3 ms·

Renters do pay taxes - it's added to the rent, effectively?

• TulliusCicero 8y ago
  This is true if you're looking at rent prices in a cost model, where the price of rent is basically the cost of providing housing plus a little extra for profit, similar to low-margin commodities like basic groceries. But in a high demand area with constrained supply, it's more of a supply & demand model: landlords charge what the market will bear, which is mostly based on how many people there are around with decent/high-paying jobs. Prices haven't risen rapidly in recent years because the actual cost of building housing rapidly increased, obviously. So using the latter model, increased property taxes probably wouldn't have much impact on rent prices.
• shados 8y ago
  Thats what I meant when I wrote "but they only indirectly pay for what they get (the landlord pays it from their rent).". The other poster explained it better than me, but basically it's too indirect. A renter sees rent go up, but not always why it goes up. We had that happened in our city, where people voted for an exceptional tax increase, which immediately got passed down in rent increases, and then people complained about -that-, not making the obvious link.