On Landlords and Housing - A revolutionary communist analysis

 

Introduction

No, the solution isn’t “just build more houses”, and landlords are still parasitic middlemen that profit from a necessity. Let’s revisit a topic I briefly covered four years ago, this time exploring it in much greater depth. This video examines the issues that landlords and property management companies face regarding housing prices and offers a perspective on housing from a Marxist point of view. I’ll also attempt to respond to some arguments raised in response to that video, keeping it as concise as possible. Of course, with a touch of urbanism.

 

On the Housing Question

 I want to begin with a brief clarification of the role landlords have in the capitalist system.

 

Engels wrote a series of articles in the 1870s, right after the Franco-Prussian War, discussing the dialectic between the petit bourgeoisie’s and Proudhon’s perspectives on the housing crisis. Workers were flooding into towns across Germany, while large-scale demolitions of dwellings took place to make way for wider roads, railways, and similar projects. As a result, a housing shortage quickly developed, impacting not only workers but also the petit bourgeoisie.

Proudhon argued that this relationship resembled workers being exploited by the capitalist class, but Engels insulted and belittled him before claiming that it was a seller-buyer relationship, with the seller having the upper hand. Since, in this case, the tenant isn’t selling their labour power but rather buying the commodity of housing, which includes the flat’s maintenance costs and a surplus margin that covers the landlord’s mortgage plus a profit margin.

 

A significant point is that capitalism allows this to happen initially. A communist mode of production that secures housing for everyone results in lower rents, higher homeownership rates, and eliminates homelessness—not through neoliberal means, but by providing homes. I believe that land and housing should not be private property meant to enrich landlords but instead be part of well-planned developments that are affordable, ensure housing for all, and feature walkable communities with mixed-use buildings, shops, restaurants, schools, pharmacies, and more. I not only think this basic good should be de-commodified but also believe it should be integrated into sustainable communities that promote degrowth, territorial development, and active transit.

 

A parasitic relationship

I made this point in an earlier video on the subject back in 2021, and I think it needed to be reiterated and expanded upon.

If I were to own a piece of land between a town and a water reservoir and proceed to charge a fee so the people in the town had access to the water, then I wouldn't have created value. All I'm doing is sitting on land and extracting wealth from a necessity.

 

The point here being made is the state can and should provide basic amenities such as water for free or cheaply, since it is a necessary for survival. Water, electricity, and sewage systems should never be controlled by a single or multiple private entities that run on the profit motive: the state should provide these services for free or at a break-even point. None of these factors cuts out the tedious process of getting water, it just upcharges people for a service that could be gotten for free from a state which works much differently than a private enterprise: without a profit motive. This is for the same reason that streetlights and sewage disposal isn’t privatized: there is no correct way to make it work with a profit incentive.

 

This is the premise behind landlords: once the housing is built and the cost of operation is fulfilled – i.e. the mortgage is paid, their role is sit on property to extract wealth from buyers in a more precarious position than them. Though I kind of view this as a kind of spectrum, with large property management companies as the big bad boogieman (unironically), and duplex owners as people who bought property out of self-interest. Their position is still purely parasitic and only further the housing shortage. But a proper analysis of the role landlords play necessitates an acknowledgement that the market is very much so centralized into the hands of conglomerates.

 

Furthermore, the point being made her is not to point a finger at individuals taking advantage of a system that screws them over if they don’t walk all over their fellow workers. It is a critique of a system that bastardizes housing itself, that treats it as a commodity to be sold for a profit, as an investment, to be a stream of income. The only way to get rid of this characteristic of housing inherent to capitalism is to build non-market units and overthrow the capitalist system.

 

Let’s go even further with this analysis, refuting arguments made by Hampton, or Russian capitalist, in a response video he made about 4 years ago which has since been deleted.

