Who Hijacked Our Country

Sunday, June 15, 2008

Let’s See, Who Hasn’t Been Squeezed and Gouged Yet? Renters!

If you’re renting — better enjoy the fantastic deal you’ve been getting. It might not last much longer.

So far, banks and cell phone carriers have gotten most of the publicity for suckerpunching their customers with hidden fees, and changing the rules in the ninth inning. But other businesses are seeing how lucrative it is to be a sleazebucket, and they’re jumping on the bandwagon.

More and more landlords are using online data searches to find out everything imaginable about their prospective tenants. As the author of this article says: “It begins with a strip-search of one’s personal data.” And the would-be tenant pays for these background checks, regardless of whether he/she ends up getting the apartment or not.

Landlords are also more likely to require their tenants to carry renter’s insurance. This way, the building owners can pass their own insurance costs on to their tenants.

Like every other business, large landlords and property management companies are merging and consolidating and sharing data. This makes the gouging so much easier. A former president of the National Association of Residential Property Managers said: “There are more property managers getting together, we’re seeing where the loopholes are and we’re closing them up.”

Large apartment owners have started doing what hotels and airlines are already doing: using revenue-management software to calculate the absolute maximum rent they can charge right at this exact moment.

M/PF YieldStar is one of these “pricing optimization” services. They have 1.3 million customers now, and they’re hoping to have twenty percent of all apartment complexes on board within five years.

This service (and others like them) enables landlords to be constantly calculating the maximum rents they can get away with — and gouging their tenants accordingly. The president of M/PF YieldStar said: “They don’t have to think about and justify the rent. And they don’t…As you get more and more penetration and more people use revenue management, it’s just going to become the norm.”

And that’s not all. Some landlords are charging so many hidden fees and surcharges, they’re gonna make the credit card industry look like a charity. As the article says: “Application fees, administrative fees, credit-check fees, cleaning fees, move-in fees, surety bond fees, redecorating fees — all nonrefundable.”

A tenants’ advocate says: “It’s gotten really bad. In many instances there’s no accountability and they’re charging far more than their costs…You might actually pay $150 or $200 just for the privilege of moving in. There’s a fee for this, a fee for that. You get a fee for breathing.”

Or as Sam Kinison once bellowed out: “You’re lucky you’ve got air, ASSHOLE!”

And once you’ve moved in, the gouging continues: facility fees, storage fees, parking fees, utility-management fees or business-center fees...

A Houston property owner said: “Let's say you own a 10-unit apartment or a 1,000-unit apartment. If that apartment building is full, how do you make more money? You start by charging fees. These are all revenue enhancers, that’s what they are.”

Revenue enhancers. How quaint. This used to be called theft, gouging, and a bunch of less printable names.

cross-posted at Bring It On!

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25 Comments:

Blogger American Hill BIlly said...

Tom,

excellent truth in this post. I've been told by many that the current housing bubble was purposely perpetrated in order to help create more of the strangle hold you mention.

On another note: I pasted that vile hate filled forward along with important points about how it is subliminally targeting Christian Americans, or just regular "Six Pack Joes". I am going to leave it up, and not post for a few days; because not only my facts, but the forward itself is long. Feel free to copy paste forward, or flat out steal it, and say it is yours!!

Peace and Freedom

June 15, 2008 at 9:09 PM  
Anonymous S.W. Anderson said...

Terrific topic and post, about which I have to admit to a certain ambivalence because I've heard and read horror stories from both landlords and renters over the years.

One landlord of my acquaintance went into the business buying and fixing up several older homes for rental. Some single family, some multifamily. Some of the stories he tells of misuse, abuse, filth, damage and midnight move-outs are enough to make a person sick. And yes, he claims to have done due diligence in checking out renters, although he says he let his soft heart overcome what the little voice in the back of his head was warning him a couple of times.

If I recall correctly, this guy's worst tenant stayed 8 months and cost him $8,000 in damage of various kinds. And that was above and beyond the big cleanup required after she slipped away in the night, owing him six weeks rent. He could've gone after her, but she didn't have anything to go after. He just had to chalk it up to lessons learned, he says.

I've also heard horror stories on the renter's side. A friend rented an extremely nice place in a newer complex. But she couldn't so much as hang a picture on the wall (some were permanently installed already) for fear of making a hole, leaving adhesive or discoloration from removing adhesive. Extension cords weren't allowed. A manager inspected every room periodically. Before moving in, she had to fork over the first and last month's rent, a repainting/refurbishing fee, give references, present proof she was square with the phone company and local utilities, and agree to a 90-day probation period during which she could be ordered to move out within 48 hours without being given any reason.

