Market stabilization against short term shocks (i.e. temporary rent subsidy) functions like unemployment insurance, stabilizing the entire market and not increasing homelessness.
https://www.usatoday.com/story/news/politics/2021/08/25/89-f...
The effect of a tax increase is more distributed so that it is less likely to be directly passed on to consumers.
Increasing taxes shifts the burden more indirectly so it is less likely to be directly passed on to consumers.
With rent assistance the landlords continue to receive rent, so it may be easier for them to absorb the costs.
Since people receiving rent assistance can keep receiving the assistance if they move to a better deal, competition between landlords is still in place.
I saw a video of one guy threatening hotel staff who the cops would not forcibly remove and the courts are not requiring it because it was not deemed threatening enough. He is still in the room months after the incident, not paying, with the individual hotel owners and staff eating the cost.
If you impose a tax on buildings, that gets shifted onto tenants. If its a tax on land (ie, the rental value of the location), the landlord has to eat it and it gets fully capitalized into the price, which means the landlord can't pass that on to the tenants and it actually brings the price of the land and rents down. There's a long string of empirical studies that back up this finding, the latest being this one out of Denmark:
https://www.zbw.eu/econis-archiv/bitstream/11159/1082/1/arbe...
I'm not quite sure I understand the difference here, but I may be misunderstanding why a tax on the buildings and a tax on the land is different? Are you saying a tax based on rental prices? Otherwise I would assume any cost to the landlord would eventually get passed on to the tenet, being the source of revenue.
The landlord has to pay the tax whether they're renting it out or not, but what kind of tax you're assessing affects how much they can charge in rent to their tenant.
When you tax something, the cost typically gets "passed on" because you are changing the marginal profitability of that thing, and this causes the supply to decrease, which drives up the price.
We can make more buildings. But we can't make more land (locations).
So theory has long held that a tax on the value of land (also known as a site value tax) cannot be passed on to tenants, because it's not like someone says "well the cost of holding land went up this week Charlie, better make slightly less land this quarter." Though they can and absolutely do in fact do that with regards to, say, housing construction (and gasoline, and cigarettes, and sirloin steaks, and plush dolls, and anything else you might want to tax).
And this is exactly the empirical effect that the referenced research paper (and many more like it) find in practice. If you assign a split-rate property tax which taxes two things: land, and improvements (buildings, essentially) at different rates, and you have a natural experiment where you randomly vary the tax rate on the improvements and the tax rate on the land, you will find that the price of the property goes down proportionately to the tax rate on land (full capitalization of land taxes), but that doesn't happen with the portion of the tax rate that falls on buildings.
See this for more on the underlying theory: https://astralcodexten.substack.com/p/your-book-review-progr...
If you want more sources on the empirical findings I'm happy to provide that to.
> If they can't make a profit at that rate then they'll eventually sell the property, or develop it for a more profitable use.
This is exactly the political purpose of land value taxes, by the way! Under a sufficiently high land value tax, the only way to make land more profitable is to IMPROVE it by building useful stuff on it. So if the improvements go untaxed (you don't get penalized for building stuff), but the location is taxed, you incentivize people to build stuff lots of people need, such as dense housing rather than parking lots and single family homes.
Only because the substitution good to rent is purchase which would also be subject to the same taxation.
The only reason rent and property value are correlated is that they are substitution goods, but the linkage is not fixed. Simple examples would be say student towns, not every student is going to be able to chose between rent and purchae etc.
In the case of a moratorium, the landlord takes an immediate, complete, revenue hit. In the case of tax increases, the landlord pays something extra, spread out over both time and the taxed population.
It's like the difference between not getting a paycheck and having your rent go up.
Secondly, how much landlords pay in tax is less relevant than what incentives the policy sets up. On the part of landlords, eviction moratoria incentivise not renting to higher-risk tenants at all. Higher taxes + rent subsidy would have the opposite effect, with more reason to rent to high risk tenants, and renting out properties that might be marginal otherwise.
I don't know all the details of this, obviously, but this sort of policy analysis is much more about how it shifts incentives on the margin, rather than who pays more and who pays less.
Shifting the burden to the landlord, especially at a time of transient shock, is not only a direct tax, it's a tax when they may be themselves suffering a revenue shock just as their tenants are. Even replacing a tenant isn't automatic; there are transient costs and it can take time. While subsidizing the tenants takes cash from a large base (including debt, borrowed at a much lower rate than a landlord can get). That's the surface difference.
But you may ask "who cares? Why do the landlords a favor?" Well there's a systemic issue in such a shock (think of swimming in the ocean when a wave drops you then lifts you independent of your swimming). Keeping the tenants in situ means the landlords can continue economic activity (doing repairs, buying lunch, going on vacation, etc). The tenants can too -- if nothing else they can look for a job rather than looking for a job AND looking for a place to live. Or they may not have actually lost their job, but just suffered from transient reduced demand (e.g. fewer haircuts) which might end up being complete job loss if they lose housing. Essentially you are preventing a liquidity crisis.
And there are second order consequences as well: as the paper shows homelessness increases; this is a general tax on everyone not just in social programs but in all the followon consequences of having a lot of people on the streets.
It's the same argument for subsidising farmers, even if most of them these days are big businesses: they suffer a lot of transient economic pressure (busts and booms) but we need a reliable food supply. So we engage in dreadfully wasteful behavior because we've decided it's better to pay that than suffer a food supply shock.
Taking someones profits to zero means they 'break even' on their expenses. Taking someones revenue to zero means they have to pay all their costs out of their own pocket.
How is firing someone different from them going up a tax bracket?
The point is to limit the risk for landlords. Maybe they will earn less on good tenants, because of taxes, but they won't hesitate as much before taking "not as good" tenants.