81–90 of 433 posts
Earlier quoted context omitted.
Direct cash still has this effect. $1500 to subsidize rent that is $1500 to property owners.
That's exactly what happened with student housing subsidies in NZ. Labour were elected and fulfilled a campaign promise by raising the housing allowance by $150 pw. Rents in Wellington rose $150 pw at the same time.
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> no one This is an article in the Economist decrying it, so I don't think you can claim that no one is worried.
>so I don't think you can claim that no one is worried. No that isn't what I claimed, I claimed no one was worried. Using an article written almost two years after fact as proof against my claim doesn't make a whole a lot of sense. Now obviously my no one claim is hyperbole but the fact the bill's passing was near-unanimous is my point. Using one of the very few no votes in congress as proof against my claim would ma…
Code for 'nonsense but I said it anyway and now someone's calling it out so I'll claim it was a prank all along'.
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Why should the rent cover your mortgage?
Because people who buy a place would like to reasonably be able to pay something that takes 30 years or similar to pay with the rent itself. That is a reason why you invest in the first place.
Property ownership is a market barred from entry by a high buy in cost to account for some risk - but the risk is rather minimal and most properties are going to be value accruing over time. We can observe this by looking at how cheap general property insurance tends to be (unless you're in a really risky area - i.e. building a house in a flood plain).
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Why should the rent cover your mortgage?
Why wouldn't it? We're talking about a mortgage on the rental property itself not on the landlord's personal residence.
Yes. Everyone in this conversation understands that. There's no relation between the amount and terms on your mortgage for your rental property and the market price to rent a given unit.
If I take a 20 year mortgage does that mean I should charge more rent than if I took 30 years because my payment is higher? Should I drop rent by half when I'm done paying my mortgage since I no longer have a payment? It's nonsensical.
There's especially no reason to expect that rent should cover 100% of the principal fraction of your mortgage payment. Taxes, maintenance, interest, etc. are pure costs which are understandably passed on to tenants. The principal fraction of a mortgage payment is not a cost, it is building your equity.
If rent is covering all costs and "only" 50% of the principal fraction of your mortgage payment you're still making a profit. Because you're paying, let's say, $1000 of the mortgage payment with your own money, but you're getting a $2000 increase in equity.
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Land lords still exist in a competitive market and can't arbitrarily raise rents without collusion. One way to alleviate this problem is to have a harsher tax on vacant properties to punish using housing as a store of value and creating artificial scarcity in the market, e.g. like how the DeBeers corporation made diamonds artificially scarce and scammed the world for the past century selling a shiny rock.
> Land lords still exist in a competitive market and can't arbitrarily raise rents without collusion. Well...kind of. It's pretty bad in a lot of places. There aren't enough homes in the places people want to live.
It has nothing to do with supply - there are more houses now than can be occupied in the US. It has everything to do with misusing the supply we have.
This is generally how socialist govt programs work. Give money to the rich and advertise it as helping the poor.
Only beat by non-socialist government programmes, which give money to the rich and advertise it as such.
We give money to the rich and advertise it to the rich and hopefully temporarily poor.
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> Land lords still exist in a competitive market and can't arbitrarily raise rents without collusion. Well...kind of. It's pretty bad in a lot of places. There aren't enough homes in the places people want to live.
There's a delicate balance of property owners using their power to prevent new construction and densification in an attempt to keep their property values high by preventing competition and going too far where you destroy your local economy because the people who actually do the work can't afford to live there.
Anything other than direct cash transfers to individual humans is likely to have this effect. Institutions are simply always going to be able to navigate and take advantage of complex government programs better than real human beings. UBI or stfu. Time to try some trickle up economics. Also, for the love of god, let's stop prioritizing saving "jobs" that may or may not be necessary for civilization and start prioriti…
Ubi would go into homeowners. Hell at some Point they will raise rent by the ammount of the ubi because they know people can afford at least that
In a supply-constrained environment, it's true that a higher capacity to pay would lead to higher prices, but that's not some general truth. If it were, you could say the same thing about wage increases. Any policy goal seeking higher incomes would be useless: it will all just go to homeowners.
Why bother with public education? Sure, it will increase incomes, but it's all just going to go to homeowners.
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Only if you have no rent control and allow property owners to take as much as they are able to off the table short of starving their tenants.
When I was a landlord I found it very difficult to even cover the mortgage, let alone cover association dues and maintenance. I would try to raise the rent a little in between tenants, and it would greatly reduce interest in the listing.