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Comment by jakogut | Hacker News Reader

> These businesses should be paid by the landlord to occupy (and therefore maintain) the property for them.

While I do agree that property needs maintenance, why would a landlord pay somebody to occupy their property? What's the incentive to own the property at all then?

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I think the argument is, the landlord is not contributing anything productive and is attempting to freeload off of other’s productivity. Most businesses both agree to pay rent and make improvements to the property. When a landlord is demanding both, they are not contributing anything but still seek payment. It is a form of “rent seeking” in the economic sense: https://www.investopedia.com/terms/r/rentseeking.asp#toc-wha...

And so what would be the incentive then to own property? Well if you cannot be productive with it, or otherwise enjoy it for personal reasons, then you wouldn’t have any reason to… which would let people who can do something productive with it the opportunity to do so.

Can a landlord contribute something productive? Sure, but that’s probably more akin to a property management company’s value proposition than a landlord’s.

> the landlord is not contributing anything productive and is attempting to freeload off of other’s productivity

This is patently absurd. Does the Miller not provide anything productive when he brings flour to the Baker? The Landlord provides both a Good and a Service. Just because his contribution is not necessarily concurrent with the Tenet's, does not mean that he is not contributing anything productive.

The miller operates the mill to provide his value.

What does the landlord do? The miller isn't merely holding a millstone captive, he (or another miller) is required to operate it.

If the miller dies, someone else has to operate the mill. What happens when a landlord dies? What meaningfully changes?

What does the landlord bring? I think you’re confusing landlord with property manager. The landlord brings nothing and has no productive contribution. They seek only to create scarcity and leech off of others productive output.

Please, list contributions made by the landlord specifically.

They provide the capital so that building exists. If there weren't a chance or probability for it to generate income and to increase in value. A few would pay for it in first place and even then only for personal use. Thus resulting to system where to start business you first must outright build the building with loans or buy from some failed place. As no one would build for you to rent.

So their role is increasing the scarcity/cost of property?

Remember a landlord is not a developer or builder - they generally buy property that already exists.

I think what you are saying is that the property wouldn't be available to rent, BUT would be available to buy at a potentially lower price (as buyers wouldn't be competing with rent extractors/landlords)?

I know we are talking commercial property here, but look at the market in Sweden, where renting property to live in for more than a month is illegal in most cases. The cost for a young person to buy their first flat (often with family support) is low. The country operates fine with very limited rental. People still build property, young people still get to live.

>While I do agree that property needs maintenance, why would a landlord pay somebody to occupy their property? What's the incentive to own the property at all then?

To live in or use? That seems like a way better situation!

What about the people who need some land to live in or use but can't afford the costs that come along with it (either purchase or maintainance)?

They can't afford the costs because the landlords have inflated the costs. It's a cycle that doesn't need to exist.

That doesn't answer the question. An 18 year old who has literally never worked a day in his life can not afford an apartment no matter what the price, inflated or not. Should land owners be obligated to lower the price to $0.25 so that this teenager can buy the property with a coin he finds on the street? Should it be $20 so that his first paycheck can be used to buy lodging? Should all plumbers and electricians offer their services for a couple dollars so that every teenager can keep their new property maintained?

You have created a false reality, and then cried foul when real life didn't play ball.

This 18 year old can get a loan, they can pool together with a group of flatmates to purchase a property together or they can live in staffed accommodation, such as a dorms, motel, hotel or hostel. They can purchase a room in a boarding house. They can stay with friends and family. Plenty of options.

>Should land owners be obligated to lower the price to $0.25 so that this teenager can buy the property with a coin he finds on the street?

Wouldn't a reality where land is only held by those using it and you can buy land for a quarter be better? I don't even mean to be funny or anything but that seems like a much better situation that our current one.

How do you know it's the landlords that inflated the costs? That's a major premise that you haven't demonstrated.

Land is a finite resource, and developed land in a useful location all the more so. While speculation might skew an areas value somewhat, the cost of purchasing, developing, and maintaining a property would definitely not be zero if renting were abolished. There are still going to be lots of people who can't afford to buy outright even if costs went down several percent.

Land should be a public commodity, nobody should be able to own the land, or the resources under them, or the lakes, or the sky, etc.

Buildings should be 'permitted' to be built on land, and people can own the land insomuch as they pay land value taxes for the utilization of the land. If it's a primary purpose and they don't get income from it, then the tax would be nil, if it's a second home they'd get 90% off as they're still a 'small fry', maybe 3-10 homes is 50% of full tax, and 10+ is the full tax.

LVT can then be funneled into housing programs, housing assistance funds, or straight up basic income.

Land value tax is the tax of the value the owner gets from the land, so if you're airbnb'ing you'd pay more if you make 10k per month in airbnb, then if you're renting long-term for 2k/month. If you still have a mortgage, you could maybe have some sort of deduction - but again that's only if you're owning 3 or less homes, anyone leveraging credit for 10+ homes should be able to afford mortgage out of their normal cash-flows, or they're over-levereged and need to dump a property or two.

So someone who uses land very inefficiently and thus gets very little value out of the land should have it for close to free, whereas someone who would use it efficiently and thus derive lots of value from it should have to pay large sums to keep using it that way?

Seems like a perverse incentive to me.

Landlords buying land does not unilaterally inflate the cost of land. Arguably in the long-run, the price of land just reflects the discounted cashflow of its future rental value. City centre land is expensive not because of landlords, it's expensive because so many different parties are able to derive so much utility from occupying it, and are willing and able to bid large amounts to capture that utility.

Arguably there are two big problems with the market for land/housing, and landlords aren't one o them:

#1 Increases the value of land due to neighbourhood effects accrue to the owner when they do little to deserve it (you can tackle this with land-value taxes).

#2 Various planning controls inhibit the market's ability to respond to high accomodation prices with the construction of more accomodation, keeping rents at a higher level than they would otherwise be without this government intervention.

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