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The demand for locations changing doesn't mean that there's a different number of locations available. The number of locations is fixed. Nobody denies that wit
by nwah1 9y ago
The demand for locations changing doesn't mean that there's a different number of locations available. The number of locations is fixed.
Nobody denies that within the fixed number of locations that there can be dynamism, the question is how rent functions in lieu of this scarcity. It happens to follow the Law of Rent.
- AnthonyMouse 9y ago> It happens to follow the Law of Rent. The Law of Rent requires a bunch of things to be true that frequently aren't true in practice, or that are only true in cities like SF with restrictive zoning laws that prevent new housing construction.
- nwah1 9y agoActually, it assumes a free market, which of course is not an ironclad assumption either, but for opposite reasons.
- AnthonyMouse 9y agoHow does that make any sense? Suppose there are 1,000,000 tenants and 100,000 landlords whose land can each support 100 tenants if a tall building was built there. In the absence of collusion or zoning regulations to the contrary, each of the landlords has the incentive to add more apartments to their land until the net present value of rent of an apartment falls below the building cost, because the land isn't "scarce" in the sense that it can support ten times as many tenants as there actually are, and every landlord would prefer to make more money at the expense of the others.