The bit that "Even if they currently don’t have enough money in their balance to pay rent, [household's] won’t complain and will instead spend less money on resource consumption." seems to be important too...
For rent control you need to imagine landlords like pest in nature. How you control pest? By introducing predator that prey on pest. Or you can control resources that let pest thrive. For Ametican landlords there are no true predator other than governments. And governments typically are slow while landlords can adapt faster. In this case government would be like sabretooth tiger or megalodon predators moving so slow unable to do much to catch preys. The 2nd thing is the resources. Landlords thrive because asymmetric information. Renters find hard to negotiate. Renters also become desperate when public transports become limited in a highly demand area with no alternatives. Once you start to see this problem predatory-prey relationship, landlords as pest can be put under control. I suggest you guys read up how Singapore government control landlords. They have very practical and innovative ways that span decades of planning into future. Even though land is incredibly limited and cost of living high, in terms of available and affordable rents to citizens and foreigners will put London, NY, Tokyo to shame.
Russia does not have landlords (as a medium business). Virtually all apartments available for rent belong to moms and pops who happen to have a surplus so they're renting out. They usually have just one property which they rent out.
Add to that retirees who lend out their 2nd apartment to live off it.
The prices aren't exactly low but the market is pretty durable as the result. Lots of offerings at any moment at competing prices. The regulation is also almost inexistent.
> Russia does not have landlords. Virtually all apartments available for rent belong to moms and pops who happen to have a surplus so they're renting out.
Also known as "being a landlord"? Maybe I'm missing something!?
That’s the problem though because there is a meaningful distinction to be made between landlords renting out surplus space in their primary dwelling, and landlords who own dozens or more of properties which they rent out. Based on context I assume they were using the word landlord to exclusively refer to the latter, even though both groups would generally be called “landlords”.
As I imagine it, the person who rents out a single apartment for subsistence cannot pull all kinds of tricks that a large landlord with multiple properties will. They don't make the market, merely participate in one.
Moreover, a large landlord will often siphon the income into paying off more apartments for rent, taking them from market. Whereas for these single apartment landlords may consider selling their propertied instead of renting out so they don't hoard the stock as much. Their income from renting out is insufficient to buy more reliably.
They probably use the term "landlord" to refer to professional full-time landlords, sort of like how you wouldn't call a person a "carpenter" just because they made a table or a chair in their spare time (though personally, I wouldn't object to that person choosing to call themselves a carpenter.)
The person with one spare home that's renting it out is likely doing it as supplementary income, or might not even be turning a profit on it. They're basically just preventing the home from sitting empty, to try and get value out of it.
Naturally the renter would call them both landlords, but from personal experience the renting experience is also very different when you're renting somebody's second home vs when you're renting from a big corporation.
Plus there's a whole spectrum from surplus letting to mega corporate agents. There are individual landlords who own 3-6 lets, respond promptly to call-outs, keep the buildings in good condition, are cautious to raise rents, and don't try to screw you over on the deposit. They're difficult to find (partly because tenants stick with them) but they're out there and doing a good thing for society. The question is not necessarily "how to we get rid of landlords" but possibly "how do we incentivise this type of landlord vs big corporations".
There is also a whole slate of individual landlords with small holdings that let out rundown slums. Being small scale isn't the panacea your comment implies.
Didn't mean to imply that although I see where you're coming from. I was instead trying to counter the idea that anything bigger than a surplus room letter is bad.
That may be the case because of low baseline wages. Some people end up pooling a single apt between multiple tenants to cope. But the expenses are also low, meaning many people are able to own an apartment eventually, especially with the help of a safety net of their relatives. Make somewhat above the median and you can contemplate buying. Not sure if that still works with the lending rates and price fluctuations of late, though.
The fact that there are a not insignificant number of people comparing this game to the real world suggests that basic economic education is severely lacking.
There's actually this great book called Basic Economics, for those interested.
