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Rent seeking is a transaction where the rent seeker accumulates money without contributing to the overall wealth of a society, basically getting paid without la

by mljoe 10y ago

Rent seeking is a transaction where the rent seeker accumulates money without contributing to the overall wealth of a society, basically getting paid without labor effort, offering a product or otherwise advancing innovation or the human condition in some way. Land rent is the original example of rent seeking. SV rents would probably qualify, since the cost of rent in SV is more connected to the land and location, as well as the regulations on that land, versus the improvements on the property. Maybe $4000/mo of your rent is based on "rent-seeking" and $1000/mo is based on the property itself.

nojvek 10y ago
I think it would suffice. SV home owners are very much against new properly building. If that happens the supply increases and demand drops. $5000 on rent is absurd. Wow!
ScottBurson 10y ago
Right. As Henry George pointed out over a century ago [0], the increase in property values in urban areas as their populations grow is mostly caused not by investments made by the property owners, but simply by the network effects of having more people living in the area. So the ability of property owners, under the commonly used taxation schemes, to benefit from those network effects presents a golden opportunity for rent-seeking. Looking for example at Silicon Valley, it's easy to see that rental property owners are sucking large amounts of wealth out of the region. It's not just rental property, though. Anyone who bought a house prior to the recent run-up in prices, and then sold it for a large gain, is effectively also removing wealth from the area, in the form of the mortgage payments the new owner has to pay. George argues that wealth that is collectively created should be collectively enjoyed, and that the best way to make that happen is through a Land Value Tax (LVT) -- that taxes only the unimproved value of land, not that of any structures that may be built on it. [0] http://www.henrygeorge.org/pcontents.htm http://www.henrygeorge.org/pcontents.htm

by mljoe 10y ago

nojvek 10y ago

I think it would suffice. SV home owners are very much against new properly building. If that happens the supply increases and demand drops. $5000 on rent is absurd. Wow!

ScottBurson 10y ago

Right. As Henry George pointed out over a century ago [0], the increase in property values in urban areas as their populations grow is mostly caused not by investments made by the property owners, but simply by the network effects of having more people living in the area. So the ability of property owners, under the commonly used taxation schemes, to benefit from those network effects presents a golden opportunity for rent-seeking. Looking for example at Silicon Valley, it's easy to see that rental property owners are sucking large amounts of wealth out of the region. It's not just rental property, though. Anyone who bought a house prior to the recent run-up in prices, and then sold it for a large gain, is effectively also removing wealth from the area, in the form of the mortgage payments the new owner has to pay. George argues that wealth that is collectively created should be collectively enjoyed, and that the best way to make that happen is through a Land Value Tax (LVT) -- that taxes only the unimproved value of land, not that of any structures that may be built on it. [0] http://www.henrygeorge.org/pcontents.htm http://www.henrygeorge.org/pcontents.htm