4 ms·

> So, why don't landlords just double the rent? Heck, why not triple it? I'm not sure where you're from but the rent in my area HAS more than doubled in the pa

> So, why don't landlords just double the rent? Heck, why not triple it? I'm not sure where you're from but the rent in my area HAS more than doubled in the past few years.

WalterBright 4y ago
Since the market is inelastic, and landlords can charge whatever they want, make it 10x.
- richbell 4y ago
  > Since the market is inelastic, and landlords can charge whatever they want, make it 10x. They'll get there, slowly and steadily. You obviously cannot snap your finger and raise the rent 10x in an instant. You have to boil the frog slowly, by continuously buying up properties and raise rents considerably every year, especially for new tenants. In my city the overwhelming majority of residential apartments are owned by a single private company. This is an especially profitable venture with trailer parks, which don't have as many pesky tenant rights or protections. E.g., https://www.newyorker.com/magazine/2021/03/15/what-happens-when-investment-firms-acquire-trailer-parks https://www.newyorker.com/magazine/2021/03/15/what-happens-w...
  - WalterBright 4y ago
    > You obviously cannot snap your finger and raise the rent 10x in an instant. Why not? Demand is inelastic, and people will be forced to pay it. Right?
    - richbell 4y ago
      > Why not? Demand is inelastic, and people will be forced to pay it. Right? You're clearly not engaging in good faith so continuing this discussion would be pointless.
      - WalterBright 4y ago
        Is your point that Supply & Demand set prices or not?
        richbell 4y ago
        > Is your point that Supply & Demand are actually in play? I never claimed they weren't. However, there are a significant number of external factors that you refuse to acknowledge, like government regulations specifically enacted to protect tenants from this type of exploitation. You initially said "why not just raise the price 2x or 3x!", when I pointed out that this was happening you moved the goal posts to "why not raise the price 10x!" I am not interested in engaging with snide 'gotcha!' games.
        WalterBright 4y ago
        richbell> Blaming "the market" is a convenient way to cast blame away from people responsible onto a nebulous concept. That sounds like a rejection of Supply & Demand forces. > However, there are a significant number of external factors that you refuse to acknowledge, like government regulations specifically enacted to protect tenants from this type of exploitation. All that does is make for higher rents and lower supply.
- KerrAvon 4y ago
  I think you’re missing the point. Let me try this: there’s a tipping point where you have 50% occupancy and charge $x0,000 for 500 sq ft and make just as much money as you would at 100% occupancy with a charge of $x000. The difference between these two is in the latter scenario, some people have no place to live because they can’t afford the $x0,000. The owner corporation doesn’t care, they make just as much money either way.
  - WalterBright 4y ago
    Airlines discount tickets at the last minute. That's because flying an empty seat around doesn't make any money. Magazines sell ad space at a steep discount the day before it goes to press. Same reason. Stores have clearance sales. Again, same reason. And so on. No landlord in his right mind would leave half a building vacant if he can get a paying tenant in.
    - richbell 4y ago
      > Airlines discount tickets at the last minute. That's because flying an empty seat around doesn't make any money. > Magazines sell ad space at a steep discount the day before it goes to press. Same reason. > Stores have clearance sales. Again, same reason. You did not acknowledge or address KerrAvon's point at all. > And so on. No landlord in his right mind would leave half a building vacant if he can get a paying tenant in. Of course they would, and both KerrAvon and TFA explain why: ) The company had been seeking occupancy levels of 97% or 98% in markets where it was a leader, Winn said. But when it began using YieldStar, managers saw that raising rents and leaving some apartments vacant made more money. ) “Initially, it was very hard for executives to accept that they could operate at 94% or 96% and achieve a higher NOI by increasing rents,” Winn said on the call, referring to net operating income. The company “began utilizing RealPage to operate at 95%, while seeing revenue increases of 3% to 4%.” Plenty of companies avoid large sales or clearances as a policy because it damages their ability to sell at inflated rates.
      - WalterBright 4y ago
        > You did not acknowledge or address KerrAvon's point at all. Sure I did. Leaving 50% vacant is leaving a lot of money on the table.

