If you argue for a cause like affordable housing for everyone, is it necessarily hypocritical if you also own investment properties?
Solid prompt question OP. I see 116 votes and 116 comments, that’s a legit conversation stater.
Thanks 😄
I'm stoked by the engagement; I initially found the question following some article posted on bluesky. Replying there resulted in crickets. I thought to ask here on a hunch, and it's been wonderful to read all the responses.
Back in the day people would claim that what was good about reddit was that it was a community. Well it's not that anymore.
This is pretty good though!
I don't think it's hypocritical to do something and at the same time want a world where it's no longer a thing.
If you argue against capitalism, is it necessarily hypocritical if you also shop for groceries at a store?
If you argue that we should live in a moneyless utopia and yet you charge money for your services, is it hypocritical?
If you argue for climate change action and yet you drive a car, is it hypocritical?
Of course, owning investment properties contributes to the problem and there is no excuse for that, but I don't think it's hypocritical to see the problem and want to stop it.
I feel like you are not considering that your examples are necessary to be able to participate in todays society, unless you want to live in a 100% self sustaining homestead. Owning investment properties is not necessary for that.
IMO it largely depends on how the properties are being handled. If it's just like any other property, and is being handled solely for profit's sake, I think it is hypocritical to argue for affordable housing for everyone, as it just adds to the problem while you really didn't need to. If the properties are handled in a way that actually improves the situation, makes no or only little profit, and thus provides affordable housing, it is the exact opposite of hypocrisy, as it is actively working towards the ideological goal you have.
It being unnecessary is what it makes it bad, but it doesn't make it hypocritical.
It would be hypocritical to own investment properties while telling other people not to.
It wouldn't be hypocritical to campaign for making it illegal to have them (which would affect you all the same).
In both scenarios your are contributing to the problem, but you aren't a hypocrite in both.
Yes. Housing is a human right. Not an "investment". There are literally so many other things you could invest on, but you choose to profit through one of the worst symptoms of inequality.
What other things would you invest in?
I'm not trying to be contrary to your comment I'm just legitimately curious as to what you might view as a similar investment. I can't, at the moment, think of anything that would have a similar return structure that isn't essentially doing the same thing. Hoarding a finite resource and charging a premium for its use.
Your comment only argues it's bad, which is not the question. The question is if it's hypocritical.
I agree with you that it's bad, and also think it's not hypocritical to e.g. campaign for making owning investment properties illegal while owning an investment property. You are still the bad guy here but it's not hypocritical to want a world where the bad thing you are doing is is no longer a thing, if for example the person in question thinks it would be unfair for them to miss out on the investment "while everyone else is doing it".
Your are the bad guy but no, you are not a hypocrite.
It would be hypocritical to tell others not to own investment properties while you do.
You are part of the society. You cannot escape it.
It's not because you own property (which, if you can, is a wise investment) that you can't see how messed up the system is at the expense of the working poor.
Absolute copium. Yes seeing a problem and choosing to contribute to it is bad. Perhaps worse than being an ignorant contributor.
You can't live outside the system, love it or hate it. I don't blame people more fortunate for making good decisions. I do blame them for not recognizing the system is shit and bragging they're better when the tables are tilted.
If we are to make the system better, we need a big coalition, and personally I applaud people like OP that can at least see reality for what is is.
I think it's one thing to not be willing to go live as a hermit to avoid unethical consumption and another thing to simply... not participate in rent seeking behavior like this.
This will probably be an unpopular opinion but I think the reality is that the choice whether to be a landlord has no effect on the supply of housing and so is almost totally irrelevant to this essentially systemic issue. The only kind of stuff that matters here:
The idea that people would buy property and then provide housing on a charitable basis in defiance of the market isn't realistic and isn't a viable solution to the problem. The only solution is to build the right incentives into the system. Someone can support the latter without trying to do the former.
The price to buy housing is influenced by how many people want to buy. People who want to live there are competing with landlords who want to rent out the housing. So it drives up the buying price.
A landlord buying for a higher price will likely try to charge a higher rent as to recoup the investment.
More potential landlords means higher rent prices. Every single landlord is increasing the problem.
