Originally posted by @Rory Kinnear:
Real Estate is a long term prospect and one with risks, and you cannot expect the government to allow the homelessness crisis to spiral further out of control just to mitigate the risks of your investment portfolio. This is a once in a lifetime (hopefully) crisis. I don't think it's rational to expect your investments to perform as they always have during a time like this while folks are evicted onto the streets. Obviously there will be tenants who take advantage of these protections who don't need it, and there are aspects of these laws that go too far. A failed investment is not quite so bad as homelessness, and the homeless crisis that is looming absent some form of protection will be bad for everyone, including investors.
I am currently struggling with my lodger as he was laid off and cannot find work of any kind in his industry, and my work has been cut in half too. I chose that risk when I bought my property, and selected my tenant well, and saved for contingencies.
LA is a wonderful place to invest, with high appreciation and low supply. It does not come without strings attached however.
Rory I think you post is sincere and I understand your point. I certainly agree that in times of crisis the government has a duty to protect the health and welfare of its citizens. And I also agree that in some limited circumstances that includes the temporary infringement of their fundamental Constitutional rights. For example the stay at home order certainly restricts everyone's right to speech, assemble, and other fundamental rights.
That said, I think history has shown us that in times of crisis it is easy to restrict rights without considering the consequences, short and long term. I also think that we are also approaching a point where "temporary" is a debatable point. The simple fact is that housing is not a constitutional right, but enforcement of contracts, access to the courts, and property rights are. There are some people who think that should change, but until it does those are simply the facts.
The government can not indefinitely extend the enforcement of the contracts. It can not force people to prevent homelessness by defacto forcing the property owner to house people for free. And it can not prevent access to the courts to address these grievances. Can it delay these things for a few months in the face of a crisis, certainly. But as of now in California especially, landlords are looking at several years before they are able to legally attempt to collect the rent. I think a reasonable person might believe this is an unjustifiable intrusion on their Constitutional rights and certainly not temporary.
Additionally, as a practical matter the policies are not effective. Sure, the eviction ban has prevented evictions. But the logic behind that is that 50% of the population does not have even $400 for an emergency. So how then, are they going to be able to pay a lump sum worth 8+ months of rent a year from now. Again, with no realistic chance of recovery, you are forcing landlords to house people for free. It is the governments responsibility to protect the people, not the private landlords. If they get the privilege of that responsibility (emergency declarations) they can not off-load the responsibility.
And since we have denied people the chance to access the courts to address the issue we are already seeing an increase in "self-help" evictions. You cant back people into a corner and expect them not to react. By your statements you expect owners to be responsible, have emergency funds, eat the losses. But you don't seem to have the same expectations for renters. Why would one group of citizens be expected to carry the burden for everyone? There is not an expectation that grocery stores and restaurants give away food for free. Or cars be given away for transportation needs.
If governments want to protect against evictions they have other options. For example, preventing evictions but paying for rent, perhaps even at a reduced rate of 80% would be a reasonable balance between the needs of the state of the infringement of rights. Of course they dont want to do that because of the staggering amount of money that would cost. But that is exactly my point. Why should a small group (landlords) be forced to bear that cost when society as a whole (if you believe the progressive economists) benefits from the prevention of evictions.
In conclusion, I think it is much bigger than "Landlords need to Have a Heart". I think there are fundamental Constitutional rights that are in danger of being infringed without regard to both the practical and principle consequences.
Note: I do own rental property, but not in California. So I am not directly impacted by CA Landlord policies. For me, as a citizen of CA and the USA, it is about the fundamental principles of government policies and the rights of all citizens.