Is that excessive? I certainly think so. But can I blame landlords generally for being cautious? Not really.

As for the piling on of fees and unreasonable penalties, I think consumers might have to band together in boycotting the worst offenders' properties.

Also by joining together, they could lobby against any tax and other pro-business "incentives" and breaks that ease or remove landlords' and property management companies' pain at having a bunch of empty units.

Especially because of the rise of big rental and property-management outfits, some of them located in distant cities and other states, it might be necessary for states to have a rental commissioner, the way they have insurance commissioners now to try to keep that business fair and honest.

June 15, 2008 at 9:28 PM  
Blogger Ricardo said...

Well, Tom that was very....er....comforting. I'm actually not at all shocked about this. But I am disgusted. Across the board businesses are resorting to these shady tactics to make their bottom line look better on paper. Banks are swearing by this tactic as as they embrace it more, there's been a huge decline in customer service. Some goes for the cell phone companies. It seems like the so called ""taxes" and "fees" increase or change without rhyme or reason. Want to see another place where they do it? Check you cable or satellite bill. Those are insane.

June 15, 2008 at 11:14 PM  
Blogger Tom Harper said...

American Hill Billy: I've also read that a few people at the top have manipulated and engineered the housing bubble and then the crash. I don't have enough knowledge of finances to be able to tell, but I wouldn't doubt it.

I haven't seen your newest post yet but I'll check it out.

SW: There are definitely two sides to this. I've heard stories about tenants from Hell, the exact kinds of stories you're describing. (Ever see "Pacific Heights" with Michael Keaton?)

But there are sleazy landlords, and now that large property owners are consolidating and cooperating with each other, it's getting much easier for a slippery landlord to get away with everything and be totally unaccountable.

Tenants' rights groups will have to get more powerful so that things will be equal. There's a lot of catching up to do. Landlords and property management companies have jumped into the 21st century, and tenants' rights groups are still in the 1970s.

I hope it won't be necessary to create something like a state rental commissioner, but it might come to that.

Ricardo: Yup, these tactics are getting much too common. Banks and cell phone carriers, now landlords -- God knows who will be next. It's just gotten too easy for companies to provide shitty services and products and keep jacking their prices up and up and up, without any accountability. Consumers need to get smarter and more shrewd, but we also might need some of that dreaded "government intervention."

June 16, 2008 at 12:27 AM  
Blogger American Hill BIlly said...

S.W. Anderson,

Being in business for myself in the states for a good while; the things you learn are amazing. Your friend I don't know; I will not comment on your friend. The things that you can do for tax deductions are incredible. If this man hasn't done this, then he should. I had one company, and had a couple of horses for private use. I made them my company logo on my truck. All care, feed, and just about everything else I could think of I deducted. It is completely legal. In conclusion, I have no care for most of these property management companies; because they are running "legitimate" scams like above..........Just imagine some guy making his slogan about his favorite liquor, then it is a write off everytime the guy gets drunk!!

June 16, 2008 at 1:09 AM  
Blogger Carlos said...

Let’s not forget the minimum-wage, subhuman, Neanderthal property “managers.” I hear so many horror stories about rudeness, lack of accountability, and apathy of these heartless blobs of goo.

Believe it or not, there’s an apartment complex here in town that will not let prospective tenants look at the apartment they’re going to rent. Instead, they let them look at brochures and their web site. I can’t believe people actually rent from companies like this!

I’d like to think eventually this will turn; that eventually small investors (and renters) will prevail with smaller units, complete with human management and treatment of tenants.

June 16, 2008 at 2:46 AM  
Blogger Tom Harper said...

Carlos: Good description. I always had good luck with landlords and managers back in my renting days, but there sure are a lot of horror stories out there.

That doesn't sound legal to me -- not letting prospective tenants see the apartment before they rent. If housing is really tight, I guess they can blackmail people with "well, do you want to rent here or not?"

My favorite asshole-landlord story was in California a few years ago. Under California law, a landlord has to give a tenant 24 hours notice before entering the apartment. (I don't know if that law still exists or not.) This one landlord would stop by his apartment building every morning and put up a written notice on one tenant's door, saying that he would be entering the apartment in the next 24 hours. That way, no matter when he dropped in, he had given 24 hours notice. It was in the papers; I think the tenant filed a lawsuit and won.

June 16, 2008 at 9:53 AM  
Anonymous Anonymous said...

In San Francisco where good rentals are tight Landlords are well known for showing places, collecting a 20-25 dollar credit check fee and pocketing hundreds.

Here is California Voters just defeated an imminent domain law that was written by big property owners and business that also sought to get get rid of renters rights and control. The Voters realized they got too greedy and defeated it .

