3 ms·
The financial motivation is in keeping rents high. The units are empty because no more people want to pay as much as they are charging. Then it becomes a balanc
by goda90 3y ago
The financial motivation is in keeping rents high. The units are empty because no more people want to pay as much as they are charging. Then it becomes a balancing act. An empty unit might cost you X, but to find a tenant for it might require you to lower rent by Y. If X * # of empty units is less than Y * # of occupied units, then it makes more sense to leave them empty.
- JoshTriplett 3y agoAs noted elsewhere in the thread, that simplified model assumes all the units must have the same price.
- Qwertious 3y agoNo it doesn't. It assumes some of the units have correlated prices, because units are, to some extent, fungible - if there are no one-bedroom apartments in the price range, then you'll drive up the price of pricier two-bedroom apartments due to the increased competition.
- richbell 3y agoIt isn't just a hypothetical. Landlords use companies like RealPage to collude on pricing and keep units vacant.
- JoshTriplett 3y agoI wasn't suggesting that the net result was false, just that the model suggested in the comment I was replying to wasn't accurate, because landlords do sell the same model of apartment to different people at different prices based on when their lease started.