This is good logic but I think what you are missing is that the factor behind investment demand driving up price is volume of capital rather than number of landlords. One company can buy any number of living spaces if it has a way to profit on them, cancelling out the effects of any number of principled refusals by individuals to buy property in pursuit of that profit.
That said, one thing that is weighted to individuals is lobbying local government to protect their investments, so more people becoming landlords isn't necessarily good, because your finances being tied to something is a powerful source of bias, for instance towards opposing new housing developments that could increase housing supply and reduce price of your properties, or opposing higher property taxes for non-primary-residences. But if someone supports effective policies towards affordable housing, even knowing it will harm their investments, I think they get credit for that.
This is the same logic that fossil fuel companies do to shift blame from themselves onto consumers.
Nah fuck that.
Well like I said that's kind of the sentiment I expect because people like to make this about individual morality, but care to elaborate at all? Do you disagree with any particular part of what I'm saying?
OP: constructive addition to thread You: nah
I believe in a baseline level of food, shelter, healthcare, and education being provided to all regardless of means. Plus things like parks, infrastructure, physical safety and security, etc.
But just because I believe that everyone should have enough to eat doesn't mean that I don't believe there is a qualitative difference between that baseline level of sustenance and all sorts of enjoyment I can get from food above that level. A person has a right to food, but that doesn't change the fact I might be able to farm for profit. Or go up the value/luxury chain and run an ice cream parlor, or produce expensive meals, or buy and sell expensive food ingredients. I want schools to provide universal free lunch but I also know that there will always be a market for other types of food, including by for-profit producers (from farmers/ranchers to grocers to butchers to restaurateurs).
The existence of public parks shouldn't threaten the existence of profitable private spaces like theme parks, wedding venues, other private spaces.
So where do real estate investors sit in all this? I'm all for developers turning a profit in creating new housing. And don't mind if profit incentives provide liquidity so that people can freely buy and sell homes based on their own needs.
I don't personally invest in real estate because I think it's a bad category of investment, but I don't think those who do are necessarily ideologically opposed to universal affordable housing. It's so far removed from the problems in affordable housing that you can't solve the problems simply by eliminating the profit.
I'd say if they are solely an investment, then yes you are part of the problem. Because you expect a return on your investment and so inherently rent has to be increased to generate the necessary profits.
If you'd live in a house that has more room than you need and rent these out that's fine in my book. But possession solely for profit is one of the main problems of our current economic system.
Was it hypocritical of RATM to spread anti-establishment messages via a major record label? No, of course not. Systemic change being somehow at odds with doing what you can within the existing system has always been a false dichotomy propagated by those who benefit from division.
It's not hypocritical if you are providing affordable housing for someone.
Despite the kneejerk hate towards landlords lately, which is largely justified due to the extreme levels of rent-seeking behavior evident in today's completely unaffordable rental market, affordable rental housing is actually a legitimate market and there needs to be availability to meet that demand. Renting on its own is not a crime. Some people even prefer it. It can provide significantly more flexibility and less responsibility, stress and hassle, at a lower monthly cost than home ownership IF (and ONLY IF) you have a good landlord, either because they choose to be or because the laws require them to be, which is not so much the case with most of the laws.
So for me those are the dividing lines. If you are not:
Then maybe it's not hypocritical. And I don't mean just taking the highest price you can find on rentfaster and posting your property for that price because "that's what the market price is" I mean actually thinking about whether that price you're asking is actually affordable for real human beings living in your area.
Basically, if you treat your tenants like actual human beings with the understanding they may be struggling to get by, trying to raise a family, working as much as they can even when work is not reliable, and dealing with all life throws at them, and you don't treat these things as immediately evictable offenses like a battleaxe over their head just waiting to drop, then yes, you absolutely can argue for a cause like affordable housing for everyone -- because you are helping provide it.
If, after contributing to legitimate maintenance expenses and reserves, you are making a tiny profit, barely breaking even or even losing money renting, good. If you are treating it as a cash cow that funds your entire life, fuck you.
Maybe it is different elsewhere but according to my calculations, renting property is not very profitable. Investing in stocks is better if you only want to make money and do not care about the apartment otherwise.
You can't easily get your money out of the property and if loan rates go up, you pay more and the property value goes down.
