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Baffling comment. Providing rental property is a legitimate business.
by baggy_trough 7y ago
Baffling comment. Providing rental property is a legitimate business.
- klodolph 7y agoRead more Adam Smith. In practice, PMCs in college towns are bad actors. At least, on average. They are basically sitting on an investment (land) and providing the minimum level of work necessary to keep money flowing. It’s a legitimate business in the sense that it is “legal”. However, the profits do not correspond to the value that they provide to the economy.
- ColanR 7y ago> providing the minimum level of work necessary Is that how you measure the value of the business?
- HarryHirsch 7y agoYes, landowners and the maintenance they to or fail to do has massive impacts on the lives of their tenants. In an "as-is-where-is" state the only recourse when the roof leaks is to move out. That is expensive and disruptive, and you can't even recover the funds. This fantasy of shareholder value, where everyone takes care of himself, consequently everyone is taken care of is just that: fantasy.
- klodolph 7y agoObviously not—it’s not the amount of work done, but the value which the work provides. Landlords contribute a small amount of value relative to how much they are paid, compared to other businesses. Most of the value is provided by the land itself, and the landlords merely have a monopoly on it. So I am less inclined to be sympathetic to PMCs which are suddenly being paid less, since they are generally overpaid. We have to be careful to distinguish rent from actual productive economic activity, because rent provides no value and requires no work. Speaking here of “rent” in the Adam Smith sense of the word.
- WalterBright 7y agoIf PMCs are overpaid, then the property owners wouldn't employ them. And if landlords didn't do much work, property owners wouldn't pay PMCs to do that work for them.
- klodolph 7y agoI’m not being perfectly precise in my terminology, and you’re spitting out a compiler error in response. Landlords/PMCs are overpaid because tenants pay rent not only for the services provided by the landlords/PMCs, but also for access to the land which they own. This happens because the property owners have a monopoly on that piece of land. The rent will increase in accordance with the contributions of the people using the land, and yet the money will be paid instead to the people owning the land. The Wealth of Nations is on Gutenberg. Skip to Chapter XI in Book 1. http://www.gutenberg.org/files/3300/3300-0.txt http://www.gutenberg.org/files/3300/3300-0.txt > The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take, but to what the farmer can afford to give.
- WalterBright 7y agoIf you've ever rented out land, you'd know that the price you can charge is not at all set by what the tenant can afford. Like other prices, it's set by supply and demand. For an obvious example, if I tried to rent my house out to Bill Gates for $50 billion, which he can afford, how far do you think I'd get with that?
- klodolph 7y agoThe key insight here is that demand is driven by what the tenants in an area can afford. For an obvious example, the rent in Manhattan is higher than the rent in Tulsa because the salaries in Manhattan are higher.
- coreyp_1 7y ago
- imtringued 7y agoOk, fine. Just shut them down then. It's not like anyone needs their services.
- alexbanks 7y agoProviding rental property is yet another industry in which "Why don't we just screw over people with no options" has prevailed. It may be legitimate in that people need places to live, but it is far from legitimate in any way regarding getting what is paid for.
- baggy_trough 7y agoStating that being a landlord is "far from legitimate in any way regarding getting what is paid for" is really a grotesque exaggeration.
- alexbanks 7y agoI suppose you haven't rented an apartment in a major city...
- baggy_trough 7y agoBecause you have had bad experiences renting apartments, that means an entire sector of the economy is illegitimate? There's a lot more variety to rentals than that.
- alexbanks 7y agoWe can agree to disagree.
- PopeDotNinja 7y agoI have never wanted to own a house.
- SkyBelow 7y agoBeing a legitimate business does not mean I can feel no sympathy or empathy for those who fail in that business. I can think of some legitimate businesses where my feelings of hearing of hardship within that business borderlines on pleasurable (say any legitimate business which is tied to lobbying to increase prison sentences).
- baggy_trough 7y agoYou can have whatever feelings you like, but comparing property rental to (I assume you mean) for-profit prisons advocating longer sentences is a pretty gargantuan leap.
- horsemessiah 7y agoLandlords collect money for owning property. They pay maintenance people slightly above minimum wage to fix any issues that may come up. How is that a legitimate business? What commodities do landlords produce?
- baggy_trough 7y agoLegitimate businesses don't have to produce commodities. Look around HN. This isn't 1700.