Nenshi stirs up a hornets nest with his landlord gouging comments

[SebC]

Originally Posted by photon

All business is about taking advantage of someone to some degree.

Not really. Business can also be about mutually beneficial transactions. Producer surplus coexists with consumer surplus.

[calgarywinning]

Originally Posted by SebC

Not really. Business can also be about mutually beneficial transactions. Producer surplus coexists with consumer surplus.

Yes, it's called Market Rate. That doesn't mean taking advantage. It's about a transaction that two parties take part in willingly.

[Swarly]

Originally Posted by Mr.Coffee

Agree with PsycNet. The difference in the 'operating at a loss' as a landlord and therefore justifying max profits when times are good, is that the principle of the landlord / tenant relationship is a home to live in. Given that shelter is a basic necessity, it does start to get outside the ethical grey area when all the rents are jacked up to unaffordable levels. I don't think anyone would argue that costs should be recouped and maybe a little profit made, but the criticism here and the key wording is gouging.

Nobody forced you to own a property and rent it at a loss even though you were in fact building equity. Similar to NHL owners, sometimes they'll operate their franchises at losses knowing that the equity from purchase to sale may outweigh the money lost year over year and they'll be in good shape.

Gouging is the problem... if it wasn't a basic necessity it may not be a problem but when housing is scarce, what people are now forced to barely afford their power bill just so they have a home to live in because you made a questionable investment decision and lost money years ago?

However, I do totally agree with the main theme of that article countering Nenshi. It is partially on the city to provide cheaper housing and not every fataing area of the city needs to be revitalized and fancy.

pretty unfair statement, it's also not the landlord's fault that you have made poor life decisions and now are unable to afford the current cost of living in Calgary.

seems like simply supply and demand here, and people trying to live above their means. FYI a search on rentfaster.ca shows nearly 100 places for rent today between 400 and 600 /month (400 min to weed out the garages for rent). nearly 400 between 600 and 1000/month. not really understanding what the problem is...

I say this as renter who's lease is up at the end of Nov. Expecting to recieve the new lease forms any day now. I would not be surprised in the least if my rent goes up by about 20-30% at which point I have 2 choices, pay it or move

[darklord700]

I had a new built apartment and I had been a landlord before. All's said, I cleared about $4K-$5K a year depending interest rate which represent about 10% return on my downpayment. The killer is not to have the unit rented out 100% which obviously eats into your profit.

This a new built so no maintenance work normally but I still have to show the unit, show the tenants a few things. I sold the unit recently becasue I have better ways to make $4K or so a year without bearing the risk or the hassle.

Nenshi seems to think landlords are scums out there to gouge people without realizing the risk and work we are taking.

[fulham]

I work in the rental housing business, if your landlord isn't following proper legal protocol than slam him for it. There is a major lack of rental in Calgary in general, and Nenshi's comments will do nothing to help the current situation, as that redirect scares away investment.

My company charges the max amount me possibly can while maintaining close to zero vacancy, we have a waiting list at every building so there is no price gouging happening.

if you had a basement suite and bills to pay, would you only rent out your basement for what other renters deemed fair? Or would you try to get the max amount you could?(assuming this person isn't a oilers fan)


The amount of bad renters, and horror story's people have dealing with abusive renters destroying property is large and unreported on as its easy to bash landlords

[Harry Lime]

Originally Posted by Swarly

pretty unfair statement, it's also not the landlord's fault that you have made poor life decisions and now are unable to afford the current cost of living in Calgary.

seems like simply supply and demand here, and people trying to live above their means. FYI a search on rentfaster.ca shows nearly 100 places for rent today between 400 and 600 /month (400 min to weed out the garages for rent). nearly 400 between 600 and 1000/month. not really understanding what the problem is...

I say this as renter who's lease is up at the end of Nov. Expecting to recieve the new lease forms any day now. I would not be surprised in the least if my rent goes up by about 20-30% at which point I have 2 choices, pay it or move

I looked on rentfaster using your parameters. Everything in that range is for renting a room, with a shared common area. I'm sure that any of us could come up with a dozen reasons why this would not be an ideal living situation. I'll start with the term 'single parent' and everyone can work backwards from there.

