Propmodo Daily

By Franco Faraudo · Mar. 12, 2024

Greetings!

Very few terms invoke an emotional response like “landlord.” The general public has never had a great perception of commercial property owners. The negativity towards landlords has now become a focus of politicians looking to gain favor in an election year. In today’s email, we look at some of the ways that landlords are feeling the increased political pressure.

Also, this week, Propmodo Technology is focusing on the multifamily tenant experience. Our spotlight is made possible with the support of our sponsor, Amenify, which has recently unveiled the Multifamily Ancillary Income Report. Be sure to check out our content highlighting some of the most innovative ways apartment owners are enhancing resident satisfaction and generating ancillary revenue streams.

Now, let's dig in!

Landlords Have Become the New Political Scapegoat

Empathizing with landlords has never been an easy task. They are often perceived as wealthy, unsympathetic overlords and have been a popular antagonist for decades. Popular culture has provided numerous examples of villainous landlords, such as Mr. Potter from "It's a Wonderful Life," Joe Pesci's character in "The Super," and the wealthiest man in Astoria from "The Goonies."

Recently, animosity toward landlords has been weaponized for political gain. By taking a tough stance against landlords, politicians hope to win votes in an election year. Even President Biden joined the anti-landlord rhetoric when commenting on the RealPage lawsuit during his State of the Union address: "For millions of renters, we're cracking down on big landlords who violate antitrust laws by price-fixing and driving up rents."

States across the country are enacting renter protection laws. States like California, Connecticut, and Illinois have introduced new legislation to limit what landlords can demand from their tenants. There is even a proposal for a Federal Renters Bill of Rights that would allow the Federal Trade Commission (FTC) to examine unfair practices in the rental housing market.

New York City has had its fair share of notorious landlords. Since 2010, the city has maintained a public list of its worst landlords. Yesterday, city officials went much further than just public shaming by issuing an arrest warrant for one of the most infamous landlords, Daniel Ohebshalom, due to his failure to correct dangerous conditions at two of his buildings.

From the sound of it, this won’t be the last warrant they file: “I want to be crystal clear: if you create unsafe, unhealthy, and unlivable conditions, we will hold you accountable. Let this be a message to all landlords that HPD will make certain the law is enforced to protect every New Yorker from dangerous housing conditions," said HPD Commissioner Adolfo Carrión Jr. "We will use every resource available to ensure every New Yorker understands that they have a right to live in a safe and healthy home, and we’ve got their back."

While Mr. Ohebshalom's case may justify legal action by the city, the move highlights that owning a building in the current climate carries more than just financial risks. As buildings go up for sale or into receivership, underwriters will need to exercise due diligence to determine if the building could expose them to legal action.

Ironically, recent instances of bad landlord behavior have primarily involved individual owners. But, corporate landlords seem to be facing the most significant pushback from regulators. California is debating three bills that would limit or prohibit corporate ownership of rental properties in some form. Although the idea of a massive corporation buying up properties and raising rents may seem unsavory, corporate owners have the most to lose, both reputationally and financially, if they fail to uphold their duty to provide safe living conditions.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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