 

“Landlords don’t just sit on property; landlords homestead that property and maintain it and upkeep it. They’re the ones who must spend money on repairs, on damaged pieces of property, to expand their property. They’re the ones who take the financial burden if there’s an economic downturn. What they do is cutting out the cost of one having to buying a house themselves and the time and money it would take to upkeep it. They lower the cost of housing. Instead of purchasing a house for 600k in California a landlord could charge you only 5 to 600 dollars a month” (Hampton)

 

Lots to unpack here. First, they do just sit on property, they monopolize the market to profit from this necessity. Sure, they might have to handle the repairs, but that is an extremely weak argument to justify their existence. They don’t take any more financial risk buying up property considering the steady rise in the cost of housing and property prices, and they upcharge people for often more than the price of a mortgage, which tenants can usually not afford in combination with a down payment. It sends them down a vicious circle of renting at market price and spending a large part of their income, usually much more than 30% of their income, simply to enrich a landlord. The burden argument is the same used to justify the exploitation of workers by capitalists. It has no basis in material reality. I’d really love to see Hampton find a market-priced housing unit rent for less than 1000$ a month, let alone 500. In fact, the average rent for a studio apartment in California for 2022 was $1538, and $1854 for a one bedroom. The national average for a two-bedroom apartment in the US was $1295, which includes many uninteresting areas. Hampton specifically mentioned a house, for which the rent would be well above $4000 a month, 8 times what he said it was. So much for all his ‘citation needed’ remarks. They do anything but lower the cost of housing: they consistently raise rent and upcharge tenants for units. The profitability is evident when we look at places such as Olympic village in Vancouver, where market-priced units priced at 2900-4000 dollars a month exist right next to housing coops who charge only 1000$ a month. Because once the mortgage is paid off, the units get very cheap. Combining this construction of non-market housing, subsidizing it with state grants, with private development will work wonders to deflate housing prices. The state can easily build public housing on available land or hand it over to non-profits which will be able to develop housing coops.

And holy shit, why do cities still allow people to build complexes that are purely meant to be rented out as Airbnb’s? I was an inspector for the City of Québec throughout 2024, assigned to a survey of unused dwellings in mixed-used buildings throughout the old part of town, and it was alarming to see the amount of times I happened to inspect ‘residential dwellings’ just too see lockboxes on every door, with each unit having zero personal belongings, a fan running in the middle of the room, folding beds in the corner, and a magnificent little portfolio telling tourists to enjoy their stay, along with the wifi code!

Though busting these units was always a happy moment of my day, managing to free up long-term housing for vulnerable city folk.

 

Another reason for the rising price of housing is obviously the massive surge in single-family suburban development which makes a horrible use of land and creates a scarcity that doesn’t need to exist, paired with horrible zoning laws that restrict what’s being built. Landlords certainly do not help to make housing affordable. You can’t argue otherwise without knowingly being wrong.

Work & Extraction of Value

Most landlords skip the paperwork step by taking a fraction of the rent extractions and hiring a property management company who then deals with everything. Even if the landlord does some work, they're not taking a wage or salary for just the paperwork or the grounds keeping. They're extracting above and beyond the value they provide. We also have a problem in a lot of cities now where landlords are raising rates if there is any increase in wages or an influx of higher wage jobs, so they can intercept any community growth in its infancy for their profit. They argue that they’re ‘just following the market’ as if they aren’t the market themselves!

 

“Sure, you could cut out the middleman but that would just raise costs. Even then, a landlord paying someone to repair something on their property, how is that a parasitic relationship, and an expense that’s worth being cut out. The value the landlord provides is the formula I’ve just created” (Hampton, [3:22])

 

This is just hiring a contractor like everybody else does. It doesn’t create any more value that justifies exorbitant upcharges and does not cut out any labour since a tenant with a rent-to-own scheme or in a housing coop could just as easily get those services, without that upcharge. The ‘value’ provided is directly correlated to the labour-hours the contractor puts in. The parasitic relationship is very clear: a landlord extracts value from a necessity which can be provided for much cheaper, without profit, from non-parasitic actors. This ‘parasitic relationship’ can be minimized with pressure from housing coops. One such development exists near my home, where the residents collectively own the building, share amenities and groceries, have a community garden, cars and even a thrift store. Not only do these coops bypass this parasitic middleman but it lightens alienation, by bringing a sense of community and collectively amongst an increasingly individualized population.

