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Comment by pmiller2 | Hacker News Reader

Since you mentioned Mao, I'm going to glom on here with this: what service does a landlord offer beyond four walls, a floor, and a ceiling, that's worth hundreds or thousands of dollars a month? They deal with maintenance issues, sure; occasionally, they can help mediate disputes between neighbors. But, beyond that, what justifies them getting paid simply for owning more of a thing (housing) than they can personally use? It seems like the perfect set of incentives to create hoarding and abuse, which is exactly what we see in the real world.

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They offer the service of providing limited-term accommodation with no assumption of liability for regular, small payments. Contrast this to owning a house/condo, where the owner has an indefinite right to the property, but assumes liability (e.g. mortgage debt, property taxes) and/or plunks down a very large amount of cash all at once.

> what justifies them getting paid simply for owning more of a thing (housing) than they can personally use?

... Because they own it, and let others use it for a fee.

Let me just ask straight up: Do you believe that private property should not exist?

> They offer the service of providing limited-term accommodation with no assumption of liability for regular, small payments. Contrast this to owning a house/condo, where the owner has an indefinite right to the property, but assumes liability (e.g. mortgage debt, property taxes) and/or plunks down a very large amount of cash all at once.

This presents a false dichotomy in my view. If a property is paid for, there's no emergent liability set upon the owner that isn't also set by the state (which grants them absentee property title in the first place). All of the market mechanisms that incentivize transformation, maintenance, and occupation of land can exist without recognizing absentee title as legitimate, enabling people to occupy spaces they don't own without having to pay a rentier in perpetuity.

> If a property is paid for, there's no emergent liability set upon the owner that isn't also set by the state (which grants them absentee property title in the first place).

I mostly agree here, although there is an argument that certain torts against property owners are not really "set by the state" except that they recognize that without official codification and means of redress, mob justice or personal vengeance might proliferate.

> All of the market mechanisms that incentivize transformation, maintenance, and occupation of land can exist without recognizing absentee title as legitimate, enabling people to occupy spaces they don't own without having to pay a rentier in perpetuity.

I'm not clear exactly what you're arguing here: The government could just own all land but allow anyone to build on it and occupy it indefinitely for free? Or nobody can own land they do not reside in?

There are so, so many problems here. How do you resolve disputes between rival claimants to a building? How exactly does one move to a new place-do they sell the house? So they retain ownership of the improvements, but not the land? If there is no formal ownership, how are property taxes assessed? Do they just go away? Are they based only on improvements?

If we can still own improvements, but only one per person and a person must reside on the property to own it, people will still need an improvement to live in, and they will still have to either buy one or rent one, changing nothing. If we can't own improvements we don't live in, well, who will be building new apartments and condos? You will end up with a huge market inefficiency, with lots of low-capital people with demand for housing and lots of capital owners who could theoretically supply that demand by building commercial residential property but will not because they legally cannot own and profit from any construction.

> How do you resolve disputes between rival claimants to a building?

What I am envisioning here is a world where abandoning a property grants rights to the next person to occupy it, rather than allowing the original proprietor to act as a permanent parasitic middleman between maintenance and occupants. In the case of conflict, I would imagine it would carry out similarly to how all disputes get resolved. With a state you can navigate through a legal system, and without one you have market solutions such as Coasian bargaining, social sanction, arbitration, etc. This doesn't mean that someone gets to sleep in your bed if you haven't used it since you woke up, but approaching these kinds of problems require recognizing property as the dynamic and fluid social relationship that it is. How do you deal with a family member eating your leftovers in the fridge?

> If we can't own improvements we don't live in, well, who will be building new apartments and condos? You will end up with a huge market inefficiency, with lots of low-capital people with demand for housing and lots of capital owners who could theoretically supply that demand by building commercial residential property but will not because they legally cannot own and profit from any construction.

I don't buy this. It doesn't follow that eliminating one vector for rent-seeking eliminates all incentive to satisfy demand, as there is still profit to be made from production!

>Let me just ask straight up: Do you believe that private property should not exist?

Absolutely, that would be an ideal. However, don't make the mistake of conflating private property and personal property. A primary residence would be personal property, as would a car, etc.

As for the other "services" you mention, if the housing market weren't distorted by people thinking housing needs to be an inflating asset, most of those problems could solve themselves in a market scenario.

So if I have the cash and I want to buy a lake cottage, a hunting cabin, a second home near my kid's college, etc.--that should be illegal?

Commercial property developers should not exist, and any housing needs should be met presumably by government construction?

> if the housing market weren't distorted by people thinking housing needs to be an inflating asset, most of those problems could solve themselves in a market scenario.

I agree that overly restrictive zoning and planning regulations, IMO largely driven by owners' considerations of property values, distort the housing market by restricting new supply and inflating prices across the board.

The problem is the local government in these cases is being misused to prevent the proper functioning of the market.

The solution is not to get rid of private property--dude, it's 2020, and communism is still a failure--it's to reduce the local governments' ability to interfere with the market.

