3 ms·
> Unlike most services and commodities, the price tag on rental units has no real relationship to the cost of providing housing. Rents are determined by “what t
by semiquaver 3y ago
> Unlike most services and commodities, the price tag on rental units has no real relationship to the cost of providing housing. Rents are determined by “what the market will bear,” as economists say.
Absent regulation, “what the market will bear” is what sets the price of all things. I’m interested to know why the author thinks that housing is unique here.
- beebmam 3y agoIt's pretty clear they're arguing their point from a Marxist lens of exploitation and oppressive classes. I don't mean to state that pejoratively, just factually.
- MattGaiser 3y agoYeah, this is true of everything from oil to fruit to toasters. Although I would argue that the price tag of rentals has a strong relationship to what it costs to build/operate additional units of rental space. While one landlord might have had their unit paid for 3x, where would a new entrant to the market be? At least in Toronto, the answer is, losing money. https://www.cbc.ca/news/canada/toronto/gta-condo-investors-losing-money-on-properties-1.6858342 https://www.cbc.ca/news/canada/toronto/gta-condo-investors-l... Same with fruit and oil. When avocado soared in popularity, new people entered the market until there was a price equilibrium.