Affordability & Gentrification

“But landlords make housing affordable!” This is false^[1], in contradiction with reality. They don't actually make housing affordable, in fact, they do the opposite. In the case of people who cannot afford their own land; Landlords own the land and then extract wealth from those who have no alternative but to rent, their only choice for those people is "who to rent from?" They aren't providing anything in this case, instead they pray upon the poor for passive income, not only that but when we talk specifically about absentee landlords, they decrease the supply of available land in each area, this increases the price of the land by simple supply/demand theory. Price ceilings and public housing are a necessity in this situation. This is not to mention that private ownership of housing and distribution driven by profit rather than necessity is the main reason gentrification exists. Landlords drive up housing costs in a similar fashion to grifters, making it more expensive for people who just need housing. A lot of the time we see private developers gentrifying working class neighbourhoods, effectively ‘raising’ the standard of living in that block but driving affordable housing out of the neighbourhood.

 

Gentrification, landlords, corporations buying up housing stock, lack of public housing, the list goes on. They are part of a much broader issue. Rents are much lower in cities like Vienna where there are a lot of housing coops to pressure landlords into renting at acceptable costs. That way, people with a lesser socio-economic status can afford housing, often for less than 250 euros a month. When landlords have no power, they don’t charge exorbitant prices.

Assuming Risk?

“The landlords pay for the property and are usually responsible for repairs and maintenance. They might not be contributing much to the continued success, but they did take the initial risk by buying or building the structure.”

How is it a "risk" to buy a house? Everyone needs a place to live. The only real "risk" you take is that no one will want to pay the extraordinary sum asked for living in your property, in which case you'll have to lower the price. And what's the worst that could happen? You have multiple pieces of property, you won't be begging on the street. Unlike the people who rent from you, who are taking the real risk of going bankrupt or into debt to pay for their residence, being saddled with an abusive landlord or becoming homeless.

The risk argument never really made much sense to me considering how secure of an investment housing is, it’s basically guaranteed return. Additionally, expecting a return on investment doesn’t warrant exploiting a necessity, unless the rented unit is below market price.

 

“If the demand is higher and the equilibrium is set higher, then the prices need to be set higher, that’s simply reflective of normal market activity.”

 

Except it’s not really the case. The economy doesn’t work that way and non-profit housing, affordable housing mandates and coops destroy this argument: they drive down costs all around the city since market prices are not natural and add a massive upcharge. Housing is a human right according to the United Nations, and it should be easily accessible to everyone instead of being profitable opportunities for wealthy individuals and corporations.

 

It is seriously to watch working-class Americans defend the very system that keeps them from self-fulfilment, taking the same socio-economic positions as multi-billionaire oligarchs who decide on policies that harm them, such as the supremacy of the “free” market and deregulation of business. These people blame any economic downturn or problem on “government intervention” without a broader systemic analysis or context, a lot of the time the intervention in question like an affordable housing mandate is not sufficient and needs to be paired with other policies.

Opportunity?

 “Landlords are making their way in the world like everyone else. Do you really think all these people who hate landlords wouldn't jump on the opportunity themselves to rent out land to make more money? Some of these people rely on land lording as their only income. Being a landlord is using what you have available and being smart about it.”

 

First, people need to be housed, we shouldn't have to live on the unpredictable & hard conditions of the streets. It was declared a fundamental human right but ignored by most capitalist countries because people are just numbers. Though again it is a policy choice to refuse to build public housing, so this semantic argument leads us nowhere.

 

Then, landlords never ‘earned’ that money, any problem you have they barely fix because it costs money. We all know of the ‘landlord tricks’ to save any penny they can on a repair. They live off a renter's hard-earned money while they do nothing all day. I don't care if they have a family to feed, they should feed them with dignity by getting a real, useful job where they work for their money instead of being leeches that sit around collecting people’s income like a mediaeval lord. Mao was right about them.

 

A Broken System?

