By John Laurits
In 2015, studies estimate that US renters paid $535 billion to landlords in residential rents. To put this in perspective, $535 billion is about enough to give $15,000 to every human being in the US state of California. It would also be enough to replace every page of every book in the US Library of Congress¹ with $100 bills. And if a person stood outside of Walt Disney World every day from open to close, handing $30,000 in cash to each individual visitor, it would take a year to hand out $535 billion. But what exactly did this massive sum of money actually pay for? Why did people start paying landlords in the first place? And do lands really need lords?
Categories: Economics/Class Relations
Its fun to see some historical context, however, per usual, when a writer with no real idea if how rentals are run, the prescriptive section of the article falls hollow.
I just sold a single bedroom house for rental. The new landlord is set to cash flow $300 or less a month, not including costs of upkeep, other then mortgage and taxes, and holds all the risk. The bank will more than double its money over 30 years, for doing nothing. The landlord makes more money in tax defferal, than cashflow, which means that the major source of ‘income’ is actually a tax shelter.
In brief, the landlord is mostly trying to find a way to subvert the tax law, while using bank leverage to escape inflation. In the end the bank and the government, are conducting the racket, bloodletting the workers, while the landlord is greasing the skids a bit by working the system.
The real enemy here is the banks and government, as usual, and to focus on the idea of rent, rather then the obvious fleecing plays into their hands.