| ▲ | estearum 3 hours ago |
| Doesn't matter at all how much it is. It'll be (almost entirely or entirely) eaten by landlords. I am a landlord. I am setting prices for renewal. I have come to learn that 100% of my possible customer base now has $200/mo more to spend. I raise prices $200/mo with absolute certainty that I will find a renter. Congrats, mission accomplished. |
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| ▲ | zozbot234 15 minutes ago | parent | next [-] |
| > I am a landlord. > I am setting prices for renewal. Landlords do not really set prices arbitrarily, especially not in HCOL areas where most of the cost is land rent. The rent is set by the market, and if there's a new UBI only a negligible fraction of it will go towards rent. Rents might even decrease since any given UBI amount will go a lot further in a lower-COL area, which incents people to move out (reversing gentrification dynamics) and creates future opportunities for job creation in these economically depressed areas where such opportunities are most clearly needed. |
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| ▲ | PaulDavisThe1st 2 hours ago | parent | prev | next [-] |
| I am a progessive state government. I am considering legislation for the next fiscal year. I have come to learn that 100% of private landlords have increased their rents by the full amount of the UBI we introduced last year. I ban private rentals and/or private ownership of homes and/or introduce strict rent control policies (depending on precisely how progressive we're feeling this year). Congrats, mission accomplished. |
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| ▲ | estearum 2 hours ago | parent [-] | | Yes! Excellent work. Now there is no incentive for anyone to build housing for our growing population! | | |
| ▲ | EGG_CREAM 2 hours ago | parent | next [-] | | I am a progressive government. The free market has failed to provide a necessary service. So now I pass a law that creates a not for profit contractor that builds houses. It’s not that complicated. We do it with fire departments, police, and many other services already. Free market might have been more efficient theoretically, but when it fails in practice we find another solution. | | |
| ▲ | estearum 2 hours ago | parent | next [-] | | Yes, so un-complicated that we're now talking about state-built housing just to make UBI do anything other than enrich landlords. UBI is a bad idea. State-built housing is not necessarily a bad idea. You can just do the latter and skip the former. | | |
| ▲ | EGG_CREAM 2 hours ago | parent | next [-] | | I kind of lost the UBI plot, to be fair. I don’t really understand what UBI actually had to do with this exercise fundamentally, the exact same thing happens with or without it, it’s just that the floor of what “affordable housing” is gets risen. Unless you think that an unfettered, UBI-less economy doesn’t produce expensive housing? Which, I think we have many real world case studies in almost every major city in rich countries to disprove that assertion. I do see what you mean, I think, now that I’m rereading and contemplating. A monthly stipend probably does more to raise prices than anything useful, unless you also pair it with regulation to stop the wealthy and powerful from taking it all for themselves. And at that point you could have just done those regulations without UBI. Hmm. Do you think a few lump sum payments over a citizens lifetime would have the same effect? Maybe some large sum paid when you reach age of majority and then again at retirement? | | |
| ▲ | estearum 2 hours ago | parent [-] | | > A monthly stipend probably does more to raise prices than anything useful, unless you also pair it with regulation to stop the wealthy and powerful from taking it all for themselves. And at that point you could have just done those regulations without UBI. Yes largely correct, but more specifically than "wealthy and powerful," I am referring directly to the landed class, wealthy or not. This type of infusion will ultimately be baked into the cost of land, which will propagate up to rent, then up to wages, then up to goods. The gains will accrue almost entirely to the landed class in the form of higher land rents with no symmetrical increase in costs because land itself does not incur costs. > Do you think a few lump sum payments over a citizens lifetime would have the same effect? Maybe some large sum paid when you reach age of majority and then again at retirement? It wouldn't have the same effect but it'd have an analogous effect in the localized markets in which those subsidies are applied. For example, you'd expect the price of land (and so rent → wages → goods) to increase where retiring people congregate. But it'd be less harmful to the exact degree that the subsidy itself is less broadly "helpful." |
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| ▲ | PaulDavisThe1st 2 hours ago | parent | prev [-] | | Por que no los dos? |
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| ▲ | bequanna an hour ago | parent | prev [-] | | So in this version of the future, everyone lives in government housing? | | |