> The fact that there are a not insignificant number of people comparing this game to the real world suggests that basic economic education is severely lacking.
Landlords aren't needed for a society to work. A lot of Eastern European countries have home-ownership rates way beyond 90% [1] - that allows the economies of these countries to be able to undercut Western European countries on wages despite everyday cost of life (e.g. electricity, food, gas) being similar to Western Europe (or, like in Croatia, often enough even more expensive than that!), as there are almost no landlords extracting value off of society and into the hands of the very few very rich.
The only place where landlords actually fill a valid gap are to serve those who have to move to a new place or who are in the country only for short/medium term.
It's not surprising that the countries with high homeownership rates are formerly Communist or (like the Nordics) strongly Social Democrat in history. A population is way happier when they do not have to fear eviction every day in life.
The reason for this could be a lack of people coming into the country that need a home. If the number of people entering a country is minimal, the demand won't go up, and almost everyone can afford a home. If there are far more people entering then homes get chopped up into apartments and each rented out for the same price the whole house would've been rented for a few years ago. Landlords in this situation are just adjusting the supply to meet the demand, and to be honest doing a better job than, say, the UK government, who just pay taxpayer money to hotels and stick people in them.
I’d have thought the pressure of immigration on housing needs is lower than the pressure of centralized wealth creation? I have no sources just an intuition. London and Amsterdam are a good example of this
Huh? I'd have said Amsterdam is actually a real good example of immigration driving up rents. When covid happened, Amsterdam rates actually went down, whereas they kept going up in the rest of the nation. Why: the expats stopped coming.
Make being a landlord too tough, rental properties will disappear.
When you hear "landlord", you might think of a Duke enjoying a lavish meal while the tenants slave away in the fields to pay rent. Or a huge corporation. But there are a ton of middle and upper middle class people who are land "lords".
I was one myself. I rented out my house, after moving to another city for a job, to wait for a market recovery post the 2000s housing bubble. I was a landlord for 3 years. I couldn't wait for it to be over. It was a ton of work and tenants already have a ridiculous amount of power, even in a red state. I turned a small profit that only slightly helped paying rent on my new city.
If you think being a landlord is easy money, give it a try someday. I understand we need to ensure fairness for everybody, but the way isn't cartoonishly demonizing all landlords.
I’ve rented from individuals and it is fine. The real pain is the big corporate places that make it a business to do renting. They have the scale to be motivated to nickel and dime you about stupid stuff, and, like, living in a place where corporate policy types make all the rules is hell, but worse, because the demons are stupid as well as evil.
We should be really targeted in our regulations, hit places with more than, say, 10 tenants pretty hard. Regulate them out of existence, even. Then you’d have had less competition.
You were a hobbyist trying to eke out some income to stay solvent. Even in that situation, you’re upset with the proles and their meager power.
It starts to get shitty when you enter the zone of the dentist with a half dozen or more properties and gets worse as you go up. The incentives are to leverage the buildings to grow and depreciating the property while maximizing the revenue. Just like rent seeking in technology, it’s not pleasant.
Don't ask me, I'm just an outsider looking in on a complete garbage fire of a system. Judging by their social issues I'd say all two of their parties are equally ludicrous.
Looking outside in (from the EU), even the democrats are quite a bit further to the right than even some of the parties we label as "radical right" over here. Even Bernie Saunders (the most left-wing democrat I can think of off the top of my head) had standpoints on things like gun control and universal healthcare that would never fly here.
- Gun control in almost any country is WAY stricter than in the US, and people in the EU are absolutely fine with the government interfering heavy-handedly in that subject. There would be riots in the street here if schools would need to have "active shooter policies" for example, we'd rather have a blanket ban on private firearm possession and have the police enforce that. In that sense, even Saunders seems quite fine to have a relatively hands-off gun policy and that lack of government regulation is typically more associated with the right than with the left.