“But isn't everything selfish under a capitalistic system? Landlords are just trying their best, using the tools given to them. What else is one to do, growing up in a deeply entrenched capitalistic society, where the only tools for survival and even an attempt at any sort of autonomy are through completely self-serving means? I think it's difficult to say anybody would do anything different if they benefited in such a way from capitalism. It's not a justification, but I think there's a tendency to get carried away in the Marxist fervour to dehumanise with terms like "parasitic leeches". That'll win nobody over and prevent more people from learning how Marxist systems can still benefit them. Housing is still mostly privatised like most things right now, and I think kudos can be given to people who are trying to work as honestly as possible under a deeply broken system. “

 

This comment I found in the thread I based this section on is compelling. We need to act in such selfish ways to get by in a capitalist society, and this includes exploiting others. The argument being made here is the system is broken, and landlords are merely taking advantage of it to get by, and that picturing landlords as leeches wins nobody over. People trying to make the most human decisions and work as honestly as possible in this deeply flawed system should not be dehumanised.

 

I kind of agree with parts of this statement, the system is broken and a lot of us are simply trying to get by. I understand there are a ton of perfectly fine landlords who rent at below market price. Those people are fine, providing housing in ways similar to the state with public housing. What’s missing here is the bigger picture. These ‘benevolent’ landlords are a tiny minority compared to the landlords who are the most prevalent, huge corporations like Blackstone who own housing and rent it, driving up costs to give a return on investment to their shareholders.

 

Sadly, that kind of generosity we see with those few individuals is really disincentivized by market forces, and spending the bare minimum on improving human conditions and quality of life in the pursuit of profit is more rewarding than being a good person. So due to the broken system, benevolent people are the exception, not the rule.

 

From there, someone else argues: “This was the first thing that came to mind when I saw this video. I know a lot of people have issues with their landlord, but I actually feel bad for the people who are only renting out a unit or two (like if you have a duplex and live in one and rent the other).- but when enough people act like this the small-time "nice" landlord is going to have to sell and it is just going to be gobbled up by the big corporations. I think we need to start making considerations and change our language so that we do not inadvertently cause the problem of unfair/high-rents and slum-lords to get worse by pushing out the average-joe who is just renting out one unit or the condo they bought when they were a bachelor type of thing.”

 

This is a good point, and I agree with it. Under capitalism, purchasing a duplex to secure additional income to get by, and renting the other unit is perfectly fine, I think if the tenant ends up owning the property after a while.

The plan

The only way to get rid of this mess is to lead a successful revolution, overthrow capitalism, establish a worker democracy, and decommodify housing.

Of course, we live in a capitalist world and it is utterly idealistic to think we can just ‘abolish it’ overnight without an organized worker’s party. I thus believe in the meantime the solution to this problem in a reformist framework begins at the local level. So, I must ask myself: “What would you do if you were elected mayor of your city?”

 

Cities must promote housing cooperatives, build social housing, and implement rent control to push out greedy private developers.

 

 Reformist discussion on the topic of ‘building houses’ often only addresses privately developed “affordable housing”, ignoring housing cooperatives, public housing, and other policies such as strictly regulating Airbnb’s, rent control and subsidies, that work to make housing affordable.

 

The arguments against these policies do not consider public housing at all nor mixed-income development, just ‘grouping poor people together’ and imposing price controls. Of course, if you just cap rent and do nothing else to recoup the lost housing units, there will be issues regarding housing supply as landlords expect to make an often-large profit. These solutions work together, not standalone. Arguing otherwise is turning the pro-tenant argument into a strawman, entirely misrepresenting it, and ignoring the actual solutions supported by empirical evidence/real world data. It’s like taking protein shakes without going to the gym and expecting results: it’s not going to happen. You need to work out to beat up fascists with your bare fists.

 

The necessity to make a profit on a mortgage often above an acceptable market price leads to concentration of capital and price gouging. It effectively commodifies housing and inflates its price well above its value.

 

Policy-wise, we need public housing mandates imposed on private development – paired with a rent cap, since this former policy usually incentivizes landlords to raise the rents on the private units to make-up the lost potential profit from the mandated public housing units. Mixed income zoning, investments in public and active transit, mixed-use zoning laws: all these policies increase the value produced per acre in each neighbourhood, reduces housing prices and increases revenues to the city, which can in turn be used for infrastructure improvements, bike lanes, public services, transit lines, parks, and amenities.

