Currently you charge tennant a as much as you can until they no longer live there. That works out to be as much as they can pay for the benefit they get. If you charge 1k a month now, the reason you don’t charge 1200 is because they won’t pay it.
If you have a LVT, and try to increase the rent, your tennent wouldn’t be gaining any more value from the land that they currently are, so you still won’t be able to charge 1200.
>If you have a LVT, and try to increase the rent, your tennent wouldn’t be gaining any more value from the land that they currently are, so you still won’t be able to charge 1200.
This only holds if there's no competition between landlords - so the landlord extracts the maximum possible rent from each tenant. If I'm a tenant and living in this area is worth $1500 for me; but there are two landlords competing to have me pay them, I might end up paying $1000. If then both landlords raise their prices to pass the LVT, my rent ends up higher.
It's an empirical question and not easy to answer as to how much of the economic surplus is captured by the tenant vs landlord
On the opposite situation where properties are empty, they are empty at any price, LVT won’t change the price. They currently can’t be rented out for $50 a month, so why would they be rentable with LVT
The only properties which will be flakey are those where the cost of renting it out (maintenance etc) is lower than the current asking price, but higher once you include LVT.
However as LVT will cost whether you’re renting out or not this will simply increase incentive to sell (if you can’t get enough to rent out), reducing the purchase price, and allowing people to live there.
Given that in cities where rents and land values are highest the number of empty properties is minimal, increasing the cost of owning an empty property won’t increase that number.
> this will simply increase incentive to sell (if you can’t get enough to rent out), reducing the purchase price, and allowing people to live there.
But that means less supply for rental, and presumably lower impact on the demand for rental given how different the renting versus buying populations are. Even in a maximally efficient model this should result in raising rents?