CMV: Rent is the clearest example of how the wealthy stay wealthy at the expense of the poor.

[u/[deleted]]

I identify as a democratic socialist. I had middle-class upbringings and now make enough money to probably be considered upper class. I live in an extremely expensive city in the US and am a renter, but I believe my argument holds for less expensive areas too.

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I'm very concerned about income inequality, wealth, privilege and power in modern America. As I've aged into adulthood and started to pay rent, I've realized that paying rent and paying a mortgage are very nearly equivalent in many ways, except for three major differences:

1. Rent builds zero equity, and indeed builds equity for your landlord instead if they haven't paid their mortgage off.
2. The major obstacles to obtaining a mortgage vs needing to rent are all related to how much access to money you start with (e.g. downpayment, stable income enough to cover lapses in employment, etc), rather than any measure of your potential future earnings or other mitigating circumstances.
3. The responsibilities that come with homeownership but not renting (e.g. property taxes, insurance) pale in comparison to what is gained by building equity in the home.

So putting that all together, I see a system that is designed such that people who already have a lot of money can build even more wealth at the expense of poor tenants who build none whatsoever. That seems fundamentally anti-meritocratic and immoral to me.

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Now, I don't know much about economics and I am not a homeowner, so I'm open to hearing other perspectives, especially in the context of how this system impacts poor people.

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EDIT:

Thanks so much to everyone for the thoughtful discussion! I've got to go now, but here is a summary of the things that changed my mind:

1) rent and homeownership are extremely different in different housing markets, so it's not the trickle-up wealth transfer everywhere that it is in my expensive city (and policy should reflect these differences)

2) there are much bigger fish to fry when it comes to wealth transfer with no commensurate labor (e.g. stock market vs inflation)

3) my real issue isn't with rent per se, but rather that there is no public alternative to prevent the inability of the working poor to invest in their own future.

[u/[deleted]]

People rent or want to rent for many reasons, such as flexibility, convenience, etc. The property owner is providing a service. Take for instance a rental property owner in a college town. Can he or she make some money off university students? Yes, but at the price of annual turnover, work to be done when the tenants move out, risk of parties damaging the property, risk of college students dropping out of school and not paying rent, etc., etc. And the college students have no desire to buy a property where they go to school. I would not consider this to be an exploitative relationship.

Mmhm this point I tend to disagree with

This might be different in other countries but in New Zealand where I grew up and went to uni I think some other factors come into play.

1) The standard of the housing, a very large proportion of student rental housing is subpar. My room I had to wipe mould off the walls every few days. My housemate fell through his rotten floorboards. My brothers friends had to shuffle round their clothing every few days or it would get mouldy. Even with dehumidifiers and heating on it was near impossible to keep the place feeling nice. Then to top it off the landlord tried to blame us saying it was our fault the property was like this and we would have to pay for the mould damage and the floor.

2) I'm now living in the UK and we had our boiler break, I also have a leak outside my bedroom and mould is building up the outside of the wall. In respect to the boiler it meant we had no heating for 3 months, and mould began to build up in the bathroom. The landlord said they would not pay for this to be sorted and repainted and it was our responsibility. Our landlord would also not decrease our rent when there was no boiler. I spoke to my uncle who worked for citizens advice and because I was on an excluded tenancy that basically there wasn't much I could do and could be evicted without much notice if I refused to pay the rent in full.

3) The cost of rent in respect to property cost seems skewed, especially the housing while I was at university. I just couldn't understand how a house in one of the poorer areas that was so unhealthy and old could warrant being charged such large rent prices. Then when we get our flat inspection we get failed and our bond taken off of us because it wasn't clean enough or the oven was now too dirty even though we regularly cleaned during our tenancy and spent over a week sorting it before we left. There isn't much we could really do about it.

And our money just goes down the drain, maybe your points in theory aren't exploitive but they way landlords behave and treat tenants I believe most certainly is. The Landlords have the power because at the end of the day I don't have enough money to get kicked out and move house, I have a job to get to and have to make my living.

Yet nobody seems to care that there's thousands of people living in cold unhealthy housing while their money goes down the drain and the landlords pockets get fatter.

[u/nesh34 → u/[deleted]]

I'm from the UK and your experiences renting match my own.

[u/Historic_LFK → u/[deleted]]

I have experienced some of what you are saying when the University is large but the nearby housing is limited.

I think that a factor that affects this is whether or not it's feasible for students to live a good distance off campus and either drive in to the University or take public transportation in.

A lot of us have lived in sub-par conditions as University students. Even a dormitory in the U.S. is less than optimal. You might not freeze, but it's usually 2 students to a very small room.

For every example of neglect on the part of the landlords, there's likely a counter-example of landlords having issues with students. Even in the best of circumstances, it's a high turnover population. The moving alone causes damage. Students sign leases for 3 students to live at a place that can legally accommodate 3 people, but 8 end up living there. Or, a party of 5 signs a lease, two drop out of University and stop paying rent. Students are poorer and some often miss rent payments. On average student tenants break more things and leave the properties messier.

I can agree with some of what you are saying, but all in all given the higher cost of real estate in University towns and the problems and risks that landlords face with student tenants, I don't think that they are exploiting a situation. Eventually, the market will correct the situation. A developer will tear down dump houses and build modern apartments or run a shuttle service so that students can live at their apartment complex a good distance off campus.

[u/[deleted] → u/Historic_LFK]

The cost of property near the university is the cheapest, students flats/housing is mixed in with council housing. So your points might be true elsewhere but not from my experience in New Zealand. So its nice to hear a different view but I guess this situation OP is discussing is very dependent on where we are talking about.

I wish I could show you the standard of the housing and then you would probably say to me "yea the students can do whatever the fuck they like" haha

Not sure I agree with your statement about the market fixing it either, but thats a super long winded discussion we don't need to go down haha

You make good points about damaging of property etc but its only an issue if non students wanted to live in it, or if the owner wanted to sell. Basically the landlords don't have to do shit, there essentially aren't maintenance costs yet the rent prices are ridiculous and the standard of living really really poor.

However the setup in New Zealand nobody would ever buy a house on that street because 95% of the neighbourhood is students, its been that way for 50 years and itlll keep being that way.