IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing.
Issue is when they want to politically and artificially raise the value of their property by preventing more housing from being built, so, if you're going to ban something, ban artificial regulations on construction!
North Carolina has done some good by loosening up code around tiny homes, but, a lot of municipalities want to enforce big homes only because they like the property tax of high value houses, 4 bedroom and all. Small town I'm in basically won't allow expansion of housing because the people that live here don't want the village to get any bigger, but if it's democratic like that I'm mostly OK with it, it's when there's demand for housing and someone with a perverse incentive to block it that we should want to solve for.
Proof: Propose a 100% land value tax, which definitionally only removes that part of income that is generated by the community around their property, and see if they go for it.
They don’t create supply in any way, the only ones who do that are builders. But sure they maintain houses. Although just the bare minimum, they will never fix it nicely - just enough to rent it out.
For a house to be available for me to rent, both things need to happen.
Someone had to build it, obviously. But just as necessary, someone needs to offer it up for a rental.
Building often happens because a developer believes someone will buy the homes they build. A lot of the time, they are right; some of the time they are wrong. Some developers will get buyers lined up first, to minimize the risks of being wrong; many do not. In the latter case, there's no inherent connection between the building and subsequent buyers.
Depends a lot on the landlord. Many will fix it up nicely because they can charge a higher rent. Much of my work is repairing rental properties and I've seen all types of landlords. I try not to work for the cheap ones if I can help it because I don't want my name associated with the crap they want me to do.
I spent over a decade living in various rentals after I moved to a new state. I didn't have the money to buy when I first moved, and even if I had, I didn't know the area well enough to know whether I would want to buy where I first lived. And having the ability to just pick up and move meant I had a lot of flexibility for chasing job opportunities. Don't get me wrong, there's plenty to love about the home I own now, but it absolutely ties me down and anchors me in ways that renting never did. I for one am glad to have had people willing to rent property to me.
Like I said in another reply, I don’t consider landlords to be inherently bad. But there are a lot who will try to take advantage of you if you let them. You have to be lucky to get a good one - I only had a couple out of the dozen or so and I wish them the best.
A renter is someone looking to rent. If someone buys a home then rents it out they just +1 the supply of rental units.
A high proportion of real estate sales are owner churn, not the purchase of brand new never used before properties.
I just can't bring myself to agree with the hard-line socialists who think landlording is fundamentally a bad thing. There are a lot of problems with it, but it does have a legitimate place in the world.
https://en.wikipedia.org/wiki/Rent-seeking
Tenants who rent property get something tangible in exchange for their cash - exclusive use of the property.
Just because the word "rent" is common to both, doesn't mean they are connected in any way.
The concept of "landlords do nothing while collecting passive income, therefore not creating any value but instead are just exploiting that they own the land" would be correctly described as "rent-seeking behavior".
From this, we can conclude that there must be some point after an investment is made where continuing to benefit from it transitions to rent-seeking behavior.
Would rebuilding the apartment every so often straighten you back to profit-seeking?
Rent-seeking is just a meaningless insult if framed like that, it highlights no economically net-negative behaviour.
I guess you could class some rent as predatory as well, allowing others to use your property for a fee is not necessarily predatory (unless you're of "property is theft" kind).
Criticising landlords is fine, but words (and phrases) have actual meanings, and the term "rent seeking" has literally no place in a discussion about landlords.
> the term "rent seeking" has literally no place in a discussion about landlords
Having "literally no place" is certainly a strong choice of words, particularity as it was introduced in this thread as being a inaccurate label to apply to landlords.
Personally, I first learned about the term applying it to Feudalism, in which the (land)lords' only contribution was their ownership of the land. That example alone seems to pretty handily disprove your claim of "literally no place", in fact it's specifically cited in the Wikipedia article as the Georgist interpretation of economic rent.
They're orthogonal. In a competitive market, landlords earn no economic rent. In a market with supply restrictions, however, landlords will earn a return "in excess of the costs needed to bring that factor into production" [1].
This is almost never true. Leases come with a million stipulations, and they get to decide what you can and cannot do. It’s exclusive in the sense that the landlord can’t force other tenants on the place you’re renting.
One thing to keep in mind. It might be that it's "democratic" in that all the homeowners are allowed to vote for or against the zoning policy (or for or against the local leaders who set zoning policy) but ONLY the local homeowners are allowed to vote. Those who rent (or who can't even afford to rent) live in a different district and aren't allowed to participate in the election.
