lemm.ee

6 points

10 months ago

Yeah, I agree, we should abolish landlords

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BorgDrone@lemmy.one

1 point

10 months ago

Landlords also have to comply with the law, which limits the height of the rent they can charge and the maximum yearly increase.

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2 points

10 months ago

With the absurd increases of rent globally, record profits for landlords, and massive amount of empty properties have these laws worked?

If properties are seen as an investment, as they currently are, they must always increase in value at a greater rate than inflation. This means that, in order for investment properties to work, housing must always become more expensive. This increases rent and makes buying a home more impossible yearly. If they lower in price, then the investment fails. The cost of making housing accessible is the economy.

The issue isn’t simply increasing rent arbitrarily this is a marathon. They’ll raise rent at a higher rate than workers accrue money as they currently are. This makes housing unaffordable. UBI is a band-aid solution that doesn’t fix the root issue.

Even Adam Smith agreed landlordship was a poor idea in a capitalist market. Renters should accrue equity, or housing should become public.

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intensely_human@lemm.ee

2 points

10 months ago

This means that, in order for investment properties to work, housing must always become more expensive.

This is true of everything. For income to keep pace with inflation, it must always be increasing. In fact, to keep pace with inflation, prices must rise by the amount of inflation.

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1 point

10 months ago

To clarify, in order for investment properties to work the value of a property must increase quicker than inflation in order to profit. Otherwise, you’re not investing, you’re simply retaining current buying power. This is true of all investments. You want your buying power to increase, not stagnate. This means that the cost of housing must increase at a higher rate than general inflation, and thus the cost of mortgage and rent must take up a larger portion of a persons salary otherwise the investors (landlords, investment property owners) will not profit.

Along with that income has not kept pace with inflation and hasn’t for more than 50 years. Both these issues have compounded to create the issue we see today. This is a closed system, and in order for one piece of the economy to be more profitable other pieces must decline. Otherwise, you are stagnating. Stagnation under capitalism is death.

I agree though that the prices of housing should be tied to inflation (or, better, to a percentage of average wage) but that would, necessarily, mean that the property does not accrue profit, it only sticks to inflation. This is not profitable, this is not an investment. This would, essentially, abolish landlords but in a much more economically violent way as their investment portfolio is now worthless (as an investment).

In other industries the cost of each product can decrease as efficiancy increases, and volume increased through incremental changes and diversification. This allows for profit to increase while the cost of goods matches inflation (or, like with computers, they get cheaper). Now, I’d argue this is unsustainable as eventually you’ll hit a wall where it’s not possible to decrease cost to manufacture, and you must now increase cost to purchase quicker than inflation, but there are ways to mitigate this and in it’s whole that is another conversation.

Apologies for novel, thank you for your kind argument though. You seem like a chill person

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intensely_human@lemm.ee

1 point

10 months ago

If your method of investing in housing is just buying and selling the same house, then yes it’s not going to work. That’s also a good thing because someone who just buys low and sells high isn’t producing any value.

But people can invest in properties by improving them before selling, and also by renting them out. And neither of those situations requires a housing market whose average price is outpacing inflation. In those situations, it’s the production of actual value that is the source of the profit.

Profiting from arbitrage requires a fucked up market, and a lack of information. Profiting from producing value just requires clear communication and competency. Two very different kinds of profit seeking.

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2 points

10 months ago

If you improve the building, thus increasing it’s value, you’ve increased the proportional value of this house compared to the market. Now, since this house has increased in value, the average price of housing goes up and this house is less affordable. If everyone does this then the same effect takes place of average housing increasing in cost but now there’s a large quantity of very nice unaffordable housing. You no-longer increase it’s proportional value and the average price still goes up. Your house is in the same class as other housing bought at the same time.

If all landowners continually improve their housing in order to increase profits the profits must increase to a point where the cost to improve is matched and exceeded. This means that all property one wants to profit off of must still increase in price quicker than inflation. Under your proposed solution this only means the housing is nicer.

The outcome is the same, less affordable housing. If more, cheaper, housing is created then the value of these improved properties must decrease as well (supply and demand) and these cheaper houses if the price stays tied to inflation the profit gained is stagnant. There is no incentive to increase housing.

Currently though this is not happening. Most investment properties increase in value without improvement. Most landlords simply profit off of ownership of this land and housing not in their added value. If all landlords were to improve housing instead of simply raising price then that would increase investment price while not increasing overall profit. They’d make the same amount of money they would if they simply didn’t improve it. There is no incentive to improve as this adds risk for no reward. This is only possible on a small scale, and why we see few companies making profit off of buying housing, improving, and selling.

On rentals, even if they did cause value to be added, it would be through the money of the tenents and the labor of the workers. They are simply a middle man who adds no inherit value to this process. They produce no value, they simply take money from one hand, pocket some, and place some into another who adds value for them.

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1 point

10 months ago

There are many different categories of landlord, residential housing, and rent agreements, and also lots of states and countries on Earth. It’s not accurate to say

which limits the height of the rent they can charge and the maximum yearly increase.

for rental housing in general.

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BorgDrone@lemmy.one

1 point

10 months ago

Depends on where you live. In my country there are basically 2 classes: social housing and free market. Which one your home is is based on one thing: the rent you paid when you initially started living there. For each year, a threshold is set for social housing. Anything that is rented out under that threshold in that year will be considered social housing for however long the tenants stay there. Everything above it is free market.

For social housing, there is a point system that determines the maximum rent. Points are awarded based on the house itself. For example: each bedroom adds certain number of points, same for bathrooms and other features. Once you have the total number of points, you can look up the maximum rent in a table.

For both social and free market properties, there is a maximum annual rent increase.

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