191–200 of 258 posts
It all comes back to fractional reserve banking. It is the root of all evil in our financial system. If Rothbard could only see the current state of affairs...
You do not even need fractional banking for this. Same thing could happen without it. Someone lends money and is unable to pay it back. Both sides pretend that things will eventually go well. As at least on paper they have not lost anything until prices are realised.
Article is from 2025, and "extend and pretend" is coming unglued.[1] Extend and pretend was big around 2024.[2] The other side of this is that landlords hate to reduce rent to rent vacant spaces because their paying tenants will demand rent reductions or move. That can crash the rental market. A building half rented at rent X is more profitable than a building fully rented at rent 0.5 X. [1] https://propmodo.com/the-…
> That can crash the rental market. At this point I think that's exactly what we need in a lot of places.
If the land isnt being used efficiently the owning entity should fail and a new productive use made.
Whether thats tearing it down for the public to get better use of the land; rerouting roads, community swimming pool, park etc. Replacing with a more economic building; factory, stadium, appartments (zoning not withstanding). Or a more productive entity getting use of it.
Bagholders being entrenched and protected are becoming a weight around the neck
The "problem" is that we let people claim the "rent" is X for certain people and "Y" for other people--both at the same time. Just stop that. The "solution" is that you should have to pay tax on what you claim the rent is after a small grace period (Less than 24 months certainly. Probably less than 12 or at least prorated starting before that.). If your financial agreement requires and claims that the rent is $5000,…
If the property is devalued, the property taxes lower accordingly. Portland, Oregon has been facing this problem recently. The devaluations caused the tax revenues for the city to drop, which in turn has caused budget issues. For example, "Big Pink" is an office tower in downtown Portland. It's last sale was for about $370 million. Out of desperation in a saturated market, the owners sold it last year for about $45 m…
The point of the vacancy tax is also to prevent the over speculation before it happens. If the operators know that they are looking at having to cough up more cash than they expect in the future, they might reign in the rampant real estate speculation. If the bank knows that they might have to start coughing up cash, they'll be more inclined to actually just drop the property into bankruptcy.
I actually think there's a business to be had here. As described, the landlord can't offer a traditional lease for the actual value of the space. However, the landlord could offer essentially day rentals without creating a lease. There are systems for this already, such as Peerspace and their ilk, which I've used for small events. I believe these don't trigger the foreclosure clauses. I think that a property manageme…
So, wework? :o)
viz. wework could apply the "single-use low-priced shampoo sachet" model [0] to SaaS-style rent-seeking of long-lived infrastructure. Infra. that is guaranteed to be always under-utilised... even in boom markets, because nothing functions at 100% capacity.
Adobe, as another example of (software) infrastructure --- i.e. traditionally, lifetime licence and ownership desktop software --- figured out their own "shampoo sachet" pricing. viz. how to make and ship desktop software product but kill-switch them with metered SaaS subscriptions.
The monthly price is just high enough to make gobs of cash for Adobe, while causing the typically-feast-and-famine freelancer to take the capitalist shellacking because it's just convenient enough. They can align software spends with active projects, and avoid the anxiety of cracked software doing nefarious things to their computers and data.
But over a long enough time, they pay Adobe a (presumably) huge premium over up-front priced software. And they stay locked into a planned obsolescence cycle controlled by Adobe... "The new version of your beloved editing software will only work with the latest Windoze which means hardware upgrade and oh, you have to do it because well we are soon kill-switching the current version you are dependent on."
Wework like operators can do exactly similar shenanigans with access to commercial infrastructure. Crowd out competition by aggressive long-term leasing on their buy-side, and on their sell-side build daily-subscription-dependency (buying ease, google-ish facilities which feeds into cult-and-status-signalling games), and convert a percentage of that into routine-subscription-dependency. Meanwhile also run rent-seeking games inside the main rent-seeking game... now you have a captive wallets who will buy the add-ons and extras because it's easier than walking two blocks for some cheaper and better alternative (e.g. food, coffee, lovely meeting space etc.).
edit: add reference for "daily sachet pricing".
[0] Buying less, more often: An evaluation of sachet marketing strategy in an emerging market
https://www.researchgate.net/publication/233676293_Buying_le...
Earlier quoted context omitted.
Yes I understand your point - you are just a commentator with no actual interest in the matter hand. Not an owner, not a tenant, just some random stranger strolling on the street thinking other people should do something because you think it's the greater good. Now you're proposing a different ownership model completely or that a government/city should be able to force a legal owner out of their legally owned propert…
i am considering what i am proposing. but i can't do that alone. throwing my ideas out there and having them critiqued with counterarguments is the point. if you just say i have no clue and my ideas are bad and i should reconsider then i am not going to learn anything. i can only reconsider if i get new input about what's wrong with my idea. basically you act like the error in my idea should be obvious, and i should…
No one’s outlined a scenario where the bank or the owner are violating some law/regulation.
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The people advocating for change in this situation likely advocated for all the impediments you’re providing as to reasons why it’s not supposedly a free market. Someone bought an asset they could afford to hold in bad times. End of story.
There's something wrong with the structure of the market if people are holding assets they don't need that others could make better use of.
Earlier quoted context omitted.
> "Last value" is pretty meaningless when it's stale though. For who and in what way though? Every entity involved wants to keep the price high, except the renter/new buyer, so with that in mind, "Last Value" seems optimal for achieving that. Maybe it's different in the US, but in Spain there is a ton of properties that sit completely empty and unused, even since earlier than 2008, just because the owners don't think…
There are buildings in my town that haven't been used in 20-30 years. And that's in the 'modern' shopping area. In the old 'downtown' area there are some that have been empty for 40+ years.
One day a crew turns up and starts jack hammering away a gangway. Its technically now two buildings; one of them is still unfinished and empty, the other has now been finished and is up for rent.
In terms of my utility I would prefer things renovated, changed, or rented out to funky things than have ghastly empty buildings
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Here the bank cares less about annual income than future income. Keeping it vacant only impact current income, lowering rent impacts future forecasts.
> Keeping it vacant only impact current income, lowering rent impacts future forecasts. Does it though? Suppose you can't find a tenant right now because the market is soft but is predicted to improve in a few years. If you leave the unit vacant, you lose money right now. If you rent it out with e.g. a 3-year lease, you make more for the next 3 years than you would with a vacancy, and if the market price has increase…
Earlier quoted context omitted.
The specific proposal is not great but changing the rules is in fact the correct solution of the current rules lead to systematically bad outcomes.
How is it systematically bad? Is there a banking crisis?