If that's the case, then voting doesn't represent "the will of the people", just the will of those people permitted to participate.
To what extent, and by what mechanism, should the government of those two areas weight my preferences on housing policies in those areas? (I think it is properly exactly zero, even I say really, really want to.)
Well sure, but it's good to incentivize looking for sources of wages other than (literally) rent-seeking.
> Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. (https://en.wikipedia.org/wiki/Rent-seeking)
Given that renting out property you own doesn't meet this definition it can categorically not be called rent seeking. I'm always shocked that people apply this definition exclusively to property rentals, and not VHS rentals, without seeing the hypocrisy.
Googling it after reading Wikipedia shows that about half the sites out there talking about it are also using it wrongly.
Thanks for explaining!
And a little further down is this: > Rent-seeking implies the extraction of uncompensated value from others without making any contribution to productivity.
Which to me certainly sounds like someone who's only contribution is ownership.
I think we're at the bottom of the discussion here. You've got your opinions but each time you've been pressed you don't really have a justification that stands up.
But no, VHS tapes are not factors of production. That’s a term with a widely understood definition, and linguistic tricks like “a VHS tape causes an image to be produced on a television” or “viewing an VHS tape produces a sense of enjoyment” are not valid arguments.
A VHS tape is capital in the same way that a machine or house is capital. They are capitalized goods that produce something of value on the other side. You still haven't been able to demonstrate that renting one is morally questionable while the other is fine except by special pleading.
Growing municipalities kind of have to choose if they want to become bedroom communities or industrial/business communities and if they choose the former optimizing for rich people is the easy lazy not sticking their neck out choice and what does government employment optimize for if not retaining people disposed toward that sort of decision making.
Perhaps they ought to be more careful when filling out paperwork. Or perhaps they’re not accidents.
Noone says it's nothing else. But rent seeking is a big component of it, you just focus on other minor parts.
In general, locking down some limited but critical commodity (e.g. land) is bad for any economic system. It doesn't really matter whether it's "Wall Street" or "your neighbor". A healthy economy is geared towards creating an added value.
I am trying to read this charitably, but it is hard to read as anything but: 'landlords do not add value'.
Germany practices basically rent control, so that 60%+ of population rent and consider it stable. That's another way.
Maybe there are more, I didn't think hard. The basic idea is to prevent formation of an "aristocracy" that holds some limited but necessary (not luxury) resource. Pretty much every revolution happened because of that.
Clearly you have never interacted with most land lords
Point is, in choosing to be a landlord and buying property, an ideal world would respond to this demand pressure by building housing, didn't mean to suggest the landlords themselves put on their hard hats and frame a new building. Just that they're also part of the marketplace.
Rent income is not wages, that's the critical part you're mistaken. Income and wages are not the same thing. Rent income is as much wages as Elon Musk selling stocks is to him, or a bank making income on interest payments. Renting is a business, it's income is business revenue, not wages.
There is this terrible view that landlords are "just like you and me, hard working regular people" - not that it's false, but so are the people that own mom & pops shops, or a local subway franchise, they're all business owners making business profits, not wages.
Business practices that harm the public should be regulated and curtailed. With taxis for example, the medallion system was used to limit the number of Taxis in operation. Similarly, not only should an individual be limited to (directly or via an ownership/shareholder interest in a company -- even with them or their family) a reasonable number of properties, but the number of rental properties in an area should itself be limited. Property owners can either sell houses, or sell condos and make income via condo (regulated) condo fees.
Food, shelter, health-care/medicine should be heavily regulated, if private parties take part as intermediaries between individuals and their food, shelter, health-care, they should expect lots of red-tape and limits. Ideally, the government itself would be driving these markets directly by building and selling properties, hospitals, pharmacies, grocery stores, etc.. that's not socialism or communism. That's just common-sense capitalism, everyone, especially the richest make more money this way. not only that their money will spend better this way.
The kind of capitalism we have now is a short-sighted parasitical money-grab. The kind where if fully realized, you'll build your own mansions and sky scrapers but you'd be complaining about the slums and crime nearby, how you can't get good help, skilled labor, and spend a ton of money on bribes instead of paying a fraction of that in taxes.
In theory, reaganism and trickle-down economics could have worked. A rising tide does indeed lift all boats. But in reality, it's more of the "scorpion and the frog" story. In this case, landlords can own a reasonable number of decent homes and make decent income, and then diversify the money in other markets. But currently, it's a race to become the biggest slumlord or until the markets collapse again.
