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> Then someone else is incentivised to build a new building, undercut the competition while still making profits since the existing stock was overpriced. Not w
by Retric 2y ago
> Then someone else is incentivised to build a new building, undercut the competition while still making profits since the existing stock was overpriced.
Not when there’s a glut of housing. Undercutting by a new complex results in those same algorithms lowering prices and people aren’t going to move without any incentives, so you end up with a largely vacant complex...
Don’t get me wrong rents aren’t completely uncoupled from reality. But they rarely fall because renting 80% of your stock at historic prices is better than a price war resulting in you still renting 80% of your stock at new lower prices.
> spot overpriced rentals
When prices are manipulated all you’re going to see is the manipulated prices.
- Eddy_Viscosity2 2y agoWouldn't fees for un-used housing fix this? Put a cost on with-holding units on the landlords. Otherwise this is an externality where the costs of with-holding is paid by the people who can't find a place to live.
- Retric 2y agoYou might be able to make something like that work, but it without care it would discourage new housing and incentivize removing less desirable properties. A better option might be a tax on unlisted properties, but that’s harder to enforce as renovations after someone leaves isn’t a fixed time period.