Buried in the bad news about the state of commercial real estate in America is a hint of why ‘landlordism’ will fight tooth and nail to maintain healthy profits in the residential sector. That battle may well be fought no matter how many struggling renters are turned out onto the streets as rental housing becomes increasingly unaffordable for some.
The current crisis? Imagine that you are the landlord of a ‘residential’ sector building when suddenly many of your potential clients catch a rare wasting disease and die. Panic time for landlords, who can no longer find enough folks to render unto them their rightful profits.
Preposterous? Could such an unlikely event ever happen . . . anywhere? Well, yes, in a manner of speaking.
COVID released a huge number of tenants from their ‘9 to 5’ weekday downtown homes. It was as if they’d caught an infection, died and gone to heaven!
Heaven for some office workers, as it turned out, was their own homes.
Not surprisingly then, there has been strong resistance, post-COVID, to becoming ‘born again’ into the downtown-office-work disease of commuting. Office landlords, and the financial institutions that lend to them, are in a state of panic. Will lords of the commercial free market, together with their bags-of-money-folk, drown miserably in a sea of empty high-rise office space with flashy tinted windows that once provided such a rose-coloured view of profitable city downtowns?
The jury is either still out, or puttering in suburban gardens during coffee breaks. In any case read more at CNBC: The coming commercial real estate crash that may never happen
On to the point. . . in a moment. Consider this thought, which is clearly explained in the article. While the pandemic of downtown-office-work disease is surely happening, what is not clear is whether the cascade of economic disasters now occurring will bring down prosperous life of the entire nation. It may never happen, even as we see pundits and experts feel free to shout ‘wolf!’ from every downtown commercial tower-top.
The point? Let’s now search for evidence of such wolves in another land where landlords seek to profitably flourish: the residential rental market. Suppose a calamitous disease were to sicken and carry off hundreds of thousands, nay millions, of renters bound for a more desirable afterlife. Leaving behind empty homes and weeping landlords (not to mention bawling housing owners, as the value of their assets sink in a world of surplus housing.)
There is no point in belabouring the analogy linked to a commercial real estate disaster if we can’t imagine a disease that carries off residential tenants to a greater glory. So let us strain for a moment to imagine the nature of such a pandemic, at least as it must be perceived by horrified residential landlords and their financial enablers.
Consider for a moment what is emerging as new holy grail for housing activists in the US: social housing. Not only will a 21st century newly-minted version of social housing provide for millions of poverty-stricken Americans, it will — key point — be equally desirable and attractive for millions of the American middle class.
Middle class ‘died and gone to social housing heaven’ moments will be absolutely essential to finance the social housing for the poorest citizens.
Here we have a pandemic analogy that will send millions of free-market renters to a newfound social housing heaven. The possibility of such an event must, should it ever approach reality, horrify free-market landlords and their financiers. IF it happens, of course.
A final question we offer up for consideration: is it possible for residential landlords and their bankers to allow such a happy residential housing pandemic to happen? And the corollary: can such a good idea as new-era social housing ever hope to prosper in the face of the political sabotage that will be wrought by the powerful and influential free-market forces of conventional housing construction and ownership? IF they remain free to interfere?