This is completely false. This might be surprising to learn, but for normal car dealerships (not buy-here, pay-here or used car dealerships) a huge amount of their compensation rides on receiving holdback payments from manufacturers, as well as per-unit bonuses that often have cliffs.
Cash buyers paying invoice price are welcomed (if they aren't too big of a headache) because they push a dealership over or at least closer to the next sales-volume bonus cliff.
Holdback alone is worth more than any realistic origination fee.
Dealerships are also earning miscellaneous per-car bonuses which are also profit, which go up based on overall volume: if they sell 50 cars, they get $200/car, if they sell 100 units this might jump to $500/car - just a random example.
If a car is in high-demand or really uncommon (in reality, not sales-speak, and a customer has no other options), they can afford to not sell a car at invoice - but this is an exceptional circumstance.
> The kind of capitalism we have now is a short-sighted parasitical money-grab.
What’d make sense for me is if a rental has a documented history of being poorly maintained, past some threshold the property can be auctioned off, with the proceeds going towards funding public housing. This should help filter slumlords and bare-minimum-effort speculators.
Here in Norway the solution, as with so many other things, is taxing. Your home is evaluated at some "market rate", but if it's your primary residence the effective tax value is just 25% up to $1 million (70% on value above $1 million). For reference, a typical 3-room apartment in Oslo, the capital, is around $400-500k.
However, if it's not your primary residence, then you pay tax on 100% of the "market rate". The tax rate is 1%, so not insignificant.
Until a few years ago, tax on non-primary residences was much lower, and hence we had a lot more people buying to rent if they inherited money or similar. Some even had a dozen or more properties. These have now exited, so policy is working as intended.
One thing of course politicians for some reason didn't think of is that if most of the landlords suddenly sell, rental market will shrink. So now it's super-expensive to rent, and those who rent usually do so because they can't buy for one reason or another (no stable income to support a loan for example).
You've also encouraged your middle class to massively over-leverage themselves to a single house/apartment by creating a huge tax subsidy for them (from 30-75%), which will no doubt continue placing upward pressure on house prices and also create risks if interest rates increase. Why would you not take the biggest loan the bank will offer, given interest rates are quite low in Europe and you will not be taxed on most of the value of that property you can acquire with leverage?
Crazy thought, did your politicians ever think about the idea of NOT subsidizing the demand side at all? If the issue is the price of housing, subsidizing demand for it in any way is going to make that problem worse!
And as if it was ordered, a news story[1] on exactly that this morning. Last year alone the average price for a rental unit went up 6.3%, and simultaneously a record number of apartments were sold. So very unlikely to come down.
[1]: https://www.nrk.no/norge/leieprissjokk_-nesten-20.000-kroner...
IF you want affordability? Tax land.
Doesn't matter who owns them. Your grandma or wall street.
This is literally not true.
A landlord owns the property. Property managers operate the property. Sometimes these are the same people (in mom and pop scenarios), but typically and at scale they certainly are not.
Property management is a job. Landlording is not. It is simply owning an asset.
+1 on taxing land though.
Yes that is correct if you occupy land while your community makes it more and more valuable, you should not get wealthier and wealthier for no reason. All of that should be taxed away.
I'm not sure what this applies to with regards to my original comment. Improvements, insurance, and taxes are capital expenditures which need to be managed. This was to counter that landlording "is simply owning an asset."
> Yes that is correct if you occupy land while your community makes it more and more valuable, you should not get wealthier and wealthier for no reason. All of that should be taxed away.
Why assume that the landlord isn't getting the brunt of the cost for making the community more valuable? I don't think there's a strong case for saying a property manager is a job while denying landlording being one. Assuming landlording is completely passive is as far-fetched as thinking that property management is completely passive (both may require irregularly tasks to be performed or require no involvement in the ideal case).
More like "was too rural or too poor in the 70s/80s/90s to indulge in the then trendy policy like zoning the crap out of themselves and passing a bunch of ordinances more akin to country club rules thereby making incremental growth and development actually possible in the 2010s and 2020s"
Because most development today seems to correlate with whether or not that particular policy bullet got dodged than culture or spirit or anything like that.
These costs aren’t that high though, compared to rent. 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit. Then they raise your rent every year, demonize rent increase caps, and then vote for reduced housing builds. I find it very difficult to accept them. If I had the money and the capital I absolutely would own a dozen homes and rent it all out, you would make insane money. Not to mention the mortgage costs being so low during ZIRP days. At the rate of AI coming for SWE jobs, landlords seem untouchable.
