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More than half of American retailers didn't pay their rent in April and May

businessinsider.com

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Re: More than half of American retailers didn't pay their rent in April and May

#91

Post by pjc50 »

RcouF1uZ4gsC wrote: post #45

When the next pandemic hits, I doubt any government will dare to attempt a closure. The costs for these closures have been high in terms of economic pain. In addition, the protests, though they are justified due to the oppression the community has experienced, are likely undoing a lot of the effects of social distancing by putting a lot of people together in close proximity for hours. So in the end, we will have expe…

The governments of other countries that had successful lockdowns will definitely do it again now they know how to do it.

Re: More than half of American retailers didn't pay their rent in April and May

#92

Post by nitrogen »

_qwfv wrote: post #66
chkaloon wrote: post #58

Earlier quoted context omitted.

Problem is, there's always two parties in every transaction. Holiday for the rent payer is a death knell for the landlord. Mortgage holiday is the same for the bank and its bondholders/depositors.

Is that a problem? Those landlords and banks have collateral -- the properties and mortgages themselves. I care a lot more about housing from a "how well does it house humans" perspective than a "how well does it generate income for landlords/capitalists" perspective. If landlords and mortgage lenders ended up having to sell their assets for pennies on the dollar, I'd imagine it would make housing a lot more affordab…

Sometimes people are forced into becoming a landlord. They bought an affordable condo in an affordable city (think 5 digit prices). The market dies and they can't sell. They lose their job. They have to go back to school. So they move in with friends and rent out their place just to cover the mortgage they can't get out of. Bankruptcy would ruin their chance to dig themselves out.

I really feel for both renters and small-time landlords. I've been in and/or known people who've been in tough spots on both sides. But I have limited empathy for those who have no empathy.

Re: More than half of American retailers didn't pay their rent in April and May

#93

Post by pjc50 »

MattGaiser wrote: post #78
ikeyany wrote: post #46

Earlier quoted context omitted.

> fragile ... the word is fragile. We've built an insanely fragile economy. Take a look. There's been no war. 100% of the (not so great) US infrastructure that was there before SARS-COV-2 is still there. We've lost about 100k people, which is horrific but in the scheme of things at "USA" scale, and with the skewed demographics, not much of a hit to the economy. And yet the economy is staggering and it's likely to get…

> There's been no war. 100% of the (not so great) US infrastructure that was there before SARS-COV-2 is still there. The infrastructure may not be physically destroyed, but it is effectively out of commission. Same with everything from warehouses to meat cutting plants. You could make the same argument if a gas attack were used on a factory instead of a bomb.

This was Keynes' point: the productive capacity is there, it's the question of putting it to work somehow.

Re: More than half of American retailers didn't pay their rent in April and May

#94

Post by chkaloon »

rurp wrote: post #84
ikeyany wrote: post #46

Earlier quoted context omitted.

> fragile ... the word is fragile. We've built an insanely fragile economy. Take a look. There's been no war. 100% of the (not so great) US infrastructure that was there before SARS-COV-2 is still there. We've lost about 100k people, which is horrific but in the scheme of things at "USA" scale, and with the skewed demographics, not much of a hit to the economy. And yet the economy is staggering and it's likely to get…

Well said. People often forget that optimizing for efficiency isn't free, it has a cost in flexibility. The modern economy is heavily optimized which, yes, can produce enormous profits, but it also makes the economy extremely brittle. Approaches like just-in-time manufacturing or loading up on debt in a good economy to expand faster work out great... until they don't. And when things go bad, they can go bad quickly.…

Yes! That is an astute point. Corporate farms are efficient. Monoculture forests are efficient, etc. But they are fragile. Unions and income transfers cause inefficiencies, but without them, society becomes fragile.

Re: More than half of American retailers didn't pay their rent in April and May

#95

Post by freehunter »

ed wrote: post #86
ikeyany wrote: post #46

Earlier quoted context omitted.

> fragile ... the word is fragile. We've built an insanely fragile economy. Take a look. There's been no war. 100% of the (not so great) US infrastructure that was there before SARS-COV-2 is still there. We've lost about 100k people, which is horrific but in the scheme of things at "USA" scale, and with the skewed demographics, not much of a hit to the economy. And yet the economy is staggering and it's likely to get…

> the mere fact of people stopping doing a bunch of stuff Lol this is condescending, this isn’t due to millennials forgoing their avocado toast

No, it’s due to people not going to movie theaters and not going to Home Depot and not going out to eat at restaurants. You know, things they would normally do but haven’t been doing because it’s not essential.

