For the last five years we’ve all heard extensively about fledgling home owners who, because of economic downturn and unscrupulous lending practices, are finding themselves turned out of their homes. It is undoubtedly a horrible sequence of events but I’ve yet to see anyone address what is perhaps an even larger issue in the United States: Exploitation of home renters.
In the United States there is a rather unique concept which can be argued to drive a lot of the mentality in this nation: The so-called “American Dream,” which, when achieved, supposedly comes with a happy family, a regular career job, and property – a big house, picket fence, and two (or three) vehicles. But as many Americans are learning, especially in recent times, this is mostly fantasy.
There’s been plenty of debate about whether the housing crash in 2008 could be attributed more to unscrupulous bank activities or a lack of personal responsibility on the part of those who accepted their unpayable loans. My mother was offered a loan from her bank to buy a home but she did the math and realized that it would be unsustainable, so she declined. Granted, many others likely trusted their bank to have done the math reliably and jumped at a chance to own their own home, something many had likely given up hope on.
Regardless, the housing bubble burst and many people were turned back to renting for their housing. And those who chose to not take the questionable loans from their banks remained in rentals. So often in the last five years we’ve heard President Obama and nearly every politician and reporter and pundit go on and on about the persecuted, middle class home owners in this nation – but they forget that there is a large lower class that only dreams of home-ownership in the brief bits of sleep they get between shifts.
In fact, in 2012, it was found that nearly one third of Americans are living on rental property. While it used to be the unspoken understanding that someone usually only rented if they were young and transient, settling down with a family and buying a home later in life, this is no longer the case – the rate of renting for Americans aged between 30 and 64 (typically when “settling down” would occur) stays around 32%.
There has been debate regarding renting versus owning – one common belief is that those who rent are transient and as such have little stake in their community, especially compared to those who own property and will presumably be living in an area for the long term. This is probably accurate for younger renters, however with the increasing rates of renting housing, the demographic of renters has begun to cover the spectrum.
Either way, regardless of the merits of renting versus owning – renting is simply becoming (or has been) a reality for a great number of Americans. As it is those located towards the bottom of the socioeconomic spectrum who are typically life-long renters, they are also some of the most economically vulnerable individuals in our nation.
As I’ve noted previously, our working classes in the United States have been given few wage increases (if any) over the last 40 years – failing to keep pace with both increased worker productivity and the increased cost of living. Those who have felt this most acutely, especially in recent times, are frequently individuals who rent and live paycheck-to-paycheck (for those who may not be familiar with the concept, it refers to a lifestyle where a wage earner’s cost of living almost matches their earned income, with little or no ability to save money or burden unusual expenses).
While many talking heads have called for increased regulation and scrutiny of banks’ handling of loans for people trying to buy their own homes, they’ve ignored the third of this nation that rents – many of whom are going to be long-term renters. As the most overworked and underpaid class in American society, these “perma-renters” are among the most economically vulnerable in the nation. And unsurprisingly, they are frequently exploited by their landlords – many of whom these days are not people (regardless of what Mitt says) but corporations who own a large portion of property in a given town or county.
Even as the housing bubble burst and sent property values in a dive across the nation, rental prices continued to increase steadily. This is because, legally, rental owners can do this in most states – regardless of actual property values (which, until last year, have only been declining). Sure, the natural suggestion would be, if you don’t like the rent or can’t afford it, to simply move. But as it is, there are a variety of barriers to moving that, together, often trap low-income renters:
- Security and/or “first month’s rent” deposits
In current times it is common for these deposits to be of an amount equivalent to a month’s worth of rent; sometimes it is as much as two months’. Difficult to come up with if living paycheck-to-paycheck.
- Deposits often not paid back in full, if at all
Originally, were only kept to pay for excessive damage or vandalism done by the tenant. All too frequently, today, when a tenant moves out, landlords will retain deposit money to pay for natural wear-and-tear maintenance. In some cases the temptation to keep all of it will win out and the tenant will foot the bill for such standard upkeep practices like painting and carpet cleaning as well as appliance upgrades. And in many states landlords can legally retain the deposits for as long as 60 days – meaning it cannot be realistically used by a tenant to pay the move-in deposits for their new rental.
- Other fees
It is quite common for low-income rental properties to have landlords (and more and more commonly, “property management” companies) who, in addition to the move-in deposit run-around will charge large daily fees (10% of rent or more is not uncommon) for late rent and other fees – effectively penalizing individuals who don’t have quite enough money to make rent by making it harder to pay off.
- Landlords/managers are litigious
These people know that they’re probably crossing the line with the way they handle their tenants’ deposits and charge them fees but they, quite correctly, count on their tenants who are often too preoccupied with work and family or simply not having knowledge of the law and their rights (though in many states the landlord is given tremendous allowance), and even if they do – to lack the time and money to do anything about it. This leads to the next point…
- Renters are frequently threatened and bullied
Low-income tenants subject to fees or are late on rent are often recipients of threats of swift eviction, in the form of a public shaming-style notice on the front door. It has also become common practice for moving tenants to be extorted into paying unnecessary fees or overdue rent fees by threat of “blacklisting” – often tenants looking for new rentals will be asked for a referral from their last landlord and will be denied if not given a positive referral.
- Moving itself is not cheap
Between excessive “reconnection” service fees for utilities, moving tenants have to pay for things like rental vehicles and storage areas – which add up very quickly.
- Price fixing?
As property values across the nation fell, rents rose – in some areas even more rapidly than before. It also became curiously common for these rents to rise at similar rates and to similar levels in a given area. While price fixing, which is essentially what was just described, is illegal, little in the way investigation has been done, nor is it known how ubiquitous the practice is – but as rental properties are increasingly managed by corporations not people, this behavior indicative of price fixing occurs. It makes moving to another rental of the same price seem unnecessarily costly.
It’s a system that blatantly discriminates against low-income earners, and not only permits but encourages landlords and management corporations to take advantage of and exploit economically vulnerable people. While people complain about the rising costs of gas and Coca-Cola, it’s easy to forget that housing, especially in the oft forgotten rental arena, has come to take the largest chunk of people’s paychecks. Ancient wisdom, I have heard, used to say that if you were spending more than a week’s worth of wages on your housing, you were living beyond your means – but who among the lower, working classes can realistically do that? Even the middle classes are finding this old wisdom to no longer be true.
Yes home-ownership and the way loans and mortgages were handled by financial institutions in the US were atrocious and require increased regulation. However, ignoring 32% of the population in this country who are renters is woefully naïve and problematic. In general, though, we do not like to discuss or acknowledge poverty and the realities of the many low-income individuals and families across this nation but this must end.
Yes, the rent is too damn high. Unchecked and forgotten, owners of rental properties have been allowed to exploit their tenants with little hindrance for decades now – and today this is an issue which affects millions of Americans. We still call them “landlords,” a term derived from hundreds of years ago when feudalism was the norm – how far have we come, really? Maybe it’s time to create a “Tenants’ Bill of Rights.”