- For healthcare policy, I only briefly skimmed his site but I don't think I actually saw a plan to have the government nationalize the hospitals and take them out of private hands? AFAIK in most EU countries most doctors/nurses are government employees with only a small minority working in privately owned clinics.
I don't think I actually saw a plan to have the government nationalize the hospitals and take them out of private hands?
Nationalizing all the hospitals would put you way to the left in many EU countries. Most right of centre parties (and even some left of centre parties) in the EU are pushing for more private health care, not less.
So at least we could say the idea of having publicly owned hospitals did fly in Norway and the Netherlands, for example. Unless I’ve misunderstood the data.
WRT guns, it is true that we have a crazy amount of guns in the US, more than one per person, which is totally absurd. But there’s significant state-level variation, for example I grew up in Massachusetts where we have around 7 guns per 100 people, which seems OK compared to some EU countries. Bernie represents a fairly rural state (and also one with gun manufacturers), so he’s more little-l liberal (in the “anything goes” sense) on guns than a lot of Democrats.
Anyway, I’d agree that he’s more left-leaning than most democrats and maybe he’s a little to the right of, at least, some centrist EU political parties. But IMO the fact that one of our most left wing politicians happens to be weak on guns is more of a coincidence that overplays the difference (which certainly isn’t to say there isn’t any difference). You could look at Liz Warren for someone who’s just smidge to his right, but is also more willing to restrict guns.
Another interesting departure from Democratic Party principles for Bernie was that he was more of a NAFTA (free trade in North America) skeptic, and is less of a proponent of immigration. In the US these are generally Republican-party aligned positions, so if we want to call the parties our arrows for “left” and “right,” that puts him more to the right. But, he came to those positions through worker protections concerns. And, it is not that uncommon for left wing parties in Europe to have similar concerns, I think? IMO, there are just too many issues to make a one or two dimensional map.
I'd have loved seeing a proper reflection of capitalist economics where rents get so high a large chunk of the population ends up homeless and fully destitute.
Then play Monopoly. The game was designed to teach people the flaws of capitalism. Imagine playing Monopoly without buying any properties and only collecting $200 every round. You wouldn't last long.
"Today China is a country of homeowners with more than 90% of households owning homes (87% in urban and 96% in rural China) (Clark, Huang, & Yi, 2019). At the same time, more than 20% Chinese households own multiple homes, higher than many developed nations (Huang et al., 2020)"
> Now, Colossal Order says, it will be based on a household’s income: “Even if they currently don’t have enough money in their balance to pay rent, they won’t complain and will instead spend less money on resource consumption.”
Good idea, negative reward for increased income. Sounds like a socialist utopia.
I believe a better option would be to remove mortgages. I have a few reasons for this:
1. Houses are priced based on what people are able to pay for them, they cannot hold more value than people can afford. Additionally, there is little incentive to purchase a home when you are old. A mortgage essentially allows a person to borrow significant amounts of money from their uncertain future.
2. Mortgages are becoming unreasonably long. There is nobody that can reasonably suggest that they can afford to repay a mortgage over a period of 50 years. You cannot predict that far into the future regarding your health or employability. We have people now getting mortgages that will last well into their retirement, there is no real hope of these being paid back.
3. In almost all economic turmoil, mortgage issues exasperate the problem. It very quickly becomes a negative feedback cycle. People fail to make payments, banks see increased mortgage risk exposure, mortgage rates are increased, people are less willing to get mortgages & more people fail to make payments, house prices drop significantly - suddenly multiple industries collapse.
Of course in practice this will not be achievable. Foreign investors would still have access to borrowed money that is difficult to track. People would still be able to borrow money through non-official routes (family and friends).
Annec data: We built several houses in the UK ourselves (paying contractors where required). Including the cost of land, our time and all other expenses, the houses were instantly worth 2x once built. In the 10 years or so they have existed, they are now worth 3-4x the original investment. It doesn't add up.
It adds up when you realise that the number of people entering the country (by birth or net legal/illegal immigration or asylum) is far higher than the number of new homes being built.
