A UBI of $x/month will just yield rent increases of $x/month.
Evictions went down for 3 months, then rose again back to their prior levels as landlords increased rents.
In the study you posted, it’s not possible to isolate the variable. Many things could have affected the (minor) changes in rents. Not a good analysis.
Minimum wage increases purchasing power for the employed workers, but also increases unemployment, which has the opposite effect on prices.
If you want to tax high-income people into lower-income housing then just increase their taxes. What does UBI have to do with any of that?
It’s not possible to “isolate the variable” in any economic study ever, so I suppose both of us will have to argue from conjecture. My conjecture, as a landlord, is that if incomes go up in my market, that is unambiguous signal that I can increase my prices. Your conjecture is “you won’t be able to,” but I already know I’m able to. That is how I’ve already set the price I charge.
The best possible news for me, an absentee landlord, is a big company with high salaries opening an office nearby. Same as every other landlord.
A distinction without a difference imo. My point is that how you pay for it is what determines the impact on prices, but I think we’re basically rehashing demand-side vs. supply-side economics at this point.
> I already know I’m able to
You don’t decide the market rate by yourself. And I don’t think you’re properly accounting for how UBI impacts this in aggregate.
Please explain how taxing high-income people into low-income housing doesn't increase the prices of traditionally low-income housing.
I'd disagree as I think it obviously does. I doubt any economist would agree with this statement.
You're saying I'm "incoherent", but from my perspective all you've done in this conversation is confidently assert your conclusions. You're clearly very certain of your beliefs, but that's not going to convince anyone (if you care about that at all). I'm willing to reconsider my views if someone makes a compelling argument, but I haven't found yours to be convincing fwiw.
All of the downward pressure on housing prices you have theorized are coming from (one of) the proposed funding methods, not UBI. UBI doesn't have to be funded in this way, so it should be self-evident that this pressure isn't coming from UBI itself. You would get the same (alleged) effect that you're mentioning if you don't do UBI at all and instead just more steeply increase marginal tax rates. You would not get that effect at all if you implement UBI but fund it by a method other than steep marginal tax rates. So the proposed effect is coming from the tax scheme, not from UBI.
I think you're clearly not willing to reconsider your views, which frankly I get since UBI should be a really great idea. And if it would work, I would fully support it (in fact I used to). But empirical evidence of similar policies getting baked into land rent is apparently outright dismissible, and there's apparently no need for evidence of your claim that higher marginal tax rates at the top end reduce rents at the low end?
What would convince you otherwise?
I'm not actually convinced that UBI is a great idea. I lean towards supporting it but I also have reservations. The numbers involved are staggering and there would clearly be some major negative consequences. I think the benefits of unlocking so much human potential and defending against social instability created by mass AI job displacement probably outweigh those, but I'm open to counterarguments.
That said, your arguments here are just way too simplistic imo. They only work if you ignore or dismiss half the equation. Instead of addressing the argument that taxation has a very different impact on prices (including rents) than money supply expansion, you are playing word games to say "oh but that's not part of UBI".
Once again, I'm not ignoring or dismissing half the equation. I'm asking you to explain how the "tax" half works to yield the effect you're describing.
Also, there is no empirical evidence supporting your argument. The one study you posted has zero statistical significance. Pretending otherwise is pseudo-science.
"Statistical significance," like UBI, is a very specific idea. It's not shorthand for "does it convince me." It is literally not true the study had zero statistical significance.
To fund UBI would impact a lot more than just super rich people with multiple homes. You'd have to tax into the upper middle class most likely to pay for it.
Do you not see the logical inconsistency in your argument? That adding all this purchasing power at the bottom of the market would have a massive impact on prices, but removing the exact same amount from the top has a only a narrow, insignificant impact.
> "Statistical significance," like UBI, is a very specific idea. It's not shorthand for "does it convince me." It is literally not true the study had zero statistical significance.
It's just a cherry-picked correlation in a massively noisy dataset, and a very weak one at that. Calling that study "empirical evidence" is a joke. You might as well cite astrological charts.
And no, there's no logical inconsistency with predicting different effects from the same purchasing power removed from the top as added to the bottom: those people have different marginal propensity to consume. As an example I've already mentioned, 80 million American adults live with non-family roommates. Those 80 million people aren't evenly distributed across income brackets, are they? Lower class people spend 30%+ of their income on their housing, often by pooling multiple incomes into a single unit. As you go up the income spectrum, roommates disappear and then % of income dedicated to housing goes down.
> It's just a cherry-picked correlation in a massively noisy dataset, and a very weak one at that.
At this point it's clear you haven't even attempted to read the paper. The data is neither cherry-picked nor noisy. The (independent) data source has 39 states in it. All 39 states are used in the study. The effect size is small, as you'd expect from small increases in minimum wage, but the correlation is extremely strong and almost certainly not due to chance.
By this logic, if you could snap your fingers and make half of all wealthy people's net worth disappear (by some definition of wealthy), it would cause rents to go... up? You only need basic economics to know it doesn't work that way.
> And no, there's no logical inconsistency with predicting different effects from the same purchasing power removed from the top as added to the bottom
The effects would certainly be different, but how they would ultimately resolve in aggregate isn't even theoretically computable. Yet you're claiming to know what the exact impact would be. All we can say for sure is that there would be two massive countervailing effects.
> At this point it's clear you haven't even attempted to read the paper.
No I haven't because it would be a waste of time. Reading the abstract is enough to know that the premise is flawed and it can't possibly provide empirical evidence to support your hypothesis because there is no control. The same exact changes in default rates and rents could have easily occurred without the minimum wage increase due to countless other factors. It's pseudoscience.
got it
That’s just arguing in bad faith and dishonesty bud.
Have a good rest of your week!
Ultimately, I think you know now that your original point about rents going up exactly in proportion to UBI was over-simplified and wrong, but I can see that you’re someone who doesn’t like to concede a point.
It’s cool though, thanks for the discussion.
"Oh, also, I'm building a new set of apartments and I discovered that when I set the rent to today's price + $300/mo then suddenly everyone was interested since everyone else on the market now takes +$600/mo."
Yes, inflation is a real concern which should be discussed, but "duh, all the money will just go to X" is far too a simplistic argument.
But then ya know what will happen? The store, cafe, bar, and gyms’ landlords will raise their rent accordingly and eat approximately all of the gains that came from their price increases.
Why on earth do you think rent is so expensive near high-productivity? The buildings aren’t better. The land itself isn’t higher quality. The landlords aren’t better. It’s more expensive because it can be due to the market’s productivity, and corollary ability to pay high prices.
The Fed understands this. As soon as the checks start flowing, interest rates will rise to keep money supply flat.
Rent is higher than pre-COVID basically everywhere and they continue to rise faster than inflation so I’m not sure what this “experiment” shows.
If every single landlord knows with certainty (2) that every single tenant in their market has increased their ability to pay (1) by $1000/mo, then every landlord independently will come to the conclusion that they can raise rents by $1000/mo.
They know the tenants are able to sustain it, and they know other landlords know the same thing.
Most insidiously: the demand that will move most aggressively up the price curve is lower income people seeking better lower/middle income housing. So those prices will move the fastest.
Evictions went down for 3 months, then rose again back to their prior level after as rents increased.
This says public investment will just increase aggregate land rents to at least the cost of that investment. UBI is effectively a gigantic “public investment” that is everywhere. It’ll get baked into land rents, which will then propagate into actual rents.