| ▲ | t0bia_s 36 minutes ago | parent [-] | | UBI is perfect tool to make citizens obey to state. You'll always vote for your breadwinners. Why, instead of centralised planned economy that failed ans killed millions people many times in history, not just lowering taxes and let people to decide how spend their capital individually? Game theory applied on UBI sounds really like an ugly idea. |
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| ▲ | LightBug1 3 minutes ago | parent | prev | next [-] | | Did you just imply that landlords are incentivised to build housing for a growing population?! * scream laughs * | |
| ▲ | rybosworld an hour ago | parent | prev | next [-] | | Are you implying that landlords are naturally incentivized to build homes? Because in most circumstances, the exact opposite is true. In the U.S., the government has a number of programs that offer landlords vouchers in order to encourage them to build out more homes. | | |
| ▲ | estearum 42 minutes ago | parent [-] | | Landlords are different things from developers. Sometimes (more rarely than people think) a single entity plays both roles, but it's impossible to reason about this space if you conflate the two Yes, developers build homes to make money. This is how approximately 100% of the housing supply in the US was created. |
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| ▲ | PaulDavisThe1st 2 hours ago | parent | prev | next [-] | | Indeed, a critical problem. But wait ... what's that? You say there are places where the state builds housing? How could it be? | | |
| ▲ | estearum 2 hours ago | parent [-] | | Sure but now you're not just talking about UBI, are you? You're now talking about UBI, plus rent controls, plus state-built housing. All to make UBI actually do anything at all other than enrich existing landlords. Why don't we just skip the UBI and the rent controls and instead just have the state build housing? | | |
| ▲ | PaulDavisThe1st 2 hours ago | parent [-] | | Because UBI is largely orthogonal to those things. It's a way of taking productivity gains and ensuring that the entire population benefits from them. | | |
| ▲ | estearum 2 hours ago | parent [-] | | But... without those other changes... UBI doesn't benefit the entire population, as we've just established. It benefits landlords. | | |
| ▲ | PaulDavisThe1st an hour ago | parent [-] | | The broader claim that you're making is that any increase in after-tax income benefits only the rent-seeking classes (since the same argument you've made for landlords would apply to all other rent seekers, including netflix, airlines and more). I don't know enough about economics these days to know if anyone who knows a lot about thus stuff thinks this is true, but it seems on the face of it to be absurd, since it would mean that pay raises are substantially diminished by rents paid for anything where demand is not elastic. I mean, I'm not insisting that cannot possibly be true, but it seems unlikely ... | | |
| ▲ | estearum an hour ago | parent [-] | | No, this argument does not apply to rent-seeking classes. I am describing land ownership specifically. Land is a totally n-of-one asset in that it is completely inelastic. It is not created nor destroyed by any human intervention whatsoever, and so its supply is not affected by prices whatsoever. The relevance of this is amplified by the fact that land is a required input for all forms of production. People and machines must exist in space, and therefore demand land. This does not apply to any other asset that we care about. | | |
| ▲ | PaulDavisThe1st 32 minutes ago | parent [-] | | OK, so there are classes of activity that are fairly inelastic, but not as inelastic as those requiring use of land. Fair enough. But why would the cost of air travel not increase in response to UBI? It's not inelastic, but modest increases don't appear to reduce demand much at all. Or eggs (again, not inelastic, but not very elastic either)? The housing:land demand ratio is also not fixed, due to multi-level dwellings (hence, for example, Singapore or Hong Kong), or increased density (e.g. ADUs or smaller lots). I just don't see why you see UBI only affecting owners of a nearly-inelastic resource (land) rather than everything else too (even if to a lesser degree) ? |
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| ▲ | UncleMeat an hour ago | parent | prev [-] | | Of course there is an incentive to build housing. Developers build homes and then sell them to people who live in those homes. | | |
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| ▲ | SoftTalker 3 hours ago | parent | prev | next [-] |
| How do you control what other landlords do? Why won't any undercut you by $200 and get your tenants? |
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| ▲ | kbelder 3 hours ago | parent | next [-] | | In a normal market, they would. But housing is highly regulated with artificial shortages, so that pricing is very distorted. | | |
| ▲ | estearum 2 hours ago | parent [-] | | Regulation is not what suppresses production, but the actual profit margins. It's extremely hard to make money building housing because the cost of land and labor are so high. These costs are high because we now live in an advanced economy where land can do much more valuable things than "be housing", and laborers can do much more productive things than "build housing." | | |
