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Comment by pasabagi | Hacker News Reader

1. I own a 4 unit building on a decent sized lot in a big city.

2. I make housing available to 3 other families

This is the point - the second sentence does not actually follow from the first. The person who built the building, either the actual builders or the investors, make it available. At this point, it is a normal service-provision kind of relationship you see across the economy.

Except, with landlords, it isn't that they provide the building. It's that they provide the land. The land is parcelled out in a manner which, at best could be compared to if we just gave rights to parts of the electromagnetic spectrum to whichever radio stations started pumping waves into it first. Of course, in reality, land ownership is usually rooted in much more brutal and sordid stories in America.

So you essentially end up with a class of people who take no risks, provide no service, and add no value, employ nobody, and often literally do nothing.

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>The person who built the building, either the actual builders or the investors, make it available.

The person who owns the land makes it available by deciding to rent to people. The person who owns the land can decide to tear it down or not rent to people.

>take no risks

Real estate is not a risk free investment. It would be much more popular than bonds (when interest rates aren't near zero) if it was.

>provide no service

Maintaining the property in a habitable condition is a service. Maintenance expenses are why a large number of people choose to rent instead of buy when staying somewhere short term.

>add no value

Making housing available in desirable locations for less than the cost of a SFH is adding value. It can reduce people's commute or put them in neighborhoods they want to live in. If that land was instead covered in SFHs (which seems to be the implied ideal for the "landlords should not exist" crowd) the number of people who could live there would be significantly reduced.

>employ nobody

Landscapers, plumbers, electricians, roofers, property managers, cleaners, inspectors. In the case of new construction, a lot more people.

>often literally do nothing

Ha. I wish.

> The person who owns the land makes it available by deciding to rent to people.

No, the state makes it possible for the landlord to charge money for the land, by preventing squatting. The land is already available. It is the ownership that renders it unavailable.

As for the factual side of your argument (maintenance expenses as a motivator, etc), I can't comment. It's starkly different from my experience. I imagine it's actually starkly different from yours - you're just using it to rationalise the inequity.

Obviously, there can be incidental work in the maintenance of a monopoly. If somebody tomorrow gave me exclusive right to the fishing in the north sea, then I rented that out to fishing companies, there would be work involved. But fundamentally, renting out exclusive rights is not primarily about exchanging services for money. When you own land, you have just such an exclusive right, and it is just as predicated on the willingness of the state to back it, and is therefore an entirely political decision whether or not this is actually a good idea.

In the case of California, the state with a crazy unemployment problem, and sky-high property values, it's unarguable that the current system is not working. So questions of what is and is not a legitimate or useful monopoly over resources (land, in this case) should be totally on the table.

The state also makes it possible for me to charge for usage of everything else I own, not just land, by restricting people's ability to use it freely without my permission. For example, my body, my computer, my laundry machine, my bed, ect.

Is your main argument that because of the limited quantity of land it deserves special reconsideration, or do you think all or a vast number of property rights should be abolished?

My main argument is that when you have a limited quantity of something, like radio spectrum, it's normal to have a public conversation about how this should be divided - and ultimately, it's a democratic decision about who gets what, why, and for which uses.

Land should be regulated this way, but it isn't, because of the hangover (in europe) of medieval norms where landlords were essentially gangsters extracting protection money, or (in america) the essential abundance of land available for the taking[0].

If you have an expanding frontier, a fixed quantity (land) behaves like a growing quantity, so there isn't the intense pressure for land reform you got in europe. Except now, the land is all taken, so the regulatory regime which worked for a growing supply of land becomes increasingly dysfunctional, leading to problems with homelessness and tenant impoverishment, where people are paying increasing quantities of their income (50% +) to landlords, not because those landlords provide them with a good service, or because the landlords have high costs, but because it's their only choice.

[0] Obviously, the first nations population massively lost out in this.

>leading to problems with homelessness and tenant impoverishment, ..., paying increasing quantities of their income

I see all of these as problems with zoning. I could also rant about rent control but it has a much smaller effect compared to the prevention of construction and density.

I guess, either way, you need a system that addresses supply and allocates housing fairly. I believe the free market can do that. Saying no land ownership doesn't really address who builds more housing, what incentive do they have, what restrictions are there, who gets to live where. Sure, if you could replace it with a system where the government builds as dense as is safely possible to meet demand, then held a lottery for who got to live there, and those tenants were forced to relocate every 3-5 years to give other people an opportunity to live there, I guess I'd be on board with that.

My hesitation is that would be a total rewrite, and we have a system that works pretty well where we could remove some market distortions and have it working really well. Remove residential zoning restrictions and landlords will build, there is incentive for it. So much of LA is zoned for SFH+ADU, and your neighbors will sue you if you get creative. There is no room in the zoning code for low end housing. I read about these men's hotels [1] and I don't think you can build something like that anymore, something that addresses a need at a price point people can afford. It sounds crass but we need tenements, so someone who is barely scraping by has a bed, an address, and a shower.

There is nothing besides legacy rent control units at the $500/mo price point in LA. There should be. We shouldn't rely on rent control, where we privatize the costs of a social problem and give landlords a huge incentive to get people out. We should just build some livable shit.

1. https://newrepublic.com/article/161808/ewing-annex-hotel-hou...

My gut feeling is that even if you did remove distortions, the problem would persist. If the price for a commodity ultimately stabilizes at material cost + labour, I think rent ultimately stabilizes at 'everything you can afford to pay and some'.

Ultimately, commodity price is driven down by the fact there's always some industrialist who can flood the market with cheaper crap, until there's basically no profit in it. You can't flood the market with 'living in walking distance from work', and a large part of the cost of any building project is simply buying the plot to build on, because each landowner has no direct competition.

>This is the point - the second sentence does not actually follow from the first. The person who built the building, either the actual builders or the investors, make it available. At this point, it is a normal service-provision kind of relationship you see across the economy.

If making it available is such a no brainer, why did they sell the building?

If there was no value in selling the land and building to a new owner, developers would just cut out the middleman. The reality is that developers want to build and take profits today, not over 30 years and then build again with no risk of the previous property turning a loss.

> If making it available is such a no brainer, why did they sell the building?

Rent is incidental to the real profit that you make from owning a building - asset value appreciation. Often developers do cut out the middleman. It's also sometimes a simple matter of where your credit is coming from and what interest you're paying - obviously, high interest rates push you towards a quick sale, etc.

I honestly don't think it should be controversial that rent is a form of rent, that is, a type of income that derives from simple ownership of something, not from any service or product. But you know, here we are.

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