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I think the cartel protects itself from an abundance of supply, that's part of the problem. If supply is high it should naturally translate to landlords cutting
by nsoldiac 2y ago
I think the cartel protects itself from an abundance of supply, that's part of the problem. If supply is high it should naturally translate to landlords cutting prices to compete. Instead, a cartel can coordinate to keep prices high or withhold listings to artificially constraint supply. That should keep rents high even during an abundance of supply. I read somewhere they're accused of doing exactly that.
- SoftTalker 2y agoYes but at some point the fixed costs of a vacant property are going to outweigh the extra income earned from higher rents on occupied properties. A vacant property still has to be insured, maintained, heated/cooled, taxes paid, mortgage or commercial loans paid. So if the supply is high enough that landlords can't afford to hold enough of them vacant to maintain high rents, they will eventually have to rent more of them.
- BurningFrog 2y agoEmpirically, a cartel of 2 can be quite stable With 3 or 4 members it gets harder, and with 5 or more someone will soon undercut the others. In secret or publicly. The landlord cartel theory requires landlords both to have unselfish solidarity with other landlords, and be selfishly greedy against renters.
- nottorp 2y agoApparently this application that we're talking about eliminates the inefficiencies in maintaining a cartel with a multitude of members.