Tenant Unions Real Unions or Exploitation

Hi, I'm Kevin Moyer with The Rowe Report, and today I want to talk tenant unions. Tenant unions are gaining popularity in Philadelphia. There's been a 4 times, a 400% increase in the reported tenant unions in Philadelphia recently. As many of you know, there's a recent law enacted, the Safe and Healthy Homes Act, which gives even more power to these tenant unions, as they are called. But I want to talk today about why they're not actually tenant unions and why they hurt far more than— there's more hurt than good from tenant unions. There are 3 reasons why these tenant unions are not actually unions. First of all, a lot of people don't realize unions in the United States of America are actually very highly regulated. There are rights and obligations attached to the union, how they can negotiate, when strikes are permitted, and society gets a say. So the union represents the labor, the companies on the company side, and then society gets a say in the rules that are written on how Unions can operate and how they do operate. That's just not the case with tenant unions. It seems any group of people can just declare themselves a union. There are no rights obligations. There's no statutory outline for how things work and and how they must be conducted and how negotiations have to be conducted. It's just that they get all the benefit of being called a union and none of the obligations that we have established for unions in this country for decades and decades, if not over a century. Secondly. Unions historically are primarily to benefit labor in an unequal match in bargaining against companies, specifically when the labor doesn't have a lot of choice in companies. So for instance, you think airlines, airline pilots and workers, there are only a handful of airlines operating in the United States. So if an employee makes a big stink about something and gets a bad name in the industry about they make us think about work conditions or pay rate, they can be kind of blacklisted from that entire industry because there are only a couple people talking amongst themselves there. However, in rental housing, it just doesn't work like that. There are millions of operators of rental housing across the United States of America. So the structure that formed the foundation of a lot of our labor unions does not exist in this analogy. So you have no rights and obligations. The playing field is not as unequal as it is in industries that truly do need and benefit from labor unions. And then third, the most important is that a rent strike isn't a strike. So again, it's almost like you're getting all the benefits of just being a labor— a union without any of the obligations or the pain or the mutual suffering. When a labor union goes on strike, there's mutual pain. Everybody's hurt. The company is hurt, of course, because it doesn't have the labor. The laborers are hurt Because they're not getting wages. They're going out on strike to stand up for their bargaining position. And society's hurt because we don't get the benefits of the entire exchange of the company providing goods and services, the wage workers getting their salary. Society hurts. Everybody hurts. For tenant unions, a rent strike is just theft. It's just tenants agreeing not to pay rent. They still live in the building. They still get the roof over their head. They still have access to the utilities. They still have the heating system. It's just theft is all it is. It's a one-way street and it doesn't reflect the mutual suffering that strikes do when true labor negotiations break down and all parties suffer as a result of it. So it's just really getting all the perks and all the protections of union without having any of the rights, responsibilities, and duty to society that true unions have. So am I saying boohoo landlords? No, we talked about this in previous episodes. Landlords don't deserve sympathy, fine, don't worry about that. That's not the point of the argument that I'm making. It's not the poor landlord that has to deal with this. It's what happens to Philadelphia when laws like this continue to layer on top of one another. So the laws that benefit these tenant unions, what happens? These tenant unions are now a protected class. Anybody can simply declare themself a protected class for any reason, and now any action taken adverse to this person in this protected class can now be construed as a fair housing violation. It can be. So I join a tenant union and my rent goes up 6%. I can file a fair housing complaint saying that this is retaliatory for my participation in this union. Does it have any truth? Doesn't matter. The lawfare is the punishment now. So you'll be dragged into fair housing court. I just had a case yesterday in fair housing court for a very similar situation, not union-based, but a retaliation claim. Anybody can drag in there, anybody that's part of any protected class, for virtually any reason will drag through this process now, and it creates tremendous risk. What if your tenants unionize and they decide to withhold rent on a large multifamily property because the elevator didn't work for a couple days? This is a real risk that multifamily operators need to calculate when they're deciding where to put their investment dollars. So if you are an organization, a company, an individual with capital to invest in a local community, say $10 million to invest in a multifamily apartment building, There's added risk now to bringing that capital into Philadelphia. There's more risk on top of all the layers that already exist of tenant unionization and their protection. Be it right or wrong, doesn't matter. The lawfare is the risk. So why would someone with that capital take and place it in Philadelphia when they could place it into a more friendly jurisdiction that does not have the same risks of a quote unquote tenant union? And they're— and they're the cost that comes with going to battle over a tenant union, whether or not they're right or wrong. So when you have these layering compounding risks put on property owners, capital will drain out over time. And as capital drains out, tenants' choice of quality housing will erode over time. There will be fewer new construction. The construction that exists will not get the investment capital to modernize it and upkeep it. And you'll see capital drain out of your community over time. So if you're com— if you are creating a law or regulation, you— it better be narrowly tailored to a specific purpose, and it better be really good in order to justify the decrease in, in capital that you're going to see. And this is not one of those laws. There are no new protections. We should just be better at existing— at enforcing existing laws against being a slumlord. That's fine. If you have mold in the property, if there are bug infestations, if the utilities don't work properly, enforce the existing laws. against property owners to ensure there are— it's not slumlord behavior. These laws have a potential, if not probability, of hurting true good operators in Philadelphia and scaring away capital from being invested in the community.