In 2015, studies estimate that US renters paid $535 billion to landlords in residential rents. To put this in perspective, $535 billion is about enough to give $15,000 to every human being in the US state of California. It would also be enough to replace every page of every book in the US Library of Congress¹ with $100 bills. And if a person stood outside of Walt Disney World every day from open to close, handing $30,000 in cash to each individual visitor, it would take a year to hand out $535 billion. But what exactly did this massive sum of money actually pay for? Why did people start paying landlords in the first place? And do lands really need lords?

The Historical Origin of Landlords :

Feudalism & the Medieval Politics of Land

Long before the blossoming of modern technology and the dawn of the industrial era, humanity occupied only a fraction of the lands it does today. Between the hubs of ancient commerce, an immense wilderness existed that (legally speaking) was the property of no one and even land that had already been settled was likely to be managed communally. In parts of West Europe, wild and communal lands were (and are still) called “commons” and those who could not or did not wish to make a living in the town often had the option to subsist by farming common land or to join a communal farming-village that was already established. Similar forms of non-private, custom-based and communal systems of land-use existed across the globe in the pre-industrial ages for tens-of-thousands of years — until a few centuries ago.

Pre-Capitalist Society: The Feudal Mode of Production

Before modern notions of private-property arose alongside the full development of capitalism in the 18th century, social and economic life in medieval Europe was organized within a system that today is known as feudalism.² Under the pre-industrial conditions of feudalism, the central focus of economic activity was agriculture and, since land was the main thing needed for production, landholdings were the most important form of wealth in feudal society.

In the same sense that ‘money is power’ in capitalist societies today, land is power in feudal society.

‘Landed Lords’ & Feudal Hierarchy

Feudalism appears in different forms, depending on time and place. In feudal England, all land belonged to a king who strategically granted titles to powerful members of the nobility that allowed them to rule over large estates in exchange for pledges to provide knights or soldiers for the king’s military. In turn, the “lords” of these estates (none of whom could possibly use so much land) leased parts of the land to their aristocratic peers and important allies, many of whom also sublet parts of their land, often for similar pledges of military-aid, for rents, or as payment for services.

Noble landholders were considered to be the lords of their sub-tenants, as well as the peasants and serfs inhabiting the land, and most lords were also considered a tenant (also known as a vassal) of the overlord who granted the land to them. A lord whose land was given directly by the king was known as a tenant-in-chief and held the title of baron, in addition to attending the king’s councils. Altogether, such arrangements added up to form a kind of “military-agrarian complex” that reinforced the monarchic regime’s ability to control land through a complex bureaucracy of landholders that enforced the rigid hierarchy of feudal society.

The Historical Origins of Rent



While the warlords, aristocrats, and Church officials who made up the landholding class mostly occupied political, military, and religious​ roles, it was the peasants who did the work in feudal society. Unlike the nobility, few peasants had their own land and many were considered serfs (an Old French word related to servant and slave) who were legally prohibited from leaving the land they cultivated without their lord’s permission due to laws dating from the late Roman empire. In most cases, serfs were bound to work the same land as their ancestors, which meant that serfs were essentially leased along with the land by one landed lord to another. While free peasants at least could move or be married without permission slips, their circumstances were rarely better. Since most were landless, landed lords demanded rents from peasants in exchange for the right to work the soil, often paid with daily labor or with a hefty part of the peasant’s own harvest.

Because the Church had forbidden usury (that is, lending at interest), landed lords started to buy and sell leases of land and, by the year 1500, the leasehold had become a common and lucrative way to circumvent the Church’s ban. The practice of transferring land in the form of leaseholds — which naturally included the feudal right to exploit the labor of serfs and extract rent from its tenants — is what forms the legal foundation for the residential leases that exist across the world today.​

The Transition From Feudal to Capitalist Rents

Unlike the hereditary rights of kings to rule or the institutions of serfdom, which had already been largely eroded by the time of the industrial age, the feudal relationships of landlord and tenant were never really abolished. As factory-based industry spread, the market-economics that would come to characterize the emerging capitalist societies took hold around the world, much of which — thanks to colonialism — had not just been colonized by Europe but also by European legal systems, along with the feudal property laws they codified​. The English system was transplanted everywhere from the Americas and Pacific Islands to Africa, India, and Australia, while similar feudal systems were exported by France, Spain, and other colonial and imperialist nations.