The real parasite is the bank who takes a cut but has little risk as the money it lends out is created from thin air.
That's not at all how interest rates work on homes... They're fixed and yes while fluctuations in interest rates can have an effect on the home value, that won't change how much your mortgage payments are, and can only effect your property taxes by at most 2% per year
Rent doesn't have to fluctuate with interest rates at all as it's up to the home owner
Edit: unless you're in a variable rate interest loan in which case, yeah your lender is screwing you
Even if your costs only break even, you’re building equity
Often the difference in profitability is whether you pay for a property manager or do the work yourself
I know a couple people who did it and made money, fwiw. They gave up so they didn’t have to deal with people
Yes. Housing is a necessity. It's not a way to gain financial freedom or security. Anyone that participates in the system of commodifying a need in any capacity is a greedy and awful person. You can't be for affordable housing while also having some poor person paying your mortgage and shrugging that "this is just how it is".
In what way? The majority of affordable housing (as defined by the government) is housing to rent. Someone has to own it and it’s incredibly likely to not be the people living in it because they can’t afford it or do not want to be buying a house.
Yeah. It's up to you to decide if you care about being a hypocrite though.
Not really, believing there should be affordable housing for everyone doesn't mean all housing should be affordable to anyone.
I believe there should be different levels of density of housing and pricing in different areas, and that the state should subsidise some percent of rent based on income, possibly up to 100% up to a certain cost, if you haven't had evictions on record; but I also own different properties I rent at market rate because it's commensurate to the cost of living in the area, and a lower rent would not make living there any more affordable, and would open me up to possible tenant disputes if someone who can't afford to live there were to move in.
If the cost of living went down in the area I would also adjust accordingly, as I don't believe in fleecing people and it's also generally beneficial to be in line with market value to maximise client volume.
Affordability isn't a "rent is too high" issue only. It's a "there is no place I can afford to live in that makes sense for the places I need to reach" issue too.
Cost of living is a huge factor, I have friends who work in the service industry who almost had to move completely out of the city due to the 22-23 price hike, despite local laws preventing rent from following inflation.
It's only hypocritical if you believe no housing should be market controlled, which is a non-serious opinion, to be frank.
Depends on how greedy you are.
Yes. That is, if you're actively hurting the availability of affordable housing, that would be hypocrisy. Your economic interests are at odds with your stated ethical stance, which means your ethical stance is unstable.
Owning the property is not the problem: Rent-seeking is. Running it as a managed coöp would be the ethical path forward in that situation.
But if you're advocating for changing the system there is nothing hypocritical about owning it since your impact is a drop in the bucket. In order to make changes you need power and power comes from wealth.
I'd say that you're unlikely extract enough wealth to make a difference in the large scale, but you absolutely have enough power to make an immediate difference for however many people can live in your building.
That's the problem with consequentialism: A certain evil now for a possible good later. I don't agree with that.
If you make even a penny of profit, then yes. Housing should never be something someone does to make money. Shelter is a basic human need for survival.
Should buying and selling homes be completely removed as a private institution then? What about land ownership entirely?
edit: when land ownership is controlled by a position of authority who decides who gets to live where and move where, congratulations, we're back in monarchy. We can do this smarter without holding completely delusional values.
I feel like it kind of is. There are surely other investment possibilities. Why choose the one you're against?
Because (historically speaking) its arguably the safest and highest yield form of investment that the working class can make. That being said obviously theres a tipping point in regards to the amount of income you're generating at which it becomes predatory.
Funding a nice retirement? Ok. Making it so only one parent has to work? Fine. Jacking up the rent to cover the insurance on the new Lambo? Fuck you.
The line you're trying to draw is very arbitrary, so it still feels a bit hypocritical.
You are assuming they were against it at the time they bought it, if they even bought it and not for example inherited it.
It depends on how you are looking at it. Since you called it "Investment properties" I have to assume you plan to maximize profits on it so I would have to say yes it is. However if you are renting the property out for a minimum value and only charging enough to be able to cover costs and the mortgage and maybe a minor income on the side, I don't think it is. Obviously you need to cover expenses for the property or else someone else who won't do the same is going to obtain it.