I have observed the new European right-wing neo-liberal sunrise with great interest, and I think the "people entering the coutry", aka "asylum seekers and other pesky poor people I don't like" (where there still is social housing) or "IT professionals and bank boys and all those pesky rich hipsters I don't like" (for gentrified/gentrifying cities) are a much smaller part of the problem than it seems. It is easy to blame them because they are foreigners and thus don't vote, and it makes "externalising" the problem (which is multifaceted, complex, and absolutely the fault of the current generation of politicians/investors and the middle class) easy - it gives you a super simple "guilty party" you can smack at with a baton and feel good about it. Where as you might be a part of the problem (that lovely single family home you have invested in so well could have been a 4-story housing unit for 4 families, but it wouldn't have been your investment pot, wouldn't it?)
I think NIMBYism and financialisation of housing in general is the actual problem here. If it is a financial instrument to invest into a mortgage or development and you can expect those insane returns simply by being able to "afford" a home - you will naturally be skewed towards making homes more expensive and less available, as scarcity raises value. Where I am it is the trope of the last year or two in politics that "those pesky foreigners have gobbled up all the real estate", all the while construction is regulated up the wazoo, older people do not allow hardly an electricity cabinet to be built even if they can see it with binoculars...
It is in the interest of those who bought their houses early and for cheap (some - even before the Euro) and (some) paid off the mortgages. Since pension schemes are getting dismantled, and solidarity is decreasing - a lot of people tend to see "selling the big house" as their only plausible way to have savings that do not depreciate and do not get taxed. And they sure AF do not want housing to be more affordable, because their pretty single-family home will become more affordable too. Boo boo foreigners.
Naturally they would not want this investment to depreciate.
Mortgages not balanced with rents are certainly a problem, as are fiscal benefits to those taking mortgages (and the general neo-liberal thing with taxing investment way less than income). But the biggest issue IMO is the fact that housing is investment first, basic need second. This needs to change if folks in populated western countries want to live... somewhere.
> It is easy to blame them because they are foreigners and thus don't vote
I don't care if people vote. That doesn't inform my opinion on supply and demand.
> asylum seekers and other pesky poor people I don't like
If you're saying something that only attacks a person's imagined character, and not their argument, you shouldn't say it.
> If it is a financial instrument to invest into a mortgage or development and you can expect those insane returns simply by being able to "afford" a home
It's become a financial instrument because of the likelihood of future increase in demand vs supply.
In the UK, the native indigenous people have a birth rate below replacement rate (note that 'native indigenous' is not 'UK-born' [1]), meaning the requirement for housing should be relatively low. In spite of this, the population of the UK in the last 10 years has increased by at least 6.8% [2].
It remains unclear why we are surprised there is suddenly a housing crisis. /s
Mortgages are useful even if you don’t repay them. The mortgage gets settled upon death. And while alive it allows the lendee cash flow to live in a home.
It effectively becomes a shifted rent payment where instead of landlords, the person owns the house and services the interest.
I prefer this over the cash house method or just perpetual renting.
Mortgages are what allow the “middle class” to own homes, and not just royalty or rich.
> It effectively becomes a shifted rent payment where instead of landlords, the person owns the house and services the interest.
That's only true if you can keep up with payments. You'll soon learn what you do or don't own when you miss them. To be clear: You do not own your home until the last payment is made, ownership until that point is in name only.
> I prefer this over the cash house method or just perpetual renting.
Inflated house prices almost directly impacts the renting market. Rents are typically set at about 1% of purchase price [1] and then they tend to track the estimated house cost over time.
> Mortgages are what allow the “middle class” to own homes, and not just royalty or rich.
At least in the UK, a family where just the man worked would be able to buy his own home within 10 years. Mortgages allowed the housing market to set higher prices.
The problem with mortgages is that they are always looking to de-risk their investment, and as a result it prices out the the people who would need it [2].
