Politicians and housing activists often blame greedy corporate landlords as a primary cause of rising housing costs. They then demand more controls and restrictions, including rent control, on rental property owners. The politicians and activists conveniently ignore the fact that more than 40 percent of rental housing is owned by individual investors, so-called :mom and pop” landlords. In doing so, they are throwing mom and pop under the bus.
Admittedly, most mom-and-pop landlords own single-family homes or small apartment buildings that are often exempt from rent control regulations. However, if we accept the premise that government officials can dictate housing prices, then there is nothing to stop those officials from removing exemptions.
Even when landlords are exempt from rent control, they are usually required to honor other “renter’s protections,” such as “right to counsel” and “ban the box.” The “right to counsel” provides tenants facing an eviction with free legal representation. I have been to eviction court ten times, and only once did I hire an attorney. I only did so because the tenant had been provided free legal assistance. Those attorney’s fees were passed on to other tenants in the form of higher rents. From my experience, nearly all mom-and-pop landlords represent themselves. If tenants have the “right to counsel,” those landlords will likely hire an attorney, which will ultimately lead to higher rents.
While “ban the box” laws vary, all prohibit landlords from asking about or considering criminal convictions during the tenant screening process. Some laws also prohibit landlords from asking about or considering past evictions. Given that both criminal convictions and evictions can be indicative of an applicant’s character, such laws place blinders on landlords. Property owners are prohibited from considering important and relevant information about an applicant. Uninformed decisions seldom work out well for landlords.
Pointing the finger at greedy corporate landlords makes for good headlines and attracts many votes. But throwing mom and pop under the bus drives many out of the rental business, leading to the very thing that politicians and activists complain about—greater corporate ownership of rental housing.