[WSBARP] Landlord Question - Next legislative session

[Eric Nelsen]

We are all generalizing, whether arguing in favor of tenants or landlords. Policy decisions are generally made by generalizations, after all. The devil is always in the details.

Little of the current situation is a policy outcome I want or agree with; the moratorium was imposed hastily in an emergency that has now consumed our country for almost a year, with every tool of governance forced to run with one foot in a bucket because of gross incompetence and malicious indifference at the federal level coupled with insufficient local resources. It never should have taken this long, too many people have died, too many are going to die still, and governmental capacity to act is still badly crippled. Governor Inslee was given a surgical problem, then blindfolded and handed a sledgehammer and told to take care of it. So we got a sledgehammer solution for a surgical problem.

I do agree that there should be a policy-level allocation of relief to mom-and-pop landlords to help ease the economic burden they have taken on. Personally, I would advocate for limiting relief to landlords who are individuals and closely-held corporate entities (say, max 4 owners of the entity, with additional rules to prevent gaming this limit by having interlocking ownership or control), who own no more than six rental units total, and whose rental revenue amounts to 50% or more of their total personal income. That helps individual small-time landlords that have been front and center of the argument for landlord relief, and avoids benefitting the corporations who typically hoover up the vast majority of “small business” relief. I would also condition relief on release of tenant debt in some fashion. (Obviously those limitations are off the top of my head and could be tweaked.) The idea is, if you’re a bigger landlord than the described threshold, then you’re really an investor and you don’t get a bailout.

The “moral hazard” argument applies both ways. Personally I worry about the constant coddling of property by our legal system, to the point where investors of all kinds, real estate, stock, and whatever, have had literally decades to develop a false sense of security by being constantly bailed out by the government from the natural consequences of investor-class and banker-class recklessness. And just now, there are critical policy reasons to prioritize human life and shelter (that is, life and liberty interests) over profits (property). So that false sense of security is getting zinged and property owners are outraged, forgetting that for themselves, their life and liberty interests are basically already well-provided for. No one owning a rental property is going without a roof over their own head.

Also, a money/contract relationship is not the same as a social human relationship. There is no moral obligation to pay money, because morality arises from social relationships, and money is not that—or at least that’s how we’ve set it up over the centuries. If a landlord’s sole “relationship” to a tenant is based on the rent derived from providing them shelter, then the relationship is about money. Don’t expect a tenant to make an allocation of their resources that benefits the landlord more than they absolutely must. That is, after all, the basis of all “laissez faire” and “invisible hand” preaching: everybody is a self-interested money-calculator and morality based on non-monetary factors is irrelevant. I personally think laissez-faire and the invisible hand is garbage, but if property-owners want to talk in those terms, then they shouldn’t squawk when someone else behaves the same way.

I have pushed back before about the righteous tone on the listserv, about tenants spending their money on goodies and giving the landlord the finger. But if I have $1000 to spend and the choice is between taking care of myself or paying money to a landlord when the law isn’t going to force me to, and my relationship to the landlord is based purely on money, then hell yes, I’m going to spend it on myself. And please note, that is the proper response under invisible hand theories: do the self-interested thing and it will all balance out: the landlord is hurt but Netflix benefits.

But if the landlord is my friend, or has some other social claim to my loyalty, I’m far more likely to pay some rent because I will feel a moral obligation. Contrariwise, if the landlord is my friend, the landlord is far more likely to understand and sympathize if I am genuinely struggling financially, and we have a social connection that opens the possibility of discussing what each of us needs to survive and finding a cooperative solution that gets us through the crisis together.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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