a tenancy board that would help a landlord? I'm not going to call you a liar, but I've never heard of these organizations helping a landlord. Would your local group help landlords?

Help in terms of providing advice. I've contact the one in BC (run by the government) and they answer any questions regarding tenancies. I've not interacted with smaller local groups, but they are usually there to support tenants.
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Chris Pasternak
Real Estate Broker · Pueblo, CO · Member since 2013 · 366 posts · 303 votes
4y
I thought unions were used for places you want to stay a while, like a job. These people see themselves as long term tenants? Never to buy a house and build wealth? Interesting item to choose to invest your time in...
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Originally posted by @Theresa Harris:
Originally posted by @Andrew B.:
Originally posted by @Theresa Harris:
Most places have a tenancy board that protects both landlords and tenants-to what degree depends on the area. People need to educate themselves to know what their rights are. Tenants have the freedom to move if they aren't happy with the landlord. There are some bad landlords (and some bad tenants), but most are good.
With housing prices going up, more landlords are selling rather than keeping rentals especially if they've had a bad experience with tenants.

Can you point to an example of a tenancy board that would help a landlord? I'm not going to call you a liar, but I've never heard of these organizations helping a landlord. Would your local group help landlords?

Help in terms of providing advice. I've contact the one in BC (run by the government) and they answer any questions regarding tenancies. I've not interacted with smaller local groups, but they are usually there to support tenants.

Theresa is in Canada HUGE difference in how real estate and rentals are run compared to the US.. apples and oranges..
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