BUT, if you are trying to maximize return and charging as much as you can, then yes it is super hypocritical to be defending the cause while contributing to the other side of the cause. I still think defending is better than just ignoring it but, yea it isn't helping your case if anyone ever finds out you do.
Hm I'd say not necessarily. That depends on your situation I guess. The question comes down to "would you give up your property for other people to live in?" If you own 1-2 small properties, that's not being a greedy landlord. And it would make it possible for you to give people housing they could afford (while still profitable for you, if you needed it to be).
If you charge insane rents, then you're not only a hypocrite but maybe also schizophrenic. That just sounds like a disconnect.
But it's very possible to "change the system from within", even if that's not my political opinion. If you can buy property, maybe you should. And then rent it to people for an affordable price.
I'm sometimes thinking people should get together and buy mansions to convert into shelters
For many people owning their own housing is the wrong decision. That means somebody else needs to own their housing and that person may as well be you (depending of course on your situation - it isn't for everyone)
Yeah even in a perfect utopia not everyone would own a house. Sometimes you’re only living in a place for a short time
Yeah this is the thing that makes me really disagree with the whole "landlords are necessarily bad" thing. A lot of them are, to be sure, and there is so much wrong with our housing market, but there should still be a place for those who wish to rent to rent. I mean just speaking for myself right now, I would not want to own a home right now, even if it was affordable. I'd like to some day but where I am at life right now I would rather rent.
So why not have it be owned by some kind of non profit organization or handle it like local utilities?
I only mention it because a lot of what I've seen on the topic is people saying the point you made and nothing else. It just seems like we've (largely) figured out and implemented a way for the system to work in many places, but only for certain basic needs and not others.
That doesn't change anything useful. There are many not for profit health insurance companies in the us - they are no cheaper and don't have better service than the for profit ones.
Yes, there are plenty of other investment opportunities, the fact that you chose the one that profits off of housing insecurity shows you don't care enough about it to forgo a little bit of extra money.
Like other people have mentioned you would also have to be advocating against your own interest. Yes you can do that but your passion will at least be dulled by your innate desire for profit. You'd have more passion and will for the cause if you didn't own investment properties, even more if you are renting and are a victim of housing commodification.
Another point is that you'd be adding to the demand of houses and thus raising the price. You could argue it's a drop in the ocean, but that sort of attitude leads to a million drops in the ocean and rising sea levels. You would also probably be buying it on a mortgage that's larger then the house was previously on so the floor for rent , the break even point, would be higher.
Eg. If you bought the property for $400,000 on a mortgage for say $2,000 a month from someone who only had a $200,000 mortgage on it for $1,000 a month you've now upped the rent floor $1,000.
It isn't hypocritical, but I'd question why I would invest in something that I would want to lose value from a moral standpoint.
If your profit is modest no. Even less so if you live on the property like renting out a room or having a multiflat or coachhouse.
Are you renting them for unaffordable amounts? Maybe. But I think you can both live in the world that exists, and argue for a better one.
And I guess if your investment property is affordable housing then you are also walking the walk, right? So no I don't think it's necessarily hypocritical. Likely so, but not necessarily so.
We've rented for much less than it costs to buy a house here, in fact all of the places we rented were like that. Old houses that were paid off, that we did not want to buy, just paid to live in them month to month. Sure we can wish for a better system but sometimes renting is affordable.
I work in residential construction, but I make sure to tell colleagues that we are all parasites on the backs of other parasites.
I'm doing my part!
Methinks it is only not hypocritical under a few circumstances:
Any other condition is in principle hypocritical... Although there is probably still a massive moral difference between someone with a severe disability who owns a few rentals to pay for bills vs a professional investor who systematically prices out locals to improve profit margins
What if you think affordable housing should be government subsidized? Or as is the case in many places, below market priced units that the builder is required to include, with limits on how they are used (income qualifications and owner occupation).
Neither of those requires you not to rent to other people. It would be like saying I'm for mental health services being paid for by the government but running a psychiatric business.