| ▲ | cogman10 12 minutes ago | parent [-] | | Yup. Development companies contract when the housing market contracts. They aren't building houses for the fun of it, they are building them because they believe the 100 houses they build in a hot market will ultimately pay back the land purchase rights. They will never build so many houses as to decrease the cost of a home. I actually got my home from a developer right after the housing bubble. They confided in me that they were giving away these homes pretty much at cost and that they had to fire a huge portion of their staff because the market was just crap at the time. Really, the only way to actually achieve that is through the state ownership and build out. The state could also spend a premium on building homes that it sells at a loss or rents at lower rates. But that will be pretty unpopular with the general public. |
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| ▲ | davyAdewoyin 2 hours ago | parent | prev | next [-] | | It doesn't matter, because land is scarce resource | | |
| ▲ | gruez an hour ago | parent [-] | | Land might be scarce in the technical sense, but not in the practical sense. Housing is only expensive because people want to live in superstar cities, which in turn is because that's where all the jobs are. If UBI eliminates the imperative to live in superstar cities, that makes scarcity a non-issue. | | |
| ▲ | randerson 27 minutes ago | parent | next [-] | | I can work from anywhere, but I like to live in a superstar city because I find it boring living in the suburbs. I want to be near my friends, near the live events, near the buzzing restaurants and art galleries and clothing stores where I can walk around and touch things. There will always be a concentration of people in cities for these reasons. | |
| ▲ | estearum an hour ago | parent | prev [-] | | Just need UBI, unlike all other forms of marginal increases in income, to spur people to move away from cities rather than towards them. |
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| ▲ | estimator7292 2 hours ago | parent | prev [-] | | Because tenants are not scarce. If you cut your prices, you lose $200/mo forever. If you simply follow the maximum market price and wait, someone will fill your room eventually and you have them locked into a higher rate forever. Competition doesn't work for necessities. Someone will rent your room at any price because it's necessary for survival. One of the major crises of our time is the fact that there are more people who need housing than there are rooms to rent to them. Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price. Getting tenants in rooms a few months earlier at the cost of lower rent means you make less money, and are less competitive as a business. | | |
| ▲ | Anon1096 2 hours ago | parent | next [-] | | You're failing to explain what dictates the price the market will bear. > Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price. is very obviously not true, otherwise prices right now would be effectively infinite. Why are prices for an apartment in SF only 3k/mo instead of 30k? Surely under your reasoning a landlord could just wait and get a tenant at any price they set? The answer is always supply and demand. As long as the supply is constrained or demand goes up faster the price will rise. But UBI doesn't change that math at all. (I say this as someone not actually a fan of UBI) | | |
| ▲ | randerson 39 minutes ago | parent | next [-] | | > You're failing to explain what dictates the price the market will bear. Most people like to live in the nicest place they can afford. This is a force pulling prices upward when many people with excess cash are competing for a limited supply of homes. Its why you'll pay more for the same size property in a wealthy neighborhood. > Why are prices for an apartment in SF only 3k/mo instead of 30k? Because some people in SF can only afford 3K/month. But if you added 3k/month to literally everyone's income, that number would increase. (In case you're wondering why the many people with more than 3k/month don't crowd those people out: the wealthy depend on those 3k/month people for labor. At least for now.) | |
| ▲ | estearum 2 hours ago | parent | prev [-] | | > Why are prices for an apartment in SF only 3k/mo instead of 30k? Surely under your reasoning a landlord could just wait and get a tenant at any price they set? No, because local wages cannot sustain those prices If local wages could sustain those prices, then yes all rents would rise to that new higher local income level That is (quite self-evidently) prices are so phenomenally high in ultra high-income areas like SF Every single landlord is setting prices by the same metric: what can the people who would live here be able to afford? Competition between landlords is almost nil, which is why you find almost no "deals" anywhere. The market is totally efficient. Everyone agrees on how to set prices: by local wages. | | |
| ▲ | cogman10 8 minutes ago | parent [-] | | > Competition between landlords is almost nil In fact, collusion with the likes of yeildstar is the name of the game. Everyone is setting prices based on what the algorithm tells them to set prices and they all benefit from that uprise in prices because there's basically no competition decreasing the price. There's also been a steady consolidation of ownership of rental units which also artificially increases prices. There's a reason nowhere in the country at this point has affordable housing. |