'Weed out garages for rent', has me wondering if there are garages in this city not being used to park cars.

Also, the decision on whether to pay or to move is going to change in tone when the market shifts downward. It's rare for a landlord to lower the rent, so eventually a tenant will give notice and a landlord will lower the rent on an empty apartment, losing that valuable tenant. Losing even one month of rent might offset the lesser raise in rent now, that would ensure the cooperation of tenant in the future concerning their occupancy.

[darklord700]

Originally Posted by fulham

The amount of bad renters, and horror story's people have dealing with abusive renters destroying property is large and unreported on as its easy to bash landlords

Exactly. Even though I had net cash inflow from renting, it only takes one bad renters to wipe out years of gains. That's why I stop doing it as it's just not worth the hassle and risk. I would welcome our Honorable Mayor Nenshi to show me how to get rich quick from renting.

[Harry Lime]

Originally Posted by darklord700

Exactly. Even though I had net cash inflow from renting, it only take one bad renters to wipe out years of gains. That's why I stop doing it as it's just not worth the hassle and risk. I would welcome our Honorable Mayor Nenshi to show me how to get rich quick from renting.

That's also why it's so valuable to have a renter who cares and takes care of the property. A good long term renter is gold. If that tenant feels like they are being gouged when times are good, you will lose that tenant, and the odds of ending up with a loser who will trash the place greatly increases.

You get rich slow by renting.

[CaramonLS]

Perhaps it is time to look at limiting the amount of residential properties that a single person can own in the same area to avoid some of these situations.

Part of the problem is property hoarding, which has significantly driven up the cost of owning a home in this city.

[cam_wmh]

Originally Posted by CaramonLS

Perhaps it is time to look at limiting the amount of residential properties that a single person can own in the same area to avoid some of these situations.

Part of the problem is property hoarding, which has significantly driven up the cost of owning a home in this city.

What statistics do you have to verify this?

[CaptainYooh]

Originally Posted by CaramonLS

Perhaps it is time to look at limiting the amount of residential properties that a single person can own in the same area to avoid some of these situations.

Part of the problem is property hoarding, which has significantly driven up the cost of owning a home in this city.

OK, I'll play along, even though I think this is a truly thoughtless, NDP-like statement.

Say, you are in power to make this decision. How would you frame your suggestion/idea it in a law (by-law)? And while you're at it, try phrasing the control, enforcement and punishment provisions.

[PsYcNeT]

I'm wondering exactly how the "shoe will be on the other foot" when the "market corrects itself".

Why exactly are rents going up? It certainly can't be mortgage rates; those have dropped in the last 18 months.

You'd figure, for those landlords who recently renewed their mortgages, they would have dropped their rental price, no?

[llwhiteoutll]

Originally Posted by CaramonLS

Perhaps it is time to look at limiting the amount of residential properties that a single person can own in the same area to avoid some of these situations.

Part of the problem is property hoarding, which has significantly driven up the cost of owning a home in this city.

It wouldn't solve anything, the people renting are not doing so because there are no houses to buy. They are doing so because they can't afford to buy. Unless you also favor government limits on rental rates, housing prices and directed prices on other commodities?

[ranchlandsselling]

This is unbelievable what some people are posting, just complete ignorance.

Part of the problem is property hording? Hording of properties? Which drives up the cost of owning a home? How? If the unit is then rented out it provides something this city is in need of. Hoard means to amass and hide or store away, which makes no sense as that’s not what’s happening.

Someone else said renting out a house is for living in, and theorized that the landlord shouldn't make too much money because they're essentially being paid to own something. Land and a building, they get to own it, so why should it also cash flow when someone else needs it to "live"?

Shouldn't make profits when times are good? Really? I hope anyone that thinks that has never accepted a bonus at work and if they did walked it back to their customers.

Being a landlord involves a ton of work, a lot of capital risk and sometimes very little return. Some of these people are just like the ones doing the criticizing. Taking some risk, working hard trying to run a business so they can put food on the table for their families and a place to live.

Apparently:
Step 1 - become landlord
Step 2 - screw poor people
Step 3 - insane profits

Rents go up because of demand and supply. Yeah, rents are sticky on the way down, but generally because rents increase with inflation, and inflation is the norm.

