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Landlords don't set prices. They are price takers in the market just as much as tenants.
by harryh 7y ago
Landlords don't set prices. They are price takers in the market just as much as tenants.
- Polylactic_acid 7y agoLandlords set the prices by preventing new construction that would lower their prices.
- matchbok 7y agoUh, landlords don't control new construction. Government and NIMBYs do. Landlords would gladly accept new development because... it would let them make more money?
- n4r9 7y agoHere in the UK we have a chronic issue with a lack of new housing developments, alongside issues like poor rental conditions. We also have a very strong "landlord lobby", and a sizeable proportion of landlords in the ruling party, which get in the way of fixing either issue because it means less return for landlords from the assets they currently own.
- ch4s3 7y ago> Uh, landlords don't control new construction. Government and NIMBYs do Well, government and highly engaged groups of voters exercise control in municipalities in Western democracies. Landlords come in many stripes and some are local voters who hold land/property. These landlords are often NIMBYs, as any increase in supply of housing drives down the asset price of housing/land, which is to say their investments. MOst of these landlords aren't in the position to take advantage of liberalized zoning, as the are undercapitalized relative to the cost of land/construction. All of their financial eggs tend be in the basket of their existing property. Larger landlords, or developers/real estate firms may well favor liberalized zoning as they profit from development. However, at the moment many voters hate developers, sometimes for good reasons. In a sense, we're in a bit of a pickle.
- mandelbrotwurst 7y agoNot necessarily, depends on which landlords, their access to capital and interest in / ability to obtain ownership over additional properties. If you have a single rental property and no interest or ability in obtaining any additional, then you're going to make less money if new development increases supply and prices go down.
- epistasis 7y agoIn a shortage, like Berlin's, the landlords have much more ability to set prices than the tenants do. And in particular they now have the ability to set higher prices, which is the particular act that angers residents.
- TomMckenny 7y agoPrices are set by the Property Management Software SaaS that all landlords use. So it is a Cartel. That is why prices rise even in places where population drops and vacancies rise. This can't be a surprise, vast swathes of the economy have fallen into virtual monopoly over that last few decades. By the way, I think we can extrapolate candidate Bloomberg's (non)position on the housing issue here.
- toasterlovin 7y agoC'mon. Landlords are not a cartel. If a landlord can't fill a unit because renters won't pay what they ask, then they have every reason to lower the price until the unit is filled. Because some rent is better than no rent.
- TomMckenny 7y agoThis theory is simply not correct, the market is broken. Even flint Michigan has lost 1/5 of it's population since 2000 and rent has still risen. Just show me some towns where the market works. The use of that software has exactly the same outcome as a cartel but, understandably, few people want to acknowledge that even to themselves.
- deleted 7y ago[deleted]
- bmn__ 7y ago> they have every reason to lower the price until the unit is filled That's the behaviour of the completely rational homo economicus which does not exist in real life. A certain amount of landlords of walk-in business space in Manhattan have a fixed price in their mind and will not go below, no matter what.
- smegma2 7y agoWouldn't it be likely for another more rational landlord to exploit that opportunity then? Or are there some barriers?