Government Loves Landowners but Hates Landlords

They call them “landlords,” but they also lease the dwelling places, pieces of buildings, which are capital goods, not land. The “land” lord also provides labor services. They could be called “dwelling lords.” But often they are not really lords, since the real boss is the state, which lets financial wolves prey on helpless dwelling providers.

A case study is what happened to Daniel Bader in 2006. He was accused of familial-status discrimination by the California Department of Fair Employment and Housing (CDFEH). His big crime? On the Craigslist web site he posted a “for rent” ad which included the phrase, “perfect for 1 or 2 professional adults.”

In a truly free society, people have freedom of speech, and that includes entrepreneurs who advertise, so long as they are peaceful and honest. Moreover, the ad did not say that the rental was for adults only. His intention was not to discriminate against families with children. This dwelling provider just sought to describe what the unit in the back of his house was well suited for. He had rented to families with children in the past. Nevertheless, the Fair Housing Council of Orange County (FHCOC) filed a formal complaint when they saw the ad and demanded $4,000 plus five years of “continuing education” at $250 per class at their training facilities.

Most landlords cave in and pay the extortion loot. Why does the state impose this oppressive cost on dwelling providers? It is at first glance puzzling, because all levels of government provide massive subsidies to landowners, with big tax exemptions that make their rent and land more valuable as governments provide public goods that generate rent, paid for mostly by taxes on labor and enterprise.

The state loves landowners, so why does it hate landlords? It seems to me that this all makes sense if one realizes that it is the big landowners that are the prime beneficiaries. A democracy requires the support of the majority, so the state also subsidizes the petty landowners. They become allies of the big landowners. Since tenants also vote, the state also cleverly turns tenants into allies of the big landowners by shifting rent to them via rent control and anti-discrimination laws. The result of such laws, even when enacted with good intentions, is the creation of predators such as “fair housing councils.”

Daniel Bader refused to pay the extortion, so the CDFEH filed an 'unlimited damages' lawsuit against him in Orange County Superior Court. He countersued the CDFEH, FHCOC, and the CEO/Chief Counsel for the FHCOC. His lawsuits were thrown out by the judge, and he was ordered to pay their attorney's fees, over $20,000. The judge ruled that these agencies had free speech rights and were entitled to file the lawsuit and demand monetary damages against Bader. But evidently Bader has no free speech rights for his ads. Moreover, a lawsuit is not really free speech. Evidently, governments see landlords as easy prey.

What saves us from complete tyranny is trial by jury. On the eve of the scheduled jury trial in January 2009, the CDFEH dismissed the lawsuit against Bader. When his lawyer made a motion for the reimbursement of over $44,000 in attorney's fees and costs, it was denied. The predators can win their war on landlords even when they can’t win in court, just by imposing legal costs.

The case is currently on appeal, scheduled for Feb. 19, 2010. The website relates the story, and it has also reported in the Los Angeles Times and Orange County Register, as shown in the web site. Bader was also interviewed on radio and on the Bill O'Reilly show.

Dwelling providers should realize that their ads, especially in the Internet, make them targets for extortion by “fair housing” predators. Many landlords are naive; they don’t realize that they are being hunted. As told by Bader, if the dwelling provider settles with these agencies and pay their demand, they make the “landlord” sign a confidentiality agreement, and then they call the payoff a “donation.” These leeches can do this because they are backed by the power of the state.

These “fair housing” organization are funded by government. Their mission is allegedly to educate the public, but the real goal is to instil fear on dwelling providers, shifting power to tenants. Court judges are parties to this extortion, as shown by the Bader case.

Ultimately this predation under the name of “fair housing” hurts tenants, especially groups who really have suffered arbitrary discrimination, as these costs increase the risk of providing dwellings. These costs are ultimately passed on to tenants or else reduce the supply of rental units, making housing that much more expensive or unavailable. It’s just one more example of the maxim that the state is a cruel master.