Comment

Who takes out this loan? The person who wants to live in the home?

Yup. Or coops.

What if they can’t afford to pay it back?

What if someone can’t afford rent? I’d rather see the government eat the risk than see people go homeless.

Isn’t paying interest on the loan the same as paying rent

No, because if you pay rent, your rent becomes someone else’s capital. If you pay off the debt, you invest in your own property.

except now you’re stuck without being able to move

Who says you can’t transfer the home to someone who buys in? That’s an advantage of coops.

and no one else is there to fix your roof when it needs it?

Landlords usually don’t do that. They hire handymen to do this, so why canwt that be done by the person who lives there?

source

Sort:hotnew top

CannonFodder@lemmy.world ⁨2⁩ ⁨days⁩ ago
If a co-op takes the loan, aren’t they just becoming a landlord? And who does the work to organize it - are they paid? Isn’t that just like a landlord taking profit?
If you look at the government as just a collective of the people, then there’s no magical entity ‘eating the risk’ - it just means the people get screwed over and/or someone doesn’t get paid for their work.
Yes, you can use a handyman to fix your roof, but you have to pay them. And if you can’t afford to, you what - take more loan from the government which endlessly prints money?

source
- Prunebutt@slrpnk.net ⁨2⁩ ⁨days⁩ ago
  
  If a co-op takes the loan, aren’t they just becoming a landlord?
  
  No, because the people living in these places own a share in the coop. It’s distributing the load of repaying the loan on several shoulders and once it’s payed off. The rent becomes basically only the upkeep (rather than a sourge of income for the owners… because the owners are the ones who pay the “rent”).
  
  And who does the work to organize it - are they paid?
  
  Depends on how the coop manages it. But they could theoretically use the rent as payment for someone who manages the co-op.
  
  Isn’t that just like a landlord taking profit?
  
  No, cause that’s not profit. That’s part of upkeep. Do you know what “profit” is?
  
  If you look at the government as just a collective of the people
  
  I don’t agree with that abstraction, but ok.
  
  then there’s no magical entity ‘eating the risk’ - it just means the people get screwed over and/or someone doesn’t get paid for their work.
  
  What are you talking about? Institutions aren’t “magic”. Risk of loss gets easier to manage if more people chip in. That’s the whole reason why insurances exist. And why diversifying a financial portfolio is the best strategy for banks. Yes, some will not be able to pay back their loans. But you can buffer that with interest by the ones that do pay them back.
  
  Yes, you can use a handyman to fix your roof, but you have to pay them. And if you can’t afford to, you what - take more loan from the government which endlessly prints money?
  
  And your alternative is that these people who can’t afford a handyman (or fix the roof themselves) can afford rent? Do you think paying rent every month is cheaper than hiring handymen? And evensif it were like that: how would the landlord afford the handyman? Why would they rent out their property, if rent was lower than the cost of upkeep? Your scenario doesn’t add up.
  
  source
  - CannonFodder@lemmy.world ⁨1⁩ ⁨day⁩ ago
    Do you know the difference between profit and income for a personal landlord? Effectively not much. It’s not just an investment for them, it’s a good chunk of their job and their income. Often they are paying the mortgage with income from another job too.
    They can rent their property at a rent lower than upkeep because they are gaining capital that they can eventually sell.
    Larger landlords can even do better due to the economy of scale for upkeep costs.
    Unfortunately, landlords will often try to make the most and so maximize rent based on the market. The market should balance this out (ie if being a landlord is so lucrative, more people should become landlords and that would increase the competition and costs would go down). But many people don’t want to figure out all the details, borrow large sums of money, take on the risk, take on the stress of managing tenants, etc. - which just shows the value added by the landlord is real. Of course without enough regulations, things can go wonky - like our current system with large corporate landlords. I’m not saying that’s good. Just that the basic landlord concept isn’t inherently flawed.
    
    source
    Prunebutt@slrpnk.net ⁨1⁩ ⁨day⁩ ago
    
    Do you know the difference between profit and income for a personal landlord?
    
    I was asking about the qualitatve difference, not the quantitative.
    
    Effectively not much.
    
    Citation needed. Im guessing that the minimum is more than a few hundred Euros a month net profit per rented out unit. That’s nothing to sneeze at for one household. Especially considering how low effort one unit is (can’t be more than a few hours a month).
    
    It’s not just an investment for them, it’s a good chunk of their job and their income.
    
    For private landlords: Definetly not. The needed labour for owning a unit is negligible in comparison to a full-time job.
    
    They can rent their property at a rent lower than upkeep because they are gaining capital that they can eventually sell.
    
    This might be an ideal but it contradicts with your statement below. And even if: At some point someone wants to make profit off the property. Your “argument” only kicks the bucket down the road until some buyer (and I wonder who can buy inflated house prices) will increase the rent for profit.
    
    Rent-seeking is the most popular form of gaining income, since it requires no work (except for upkeep) and has virtually no risk, compared to a market.
    
    Larger landlords can even do better due to the economy of scale for upkeep costs.
    
    Those larger landlords want even more return of investment. Don’t tell me you’re so naive to think that no one wants to actually make money of the people with the least power in this dynamic: the tenants.
    
    Unfortunately, landlords will often try to make the most and so maximize rent based on the market.
    
    Aha! So now, we’re leaving this ideal world of yours. Why do you think that’s actually an anomaly of the system?
    
    The market should balance this out (ie if being a landlord is so lucrative, more people should become landlords and that would increase the competition and costs would go down). But many people don’t want to figure out all the details, borrow large sums of money, take on the risk, take on the stress of managing tenants, etc. - which just shows the value added by the landlord is real.
    
    You ignore that the housing market is very inflexible. People always need housing, so there is a natural demand, along with incredibly prohibitive costs of entry. People can’t afford any homes (that’s the housing crisis), because property values are through the roof, driving up rents! You act as if people are too “lazy” to become landlords, but most can’t even afford their own homes!
    
    source
    -> View More Comments