Slumlord

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A slumlord (or slum landlord) is a derogatory term for a landlord, generally an absentee landlord with more than one property, who attempts to maximize profit by minimizing spending on property maintenance, often in deteriorating neighborhoods. They may need to charge lower than market rent to tenants. Severe housing shortages allow slumlords to charge higher rents.

As many of these neighborhoods are often populated by poor minorities, the term "ghetto landlord" has also been used. A "retail slumlord" is one who keeps a shopping mall in a bad shape until the government buys or confiscates it.

The phrase slumlord first appeared in 1953, coined by Newsday Reporter Edward G. Smith,[citation needed] though the term slum landlord dates to 1893.[1]

Operation[edit]

Traditionally, real estate is seen as a long-term investment to most buyers. Especially in the developed world, most landlords will properly maintain their properties even when doing so proves costly in the short term, in order to attract higher rents and more desirable tenants in the long run. A well-maintained property is worth more to potential buyers.

In contrast, slumlords usually do not contract with property management services, and do very little or no maintenance on their property (ordinarily, just enough to meet minimum local requirements for habitability), and in turn offer low rent rates to lure tenants who will not (or cannot) pay high rent (and/or who might not pass background checks should these be required to live in the higher rent areas). Slumlords of this kind typically prosecute many evictions.

It is not uncommon[according to whom?] for slumlords to buy property with little or no down payment, and also to receive rent in cash to avoid disclosing it for tax purposes, providing lucrative short term income. (Thus, in the U.S., slumlords would normally not participate in government-subsidized programs such as Section 8, due to the requirements to report income and keep properties well-maintained.) A slumlord may also hope that his property will eventually be purchased by government for more than it is worth as a part of urban renewal, or by investors as the neighborhood becomes gentrified. In Britain, local councils deal with private landlords; with inadequate checks this can mean families with young children sent by local authorities to live in filthy, bed-bug infested properties and rogue landlords making a fortune out of public money.[2]

Some slumlords are more interested in profit acquired through property flipping, a form of speculation, rather than rental income. Slumlords with this "business model" may not maintain their properties at all or pay municipal property taxes and fines they tend to accrue in great quantities. Knowing it will take years for a municipality to condemn and seize or possibly raze a property, the slumlord may count on selling it before this happens. Such slumlords may not even keep up with their mortgage payments if they become equity-rich but cash-poor or if they feel they can sell the property before it goes into foreclosure and is taken by their lender, typically a six to eight month process at the quickest.

Reactions[edit]

Many people have a negative opinion of slumlords, blaming them for declining property values and whole neighborhoods of shanty buildings. They say slumlords leech away the wealth of the poor with little regard to future generations or the local people. In effect, they work in the opposite direction of gentrification, where landlords try to make appealing improvements to property in order to attract more affluent renters.

Decay is a natural outcome of this strategy but defenders assert slumlords offer a valuable service for those who care more about price than quality. Economist David Osterfield wrote, "... the slumlord, regardless of his motives, helps the poor make the best of their bad situation."[3]}[dead link]

On December 1, 2014, the Seattle Times published a story about a Spokane slumlord who apparently manages his rental properties while being incarcerated for rape.[4]

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