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> this unfortunately leads to them passing on the taxes to renters No, this is not how this works. Rent is set by demand and (very insufficient) supply. If la

> this unfortunately leads to them passing on the taxes to renters No, this is not how this works. Rent is set by demand and (very insufficient) supply. If landlord could increase rent by $X - they would have increased it already (software in TFA speeds up the process, but doesn't set market clearing price). A simple thought experiment would be something akin "98% tax on rental income". "Pass it to renter" would imply 50x increase in rent to preserve existing income. Bottom line: make it easier to build more housing. it doesn't have to be subsidized/affordable/below market rate[0]. Any addition of units has downward effect on rent across all range of prices. [0] > [In Helsinki] The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. From "City-wide effects of new housing supply: Evidence from moving chains" https://ideas.repec.org/p/fer/wpaper/146.html https://ideas.repec.org/p/fer/wpaper/146.html

runnerup 4y ago
> software in TFA speeds up the process, but doesn't set market clearing price This software can affect the market price beyond just accelerating the speed at which it reaches equilibrium. The software can help create an inefficient market where suppliers of housing are no longer competing against each other and instead all, together, take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Similar to OPEC when OPEC was overwhelmingly dominant (before shale oil/shale gas explosion in USA/Russia). In a competitive market without this software, each individual player would try harder to reach 0% vacancy because each marginal unit sold would be nearly pure profit, and this could drive prices lower than leaving any units empty.
- kilotaras 4y ago
  > software can help create an inefficient market where ... suppliers of housing take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Right, if one can get majority of the landlords to collude and government doesn't crack on collusion - this software would create such market. Until we're in such dire situation: software is expediting price discovery, discovered prices are high because we don't build enough, we don't build enough because there's ridiculous amount of red tape, and doing anything that doesn't lead to more housing being built is spending time and effort on wrong problem.

runnerup 4y ago

> software in TFA speeds up the process, but doesn't set market clearing price This software can affect the market price beyond just accelerating the speed at which it reaches equilibrium. The software can help create an inefficient market where suppliers of housing are no longer competing against each other and instead all, together, take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Similar to OPEC when OPEC was overwhelmingly dominant (before shale oil/shale gas explosion in USA/Russia). In a competitive market without this software, each individual player would try harder to reach 0% vacancy because each marginal unit sold would be nearly pure profit, and this could drive prices lower than leaving any units empty.

kilotaras 4y ago
> software can help create an inefficient market where ... suppliers of housing take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units. Right, if one can get majority of the landlords to collude and government doesn't crack on collusion - this software would create such market. Until we're in such dire situation: software is expediting price discovery, discovered prices are high because we don't build enough, we don't build enough because there's ridiculous amount of red tape, and doing anything that doesn't lead to more housing being built is spending time and effort on wrong problem.