I don't see how your analogy does anything but bolster timr's point. Would you kindly try again with a different analogy?
I'm not snarking; I'm genuinely curious and looking to understand what you're trying to say.
I'm not snarking; I'm genuinely curious and looking to understand what you're trying to say.
I expanded on my original analogy because Timr left me with the impression that he thought it wasn't an opportunity cost because it was a law (and that made it OK). Being a law isn't important. The predictability, when buying the property, is. My analogy also shows that even if the event is predictable, or as he would say, "the rules of the game", it doesn't mean it's just in any ways.
Here's a different analogy.
If you buy a farm land that gets flooded every single year on the last day of June (for the past 200 years, like clockwork), you can't really say you lost money when the next flood happens; you should already have factored this event in overall expenses... tho it still sucks that your land gets flooded.
> My analogy also shows that even if the event is predictable, or as he would say, "the rules of the game", it doesn't mean it's just in any ways.
I agree with your statement. However, in the specific case of being a landlord in a rent controlled district, I feel that -today- the rent controlled laws are entirely fair. In the late 1970s, there was good reason to complain about how you lost expected value in your "investment". Today? No. As timr said:
> If you buy a rent-controlled building today, you know that you're buying a building with a defined revenue stream. It is not "opportunity cost", except in the sense that you chose to buy the building in the first place.
I have no sympathy for landlords who purchase a currently occupied rent-controlled building with the expectation that they will be able to make money by removing the existing tenants. If the success of your business plan relies on very low probability events, or it relies on causing misery and human suffering, it's a bad fucking plan. :)
To speak to the "lost opportunity cost" angle: If one purchases a rent-controlled apartment, the correct thing to do is to expect the value of that property to remain exactly the same for the next seventy years. Any opportunity to increase the rent in a unit should be seen as an unexpected windfall. It's completely unreasonable to think otherwise: when one bought the property, one either knew what one was getting in to, or one is so unaware that one has no business running a business. :)