Re: More than half of American retailers didn't pay their rent in April and May

#96

Post by closeparen »

ikeyany wrote: post #46
chkaloon wrote: post #34

I am afraid we are in a real Wile E Coyote moment here. You know, where he's suspended in air for a few seconds before he goes crashing to the ground? Our crash may come in the fall when UI payments stop and the rent floats become unsustainable. About the time the second wave hits. https://66.media.tumblr.com/bbbf0aec68490ae2679ef489709c3d18...

> fragile ... the word is fragile. We've built an insanely fragile economy. Take a look. There's been no war. 100% of the (not so great) US infrastructure that was there before SARS-COV-2 is still there. We've lost about 100k people, which is horrific but in the scheme of things at "USA" scale, and with the skewed demographics, not much of a hit to the economy. And yet the economy is staggering and it's likely to get…

Fragile compared to what? Which economies can comfortably absorb the indefinite suspension of nearly all activity?

Re: More than half of American retailers didn't pay their rent in April and May

#97

Post by airza »

munificent wrote: post #80
airza wrote: post #15

Earlier quoted context omitted.

I guess you're being sarcastic, but what value is being provided to society by having landlords rent houses out to people who would rather buy them?

One to look at rent is that it's like the old joke about prostitution: you don't pay for the sex, you pay for them to leave afterwards. Rent gives you greater location flexibility and less commitment to a specific place and building. You don't have to maintain it yourself, and you are freed from the mental load of having to do long-term planning around it at all. Not that it's necessarily good for the surrounding com…

I can see the argument about flexibility, but it doesn't really seem to mesh up with the skyrocketing demand for rental properties in urban areas.

On the other hand, I'm not sure why the service of removing risk from home ownership is good (or why it couldn't be separated into ownership and property management.) In the paradigm you're proposing, the renter wants to be insulated from the risk of property damage or adverse effects on the home they purchased. And the price they're willing to pay for this is... 100% of the equity of the place they live in?

Re: More than half of American retailers didn't pay their rent in April and May

#98

Post by pgodzin »

freehunter wrote: post #95
ed wrote: post #86

Earlier quoted context omitted.

> the mere fact of people stopping doing a bunch of stuff Lol this is condescending, this isn’t due to millennials forgoing their avocado toast

No, it’s due to people not going to movie theaters and not going to Home Depot and not going out to eat at restaurants. You know, things they would normally do but haven’t been doing because it’s not essential.

They are definitely still going to Home Depot

Re: More than half of American retailers didn't pay their rent in April and May

#99

Post by rland »

RcouF1uZ4gsC wrote: post #45

When the next pandemic hits, I doubt any government will dare to attempt a closure. The costs for these closures have been high in terms of economic pain. In addition, the protests, though they are justified due to the oppression the community has experienced, are likely undoing a lot of the effects of social distancing by putting a lot of people together in close proximity for hours. So in the end, we will have expe…

Well, the effect of the protests is tempered somewhat by the fact that they are all outdoors. So the risk of Covid + Protests is significantly lower than that of Covid + No Lockdown.

Re: More than half of American retailers didn't pay their rent in April and May

#100

Post by Nasrudith »

Ididntdothis wrote: post #4
rwmj wrote: post #2

Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?

This would make sense to me. Why are some businesses being shut down and have to deal with income losses and others like landlords can keep going and demand their income? This seems fundamentally unfair to me.

Because virii and reality don't give a damn about human sense or fairness fairness compared to what can and does work. "Making things fair" and forcing non-hazardous businesses to close as well even if they can teleoperate would be counterproductive.

The rents are given locked in periods which change vs the potential real swing in value. It is a "futures contract" sort of situation. If sales at a location increase tenfold over others of comparable nichw and expenses rent raising relative value compared to comparably priced competitors then the landlord cannot instantly raise rent for the contract period. They effectively got stuck renting "undervalued". This situation is a reverse of sorts - the income is down but the price is locked in so the retailers are paying for overvalued rent.

This leads to a bit of rent hardball as the retailers can "call their bluff" as they know if they were evicted they could not be replaced with anyone willing to pay the old value and try to force concessions.

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