On this... I did read a prior research work suggesting that US government should use subsidy/housing vouchers in private markets instead of public housing construction; this way it helps with creating affordable housing while avoiding risks of defunding public housing projects due to political changes. I'm not sure if the findings of that work apply to other countries or if the author was mainly thinking about US
I guess I was thinking more about my personal morals. In terms of actual implementation, I do think you're correct that the goal of "affordable housing for everyone" can be done even in a completely private housing market, as long as the market is well-managed with abundant supply (so no shortages, no institutional landlords maximizing profits at 91% occupancy instead of 100%, etc)
If you’re arguing for a particular public policy, then it’s not necessarily hypocritical (which isn’t to say it’s good).
If you’re arguing for social change based on personal behavior, then you should lead by example.
Arguing for social change based on personal behavior is pretty stupid
If you argue that others should not own investment property for whatever reason but you are a valid exception it's one thing.
If you say that "look at how much money I'm making, tax me harder daddy" it's another.
If you say that "look at how much money I'm making, tax me harder daddy" it's another.
That is a bad thing for affordable housing. For affordable housing you need profits from investment property just enough to be worth doing. Any taxes a property owner pays needs to come from the rent they charge so high taxes mean they are charging more rent to cover it. So if taxes are high that means that rents are higher than they could be. You should get rich - to the extent you do - in property ownership by owning a lot of property for a long time, not charging high rents.
Only two avenues I could see nothing being hypocritical, signing it over/forming a co-op or doing rent-to-own with rent control and everything being transferable to "next of kin" upon some kind of accidental death.
I would make the argument that it could actually be a means to align with affordable housing (although that would likely be very difficult in this current housing market). Managing a property is a service, you have to manage vacancies, repairs, rent collection, etc.
If you don't offload this to a management company and do it all yourself it is technically feasible to make a profit from the labor of managing the property even when charging below market rate for the property (difficult to do right now, but after owning the property for a period of time definitely possible).
If you were to do this you would be directly combatting the affordable housing problem by introducing competition at a lower price (it would be a drop in the ocean, but it would be fighting for affordable housing).
I think it depends a lot on the specifics of the situation.
Did you buy a single family home / house that you're living in, and renting out part of to help pay your mortgage? Then it depends on the rent you charge.
If you charge market rates and you can afford to charge less than market rates, or if you hire contractors and maintenance people for the unit that are cheaper / worse than the ones you use for your own unit, then yes, you are being exploitative and hypocritical.
If, however, you treat the unit like your own and charge below market rates then no, you're not.
If you build an addition on your house, or build a laneway house or something, then it's more reasonable to charge market rates for rent because you've actually added new housing to the area, an act that in itself should help to slightly drop rents. Same thing if you buy vacant property and build rental units on it. However, if you continue charging the most you possibly can long after you've made your money back then you're back into the territory of being an exploitative hypocrite.
And if you're just in a hot market and buying up houses / condos, and renting them back to people as is, or just doing the cheapest and shittiest job you can turning them into apartments, then yes you are being a hypocrite. At that point you're just using your capital to buy up a limited quantity item and sell it back to people at exploitative rates. It would be like being stranded in the desert and buying up the remaining water and then selling it back to people for a profit. You're providing no value to society, just using past success to force people into a corner where they have to pay you for a necessity that's in limited supply.
No, it's just having basic empathy for other humans.
Only if you're advising on how to close all the bullshit loopholes you've exploited preventing them from being used further.
Don't hate the player, hate the game
I dont think this set of facts has ever aligned in the history of...forever
Unless you are by extension making those properties affordable for whomever is leasing or renting, then absolutely it is, yes.
You can make them affordable by screening for high income.
If the property is giving you any kind of return, you’re extracting profit, so the property is less “affordable” than it would be if the resident owned it.
It’s a bit more complicated than that though. Most people can’t buy a property, because they don’t have enough money. In order to go around that problem, they either borrow money or rent the property. Either way, some extra money always goes somewhere.
Some of it is justified, because you need to go around the problem not having enough money to buy a house. However, there are many cases where that extra expense is absolutely wild and rooted in greed.
Actually, if you happen to own the property, some extra money will go to periodic maintenance and miscellaneous expenses you never even think of if you just rent the place. You just don’t pay for those things every month a little bit at a time. Instead, you pay a large bill once a year or an enormous bill every 10 years.