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One of the largest second-order effects of transferring all risk to landlords is that rents will go up because risk has a real financial cost that must be cover
by jandrewrogers 7y ago
One of the largest second-order effects of transferring all risk to landlords is that rents will go up because risk has a real financial cost that must be covered by cashflow. That will remain true no matter who ends up owning the property.
- jjoonathan 7y agoThe risk has a cost, yes, but it's far from clear that tenants will be the ones who end up paying it. Not all businesses get to pass all costs to the customer. Sometimes customers win and the business has to live with reduced profitability. I'm sure that landlords will play the "tenants pay" angle in the media, but the more vigorously they play it the more I will suspect it isn't true.
- maxsilver 7y ago> One of the largest second-order effects of transferring all risk to landlords is that rents will go up The opposite is likely. If we finally require landlords to actually take on the risks they already consented to previously, many of them will give up and sell out -- freeing property up to be used productively by real people, and lowering rents. In effect, if we stop bailing out landlords, landlording will become a slightly-less-lucrative industry, which will slightly reduce cost-of-living across the entire market.
- RhysU 7y agoYeah, but the landlords will increase their rents to account for the risk that you will stop bailing them out. Landlords already take risk that you stink as a renter. What's new is that everyone stinks simultaneously for the first time in many decades.
- tomp 7y agoMaybe the house prices will go down instead.