> … if landlords have the market power to raise rents, why wouldn't they just do it now, rather than wait until an LVT is passed? That logic only works in a no

> … if landlords have the market power to raise rents, why wouldn't they just do it now, rather than wait until an LVT is passed? That logic only works in a non-competitive market. The reason they don't raise rates is obvious: There are other landlords around and any one landlord raising rates would lose business to the others. If you raise costs for all landlords, however—for example, by imposing a LVT—then there is no risk of defection. Landlords either raise their rates or lose money with every rent payment. Any that don't raise their rates will go out of business to be replaced with others who do. And if you use price controls to prevent them from raising rates despite losing money then they would go out of business without being replaced, leaving individuals and businesses to buy their own property outright rather than renting, in which case they will be paying the LVT along with all the other costs formerly handled by the landlord. TL;DR: Don't assume that the market equilibrium price is fixed and independent of cost!