> So if I have the cash and I want to buy a lake cottage, a hunting cabin, a second home near my kid's college, etc.--that should be illegal?

Why do you need to own those things? If anything, capitalism has come around to this idea with the "sharing economy," and it works.

Do you not think those facilities can be provided for the common use of all who have a need or desire to use them? Why do you feel you should be entitled to exclusive rights to hunt that land, or enjoy the lake shoreline? More importantly, why do you feel you should be able to deny others use of that land?

Is there nothing else more useful you can think of to do with that money?

> Commercial property developers should not exist, and any housing needs should be met presumably by government construction?

That's one way to go about it. As long as builders are adequately compensated for their labor, does it matter?

> I agree that overly restrictive zoning and planning regulations, IMO largely driven by owners' considerations of property values, distort the housing market by restricting new supply and inflating prices across the board.

Explain Houston, then. The housing market in Houston still inflates at a rate higher than the general rate of inflation, and yet, there is literally no zoning there [0].

> The problem is the local government in these cases is being misused to prevent the proper functioning of the market.

Correct, because people think just because they put a lot of money into buying a house, that it should be an investment and prices should always go up. Japan provides a decent model of how to do it differently within a market framework: https://archive.is/jNx7X

> The solution is not to get rid of private property--dude, it's 2020, and communism is still a failure--it's to reduce the local governments' ability to interfere with the market.

Where and when have we had communism on a nation-state scale? Cuba arguably comes closest to the ideal, and they're doing well. China and the USSR were really more state capitalism than communism of any sort.

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[0]: https://www.zillow.com/houston-tx/home-values/

> Where and when have we had communism on a nation-state scale? Cuba arguably comes closest to the ideal, and they're doing well.

Sure, Cuba does well in some important metrics like education and healthcare, but overall it is still an impoverished authoritarian state. Not exactly a communist utopia.

Yes, this is why I said "comes closest to the ideal." I would argue that Cuba, relative to its neighbors, is not that impoverished, and that being under sanction from all of the world's top economic powers has put a damper on Cuba's potential. Cuba is no paradise, but they have made some significant strides.

It's pretty difficult trying to run a country where you still have an extremely strong blockade against you ran by the strongest economy in the world.

There really isn't any such service. The purpose of state-backed absentee title is to enable sustained profits in excess of cost.

Landlords are essentially mini monopolies.

They make money by monopolizing a piece of land, with the backing of the state, and then letting others use that land.

Even capitalists should be against them on the basis of a state backed monopoly alone.

I agree. Even from a capitalist point of view, there is no real free market in real estate, because it's a necessity that's simply not fungible enough. After the last brick is laid, almost every player in the game is literally just siphoning off a portion of someone's income for no good reason.

Realtors offer some value in knowing the market, but that's not worth a 3% commission on both sides of the sale, IMO. I already mentioned landlords. Property managers are essentially the same as landlords, except even more useless most of the time.

The only ones that offer anything of real value post-construction, IMO, are those that facilitate sales: title companies, banks, and realtors. Realtors are the worst of them, because they've enshrined their position in law in many states, and, as I mentioned, their commissions are simply way out of proportion with the value they provide in an age when home listings exist on the internet.

I don't want to buy a bunch of lumber, hire a bunch of guys, and wait for months every time I want to move. But somebody had to do all that relying on compensation in the future. I rent from them because it can be better for me than committing to buy permanently from them.

You need to understand that when people have problems with landlords, they do NOT have a problem with the SERVICE part of what they offer.

They have a problem of it being used as an investment, rather a job.

No one is suggesting that someone putting all the time and effort to get a building built shouldn't get paid for the time they've spent doing that. But that's where that payment stops, when they've gotten paid for the hours they spent working on that.

When housing becomes service AND monopoly, that is where the issue is. Land ownership is problematic, and profiting off of a state backed monopoly is even worse.

If by “service,” you mean the part where I pay someone else’s mortgage, then, yes, I have a problem. If you mean taking care of maintaining the property (which is what I think you’re getting at), then I don’t have a problem paying fair value for the labor involved.

Yes that's exactly what I am referring to.

I don't have a problem with someone transforming land and subsequently renting that land to recoup the cost of materials and labor. My issue is that the state enables profits far in excess of cost by granting the original proprietor a permanent title to that land without having to occupy or use it. Outside of the threat of state violence, I see little reason why we should recognize absentee property claims as legitimate.

That’s why you pay builders. Are you trying to claim there would be a literal, physical shortage of buildings to live in if not for landlords? If so, [citation needed].

Who would pay for the buildings / decide who gets to live in which ones?

Are you talking about personal homes or other types of construction?

I recall Adam Smith not being a fan of landlords.

I’m not even sure Smith was a capitalist in the modern sense. He held out similar derision for the merchant class, although the exact quote escapes me.

The quote most people would reference is probably this one:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

– The Wealth of Nations, Book I, Chapter X.

That’s the one I was thinking of.

Can't you say that about any income generating assets?

I think you're starting to get it.

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