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> A land owner decides not to raise the rent on their properties. If a landlord has fifty prospective tenants (as they surely will if they're offering the best
by raldi 13y ago
> A land owner decides not to raise the rent on their properties.
If a landlord has fifty prospective tenants (as they surely will if they're offering the best deal in town), how should they whittle that down if not by raising the asking price?
- nitrogen 13y agoBy choosing one at random, perhaps?
- YokoZar 13y agoMore realistically, through an arbitrary emotional choice. There's a reason stories of housing discrimination generally center around communities employing rent control. When faced with more tenants than they know what to do with, landlords have way less financial consequences from doing all manner of unfortunate things.
- masterleep 13y agoWhat an inefficient idea. Better to give it to the person who values it the most, as signified by the price they are willing to pay.
- rbanffy 13y agoIf you make someone pay more for the same thing that was worth less before, did you increase the value of the thing or decrease the value of money?
- masterleep 13y agoI don't think "you" did anything. It was the preferences and decisions of millions of cooperating parties that affected underlying value.
- raldi 13y agoYeah, Chapter One of any economics textbook makes clear that it takes two to tango. Actually, a lot more than two.
- nitrogen 13y agoScrew "efficiency." Why should rent in urban areas be $3500 for one person just because someone can afford it? People on HN love to talk about how suburbs are destroying the planet, then others turn around and claim that impossibly high rents in urban centers is "efficient"?
- raldi 13y agoRent is $3500 because special interests are artificially suppressing the supply of housing.
- natrius 13y agoCharging lower rent in urban areas wouldn't create more of them to live in. You'd have the exact same number of people living in suburbs.
- nitrogen 13y agoYes, but you'd have a more diverse mix in the urban center to run the place, more of the consumer surplus would be distributed more widely, and a strong pressure against class mobility, housing and transportation costs, would be reduced for those lucky enough to be selected for a high demand area.
- raldi 13y agoAnd then they'd sublet to the highest bidder.
- rdtsc 13y agoVery easy, pick the ones more likely to stay around, more likely to not damage the place, more likely to not cause a nuisance. Now of course it is silly. Why would they not just raise the price? Unless they do what they do for fun or provide a public charity or good, why sift through hundreds of cred reports and pay marketing researches or run a lottery of sorts if say it is easier to just say "ok, rent is now 20% higher".
- raldi 13y agoIf there were a way to know in advance that a prospective tenant was going to damage the place or be a nuisance, or to stay a long / short time (whichever is worse) wouldn't landlords already be using that technique?
- rdtsc 13y agoThey do and try if it is quick. Credit reports are used as a proxy "Paid back his bills = proxy for will probably not skip on rent and trash the place". Others could use social status, for example, maybe other un-expected clues. Would it be illegal to create national black lists that land-lords can share? Casinos do it... It is just not worth bothering probably. It just doesn't pay to worry about it if can just raise the price. The price to fix-up and absorb the damage from a few such incidents is folded into the insurance and current rent price.
- prostoalex 13y agoSome landlords do that by offering discounts for signing a multi-year lease.
- Spooky23 13y agoBecause when the good times stop rolling, these high-earning tech workers getting bussed in to wherever they go will vanish. My uncle owned a few properties, mostly outright with no mortgages. Once he found a good tenant, he'd generally only raise the rents to absorb new property taxes. Everything has a price. If your investment horizon is 30 years vs 30 months, the safe gets are good bets.
- raldi 13y agoYour comment seems to be answering some question other than the one I asked.