This Initiative was helped by the Howard Jarvis TaxPayers Group. Howard Jarvis was the co author of the infamous Prop 13 that marketed huge property tax breaks to homeowners. Some relief was needed but what voters didn't realize that this ballot also gave California Business and Property Owners to what Warren Buffet called "the lowest property taxes in the country". Never mind that in spite of that they still call the state "Taxifornia" with success.

Anyway it was pointed out that as a large rental property owner Howard Jarvis could save millions if Prop 13 passed and would he pass the savings on to his renters?

Well Guess what happened?

Renters have had to bear a lot of the brunt from the efforts to balance the State Budget. We used to get a renters credit that was like a mini version of a tax deduction for homeowners - no more.

Rent Control is only in certain cities and areas in most of the state your rents are still subject to "Market" rates and can go up and down accordingly.

No Homeowner would put up with that.

One place that priced me out now is trying to get me back years later with a free month etc.,

And yet they still wanted more -

Somehow renters get this bad rap that we aren't really contributing to society and/or we are just to transitory to take seriously.

We are considered easy targets. I've had many shares of Landlord horror stories and many are from large corporations who should know better.

Erik

June 16, 2008 at 3:22 PM  
Blogger Ricardo said...

Tom I am shock over your idiot CA landlord. What was he doing, panty raids?

There is a reason why we need better government regulation on these sorts of things. It's not to smother business as the GOP would have us think, it's about keeping them honest. When will we learn that these clowns can't police themselves? There's fees to be had!

June 16, 2008 at 3:46 PM  
Blogger Tom Harper said...

Erik: I remember the renters' credit. Such nostalgia. When money got tight, that was the first thing to go (sometime during Pete Wilson's reign).

I had nothing against Proposition 13, but it's funny about public perception. If renters had one tenth of the protection that Prop 13 provides for homeowners, everyone would be screaming about socialism and lazy parasites who don't have any initiative.

Jarvis was an asshole. After Prop 13 passed, he had other initiatives that were even worse for strangling the state government's ability to collect taxes. I don't think any of the others passed.

Ricardo: Panty raids, LOL. I don't remember many details of that case; I think he just had it in for that one tenant.

The public sure has been brainwashed about "government regulation" and "big government." I guess that started in the late '70s when rightwing groups were working for Reagan's election. They succeeded in conning millions of people into believing that businesses should be able to police themselves and be trusted to do the right thing; we didn't need this big cumbersome government "meddling in the marketplace." Why don't we just get rid of all traffic laws, stop signs and traffic lights, and we'll just trust drivers to do the right thing.

June 16, 2008 at 5:27 PM  
Blogger Ricardo said...

Yeah let them look after themselves then have us pay to bail these companies out when they falter and CEOs can get golden parachutes. What a system! :-)

June 16, 2008 at 5:44 PM  
Blogger Tom Harper said...

Ricardo: Yeah, it's cool being a CEO. Taxpayers pay all of your business costs, you get to keep all of your profits, and if you fail the taxpayers will bail you out. Nice work if you can get it.

June 16, 2008 at 6:09 PM  
Anonymous S.W. Anderson said...

American Hill Billy wrote: "Just imagine some guy making his slogan about his favorite liquor, then it is a write off everytime the guy gets drunk!!"

Thanks, I needed a good laugh.

Re: Howard Jarvis. If I recall correctly, California's college system was the envy of the Western World before Reagan became governor. And California's public schools overall were rated among the best before Jarvis got through with them. What legacies!

Oh wait. I'm sure Jarvis isn't worried about his legacy. He probably thinks he'll be the first to take his loot with him when he croaks, if he hasn't croaked already.

June 16, 2008 at 9:50 PM  
Blogger Tom Harper said...

SW: I'm not sure how much Reagan had to do with California's schools deteriorating. I think most of the damage happened under governors George Deukmejian (1982 - 1990) and Pete Wilson (1990-98).

But I wasn't a California resident during Reagan's tenure, so who knows; maybe he did start that whole thing. In any case, yes California's education system went from being the world's envy to the world's laughingstock.

I'm pretty sure Jarvis died quite awhile ago; and presumably he didn't take it with him.

June 17, 2008 at 1:03 AM  
Anonymous Anonymous said...

Every time I read stories like these...i believe we do not live in a democratic country anymore but a fascist society where corporations run every aspect of our lives and shapes/molds our laws. The manner in which big businesses find new ways to screw the little guy amazes me. First you're getting screwed by the cable, airline, credit card and phone companies and then the bank.

One of my friends had to pay $200 in bank fees for going over her limit by $17.

