Debunking the Myth of the ‘Mom-and-pop’ Landlord

The characterization of landlords as struggling families is central to the prevailing depoliticized view of housing

Ricardo Tranjan 

April 30, 2023

The following is an excerpt from the forthcoming book, The Tenant Class, by Ricardo Tranjan. Drawing upon a long, inspiring history of collective action in Canada, Tranjan places tenants and landlords on either side of the class divide that splits North American society. The book is slated for release on May 2, 2023 by Between the Lines. For more information, visit www.btlbooks.com.

At the onset of the COVID-19 pandemic, before the Canadian Emergency Relief Benefit (CERB) launch, the Canadian Centre for Policy Alternatives (CCPA) published a report showing that nearly half of tenant households relying on employment income had only up to one month’s worth of income in savings. The report argued that these households would not be able to weather the economic hardships of lockdown measures. With historically high unemployment rates and no indication of when the economy would reopen, thousands of tenant families risked eviction during a global health crisis. Following the report’s release, I filled numerous media requests where I argued that Canada needed a national rent forgiveness program. A common reaction to that argument was, “But what about the landlords?”

The reason why the well-being of landlords is equated with that of tenant families—even during a pandemic—is that landlords are seen as individuals, families, and “mom-and-pop” shops whose financial security depends on their rental income. The widespread notion of “struggling landlords” is a grave mischaracterization of the rental market. In fact, Canada’s landlord class comprises wealthy families, small businesses, corporations, and financial investors. Rent revenue increases their wealth and political influence, allowing them to extract more income from more tenants, amass more wealth, and do it again.

With no single data source on rental property ownership, it is difficult to get a precise picture of the composition of Canadian landlords. Datasets with complementary information overlap in confusing ways while containing significant gaps. Many units are rented informally, making them difficult to catalogue. The market is also constantly changing, with thousands of units added to and removed from the housing stock annually. These limitations notwithstanding, it is possible to categorize landlords into distinct groups and to estimate the share of the market each group represents: roughly 12 percent of tenants live in non-market housing; about 38 percent rent from private landlords, mostly wealthy individuals and families who own more than one home and a smaller share of homeowners who rent a portion of the home in which they live; approximately 22 percent rent from small businesses; another 20 percent from corporate landlords; and 8 percent live in units owned by financial landlords. These rough estimates provide a good general portrait.

The media commonly portrays landlords as families whose financial security is on par with their tenants. Since, in many cases, rental income complements earnings from employment, pensions, investments, and other sources, it is perceived as money that families depend on to get by. This view misses that private landlords use the rental market to amass wealth. They charge tenants more than it costs to maintain a rental unit and keep the profit for themselves. A family that pays the mortgage on a second home with the rent collected on it ends up with two homes. This is not only legal but something that is praised in Canadian culture. People who put a down payment on a second home, only to rent it and have tenants cover their mortgage costs, are seen as astute and entrepreneurial.

The problem is that entrepreneurial, profit-making, wealth-growing investments must be accurately portrayed. A family that owns multiple homes is wealthy; it is not scraping to get by. In 2019, the average net worth of multiple-property-owner families in Canada was $1.7 million (excluding mortgage debt). Private landlords may not be multi-billion-dollar corporations but they are not scraping to get by either; they are high-income households, many of whom live in expensive detached houses while collecting rent from other properties.

Going back to the question the media frequently asks me (But what about the landlords?), the simple answer is, they will be fine! In contrast, tenants who miss rent have already skipped meals, sent kids to school with inadequate winterwear, walked miles in the cold to save transit fares, and sacrificed other basic needs in trying to pay rent because the risk of being evicted is terrifying. Tenants don’t choose to fall into arrears. The housing security of private landlords should not be equated to that of financially insecure tenant families. One is accumulating wealth and has two or more homes to choose from; the other is at the risk of becoming homeless.

Amid the COVID-19 pandemic, the Toronto Star ran a story on the negative impacts of Ontario’s Landlord and Tenant Board closure titled, “Pandemic creating a ‘nightmare’ for local landlords and tenants.” Here is an excerpt from that story:

While many tenants have been waiting to get hearing dates before the Landlord and Tenant Board to resolve their housing issues, landlords have also started speaking out about not being able to pay their bills due to delinquent tenants. There is a concern that given the lingering frustration of lost income and mounting unresolved issues—many delayed now for a year or more—some landlords are giving up and selling their property… “We are small-time landlords, this was our first investment property, ever,” said the daughter of the couple who purchased [one such] house. “It ended up being way more of a nightmare than anything.”

The story repeatedly depicts “small-time landlords” as families and selling the investment property as a great loss. Let’s look at that story from another angle: a private investor looked for a low-risk investment with high returns and opted to inject money into Canada’s real estate market. The pandemic negatively impacted operations and the investor opted to shift to a different portfolio. Since housing prices rise fast, the investor realized gains at the sale of the asset despite some operational losses.

The “small-time landlord” made money in the flipping of the house, even if the plan to get tenants to pay for their second house fell through. There is nothing legally wrong with the investment, and many people find it morally acceptable or even commendable. But it ought to be treated for what it is: an investor seeking to make a high profit, not the story of a struggling family.

Canada’s rental housing market is doing what rental markets do: extract income from working-class families and transfer it to the capital-owning class. Landlords grow wealthy while tenant families experience financial insecurity, just like greedy bosses enrich on the backs of low wage workers. The dominant “housing crisis” narrative is part of the problem. It exempts landlords and governments from responsibility by suggesting that excessive rents are a new and unexpected problem that requires complex technical solutions. While the experts look for those solutions, the market continues to do its thing.

The characterization of landlords as struggling families and “mom-and-pop” shops is also central to this depoliticized view of housing. It helps to advance the idea that solutions need to consider the allegedly fragile financial situation of landlords as much as the well-being of tenants. Designing and implementing these solutions is not easy; it requires time, moderation, and many, many consultations. But the fact is that landlords are businesses. Businesses reduce costs as much as possible while raising prices as high as the market will bear to maximize profit. That is what they do. Tenants are cogs in the rental market money-making machine; if they stop producing cash, they are replaced by new cogs.

Economic exploitation is not the only issue. Various theorists in the Marxist tradition have looked into the cultural aspects of class struggles and warned social movements of the importance of fighting on this front. These insights remain relevant today. In Canada, where home-ownership is the hallmark of a successful middle-class life, tenants are up against many myths and lies, including the notion that tenants are young people waiting to grow up and buy a house, that they don’t pay municipal property taxes, and that they work less than other groups. None of this is true. Still, false myths can harm an individual’s sense of self-worth and hinder organizing efforts by making people feel uncomfortable or even ashamed of belonging to the tenant class. But none of this is new. Landlords have dug deep into the pockets of tenants since the colonization of what is now called Canada. Settlers pushed Indigenous Peoples off the land, establishing private poverty, and creating rental markets. Some settlers joined the capital-owning side; others ended up on the tenant side. Tenants have organized and fought back since, and continue to do it today.

Ricardo Tranjan is a political economist and senior researcher with the Canadian Centre for Policy Alternatives. Previously, Tranjan managed Toronto’s Poverty Reduction Strategy and taught at universities in Ontario and Quebec. His early academic work focused on economic development and participatory democracy in Brazil, his native country. His current research is on the political economy of social policy in Canada. Ricardo holds a PhD from the University of Waterloo, where he was a Vanier Scholar. A frequent media commentator in English and French, he lives in Ottawa.