3 ms·

> the amount of money rental income sucks out of the economy that would otherwise be used for production and consumption Renting is a service, a productive eco

> the amount of money rental income sucks out of the economy that would otherwise be used for production and consumption Renting is a service, a productive economic activity that yields net positive value to the society. The building did not fall from the sky and someone "claimed" it. Someone actually had to put in work and time and take risks for it to exist and be rented. Those enjoying the building benefit from these previous efforts, which in turn are compensated by receiving rent.

deleted 3y ago
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tmnvix 3y ago
This doesn't apply to the land component of the rent.
- rmbyrro 3y ago
  The land isn't really valuable. You can buy a football field for $10 in rural areas. But you'll be in the middle of nowhere, with no infrastructure, no services. The "location" value of a property is tied to what's around it. Having lots of people deciding to develop useful things and services around it.
cudgy 3y ago
Nonsense. There are properties that have doubled in price over the last 2-3 years for no significant reason other than the flooding of cheap money into the economy. Landlords did nothing special or productive to earn this huge share of people’s income. They require little labor or outlay relative to other business markets. Furthermore, housing is a necessity like water and food; such resources cannot be allowed to rise in cost disproportionately or a unstable society is guaranteed where the populous will simply seize the properties during a civil war.
- rmbyrro 3y ago
  Property owners have no control over prices. It's all dictated by supply/demand. Yes, government printing money inflates overall prices. More recently, this happened because governments needed to pay for covid. During inflationary cycles, money flocks to assets like real estate. Simply because they are good protection against inflation. Property owners don't become richer because of that, since everything else became expensive as well. There are economic systems where price-setting is controlled and/or centralized. To my knowledge, all of them failed in producing better outcomes than a free market for anyone in society.

deleted 3y ago

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tmnvix 3y ago

This doesn't apply to the land component of the rent.

rmbyrro 3y ago
The land isn't really valuable. You can buy a football field for $10 in rural areas. But you'll be in the middle of nowhere, with no infrastructure, no services. The "location" value of a property is tied to what's around it. Having lots of people deciding to develop useful things and services around it.

cudgy 3y ago

Nonsense. There are properties that have doubled in price over the last 2-3 years for no significant reason other than the flooding of cheap money into the economy. Landlords did nothing special or productive to earn this huge share of people’s income. They require little labor or outlay relative to other business markets. Furthermore, housing is a necessity like water and food; such resources cannot be allowed to rise in cost disproportionately or a unstable society is guaranteed where the populous will simply seize the properties during a civil war.

rmbyrro 3y ago
Property owners have no control over prices. It's all dictated by supply/demand. Yes, government printing money inflates overall prices. More recently, this happened because governments needed to pay for covid. During inflationary cycles, money flocks to assets like real estate. Simply because they are good protection against inflation. Property owners don't become richer because of that, since everything else became expensive as well. There are economic systems where price-setting is controlled and/or centralized. To my knowledge, all of them failed in producing better outcomes than a free market for anyone in society.