You missed insurance and mortgage.
If it is, why not do it and become rich too?
It's not really a particularly good way to make money. I've run the numbers on hundreds of properties over the last two decades and I've yet to find a scenario where I could buy something and rent it out with enough profit to be worth the hassle. You'll be much better off investing in some index fund instead.
If I had the capital I absolutely would have. It’s a bit worse now but any property you bought pre-covid (at least in big cities) can be rented out for more than what mortgage costs. I remember looking at houses in the Bay Area and the monthly mortgage would be 3K while you can rent it out for 4-5K. Anyone who owned property in the 90s and early aughts are absolutely rolling in it. You can invest the profits in an index fund on top of it.
I bought a house in the Bay Area in the 90s and the mortgage was well over $3K (remember interest was over 7%) and an equal house back then was renting for $1300 (my rent at the time for a 3br house in south San Jose).
Try to run the numbers for any property you like. Remember to include taxes and insurance and maintenance. Just to break even is not easy and then you'll have to work for free on the maintenance. Or pay a rental management company, which is another 8-10% taken from the rent.
I agree that buying a home and immediately putting it up for rent would put you underwater these days but during ZIRP times rent and mortgage weren’t too far from each other.
BTW this is a common myth but not true. Property taxes are set by purchase price in year zero when you buy it. Every year after that, they go up 2% compounding.
That's not the full story because the city/county can also add any extra fees they like, and raise them, prop13 does not apply. My taxes go up by well over 2% every year.
> All said and done can’t you net like 35-40K or so per year on a single home?
If you can find yourself a free house somehow, that feels about right. But how do you get yourself a free house? If you have to buy it, now you have a mortgage, and the math no longer works.
The only people I know who profitably rent out homes are those who inherited a home with no debt. In that case, yes it works.
> during ZIRP times rent and mortgage weren’t too far from each other
Low interest helps, for sure, but the numbers still didn't work out.
Here's a graph of interest rates: https://fred.stlouisfed.org/graph/?g=1KZYI
The rates only briefly dipped below 3% during the pandemic. Let's say you got the timing right and got a 3% mortgage for 1.2M. The payment is still a bit over $5K/mo. That's just the mortgage, add insurance + taxes + maintenance. On a home you can rent out for maybe 4K-4.5K/mo. Losing money every month.
I've been running these numbers every few months for the last two decades hoping to follow the common advice to buy rental property and become rich. But it has always been cash flow negative no matter what the rents and interest rates have been.
Only advice I have is go inherit a free house, that can be profitable.
People act as if this is due to 'private greed'. It's not. American public pension plans are underfunded and need more returns. Thus they turn to the private markets, who offer them that which they are seeking to purchase. The market is heavily distorted by these public players whose policy and aims are not constrained by the market but by public policy.
Want to punish the right people? Cut taxes so that people can save cash faster, afford houses earlier and stop renting from their landlords.
Build more actually-affordable housing, too. Not these blocks of luxury apartments with swimming pools that nobody uses. (See HDB, Singapore -- that’s what the US needs more of)
The tax simply redirect the unearned income to the public coffer which are either spent on public investment that further increase land value or redistributed as citizen's dividend.
Meanwhile landlords are free to construct as many buildings as they can without being penalized by higher taxes.
Empty lot, parking lots, and self storage facilities would be penalized because they wouldn't generate enough income to cover taxes on land, leading to more efficient utilization of land, as improvements are no longer penalized.
Right, so the city would be nothing but luxury (to maximize income to pay those taxes) high rise apartments packed tight every block.
No parks, no playgrounds, no soccer fields, no sports courts, no bike trails, no dog parks... none of the things that make living in an area pleasant. Also, no low income housing. Because none of those maximize "efficiency" (measured only in dollars) of every square inch of land.
Life is not pleasant if maximizing value extraction is the one and only #1 criteria. This is what land value tax misses.
Also, "luxury" housing cause what economists called "filtering", in which new construction are occupied by the upper strata of income, which means they pay for the cost. As housing age, this naturally becomes more affordable to the lower strata. This of course, depend on sufficient housing stock. Otherwise the inverse will happen.
Also, you only need to cover the cost of paying the land value tax to keep it, not to generate the maximum amount of revenue for that plot of land.