> So, why don't landlords just double the rent? Heck, why not triple it? I'm not sure where you're from but the rent in my area HAS more than doubled in the past few years.

WalterBright 4y ago

Since the market is inelastic, and landlords can charge whatever they want, make it 10x.

richbell 4y ago
> Since the market is inelastic, and landlords can charge whatever they want, make it 10x. They'll get there, slowly and steadily. You obviously cannot snap your finger and raise the rent 10x in an instant. You have to boil the frog slowly, by continuously buying up properties and raise rents considerably every year, especially for new tenants. In my city the overwhelming majority of residential apartments are owned by a single private company. This is an especially profitable venture with trailer parks, which don't have as many pesky tenant rights or protections. E.g., https://www.newyorker.com/magazine/2021/03/15/what-happens-when-investment-firms-acquire-trailer-parks https://www.newyorker.com/magazine/2021/03/15/what-happens-w...
- WalterBright 4y ago
  > You obviously cannot snap your finger and raise the rent 10x in an instant. Why not? Demand is inelastic, and people will be forced to pay it. Right?
  - richbell 4y ago
    > Why not? Demand is inelastic, and people will be forced to pay it. Right? You're clearly not engaging in good faith so continuing this discussion would be pointless.
    - WalterBright 4y ago
      Is your point that Supply & Demand set prices or not?
      - richbell 4y ago
        > Is your point that Supply & Demand are actually in play? I never claimed they weren't. However, there are a significant number of external factors that you refuse to acknowledge, like government regulations specifically enacted to protect tenants from this type of exploitation. You initially said "why not just raise the price 2x or 3x!", when I pointed out that this was happening you moved the goal posts to "why not raise the price 10x!" I am not interested in engaging with snide 'gotcha!' games.
        WalterBright 4y ago
        richbell> Blaming "the market" is a convenient way to cast blame away from people responsible onto a nebulous concept. That sounds like a rejection of Supply & Demand forces. > However, there are a significant number of external factors that you refuse to acknowledge, like government regulations specifically enacted to protect tenants from this type of exploitation. All that does is make for higher rents and lower supply.
KerrAvon 4y ago
I think you’re missing the point. Let me try this: there’s a tipping point where you have 50% occupancy and charge $x0,000 for 500 sq ft and make just as much money as you would at 100% occupancy with a charge of $x000. The difference between these two is in the latter scenario, some people have no place to live because they can’t afford the $x0,000. The owner corporation doesn’t care, they make just as much money either way.
- WalterBright 4y ago
  Airlines discount tickets at the last minute. That's because flying an empty seat around doesn't make any money. Magazines sell ad space at a steep discount the day before it goes to press. Same reason. Stores have clearance sales. Again, same reason. And so on. No landlord in his right mind would leave half a building vacant if he can get a paying tenant in.
  - richbell 4y ago
    > Airlines discount tickets at the last minute. That's because flying an empty seat around doesn't make any money. > Magazines sell ad space at a steep discount the day before it goes to press. Same reason. > Stores have clearance sales. Again, same reason. You did not acknowledge or address KerrAvon's point at all. > And so on. No landlord in his right mind would leave half a building vacant if he can get a paying tenant in. Of course they would, and both KerrAvon and TFA explain why: ) The company had been seeking occupancy levels of 97% or 98% in markets where it was a leader, Winn said. But when it began using YieldStar, managers saw that raising rents and leaving some apartments vacant made more money. ) “Initially, it was very hard for executives to accept that they could operate at 94% or 96% and achieve a higher NOI by increasing rents,” Winn said on the call, referring to net operating income. The company “began utilizing RealPage to operate at 95%, while seeing revenue increases of 3% to 4%.” Plenty of companies avoid large sales or clearances as a policy because it damages their ability to sell at inflated rates.
    - WalterBright 4y ago
      > You did not acknowledge or address KerrAvon's point at all. Sure I did. Leaving 50% vacant is leaving a lot of money on the table.