 

To be fair, the libertarians do have a point about zoning laws being sometimes quite harmful – forcing communities to build single-family homes in an array of car-centric developments not only plunges the city into debt the moment those roads need maintenance, but there is then no incentive or possibility to build proper public transit infrastructure. This type of Euclidian zoning also further hinders communities by isolating the work, home and third place environments. Proper zoning policy would allow mixed-use neighbourhoods and front yard businesses like cafés, haberdashers, tailors, thrift stores, the list goes on. - I really like how Portland Maine did it in their downtown. Banger place. – However, deregulation is NOT the solution, not making multiple incomes converge into the same building or neighbourhood will lead to either gentrification or a a cycle of poverty and inequality in funding when it comes to education and healthcare.

Rent control on the other hand isn’t a magic wand we want to use. It marginally reduces supply of renting units supply. But rent control doesn’t just limit itself to flat price caps, does it? In many areas it is effective through limiting the yearly percentage raise according to inflation.

Policy isn’t a one size fits all; for example Berlin excludes new buildings from rent control, and it has been effective. One effective policy was brought up by Unlearning Economics in his response to Abigail Thorne about 5 years ago. He cited Murray and argued that a land value tax on undeveloped, prime real estate location would make it unprofitable for developers to hoard the land and wait for it to rise in price due to scarcity. Instead, it would be more profitable for them to build  commercial and residential units that would both bring in good revenue to the city, but also to the landlord, all while adding rental units to the housing market.

 

There is a massive difference between harmful and unsustainable single-family home zoning regulation and other state interventions such as price ceilings, stimulating mixed-income private development with available rent-to-own schemes, housing coops, construction of public housing units. These two should not be clumped together, as the first one is a direct result of the corporate lobbying from General Motors to direct the world towards car dependency, while the latter is a protective measure for tenants.

 

Mixed-use zoning is a very strong component at the core of the new-urbanism movement, which advocates for a return to the traditional way of organizing a city on a human scale: along transit lines but more importantly with mixed-use buildings, like stores, restaurants on the ground level of the main streets along the transit axes, and housing (prioritizing coops and public units, with strong regulations on landlords and Airbnb’s, explaining later) on the next floors. This not only makes for a denser, livelier, and more liveable city that negates the necessity for car ownership along transit lines, but it also increases tax revenue to the city because of the previously mentioned increased value per acre: a business generates way more income and consequently tax revenue than any household or housing unit. This directly translates to better public services, amenities, parks, libraries, better-funded local schools, and emergency services, and most of all transit like a metro, bus, and tram lines. All this significantly improves quality of life and as a result a myriad of other elements.

Another interesting element would be the maximization of space use with point access blocks rather than hallways with multiple stairways. This can reduce the amount of space dedicated to circulation to 6.5%, down from 13% in a classic apartment block. This is not only able to provide more units for the same amount of land, but it also gives more character to the neighbourhood.

Promoting active transportation as an alternative to any other way of transit is also quite important to increase the health and wellbeing of the local citizens through more frequent physical activity. It integrates this activity in a life that is otherwise quite sedentary, especially for those who work white-collar jobs. I had this active transit experience while in Paris: even in a more remote neighbourhood, the 14th, specifically on Rue Pernetty, pretty much every building was mixed-use, and every location was in walking/biking distance. Getting groceries was a daily occurrence rather than weekly: I always passed by the local Carrefour by foot to grab a bag of groceries that was well enough for a few meals, composed of more fresh ingredients and less processed food. Breakfast and lunch always brought me to a local bakery to enjoy an espresso, chocolatine or one of the delicious sandwiches the Boulangerie dalasi makes. In short: capitalist, hyper individualist cities built on Euclidian zoning and car-dependent infrastructure are financially unsustainable, worsen the mental, physical health of its citizens as well as worker productivity, and enslaves people to the use of their car to get anywhere, even for a simple grocery trip.