If the landlord charges too much, and the tenant bolts down the line because of it, that's on the landlord. All landlords have an incentive to maximize profit while taking the least risk possible. You don't gouge your tenant because that tenant will leave; if someone else will gladly replaces the tenant at that rental rate then you're not gouging anyone it’s the market rent. If you treat your tenants like crap and they keep leaving you’re not going to do as well as if you had treated them a bit better and had less turnover.

The stories of slumlords and bad landlords are anecdotal and likely just as common as bad tenants. I’d argue there are probably more bad tenants than landlords. At least the landlord is rewarded for long term thinking, the tenant isn’t. Recourse to tenants is much more difficult than landlords.

Another quick search on rent faster between $800 - $2,000 shows 2,384 listings. The majority in the $800 range are basements, bachelor or one bedroom suites. A few shares accommodations but they look like ok places.

Actually within that 2,384 there’s only 318 shared, 755 apartments, 291 basements, 915 condos, 137 duplex, 810 house, 9 loft, 171 main floor, 380 townhouse.

[The Ditch]

I feel really bad for these people with extra properties to rent out, won't someone think of and stand up for those with multiple properties and extra space above and beyond what they need? What has this world come to.

[PsYcNeT]

Originally Posted by The Ditch

I feel really bad for these people with extra properties to rent out, won't someone think of and stand up for those with multiple properties and extra space above and beyond what they need? What has this world come to.

They put their pants on one leg at a time, just like everyone else.

Lollin at "If they can't afford it, they should just move!" yeah because moving is free and easy. A literal captive audience.

A lot of Objectivists in here telling poor people to bootstrap themselves up.

[Fighting Banana Slug]

Originally Posted by PsYcNeT

Carpool or take transit or bike or hitchhike. Then yer not payin' crap.

So is your advice to renters to move to Okotoks or live in a tent?
My point is that prices for rents and parking is based on supply and demand. The city, in its infinite wisdom, decided to mess with the supply of parking, in effort to persuade the use of alternative transport. A noble goal, but not feasible for hundreds of thousands in the city, given the urban sprawl that the city allowed for/tacitly endorsed.

If Nenshi wants to talk about high rents and that secondary suites might be a solution, fine. But for him to take shots at landlords for gouging, is ridiculous. Maybe he should complain about Esso and the price of gas, or beak off about the price of milk at 7-11. Or maybe he should keep his mouth shut.

[corporatejay]

Originally Posted by PsYcNeT

They put their pants on one leg at a time, just like everyone else.

Lollin at "If they can't afford it, they should just move!" yeah because moving is free and easy. A literal captive audience.

A lot of Objectivists in here telling poor people to bootstrap themselves up.

And a lot of people without skin in the game telling people how to manage their investment portfolio.

[PsYcNeT]

Originally Posted by corporatejay

And a lot of people without skin in the game telling people how to manage their investment portfolio.

You're assuming a lot of things here.

[Harry Lime]

Originally Posted by corporatejay

And a lot of people without skin in the game telling people how to manage their investment portfolio.

Thinking of this issue simply as an investment portfolio is what causes a lot of the instances of bad renters thrashing a property. Landlords who look at a good renter as a commodity worth a monetary figure end up with a less risky investment. You can put a monetary figure on the stress and time that a landlord has to put into repairing and maintaining the property due to an uncaring renter as well.

Renters also look at the cost of housing as an investment, and if a landlord raises the cost above what a renter feels is worth them putting their own time and money into a property, the property becomes neglected.

Looking at this simply as a 'bottom line' investment can cause more issues, that will cost more money, over the long run. The human element should be taken into consideration, and value should be assigned to the quality of upkeep by the renter and the time and repair that falls to the landlord.

If, for example, the value of a good tenant in this situation can be put at $200 (a made up number, involving no damage to repair, caring for lawn, calling immediately when there's a problem ect.) and the landlord raises the rent $400 to match the price of a 'bad' renter down the road (whose monetary value can be put at $0), I can see how that would be seen as gouging by some people. I would see it as stupidity, and there's a lot of stupid in the city right now.

Time is worth money. Care is worth money.