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if landlords are able to extract more profit than is reasonable for the service they provide (and I'd argue they often do), then that is a problem regardless of

if landlords are able to extract more profit than is reasonable for the service they provide (and I'd argue they often do), then that is a problem regardless of how well off the tenants are. I agree that everyone should be guaranteed food, water, and shelter (at minimum), but I don't think anyone is entitled to live on the most desirable pieces of land in the world.

quotemstr 6y ago
How do you decide what the "reasonable" threshold is? In my mind, the reasonable price is whatever the market decides. On what basis can anyone assert otherwise? The nice thing about using markets to set prices and deal with scarcity is that they're self-adjusting.
- leetcrew 6y ago
  fair question. the way I am using "reasonable" here is very subjective. one rough way to look at it would be to consider the relationship between median household income and median rent for a 2BR apartment. in my area, median gross household income is ~$4250/month and median rent for a 2BR is ~$1750. so after taxes, the median household would be spending about half their net income to live in a median 2BR. to me, this seems like a lot. my personal take is that the root cause of this is the culture and policy surrounding home ownership, particularly for the middle class. we encourage people to take out a mortgage to acquire a home as soon as possible, and we tell them it's not financially irresponsible for a single physical asset to make up most of their net worth. in fact, we tell them it's the best investment they could possibly make. we grant tax breaks and lower the required down payments to extend this opportunity to even more people. so we end up with a bunch of people who are either highly leveraged on their mortgage, or have paid it off but have minimal other assets. this makes it very important that house values keep going up, so we deliberately distort the housing market so they do. something I'd like to underscore is that the housing market is very much not a free market. there are tons of restrictions on what type of things can be build, how they can be built, what they can look like, what they can be used for, etc. even if you think free markets are effective pricing mechanisms (and I mostly do), that doesn't really have much to do with the prevailing rent in most areas.
- clairity 6y ago
  markets are neat mechanisms, but no market exists in a sociopolitical vaccum, so such blind faith in them is misguided (to put it charitably). without getting too far into the weeds, and because housing is a durable and necessary good that's proportional to both population and productive capacity, in a free and fair market you'd expect housing prices to track with inflation. that's the reasonable expectation. over time, we've seen housing prices detach from that baseline for a variety of reasons unrelated to its core responsibility of sheltering people. see, for instance, the case-shiller index. those detachments are distortions to the idealization of a free and fair market to ensure house prices continually rise for political and personal gain, despite the lack of sound economic principles underlying that distended rise.

quotemstr 6y ago

How do you decide what the "reasonable" threshold is? In my mind, the reasonable price is whatever the market decides. On what basis can anyone assert otherwise? The nice thing about using markets to set prices and deal with scarcity is that they're self-adjusting.

leetcrew 6y ago
fair question. the way I am using "reasonable" here is very subjective. one rough way to look at it would be to consider the relationship between median household income and median rent for a 2BR apartment. in my area, median gross household income is ~$4250/month and median rent for a 2BR is ~$1750. so after taxes, the median household would be spending about half their net income to live in a median 2BR. to me, this seems like a lot. my personal take is that the root cause of this is the culture and policy surrounding home ownership, particularly for the middle class. we encourage people to take out a mortgage to acquire a home as soon as possible, and we tell them it's not financially irresponsible for a single physical asset to make up most of their net worth. in fact, we tell them it's the best investment they could possibly make. we grant tax breaks and lower the required down payments to extend this opportunity to even more people. so we end up with a bunch of people who are either highly leveraged on their mortgage, or have paid it off but have minimal other assets. this makes it very important that house values keep going up, so we deliberately distort the housing market so they do. something I'd like to underscore is that the housing market is very much not a free market. there are tons of restrictions on what type of things can be build, how they can be built, what they can look like, what they can be used for, etc. even if you think free markets are effective pricing mechanisms (and I mostly do), that doesn't really have much to do with the prevailing rent in most areas.
clairity 6y ago
markets are neat mechanisms, but no market exists in a sociopolitical vaccum, so such blind faith in them is misguided (to put it charitably). without getting too far into the weeds, and because housing is a durable and necessary good that's proportional to both population and productive capacity, in a free and fair market you'd expect housing prices to track with inflation. that's the reasonable expectation. over time, we've seen housing prices detach from that baseline for a variety of reasons unrelated to its core responsibility of sheltering people. see, for instance, the case-shiller index. those detachments are distortions to the idealization of a free and fair market to ensure house prices continually rise for political and personal gain, despite the lack of sound economic principles underlying that distended rise.