In simple terms, CULTURE means that’s the way we do it around here. ASPIRATION is what we hope to do or be.
Some things have changed.
30 years ago, renters and rental owners shared an expectation that tenants had an obligation to pay rent. The United Nations has declared that housing is a human right. Many people would consider that idea a wonderful aspiration. 95% of UN member states have relatively less and relatively lower quality housing than the US.
The UN language is “access to a safe, secure, habitable, and affordable home.” What if a person has no income? Does it mean the owners of the duplex, the teacher and spouse who live on one side, must provide free housing on the other side of the duplex to unrelated homeless strangers? COVID eviction prohibitions and statewide rent control are signs we might be headed that way.
The situation in San Diego
Over the last generation, San Diego government policies have resulted in building half as many new condos and apartments as our kids and grandkids needed when they moved out of the family home. In San Diego, it takes a decade for a master-planned community to clear the legal and political hurdles and begin construction.
Many of us know kids who grew up here and wanted to stay in San Diego but could not afford housing. They moved to places where housing is more affordable.
The current San Diego City Council recognizes the housing shortage. They plan on declaring housing as a human right in San Diego. Declaring rights does not create any more housing.
How should society or rental owners deal with tenants?
What should we aspire to? The answer starts with values.
* Jesus said to treat others the way you want to be treated.
* A communist might aim for “from each according to his ability and to each according to his need.” That has not yet worked anywhere but it might still be said, somewhere.
* A Hindu might say it’s bad karma to give to the poor because they might have to repeat the poor life again to work off what they did in a previous life.
* Discouraging initiative and promoting dependence bothers libertarians.
* Some rich people feel an obligation to assist the needy, noblesse oblige.
* Some see not helping someone in need as depraved indifference.
Negotiation can be tricky when the parties have differing expectations about how to deal with complex issues. The way we apply our values may be different. That’s culture at work; and things get more complicated if housing is a right.
How this plays out
Many households give to some worthy causes. My wife and I select and support some that we consider worthy. We recognize that households differ in capacity, inclination, level of generosity, and favorite charity. Each household donates their money to a charity of their choice. Simple, right?
We object to the government or our neighbor deciding what charity we must donate to or dictating how much we must give. We respect your right to choose how to donate your funds, time, and talent. We want to make our own choices. Yet, we know that most of the good things come at a cost and that someone must pay that cost.
Most US states and most nations are spending today’s money and passing the debt to our kids and grandkids. After World War II the interstate highway system was constructed, and citizens have paid gasoline taxes for 70 years. Highways benefit society for decades.
Some economic realities
If society imposes an extra cost on only one kind of investment, guess what… fewer investors will want that kind of investment. If stocks with an” A” in the company name had to pay a 10% vowel tax, the value of those stocks will shrink, and some companies will change the spelling of their names.
If the government imposes extra costs on income property, fewer people will want to own rentals. If there are fewer housing suppliers, what will be the inevitable outcome? Without owners, who would maintain the rentals?
Many well-intentioned people want those costs to be paid by someone else. Some wish the rich would “pay their fair share”, i.e., more than what they’re already paying.
“Have the rich pay for it” might sound like a convenient idea, but it might not work. Few rich people will deliberately choose an obviously inferior investment. Taxing the wealthy and giving some to the poor does not increase society’s productivity.
Wise societies tax almost all citizens for programs that benefit society in general. It’s unfair to only penalize rental owners for problems they did not cause. During COVID, rental owners became the lender of first resort, as tenants quit paying rent but could not be evicted. Some government entities agreed to reimburse the owner for part of the rent loss… if the residents signed the paperwork. Many tenants did not sign, even though it cost the resident no money.
Were all those rental owners “the rich”? Hardly. The two largest groups of rental owners are teachers and retired people. While their tenants didn’t pay rent, the rental owners still had to meet their mortgage payments, taxes, utilities, insurance, and maintain their buildings.
Our choices have consequences. Often the unintended consequences can be horrendous. Where do we go from here? What do we aspire to?
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Now it is time for feedback.
Would you build an additional dwelling unit (ADU) on your property to rent to a household that wants to live here?
Would you be willing to pay higher taxes to ease the rental housing shortage?
Are you considering moving out of California because of government policies?
-o0o-
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.”
You are hitting the Neill on the head. I grow under communism they took way every legal wright from our property s but with it thay took also responsibility. In USA happen something that no where happen they kept responsibilities to owner but they took all legal rights of ownership. Who are the owners of the of the properties in United States they are mostly midel income people? As you mentioned teachers and the middle class pop and mom owners, those were the ones that wear affected the most under this regime that as I mentioned you do not see it, not under the most dictatorial regime of communism in Russia, nor in Eastern Europe, nor in China used to be that they will take your property away, but with it they’ll take together responsibilities. So here we are in United States on 21st century. They are taking away your ownership rights and keep them responsible for all of as is taxes, maintenance insurance, utility bills and not to mention it’s harassment to ask the tenant to pay the rent. This is a ridiculous. This is Crazy! This is going to bring two the social dispute which might end with a very bad and or bloody hand. Same happen in countries where we came from that classes in between started fighting. As the result, it came to wars not to mention that this policies of all this rental restrictions, state county and city rules that they are being brought is not leading to cure. The thing that is missing that means building more apartments and houses that’s missing. We are hitting in direction to decrease stimulation. Destimulate people that they want to take responsibilities to be a house suppliers which is impossible with this Rent controls and all kind of bureaucratic rules regulations that they are being brought from the level of state, county cities and so on. This is going to end up either in a big huge fight in between groups, social groups in the society or to the catastrophic or rice of homeless people, which are in a pretty high percentage amount in United States, especially more pronounced in California. Thank you!
Yes I would build an IDU on my property to help with the housing shortage as long as the rent covered the additional associated costs.
We keep throwing money at the housing shortage and I do not see an improvement. Right now the county and all the individual cities are running around like chickens with their heads cut off trying to deal with homelessness as if it were an individual problem wasting money. We need a joint powers plan which includes all county and city agencies to come up with a plan that everyone agrees to and then ask taxpayers for money.
As a child, I would see a stray dog and want to feed it, my father said,” not to feed the dog if you feed the dog it will stay around the house”. This is what we are doing in California, we are teaching people to count on the hard working tax payers to pay their way in life. Throughout history we have had poor people and the more the government does the more they destroy the middle class.I get it everyone has rights, but it seems that government has forgotten about the ones that pay the taxes, what about their rights. I have family in this state and have lived here for most of my life. I sold my business 2021, and if this state keeps going with this craziness, then I will also be leaving.