I actually don't rent since I still live at home but i move into my first apartment in Sept but I know I won't have to worry about these tactics since I'll be living abroad. Maybe when I move back to America i'll watch out for the signs. Thanks Tom.


Jo

June 17, 2008 at 6:42 AM  
Blogger Randal Graves said...

That's it. If I'm going to be strip-searched by my landlord, I better find one who's not an old, ugly dude.

Think of all the miscellaneous bank fees, and even higher education is in on the gig with the secretive 'general fee.'

If you've squeezed the last drop out, you haven't been trying hard enough, apparently.

June 17, 2008 at 7:41 AM  
Blogger American Hill BIlly said...

S.W. Anderson, I appreciate that you have a good sense of humor.

Ricardo,

Your so right, It's like that song silver wings; yet these bastards will have their Golden Shoots!

June 17, 2008 at 8:32 AM  
Blogger Tom Harper said...

Jo: I'm not sure how to describe our government; corporatocracy maybe. Almost every business seems to be run by a few giants who keep merging and getting more powerful and less accountable. I'm all for free enterprise, but that isn't what we have any more.

Randal: Yup, there's always another drop that can be squeezed out. Those whiny renters are always good for a few more dollars; just keep squeezing.

June 17, 2008 at 10:34 AM  
Blogger American Hill BIlly said...

Tom,
The roll ups of different industries has been emense over the last century give, or take. I used to do electrical work in the 90's. There were huge roll ups. Electrical Giants grew over night. Literally the company wiring your home would be doing 4 billion dollars a year in sales. I will say that alot of these/most are owned by a few. Look into Veiled Corporations, and Foundations. There available almost anywhere for a price. With these you could be the richest man on earth; yet recieve food stamps, and medicade!!!
As far as Fascist Cj I posted a couple comments. I found him basically bragging no one had the nerve to question him; then I noticed the little Neo-Con Fascist moderates out any comment that doesn't suit him!!! LOL ROTFLMAO!! Go Cj

June 17, 2008 at 1:10 PM  
Blogger Tom Harper said...

American Hill Billy: Yup, every industry seems to be merging and consolidating like this. Even if you think somebody is just a local small-time contractor or businessman, it's getting more likely that he/she is part of some huge conglomerate.

People like CJ will probably get more numerous as the election gets closer. I'm glad I have Comment Moderation. I don't mind if somebody disagrees or wants to debate, but if a comment is too obnoxious I'll just click on "Reject." Game over.

June 17, 2008 at 2:05 PM  
Anonymous Anonymous said...

Howard Jarvis has been dead for well over a decade.

Reagan did start the decline of the college system as he believed they were a bastion of liberalism. I suggest you check out how he got the FBI to frame Clarke Kerr the UC president.

Jerry Brown gave a little more support but Prop 13 happened during his watch and the republicans Deukmajian and Wilson went after the colleges (and the schools) with a vengeance.

Erik

June 17, 2008 at 3:12 PM  
Blogger Ron Nasty said...

I've said it before and I'll say it again: America was damned the day greed became it's official religion.

June 17, 2008 at 5:52 PM  
Blogger Tom Harper said...

Erik: Yeah, I guess it figures that Reagan was the one who started that. His famous quote about "if it's gonna take a bloodbath, let's get it over with" probably didn't indicate much empathy with them there college perfessers.

Ron: If the U.S. has an official religion, greed would probably be it. (Hiding behind a big smiley picture of Jesus of course.)

June 17, 2008 at 6:49 PM  
Anonymous S.W. Anderson said...

"If the U.S. has an official religion, greed would probably be it. (Hiding behind a big smiley picture of Jesus of course.)"

Ah yes.

Smiley-Jesus artwork is created in California by an artist from Southeast Asia in the U.S. on an extended work visa.

Pictures are reproduced by the millions as vacuum-molded plastic bas-relief with image of Jesus lithographed on. Art assembly, along with small backlighting bulb, socket and cord, are inserted into plastic faux wood frames in China. Later at a prison factory run by the People's Liberation Army, prison laborers box the lighted Smiley Jesus pictures, seal them in plastic and pack them into shipping cartons.

Finished, packaged products are then shipped to the U.S. aboard Greek-owned vessels licensed in Liberia. They are warehoused in California by illegal alien workers before being loaded aboard Mexican 18 wheelers for transport to Wal-Marts all over the U.S., where they will be available at always low prices.

Praise be.

June 17, 2008 at 9:43 PM  
Blogger Tom Harper said...

SW: LOL. Good description. I guess those Jesus gizmos are assembled and shipped by the same network that makes those magnetic yellow ribbons for phony "patriots" to stick onto their vehicles. In both cases, not one cent goes into the American economy.

June 17, 2008 at 10:13 PM  

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