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Comment by lurgburg | Hacker News Reader

> they all increased their rent

Why would they not have done this before, if they could? Landlords aren't trying to maintain some fixed margin, they want as much as possible, always.

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The last few cities I've lived in have seen 10+ straight years of rent increases (with a brief drop then rapid spike again from COVID) so... they do already do this?

Writing in the context of preceding comment. Landlords increase prices as much as they're able, they don't decline to increase when they could to maintain some fixed margin. I'm not saying they're generally unable to rise prices in general, but that they have no special additional capacity to raise prices in response to land taxes.

"but that they have no special additional capacity to raise prices in response to land taxes."

How so? If all landlords now have a significant new cost, why would they not raise rent to cover it?

This seems to say they cover 80-90% of tax increases through rent increases. And commercial properties should be more competitive.

https://mitcre.mit.edu/news/blog/can-landlords-really-pass-h...

Because of competition. They can't all conspire together to price fix (or if they do they could be arrested).

Writing in context of preceding comment, which seemed to be predicated on them having a special capacity to raise prices in response to land taxes.

I did wonder briefly if a land tax might decrease competition => higher prices, but then I recalled that the supply of land is fixed.

If it's s limited resource which people require (shelters), the price (rent) will be quite elastic. There will still be competition if the taxes go up. Competition is what prevents the price from rising unnecessary. The floor for all the competitors went up because taxes went up and they all want to stay profitable. They aren't going to take loss, so they raise rent to cover it. Buying won't look very attractive either because the tax increase raises those costs, and if it's as significant as they other poster wanted (to affect rich people) then it will likely exceed the $10k SALT deduction limit.

This SALT deduction is part of how they penalize landlords already, which is just passed on in the rent payments. This is part of the reason renting is more expensive than buying (comparing just monthly payments), in addition to management fees, profit, and repair/renovation reserves.

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