Another thing that isn’t talked about enough is the use of ‘third places’ as community builders: locations to hangout, exchange ideas, have a good time and build meaningful relationships. In urban America this third place, previously a pub, library, or a public square, is effectively gone since suburban developments are simply single-family homes on miles on end without any life or interest. Breaking down social siloes and negating the isolation of the elderly, increasing socialization in an increasingly individualist society is EXTREMELY important to maintain a strong social cohesion, collective mental wellbeing and so on. Densification is key to not only reducing rent but improving quality of life.

One neighbourhood in my area called Saint-Jean Baptiste in downtown Québec City formed a tenant union in 1976, which in turn formed many comities aimed toward dismantling harmful practices such as Airbnb’s since 2016, hotels and gentrification. The union also opened a thrift store, a community garden and made significant progress in freeing empty units that were rented out by Airbnb landlords which was putting an upwards stress on the housing market of the neighbourhood. After the new zoning restriction policy and redirection of responsibilities regarding illegal hotel businesses towards Revenus Québec, the neighbourhood saw its amount of Airbnb’s drop from 180 to about 80, which represents a 3% total increase in housing availability, which cooled down the market, brought down rent and allowed lower-income residents to keep living there. Citizen-action and government intervention here where the reason housing prices were able to be brought down and gentrification to be, in a way, reversed. Landlords paid dearly for their behaviour. (About 700k in fines for operating Airbnb’s illegally in a working-class neighbourhood)

Something I need to stress is that not all renting is inherently bad; a lot of people must move often or prefer to rent an apartment rather than having to own it, since they plan to move out anyways. That would account for a non-negligible portion of renters. However, the problem lays with individuals and corporations who buy up housing stock, renting it at exorbitant prices, often above the 30% of income of the tenants, preventing affordable housing and home ownership. Public housing for those who wish to rent rather than own, or who cannot afford a mortgage is necessary. One of the interesting solutions for the housing crisis is building enough non-profitable, non-market housing units for a break-even rent that will stay consistent and become relatively cheap on the long term. Enough of these units will make it unprofitable for landlords to raise their prices or profit from housing, since they will have to compete with non-market housing.

 

Post-revolution perspectives

The reformist talking points I explained throughout this video are concrete policy and urban planning practices that I legitimately believe in. But they’re not an end-all-be-all. We have examples of people buying up housing cooperatives to turn them back into market housing, and just like any pro-worker and pro-tenant progressive policy, austerity measures and conservative governments have the power to dismantle those concessions. It’s already happening with healthcare and other social programs all throughout the imperial core. There is no escape from this crisis within capitalism.

 

As my RCI comrade Leroy James put it in a 2021 article: “Quality, affordable housing should be a right for everyone, yet this is impossible in a system based on profit-making and economic concentration. Instead of foreclosures driving new rounds of private concentration, the IMT calls for the nationalization of foreclosed and vacant homes to be allocated to those in need, as part of a voluntary socialized plan for housing, operated under democratic public control. In the final analysis, only the revolutionary overthrow of capitalism and the establishment of a socialist workers’ government can resolve the housing crisis in the interests of the majority.” (https://communistusa.org/parasitic-landlords-housing-crisis/)

 

Don’t give in to neoliberal talking points, participate in municipal politics, and organize your community.

It is still worth exploring urban planning and housing policies that would maximize quality of life and efficiency under socialism. For a quick rundown I suggest you check out Hakim’s video on commie blocks, and City Beautiful’s coverage of how soviet cities were planned. There is definitely a certain genius in planning basic amenities like grocery stores, drug stores, workplaces and third places like bars, cafés and parks in the worker dwellings.

 

But again, it’s not the 1950’s anymore, we have access to more resources than post-war USSR when building the Krushchevkas. Nationalizing housing, encouraging mixed-use buildings and accelerating the development of public transit infrastructure will lead to a healthier, happier population.

 

 

 

 

 

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^[1] Martine August. Originally published on Policy Options June 11, 2021. (2021, June 14). The rise of financial landlords has turned rental apartments into a vehicle for profit. Policy Options. Retrieved March 3, 2022, from https://policyoptions.irpp.org/magazines/june-2021/the-rise-of-financial-landlords-has-turned-rental-apartments-into-a-vehicle-for-profit/