Opportunistic Landlords Are Cashing In — Feudalism is Reborn
Feudalism is making a comeback as “lords” stick it to the “serfs”
Do you remember world history where you learned about the feudal age? The age where most land in many European countries was owned only by the nobility? De ja vu people. It feels like we are returning towards that system in 2022 as landlords raise the rent.
Serfdom was an arrangement where a serf worked in the fields or as craftsmen in exchange for a percentage of the product they produced. They did not own the land they worked on, but worked to benefit the landowner. While theoretically they were free to leave, in practicality they had no options and were considered part of the land to be bought or sold with the land.
With property values skyrocketing, rents on empty properties have gone up too. No doubt any new landlord buying a property in this environment is paying through the nose. They will need a higher rent to make renting out the property financially viable.
I’m not criticising the handful of landlords who bought their property 2021 or 2022. Nor am I talking about landlords raising rent just enough to cover increased property insurance rates or taxes.
But I am calling out the opportunistic sharks who are sticking it to renter just because they can, bleeding them dry for the last dollar of profit.
For the landlord the mortgage note hasn’t gone up. They are still making the same payment each month, yet they jack up rent 10%, 20%, 30% or more. That is way more than is needed to cover their increased property insurance costs. So now the renter, who may be saving up for a down-payment to buy their own house someday, has even less ability to save money and become a homeowner. They are grinding out the $$$ to pay the landlord an increased profit. Serfdom at its finest!
With income inequality in the US at a 50 year high, the rich are buying 2nd homes, homes through REIT’s, and through private equity firms such as BlackRock. Nothing has held its value through this last two years better than real estate. Stocks have been hammered, but real estate soared. In 2021 corporate investors accounted for 15% of houses bought in the first quarter.
What happens when the corporate investors have bid up the prices of houses so high they are the only ones left than can buy them?
I will tell you what happens. Feudalism is reborn on American soil. Soon the white collared serfs with their engineering jobs won’t be able to afford a house. After that it will be the doctors and bankers who are priced out.
What will these corporate investors do when property values go up even more? They will raise the rent. They will literally suck the blood out of the next generation of renters — never to be homeowners — just because they can!
I’m not one for demanding equal results in society. However I do yearn for equal opportunity. Corporate ownership of housing is not helping opportunity for the lower 90% of American society — the same 90% that owns just 11% of stocks. We 90% may not own the stocks, but can we at least have a chance to own a house? Pretty please? If you won’t hear the pretty please, maybe you will heed the pitchforks?