We are not talking about value extraction here, but making sure that landowners work for their keep, while the unearned income/economic rent that would otherwise goes to them is returned to society, because the value of the land is largely determined by the agglomeration effect, the sum total of the community's effort and entrepreneurial spirit. Otherwise, your private effort as individuals would flow to landowners reaping the benefit of increased land value, hence appreciation in real estate price.
So if a LVT has the explicit goal of eliminating things like parking lots and self storage units because those don't generate enough income to pay for the taxes, then what hope do things like playgrounds and parks have to continue existing.. they generate far less income than a self storage facility.
That creates a virtuous cycle for the local government who is administering those taxpayer paid amenities, same as other form of infrastructure and amenities.
Explain how.. In a dense urban area, with LVT, that lot that held a park will bring even larger tax revenue when the city sells it off to a developer. Having the tax be based on maximum potential usage will only increase the temptation to sell it off and remove yet another park from the people.
Let's ignore property management for now and focus on landlords (i.e. people who own homes and collect rent from the people who live in the homes). That is very much not the same as any other job. Most jobs do not consistent entirely of literally rent-seeking.
First off you're using "rent seeking" wrong, it's a specific economic term that means something else.
But using your definition....
There's entire industries built around renting capital investments. Sometimes purely, like rental equipment. Sometimes the investmentents are so expensive they come with the labor to operate them (the way many buildings have a building manager and a desk person). Many industrial transactions are structured basically the same way as commercial rent.
It is a specific term, but it means: taking control of a limited resource (e.g. housing), most typically by ownership, that you do not have any direct use for, and then seeking revenue by then renting it to other people who actually want to use it (e.g. live in it).
Which, not suprisingly, is precisely what landlords are doing.
And also not surprisingly, those "entire industries" would be rent-seeking if the resources they rent out were limited. However, that does not apply to rental equipment, for example (though there are a few specific exceptions in the case of extremely expensive, very complex and/or very large equipment).
The bulk of the political will for this garbage doesn't come from landlords. Landlords want more, more, more. There literally aren't enough landlords in this country for that.
It comes from existing homeowners who are not landlords and don't want a bunch of high(er than them) turnover housing near them let alone cheaper housing because of the "neighborhood character" or whatever. Basically got mine fuck you.
And this is enabled with the remainder of the political will being provided by a select number of unconscionably ignorant non property owners who have insane takes about how the government should manage all this, be deeply involved in this, immensely scrutinize any sort of property development, etc, etc, all of which is to the benefit of megacorp landlords and developers and the detriment of the small time guys who own a number of properties you can count on one hand with a sum total of units you can count on two or thereabouts who make up the overwhelming majority of landlords on a unit basis and if even a small percent of them added a little bit of capacity would be a huge amount.
> However, that does not apply to rental equipment, for example (though there are a few specific exceptions in the case of extremely expensive, very complex and/or very large equipment).
They don't rent seek the literal equipment. They rent seek your ability to use it without a bunch of thugs showing up with a "stop or else" proposition. You can literally buy a car crusher on Alibaba but you can't open a junkyard in my state without a permit that they have a well known hospital-esque "we only allow X to exist overall" system for, assuming your town doesn't outlaw the business outright.
Once again, this is all to the benefit of big business for whom a few million bucks of donations to the right stuff and work directed at the right firms as needed to get a variance (i.e. pay the law away) for their billion dollar dildo manufacturing plant or whatever whereas the guy who wants to, IDK, take his HVAC bending business to the next level, open a second site and get into process equipment is shit outta luck because without greasing palms he can't afford to the government will hem and haw about every goddamn detail and prevent anything from happening. And the existing industrial plant that got in before the rules is laughing its way to the bank the whole time, well, right up until it gets regulated all the way to China but that's a different problem.
People assume that renting out property is rent-seeking literally only because they both have the word rent in them.
I would note that people don't use the word rent-seeker (or parasite) when it comes to banks renting out money. I assume this is partly because banks use the word `loan` and partly because referring to bankers as parasites would be a little too close to dog-whistle antisemitism.
It's not a coincidence that they have the same word in them. It's literally just the same word with the same definition and etymology in both cases. Rent is a payment demanded by property owners from people who want to make productive use of that property.
> Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. (https://en.wikipedia.org/wiki/Rent-seeking)
This definition doesn't overlap with renting.
Why are you thinking of it as a job? Is putting money into the stock market a job? Owning property to rent out isn't a job, and that's perfectly fine. People make money off non-jobs all the time.
The government steals half of my money, half of my landlord's money, and I have to pay my landlord’s income and property tax in addition to my own income tax.
