I don’t understand how rents actually go down in a market. My landlord has raised rent every year save for when covid laws prevented that. It is their incentive to always raise rent even when articles about my city claim “rents went down 5%” or whatever this past year. Whose rent? Expensive commercial landlord new construction rents where they try and hide the price anyhow with two months free on the first year? The rent that therefore only matters for the bank to put a valuation on that property because people move in year 2 at these sort of properties to avoid paying that full rent? Maybe that is what they are referring to. No one I know has ever had a call from their landlord telling them to pay less money next month due to the declining value of their asset.
In a high demand market though? My landlord had like 3 tenants go over the last couple of years and they had a new one moving in that month basically to no affect on their cashflow. Whenever I applied for apartments in this town it was always tour the place and be prepared to sign a lease right there because you have no time to think before someone else bites. Maybe thats true when you have a failing local job market but that isn’t the case in high housing cost regions by definition.
We reduced rent during COVID both for a present tenant and for the following tenant. Generally those statistics are across all units while individual experiences can be wildly different.
[Edit] FWIW that was based on the rental market rather than anything related to asset value.
SFR had no decreases during those years in the US. Markets like the Southeast had 7-14% increases every year. SFR companies were doing “cash for keys” because rates were increasing so quickly that it was better business to buyout a lease from the current tenant and bring in a new one at a 14% increase.
It's not clear what you're trying to say. The GP said they weren't sure how rents went down. As an at-the-time-I-referenced landlord we reduced rents. Or tenants may have been privileged people who didn't need it but it seemed like the right thing at the time. Mostly because the impartial rent statistics source we repeatedly used indicated rents had gone down for the market local to the unit we offered. Maybe this is why we got out, because we weren't practicing exuberant total maximization of what we could extract. We got in because my partner was sentimental about the unit and felt we could hold aside a small part of the market to be a little kinder and more human. What triggered us getting out, in fact, was hostile policy enacted by Seattle that frequently poisoned the relationships with our tenants. That is, with the same behaviors we began being treated very poorly. I'm off the opinion that Sawant was in the pocket of large corporate holders given what I understand of the effectiveness with which she had consolidated the Seattle rental markets into a smaller set of hands.
> What triggered us getting out, in fact, was hostile policy enacted by Seattle that frequently poisoned the relationships with our tenants. That is, with the same behaviors we began being treated very poorly.
What policies are you referring to? What kinds of things happened?
Sorry for the delay. I'd written up a response and then refreshed on accident which lost my work. Additionally, there's a lot of emotional baggage that comes with this subject. Some of our renters behave particularly badly a couple of whom lived with my partner and my child in our home.
The biggest problem as a landlord was that many of the laws were changed without any kind of grandfathering. This effectively rewrote some of my contracts. It had a lot of weird effects that I won't go into and took away many of our previously held property rights.
One thing that happened is that we offered a low-income individual, a $700 less than market discount to give the tenant and their medically complex child a safe place to weather the pandemic. During the pandemic the city introduced laws constraining rises in rent. Because my lease was written up without recognizing the discount, I would have had to pay $4,000 to the tenant to resume charge once the pandemic had passed as was the original agreement.
Also, during that period, there was a movement to reduce the ability of landlords to stop renting to particular people so that once you rented once you had to continue renting. For a while you couldn't even stop renting to sell your unit. That has thankfully been fixed very recently.
There are a lot of timelines enforced by the city. These can have complex interactions with human factors despite being good rules on the face of them. Great laws include that school-age children and their families as well as any school employee cannot evicted (including letting the lease end) during the school year so those 12 month contracts you write up for somebody in that class must be renewed in perpetuity or at some point changed to a shorter or longer term to align with summer. We had one tenant who got so paranoid by the legally mandated language (at the time) that they tried to force us to admit that we are trying to kick her out for 4 months before deciding to leave. We had no intention of kicking her out or ending her lease at any point. We did feel like we needed to retain that opportunity if we fell on to hard Financial times because that particular unit couldn't be sold with someone in it due to rental cap limitations of the HOA.
Tenants get free legal representation, which is pretty good. They're much less likely to have the capital to retain legal representation. We have had tenants, as friends of friends informed us after the fact, lie and verbally abuse us in order to try and trick us into violating the rules so they can trigger the 4K payout. On the other hand, the city communicates poorly and is often misleading so that landlords are required to have City specialized lawyers to navigate some of the most simple interactions. The real estate agent we just used to sell our unit noted that there's been a steady movement of small landlords out of the market. The only way it makes sense to keep up with all the changes is if you can scale the extra cost of keeping up across many units.
We got into it because we wanted to give a friendly human relationship to people who needed shorter-term housing and didn't have the capital to purchase. It has strained our marriage and our finances. We'll come out of it well off, but we would have been happy to continue being what almost all of our tenants have called the best landlords they've ever had.
Anyway, I'm meandering and this has gotten long. Sorry again for the delay.
