The moral virtues of landlords

By Howard Husock
Director of Case Studies,
Kennedy School of Government, Harvard University

The following is a condensed version of Husock’s speech at SPOA’s 10th Anniversary Celebration of Question 9 last December.
This organization calls its members “small property owners,” not “landlords.” But we know that tenants and the general public, whether we like it or not, call us “the landlord.” And we know that “landlord” is a term that carries no small amount of baggage.

My goal is to suggest new connotations for the term “landlord,” to urge you not to be defensive about what you do but, rather, to celebrate it – not just as a good small business that sometimes turns a profit, but as a sort of profession of moral virtues and, as a result, a profession that yields public benefits.

Let’s start, however, with the bad connotations. The very term “landlord” takes us back to medieval times – a time of static, subsistence economies. To be lord of the land was to live, by some views, unjustly off the labor of others. To be a landlord even in the modern era, however, is to be a cartoon figure, one who ties maidens to railroad tracks, screaming “You must pay the rent!” when they cry “I can’t pay the rent!” It’s Bob Dylan singing, “Dear Landlord, please don’t put a price on my soul,” assuming that a landlord would do exactly that.

We see all these stereotypes and more in a poem by the great African-American poet Langston Hughes in his famous “Ballad of a Landlord.” (See the complete poem here.)

Here we see all the evils of the landlord class conveniently grouped together in one short literary work. Landlords are those who can charge high rents while at the same time they keep their buildings in poor condition. Landlords may, and will, do anything – turn off the heat on the old and infirm, throw a tenant’s furniture out onto the street – in order to get rental payments that are owed. Landlords have the government on their side; they are part of a power structure stacked against the workingman.

And landlords, of course, are from privileged groups; it makes sense for the tenant to be revealed as a Negro. When Hughes was writing, minorities could not, by definition, be part of the landlord class themselves. One can say this much for Hughes – in the days of legal segregation, black tenants, to be sure, were in a weak bargaining position with property owners, if only because many housing markets were closed to them and it was hard to pick up and move.

But no one familiar with urban real estate markets today would find Hughes’ landlord stereotype to be realistic. We know how laws have changed to make it far easier for tenants to stay without paying rent and much harder to evict them. We know that if any tenant’s furniture were put out on the street, television cameras would quickly be on the scene, alerted by legal aid lawyers. And we know, especially here in Boston, that small property owners so often include members of all sorts of minority groups—African-American, Asian, Latino and immigrants of almost every background.

Indeed, there is good reason to believe that owners of rental property are, in fact, themselves people of modest means. In its report State of the Nation’s Housing 2002, the Joint Center for Housing Studies at Harvard University found that there were more than twice as many small and resident owners of rental housing—some 9.3 million—as there were large owners, some 3.7 million. And it found that for the largest group of both resident and small owners, annual income fell into the lowest category in the center’s survey – less than $30,000 per year. Indeed, almost as many small owners – 2.5 million of them – reported losing money as the 2.9 million who reported a profit. And a majority of resident owners reported that they either broke even or operated at a loss. So much for the easy money that comes with being a landlord.

Still, it’s not enough to reply to Hughes by saying that his poem is outdated or inaccurate. It’s not enough to say that the anti-social, anti-people traits of the landlord class have been reined in, or that the Small Property Owners Association is now inclusive and diverse. No, what must be rebutted is his central, underlying point – that private rental property ownership, enforced by the government, harms the common man. This is simply not true.

Let’s turn, then, to what I’m calling the moral virtues of landlords.

Let’s take something as commonplace as checking a prospective tenant’s credit and references. To be sure, this checking is meant as protection for the property owner, a guard against deadbeats. But it also serves as a way to sort the good apples from the bad – a protection for other tenants and, indeed, for the community as a whole, not just the owner.

The same is obviously true when owners monitor their tenants for bad behavior, which is why eviction is not a means of oppression but a form of community improvement, with the landlord maintaining a stable community and serving as the agent of social order.

Another moral virtue of landlords is that, in all but the weakest housing markets, they themselves operate under pressure to maintain their properties, lest they suffer vacancies and lose rents. In so doing, however, they also maintain the physical quality of the local neighborhood.

Landlords, then, are agents who help to organize and maintain community and to protect residents against those who would misbehave.

By the way, the need for good behavior works in both directions, for landlords as well as tenants. When I was writing an article on the history of the New England three-family house, I interviewed a major Boston-area real estate developer who told me that as a kid living in a Dorchester triple-decker, he had always been told by his parents to keep quiet and be courteous, so as not to drive away good, rent-paying tenants. It seems that the moral virtues of small property ownership exceed those of Dr. Spock!

So it is that private virtues become public ones, or, I suppose one might say if one must, greed can be good. We have found our way to Adam Smith’s famous dictum: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” The landlord’s dinner, however, includes not only the rental unit itself, in this case, but the good neighborhoods that private property ownership serves to undergird.

We can see the impact of these moral virtues of the landlord by looking at housing subsidized by the government, where the private landlord is taken out of the picture and the moral virtues I’ve enumerated are undermined. Why should we be surprised that public housing falls apart? No one has a personal incentive to maintain it. The managers keep getting their government paychecks. The same disincentive, I believe, will be true, as time goes on, of the new subsidized housing managed by not-for-profit so-called community development corporations. Nor do subsidized tenants who pay little or no rent have a stake in good upkeep. What public or subsidized housing tenant is going to say: “If you buy the paint, I’ll do the work” – ? But we know that, in the world of small property owners, that happens all the time.

Even the Section 8 voucher program, trumpeted by political conservatives as the antidote to public housing, brings similar problems. Private property owners lose the incentive to maintain their buildings, secure in the knowledge that Uncle Sam will send the rent-subsidy check on the first of every month. The tenants, who normally keep the landlord honest, themselves lose leverage because they are not paying most of the rent, if any.

In other words, in the world of public and subsidized housing, what has been severed is the normal business relationship between landlord and tenant, which not only serves the interests of the property owner, but the interests of the tenant and the whole community as well. Where this relationship has been lost, the consequences are bad for everything – from public safety and property upkeep to the sense of status and accomplishment which those who work hard and play by the rules, as someone once put it, deserve to have.

Let’s hope for a broader understanding of how wrong the stereotype of “landlord” is, and of the significant contribution of small property owners to the community.

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