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But I have been a landlord, I rented out my old apartment for several years after I moved to my new home. I don't pretend the income I got was for "services ren

But I have been a landlord, I rented out my old apartment for several years after I moved to my new home. I don't pretend the income I got was for "services rendered". It is trivially easy to demonstrate that: you can outsource all tasks (cleaning, maintenance, even management and accounting) and still turn up a profit, which implies that this profit is entirely due to your monopoly on capital wrt. the rentee, and not due to actual material services rendered.

refurb 5y ago
But the rental market and home purchase markets as separate markets. There is nothing that says rent has to be more than the cost of ownership. Go to a big city like Toronto and you'll meet plenty of landlords taking a loss each month. And there is nothing that says it has to remain static. Rents can drop while housing prices go up (see SF during Covid). And in the end, I'm not sure it matters? I've lived in cities where despite being able to afford ownership, I choose to rent. I'm glad to exchange my money for exclusive use of a house that I take no financial risk on, have no obligation to maintain, has only negligible transaction costs and I can walk away from with a months notice. All of those things have intrinsic value to me, some of those being services that I don't have to perform. I mean, is it unfair when someone rents out their cars on Turo and make a profit each month? Are they "extracting rents"?
- trgn 5y ago
  That's it. Tons of homeowners are letting at a loss in the superstar cities. They're banking on appreciation, or see inherent value to stake a foothold in their city, possibly for generations. The cost of renting in the most expensive markets is much lower than the cost of home-ownership in those same markets. It's not because of supposed rent-extraction of landlords that housing is expensive. Renters will be in for a cold shower if they think that the cost of rent is just because of parasitic extraction from landlords right now. It's because of a zoning structure and tax-code which punishes capital investment in land, and favors speculative landholding. Without meaningful change to either, there won't be downward pressure on rents.

refurb 5y ago

But the rental market and home purchase markets as separate markets. There is nothing that says rent has to be more than the cost of ownership. Go to a big city like Toronto and you'll meet plenty of landlords taking a loss each month. And there is nothing that says it has to remain static. Rents can drop while housing prices go up (see SF during Covid). And in the end, I'm not sure it matters? I've lived in cities where despite being able to afford ownership, I choose to rent. I'm glad to exchange my money for exclusive use of a house that I take no financial risk on, have no obligation to maintain, has only negligible transaction costs and I can walk away from with a months notice. All of those things have intrinsic value to me, some of those being services that I don't have to perform. I mean, is it unfair when someone rents out their cars on Turo and make a profit each month? Are they "extracting rents"?

trgn 5y ago
That's it. Tons of homeowners are letting at a loss in the superstar cities. They're banking on appreciation, or see inherent value to stake a foothold in their city, possibly for generations. The cost of renting in the most expensive markets is much lower than the cost of home-ownership in those same markets. It's not because of supposed rent-extraction of landlords that housing is expensive. Renters will be in for a cold shower if they think that the cost of rent is just because of parasitic extraction from landlords right now. It's because of a zoning structure and tax-code which punishes capital investment in land, and favors speculative landholding. Without meaningful change to either, there won't be downward pressure on rents.