Over the next few hundred years, feudal leaseholds, as well as the land in general, were gradually privatized through acquisitions, settlement, and processes of enclosure pushed by governments that were often led by the same wealthy lords in shiny, new capitalist hats.

Why Do Landlords Still Exist Today ?

Even setting aside the social and legal history that traces the origins of rent collection to feudal entitlements that granted hereditary rights to inbred clans of medieval warlords, there is still the question — why should landlords be entitled to payment at all?

A Word About Small-Scale vs. Large-Scale Landlords

Before continuing the discussion, an important distinction needs to be drawn between the small-time “mom-and-pop” landlord and the big-time tycoons and corporate landlords. The key point of difference is that small-time landlords tend to act as groundskeepers who perform labor, such as landscaping and maintenance, whereas the tycoon and corporate landlords act as shareholders, hiring others to perform the labor of maintaining their properties. In the interest of fairness, the following discussion will consider small-time landlords to be groundskeepers and exclusively address the large-scale landlords.

Political Economy of Rental Agreements

The rental of residential land and living-space is a strange commodity. Broadly speaking, commodities — whether physical products like food and cars, services like repair and healthcare, or informations like research and iPhone apps — are the results of some kind of production. Or in other words, commodities are made by people using other things. Cars are made by people using factory machinery and steel, things are repaired by people using tools and parts, and apps are created by software-developers with knowledge gained from education and the value of each is determined by how much labor is needed to produce them. But who produces land and space, with what materials, and how many labor-hours on average is needed to produce them?

If a thing is produced, it is reasonable to argue that the person who labored to make the thing has a right to control its use, whether she wants to use it herself, lend or sell it to others, or give it away because she created it. That, in fact, is exactly the reasoning used by classical-liberal philosophers like John Locke to support the idea of a natural right to property, which was fairly radical at the time because it opposed the feudal entitlements to land held by a ruling minority of aristocrats. Things like land and space, along with springs, oyster-beds, or other forms of natural capital, are non-produced. And if neither the landlord’s nor anyone’s labor is a factor of land’s existence, why should society’s laws entitle landlords to payments from anyone too poor to buy property?

How Rent Harms the Economy & Drains Workers’ Wealth

The absurdity of entitlements to rent is clearest in cases of unimproved land with no structures, utilities, or other bells and whistles added. Extracting rent for the use of idle soil and empty living-spaces is nothing but a legalized act of extortion. Since the basis of society (and human survival) is availability of living-space and cultivation of land, to keep others from occupying living space or using land productively is not just violent but anti-social in the most literal sense of the word.

In cases of improved land, rent collection seems more defensible at first. It may be argued, for instance, that a landlord who buys an apartment complex and pays for its upkeep has a right to collect rents to recover his investment and in reward for assuming the risk. But this accounts only for the landlord’s personal interest without considering the deficit to society overall. After the costs to build the complex, the only real costs left are to maintain it. Since these costs must be less than a landlord’s revenue to create income, rents must always exceed the real cost to maintain the property and rent collectors must always be less efficient than if tenants had simply paid such costs directly.

The real cost to build and maintain housing is unavoidable because society depends on housing to exist and, while small-time landlords often provide at least some real labor and materials, rent collection in itself contributes nothing to this endeavor. If small-time landlords who maintain properties are considered as workers like the grounds-keepers and other workers who are paid for similar labor, the remaining landlords’ only labor is to manage the rent-collecting business. And business is booming.

Because everyone needs a place to live.