This is why I still cannot afford a home even though I work in a senior role in AI. After paying all those damn taxes and everyone else’s taxes there is almost nothing left.
The logical conclusion is that the residents of these desirable areas like the bay / San Diego / Seattle / DC actually want housing prices to stay high.
Also doesn’t help there’s a lot of red tape as the other commenter mentioned.
I live in a former socialist country (well, part of a country, the country does not exist anymore), and when we needed more housing, we designated the land in the city to be for housing, ie. large socialist buildings. Then 1990s came, no more socialism, capitalism now, and no more large building projects, no new neighborhoods. So now, we have cows and cornfields in what would be prime realestate because the government won't change the zoning, all three neighbors there complain and apartments that used to be 120k eur maybe 20 years ago are now close to 500k eur.
If you want to live next to cows, move to a village, thousands want apartment buildings there, to live in a city.
Repealing all the bullcrap from the last 50yr that makes that artificially expensive to the point of being a non starter if not outright illegal is the hard part.
N_dissatisfied > max(0, N_for_sale - N_individuals_and_couples_buying)
When N_for_sale > N_individuals_and_couples_buying, it is still possible for N_dissatisfied to be > 0 for the reason you give. But N_dissatisfied must be > 0 whenever N_for_sale < N_individuals_and_couples_buying, even if everyone is limited to having at most one.
Less supply couldn't possibly be helpful for those disappointed, but also there's less supply than there would be if access to it as a commodity was limited, supposing that all other artificial restrictions and funding models could rely on less concentrated investments, which I think they could
That's what people with disproportionate access to capital would want people to believe. It absolutely matters if there's a ceiling and a floor on the production rate of every aspect of the supply chain of housing. If it doesn't matter how many houses someone owns, then it wouldn't matter if builders don't outpace the ability for particularly wealthy people to borrow and own as much as they possibly can. It's a particular type of commodity that should be appropriately controlled in a way that reduces the whole "tragedy of the commons" type effect.
There's always a finite supply, and there's always some contingent of people who will try and get as much as they possibly can, leveraging as much generational wealth as they need to, if they need to.
There should absolutely be a limit on the number of homes, within a particular region, someone should be able to buy, as long as a sufficient threshold is met for what can reasonably be called a scarcity problem. If an individual average home of any type would require the mean family income to quadruple in order to service the mortage, or the downpayment would require 5x their annual salary pre-tax, that seems like a very liberal threshold.
India still has this in some states [1]. You wind up with everyone in the family owning a house. After that, other people own it and pass on most of the rent.
Better: progressive capital-gains taxes.
[1] https://en.wikipedia.org/wiki/Urban_Land_(Ceiling_and_Regula...
Yes mortgage is often cheaper than rental, but the whole tradeoff is the commitment, just like all kinds of services, if you pay 40 years up front you can get a good deal, but do you really want to take out a loan to do that?
Limiting landlords ability to buy property is reducing demand for construction, you want to increase demand for housing, not decrease it.
As I said in a sibling thread, it does suck that property owners are incentivized to raise their property values, preventing supply from reacting to demand.
My intuition is that the majority of renters would rather be owners paying mortgages. This is less true of certain demographics (young people, students) and more true of others (older people, families).
I also wouldn't characterize being a renter as low-commitment. Say you're renting a place for 1.2k a month. When you sign a year lease, you're committing to pay 1.2k x 12 in rent, plus (at least) a month of security deposit, for a total of 15.6k. That may not be a down payment, but it's still a huge commitment, especially given how hard it is to assess potential problems with a living space before you've actually lived there.
Now imagine trying to asses the potential problems with a living space before committing the next 30 years of those payments, plus locking yourself into that single living space and taking on the single and sole responsibility for repairing or addressing all of those problems yourself.
Look, I really like owning my own home, but when I signed a rental agreement, for the duration of the agreement that was the most money I would ever spend on my housing. And I never once worried about replacing a roof, or replacing an HVAC unit, or replacing a water main. I've owned my own home now for over a decade and my monthly housing expenditure is nearly 2x what it was when I started between tax increases, insurance increases and loans to pay for the various major repairs, and that's with a fixed rate primary mortgage. And that's my cost increases AFTER the insurance payouts. The townhome I first rented when I moved to the area currently rents for about $100 LESS than I pay each month. Granted when I bought the place, it was renting for about $200 more per month than I was paying but that basically means renting vs buying was a wash as far as costs go. Yes, to a degree I got unlucky, but that's also the point, I couldn't know if I was going to be unlucky or not before agreeing to the mortgage. As a renter I could get reviews and recommendations or warnings from prior tenants and at least have a chance of knowing what I was getting into.
