Then tax those rents.
The fact that subsidies provided to improve affordability of rents generally increases those rent costs is long-recognised. Winston Churchill in 1906:
Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!
https://www.landvaluetax.org/history/winston-churchill-said-...>
Providing a subsidy sounds appealing to economically-naive voters and is appealing to economically-sophisticated rentiers. Such policies are highly politically tractable (they have broad support) but economically nonsensical (they aggravate rather than solve the underlying problem).
Economically, the two dynamics in constant tension are the Iron Law of Wages (wages fall to, or below, subsistence level), and the Law of Rent (rents rise to consume all surplus value).
The solution is to address both:
- A UBI provides an income floor which serves as a credible BATNA (best alternative to negotiated agreement) for any individual, whether or not part of the work force. An employer must offer terms at least as attractive as leisure (or alternative, potentially noneconomic activity) to attract new hires.
- A tax on rents, with the classic case being a land tax, returns surplus value to the public sphere and motivates holders of rent-generating assets to apply those to their greatest economic value, rather than letting them sit idle. (I'd extend the rents past the traditional land, but it's a useful illustrative case.)
Both prongs can be extended. Government might step in as, say, both employer and housing supplier of last resort, as well as providing credits to businesses which are truly socially-beneficial but economically nonviable (the classic definition of a public good: education, healthcare, emergency services, child and elder care, etc.) permitting these to function under a regime of both UBI and rents taxes.
Earlier: https://news.ycombinator.com/item?id=14793366>