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I'm not sure why there's an assumption that property owners should make money. If rents go up they make money and if they go down they lose money. That's the wa

I'm not sure why there's an assumption that property owners should make money. If rents go up they make money and if they go down they lose money. That's the way the market is supposed to work.

SllX 6y ago
Nah, it’s called the profit incentive and it is the bedrock of free enterprise. There are profits to be made even in a tough market, but at no time are people morally obligated to lose money just because losing money has become the norm, particularly with government restrictions that will make it more difficult to profit in the future. Fortunes don’t magically rise and fall with the “market”, the market is merely an abstraction that represents the multitude of transactional choices that anywhere from thousands to billions of people make on a day to day basis.
tylerhou 6y ago
But if landlords make too little money, then there will be fewer landlords and more owner-occupied buildings. There will be less construction of rental properties. In the long term, economic theory predicts that such a supply shortage would increase rents, pricing out the poorest from being able to afford to live in that area. I am not arguing that we need landlords to make more money. But until leftists overthrow our current capitalist system, we do need to incentivize capital owners to invest in rental properties to increase the supply of rental properties (which should decrease the cost with all else equal). (That last sentence is positive and not normative.)
- est31 6y ago
  Yes, shortages increase rents. Solution to that: allow people to develop. The fact that houses cost so much more than their construction cost is due to the fact that the government bans owners from building as many units as they want. Thus houses get artifically high prices in attractive areas because developers aren't allowed to meet the demand.
refurb 6y ago
Sure, but if the gov’t caps the upside, the only fair thing is to cap the downside as well.
baron816 6y ago
It’s not a problem if they lose money, but it is a problem if they have an expectation that they’ll lose money. Would you invest in anything that you’d expect to lose money on?

I'm not sure why there's an assumption that property owners should make money. If rents go up they make money and if they go down they lose money. That's the way the market is supposed to work.

SllX 6y ago

Nah, it’s called the profit incentive and it is the bedrock of free enterprise. There are profits to be made even in a tough market, but at no time are people morally obligated to lose money just because losing money has become the norm, particularly with government restrictions that will make it more difficult to profit in the future. Fortunes don’t magically rise and fall with the “market”, the market is merely an abstraction that represents the multitude of transactional choices that anywhere from thousands to billions of people make on a day to day basis.

tylerhou 6y ago

But if landlords make too little money, then there will be fewer landlords and more owner-occupied buildings. There will be less construction of rental properties. In the long term, economic theory predicts that such a supply shortage would increase rents, pricing out the poorest from being able to afford to live in that area. I am not arguing that we need landlords to make more money. But until leftists overthrow our current capitalist system, we do need to incentivize capital owners to invest in rental properties to increase the supply of rental properties (which should decrease the cost with all else equal). (That last sentence is positive and not normative.)

est31 6y ago
Yes, shortages increase rents. Solution to that: allow people to develop. The fact that houses cost so much more than their construction cost is due to the fact that the government bans owners from building as many units as they want. Thus houses get artifically high prices in attractive areas because developers aren't allowed to meet the demand.

refurb 6y ago

Sure, but if the gov’t caps the upside, the only fair thing is to cap the downside as well.

baron816 6y ago

It’s not a problem if they lose money, but it is a problem if they have an expectation that they’ll lose money. Would you invest in anything that you’d expect to lose money on?