Didn't we already try that with housing?
The bigger thing, though, is so many people are currently priced out from owning something for themselves. Your home is such a fundamental part of your life and for a lot of people renting fucking sucks. They can't live their lives the way they want to. To have that be the case because others are buying it up to profit? Ehh..
As someone that's renting because buying is impossible i think this would be fantastic. They should do it with Airbnb too.
Not American or in the US, this is problem everywhere now. People thinking they're entrepreneurs for gouging.
People will come up with all kinds of reasoning, its the property tax, it's migrants, its minimum wage, it's millennials, it's inflation ,when ultimately it's just that landlords will charge whatever they think they can get away.
and sometimes they'll try to charge in other ways...
https://www.irishtimes.com/ireland/housing-planning/2025/02/...
Many people wish to rent, not buy. If we make it so each landlord can own fewer homes, but renting demand stays similar we just incentivise more people becoming landlords
Real estate works for this because you can really put in as much as you want into it.
Other business activities do not work because the entrance cost for non-rent-seeking business is extremely high and the risk is way too high compared to real estate. This is due to American regulation and labor laws.
This is a 'first-world problem', but now that I have capital, the question is 'what to do with it'?. Yeah, you could throw it in the stock market, but that's also rent-seeking in a sense because you're not really able to invest in primary rounds (I mean you can, but it's hard to find deals), so basically you're just providing liquidity to people, which is rent-seeking of a different kind.
So then the question becomes what else to do with it? I've given a ton away, but that's useless for the most part since it barely creates any economic value.
In my ideal world, I'd start a factory and hire a manager, but the capital cost of that is high, not because of the material or the rental cost, but because of the labor cost. So then, what's the option? I could easily outsource it all to China or India, but that's completely useless for the United States.
Then the question becomes, why start your own, when you could invest in others. Great! I would love to do that. It would be even better if I could simply invest in a local enterprise... Except, that's not easy either. Regulation over investments means that even investing in this is fraught with difficulty unless you want to establish some sort of 'fund'.
So basically, there's nothing to do with the money, which is sad, since I end up giving most of the money I make away anyway, and would prefer to have more of it to give away.
Until America figures out what it wants to be, it's going to be real estate for me... consistent incomes, fairly uncorrelated with equities (which I have a lot of too), etc. There's really not many other options here. There's barely any 'productive' activities taking place in the United States.
Price controls and limits like this rarely work out in history.
Around here, many landlords renovate or build new high density construction. Put a cap on how many properties they can own and they'll switch from building/renting as many units as possible to maximizing the rent on the limited number of properties they can own.
Restricting the market in one dimension rarely has the desire effect.
Nothing like middle school economics to help a debate along ... have you checked on the level of economic activity that is due to those 30M foreign nationals, and considered if there might be any downsides to them no longer being here (and presumably not being replaced by other foreign nationals) ?
What immature peasant-logic people as yourself don’t understand is that no, there is negative net benefit to the common person, while the common American is deprived of that benefit which goes primarily to the richest, and of course the freeloading foreign nationals. Nothing about America has gotten on any controlled measure better without the increase in foreign nationals that have been imposed on the citizens of America against their will.
Is it really as simple as that you have no dignity and are just a self-interested person that enjoys living off the theft of Americans?
And again, your infantile mind cannot seem to grasp that removing a squatter from your home is in fact justified, regardless of how much negative economic impact it would have by depriving that squatter of your assets and living in your home.
Why do you types not understand these basic things? Is it really as basic as that you’re vile? Depraved? Narcissistically callous towards the people you harm? Is it really just because you enjoy making others pay the cost of your decisions while you benefit?
How about we just make you pay for all, every single cost of the foreign nationals that are squatting in America at the profit of the ruling class? Of course not, you would prefer others pay the cost with the misery you cause them.
You do realise you don't own all of America, right?
Nobody actually forced you to take 30 million immigrants into your home, because your home stops at your property boundaries.
I've seen this nonsensical argument in my home country, the UK, too. If you want to claim *all of [the USA]* as your country because you're a citizen of that country, then *any other [USA] citizen welcoming migrants into [the USA] is already taking all these "strangers" into their own home*.
(Works just as well if you substitute any other nation for [the USA], everywhere has people who think about their nation the way you think about yours).