The Balance Sheets of the Non-Working Class

According to the US Department of Housing and Urban Development (HUD), this rental business raked in an average $11,232 per unit yearly for about 43.9 million housing units in 2015 — but what does the business provide in return? The US Census Bureau’s Rental Housing Finance Survey shows landlords spend an average of 10 hours per month managing properties overall, while half of them spend just 3 hours per month or less, and that is according to landlords’ own responses. The average expenses were $4,751 per unit and most of it covered property tax and business activity (insurance, payroll, professional and legal services, etc), while maintenance, grounds, and landscaping accounted for just $1,906. This means that, aside from the necessary costs to continue providing housing to a renter, the landlord collects…

\mathtt{\$11,232 - 1,906 = \$9,326}

…around $9,326.

After settling property taxes (coincidentally also $1,906 per unit on average), the landlord is essentially siphoning $7,420 from the wages of each of their tenants. For $11,232, a US tenant can expect $1,906 in maintenance and landscaping services on average, in addition to not having to pay the property tax — and that’s it. In return for arranging those services, the average landlord can expect to be free from the kinds of wage-labor that most renters have no choice but to perform if they wish to enjoy the privilege of a roof over their heads.

Envisioning Alternative Systems of Land Tenure

The alternatives to this medieval system of land tenure are only limited by the imagination. One of the more straightforward options would be to transform private residential properties into housing cooperatives, grouped by neighborhood, building, or community. Instead of rent, funds for maintenance costs (national avg $1,906) would be pooled together through the cooperatives and paid out as needed and surpluses could be re-distributed as dividends to residents to incentivize efficient repairs or re-invested in improvements (community gardens, pools, shared tool-libraries, cooperative wifi-zones, etc).

Depending on how the transition to cooperative housing was handled, it might even be plausible to preserve the jobs of small-time landlords as groundskeepers who are compensated for labor rather than property ownership. The process of changing residence would remain mostly the same except that cooperatives would manage applications rather than landlords and the major consideration would be the average maintenance-costs at different housing cooperatives rather than rental agreements.

Toward Universal Housing & a World Without Rent

Of course, the real problem lies in overcoming political obstacles to land reform. Though rental-property owners make up just 3% of the US population, the rental-housing market is stuffed with nearly as much capital as the US ‘defense’ budget and so it may be fair to say that a successful US land-reform movement would be about as hard to build as a successful US anti-war movement. Not impossible, of course, but pretty damned challenging.​

The good news is that virtually everyone in society stands to benefit from ditching this outdated model and, if the historical record is any indication, the chance of revolutionary action is likely to rise pretty quickly once enough of the peasants are miffed about unfair land-distribution. And if history teaches us anything, it is that nothing — not kings nor even gods — can hold the united wrath of the peasants in abeyance for long…

In solidarity,

John Laurits

Notes:

¹ This assumes averages of 275 words/per-page and 64,500 words/per-book. Such assumptions are unavoidable due to typographical distortion of page-counts, differing averages by genre, and a diversity in the norms of various eras and languages. Dividing these estimated averages results in an average of 234.54 pages/per-book. $535 billion, divided by 24,356,449 books in the US Library of Congress, is 21,965.4351 — about $21,965.44 per book. That, divided by 234.54 pages each, is $93.65 — thus, $535 billion yields $94 for each page in the Library of Congress.

² There is ongoing (and, in my own opinion, very necessary) academic debate over whether the term ‘feudalism’ is useful, partly due to over-use of the term in describing a broad category of things and partly due to white academics’ sh*tty tendency to smoosh the colorful spectrum of global history and culture into a bland two-tone scheme of ‘Europe’ and ‘seems like this one thing in Europe.’ In this post, I’ve chosen to use ‘feudalism’ in a strict Marxian sense to refer to a range of pre-capitalist, non-industrial societies characterized by (1) land being the main form of wealth and (2) the productive classes’ ability to subsist on the direct fruits of their labor.

³ Note that this amount is strictly for rent, which doesn’t include the costs of heating, water, electricity, recycling, etc