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While I agree value has been destroyed, rents should fall as a result of lower property values, and tenant companies will have more money to deploy to their bus
by rfrey 4y ago
While I agree value has been destroyed, rents should fall as a result of lower property values, and tenant companies will have more money to deploy to their businesses as a result.
A net negative to the economy to be sure, but (literal) rent-seekers aren't the only ones in the equation.
- barry-cotter 4y agoNo value has been destroyed because the land and buildings are still there. There’s less demand for them than before so they can charge lower rents and the property will sell for less. But that’s because of better other options. The production possibility frontier has expanded, not contracted.
- seadan83 4y agoAs far as intrinsic value, you are correct, the buildings are just as functional as ever. But when it comes to extrinsic value, the extra value we place on something because it is desired, that is where value was lost.