> …and if your infantile logic has any value, why don’t we just cram every single human on earth into the USA, at your expense of course, right?
You should talk to more non-Americans. People like me, for example. I don't want to live in the USA. So I don't.
I mean, we'd physically fit quite easily, you've got most of a continent there, every time people like me suggest things you can do to make your nation better the collective response keeps being "oh but the population density is so low we couldn't possibly make public transport or cheap broadband work". We keep suggesting stuff like this because a lot of us just don't look up to the politics or the infrastructure you've got, certainly not any more, although the reasons are various and our interests are a dis-aligned from each others' as much as from yours.
> freeloading foreign nationals
The foreign nationals in the USA come in three broad groups:
1. People like Elon Musk, who took billions of taxpayers' dollars for self enrichment but are somehow really popular (today only with the establishment, but used to be more broadly) despite this.
2. People who do a huge amount of work in the construction and food industry, without whom the USA would collapse in about 6 months, who get all the hate because they're poor and undocumented (AKA "illegal") immigrants.
I'd like to draw your attention to the word "construction" in there specifically, as it's the other half of "supply and demand".
3. People in the middle with the boring work visas doing middle of the road work. By having in-demand skills, they command above-average salaries, but by commanding an above-average salary they drive up rent and house prices, with that money going to landlords etc.
Of these, only group 1 is "freeloading".
> squatter from your home is in fact justified
A squatter is a person who settles in or occupies a property without legal permission or claim to the property. Squatters live on land or in buildings where they have no title, lease, or right.
Ironically, this is how the USA got Texas from Mexico.
You claim 30 million. I don't know where that number comes from, as it doesn't seem to correspond to either documented or undocumented groups. Too big for estimates of undocumented (~10-12 million estimated) too small for documented immigrants (~40 million).
But it's false in any case, that number does not consist of squatters.
But you are a well trained NPC, repeating all the installed “knowledge” you have faithfully, with no ability to even realize the inherent contradictions in your statements and beliefs, largely because what you have been conditioned with like a good mindless NPC is only what the ruling class wants you to know for a fact and then infect others with in places like Reddit. You’re a good zombie infecting and devouring those brains, lacking any ability to recognize you serve those who hate you and you say you hate.
But not matter how angry reality makes you, it does not change whether you hear it from me or not at all.
You are an inherent contradictions, just like the ruling class wants you.
Matthew, chapter 7, verses 1 to 5. But which brother has the beam?
I've shown you your own self-contradictions. You say I have my own, but you fail to demonstrate them, you merely assert them.
Again, if you’re so convinced of how wonderful foreign nationals themselves on Americans against their will, how about you just put up a sign welcoming them all to squat in your house and live on your property and freeload off you; instead of prescribing that misery on others. You’re really a sick and evil person, you know that. How about you do unto yourself first, what you do unto others.
Landlords owning property is not a problem. Some people prefer to rent - they may be students, or they may not anticipate being somewhere for long, they might not want the risk of owning a home, lots of valid reasons. Having housing available for these people is good and landlords are a necessary and valid part of this market.
The problem is when people who want to own houses can't afford them, even when they contribute meaningfully to society. The root cause of this is not landlords existing. It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system, to a point that the additional wealth gives them no real benefit, but serves only to remove that wealth from the vast majority of otherwise middle class people.
If you want to fix this problem return the top tax tiers to what they were 50, 75, 100 years ago and the problem will be severely reduced. It's not sufficient to solve it, but its low hanging fruit.
I'm not sure this is true. Based on a couple articles I found, this is what the current situation looks like in USA:
a) Billionaires, (of whom there are about 1,000) own about 5% of the wealth
b) Millionaires, (of whom there are about 25 million, or 7% of the population, excluding billionaires) own about 74% of the wealth
This tracks with my impression of the rental market. Most rent money isn't going to the billionaires or big corporations, it's going to the 10 million or so mom-and-pop rental property owners.
I'm not an expert on this stuff by any means, but my intuition is that it's a cycle, wherein the rental system is one of the largest drivers of wealth inequality in the country.
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite... https://inequality.org/article/billionaire-wealth-concentrat...
Correct.
It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system
To the extent that this is true, it's not why housing is unaffordable. Even if Larry Ellison buys a dozen mansions and keeps them empty most of the time, that's not going to noticeably affect the market for normal people. Houses are expensive because they're scarce; you're far more likely to be outbid by the guy who makes $10k more than you than by an evil billionaire.