The problem is that landlords in general are very hands off.
Ayup. The bylaws of the condo I live in say the units are to be owner occupied, but it wasn’t enforced. Now about a third of the units are rentals. One problem that has created is an inability to have a quorum at the annual meetings, because the landlords don’t show up, and the renters don’t have any authority. We managed a quorum last fall, for the first time in two or three years.
It’s just one more instance of money flowing out of the pockets of them that hath not and into the pockets of them that already hath.
That has been the stated intent of “supply side economics” for forty years, based on the notion that only the rich use money properly, and are therefore deserving of having all of it.
The problem is that landlords in general are very hands off. By and large they do not serve on the condo board (which is the decision maker in the community), and their interests and those of the owner-occupants do not coincide. Landlords care if the rent checks keep coming in, with a minimum of work and expense on their parts. Maintaining the property is an expense to be minimized.
It depends on how many units in a community a landlord owns. Four of the five HOA board members where I live are absentee owner/landlords. If anything, they’re going overboard on maintenance, and last year decided to add earthquake insurance.
The fundamental problem with HOAs is that they are too much like governments in all the worst ways. People don’t want to get involved, they want someone else to do the work, and they like to gripe about the results. Further, they run mostly unchecked and, as corporations, have all the authority and money to drive down objections.
That’s why investors will eventually win.
All they need do is become involved, gain seats on the board, and then make any moves they deem necessary. Prevent change by making the use of proxies all but impossible and change the voting rules so that any uncast votes are made as the board wishes. If anyone objects, tell them “Go ahead and sue,” then push things out over several years, piling up expenses which will be paid from the HOAs funds and/or insurance.
In one HOA I know of, discovery uncovered records where the board discussed scrubbing records to avoid having some damning evidence show up in a suit. That hasn’t yet hit the courtroom and I’m sure it’ll cause some level of…awkwardness.
I wonder if, like townhouse and condo complexes, we will get to a point where you won’t be able to get a mortgage for a neighborhood that has too many rentals. That would complicate things greatly.
And if that happens, it just limits the market to those paying cash.
But it won’t happen because money doesn’t work that way. There will always be a mortgage available, it just may have worse conditions (higher rate, lower term, etc) for the person taking the mortgage. But there is always money available for anything … just at the right price.