Originally Posted by jyl
The institutional rental house REITs I track were raising rents like crazy in 2021, 2022. Double digits each year. Since they don’t want long term tenants (average stay is a few years), it doesn’t matter if rent increases drive tenants out - turnover is a feature not a bug. For everyone but the investor/company, it’s a bad thing.
Institutional landlords were recently found to be in effect collaborating to drive rents up - not by talking directly with each other, but by using the same software which, obviously, knows the rents and units of all its user companies and can do the collaborating “in software”. That was on the apartment building side, I think.
Mom and pop landlords are human, many of them actually have consideration for their tenants (though not raising rent to at least semi keep up with inflation feels like too much consideration, in my book).
The other thing institutional landlords are doing, in Oregon, is manipulating rent control to hurt mom and pops. When the state enacted statewide rent control a few years ago, it 1) allowed rent increases of 7% over that year’s CPI inflation, 2) didn’t apply to buildings less than 15 years old, 3) added a bunch of complicated rules and processes for renting, and 4) prohibited cities from having their own rent control laws. The institutional and developers were in bed with the most powerful legislator who pushed the law (she is now our governor, and still in bed with them). So the institutional landlords basically got rent control that means nothing if you raise rent every year (which they do, but mom and pops often don’t), that applies to mom and pops (who tend to own older buildings) but not to institutions (who tend to own newly developed buildings, here anyway), that favors landlords with the in-house leasing and legal staff to comply with the regulations (which mom and pop lack), and removed the threat of any more meaningful rent control at a local level.
The institutional rental house companies have been getting deeply into “build to rent”. They are having whole developments built for them, entire neighborhoods all owned by the same company, raising rents to the max and pushing profitable turnover of tenants. How much must it suck to grow up in a place like that, where the entire neighborhood is controlled by the landlord and all your friends leave every few years - well, you will too. That’s not a community.
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