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| ▲ | PaulDavisThe1st 2 hours ago | parent | prev [-] | | Everything you've written here presupposes a housing shortage. Fixing the housing shortage is a central tenet of progressive policies (regardless of whether or not they may ever actually accomplish this). | | |
| ▲ | estearum 2 hours ago | parent [-] | | Housing will always fall short of demand. Nobody, progressive or not, is actually willing to sustain an oversupply of housing. | | |
| ▲ | PaulDavisThe1st 2 hours ago | parent [-] | | This just isn't true across the time and space of human cultures and civilizations. There are plenty of places, even in the USA within the last 50 years, that have had a housing surplus. The current problems have tended to arise when desirable work is geographically limited which then leads to a much larger housing shortage in those areas despite the presence of sufficient housing across a broader territory. | | |
| ▲ | estearum 2 hours ago | parent [-] | | > There are plenty of places, even in the USA within the last 50 years, that have had a housing surplus. Yes, bad places at bad times. Can you name good ones? | | |
| ▲ | PaulDavisThe1st 2 hours ago | parent [-] | | Defining "good" and "bad" in this context requires lots of other answers first. When NYC had a housing surplus in the late 1970s, many people considered it to be a bad place. But even as they did so, a new generation of artists were moving into it. So was it a bad place at a bad time? Or a good place at a good time? When Seattle had a housing surplus in the late 1970s ("Will the last person to leave Seattle please turn out the lights?" said the billboard in I5), many people considered it to be a bad place. But that was actually the beginning of a slow and steady population growth that now sees it as an incredibly desirable and expensive place to live. Clearly, there are plenty of people for whom both cities were, at those times, "bad". But equally clearly, there are lots of other people for whom the very same places were, to some degree, just what they were looking for. And these effects occur on even smaller scales. The neighborhood in London where I was born was basically a slumlords dream in the 1960s. Tons of empty housing, all very cheap (so cheap that my grandparents could afford a large home there). By the late 80s, it had become incredibly desirable and rather expensive. You can say "it was a bad place at a bad time in the 60s", but a bunch of people considered that an ideal place to be. If we had completely equal distribution of financial resources, this sort of thing might be less of a factor. But as long as there are people looking for "value" and others looking for "luxury", the good/bad distinction doesn't really describe the world very usefully. |
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| ▲ | chr1 2 hours ago | parent | prev | next [-] |
| That extra 200 will also allow some people to move to a rural area, decreasing demand, which means you won't find a renter. |
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| ▲ | estearum 2 hours ago | parent | next [-] | | Yes if you simply assert an upside down reality, this is a good solution. However, people actually move toward higher COL areas as their income permits them to. If more income meant people moved away from high COL areas, cities wouldn't exist. We'd have a flat distribution of people across approximately all land with ultra-low COL and ultra-low productivity everywhere. | |
| ▲ | lenkite 2 hours ago | parent | prev [-] | | This - since you can live in a rural area with UBI - and you get more time in the day to manage your accommodations, the move to urban housing is not so critical. |
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| ▲ | iso1631 3 hours ago | parent | prev [-] |
| Unless of course that UBI is funded by a land value tax. |
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| ▲ | SoftTalker 3 hours ago | parent [-] | | How does land value tax help in particular here? Landlord pays land value tax, which is distributed via UBI, and then paid back to the landlord in higher rents (in the above scenaro). | | |
| ▲ | larsiusprime 2 hours ago | parent [-] | | This is a good resource on the question -- Land Value Tax is not passed on to tenants, the landlord eats it. This is pretty unique among taxes, which is why LVT is a particularly good way to fund UBI, otherwise you would expect the UBI to result in inflated rents. https://progressandpovertyinstitute.org/wp-content/uploads/P... | | |
| ▲ | SoftTalker 2 hours ago | parent [-] | | The argument seems to be "that landlords are already charging the maximum that tenants are willing to pay for access to a given location and so cannot arbitrarily raise rents when a LVT is imposed." But, if the tenants now have more money in the form of UBI, then that argument doesn't hold. | | |
| ▲ | estearum 2 hours ago | parent [-] | | No the argument is that the landlord will raise rents, but they will not keep them. The gain generated by UBI, by virtue of raising the value of the land underneath the unit, would be recouped by the LVT at tax time. UBI is passed from the tenants to the landlord in the form of higher prices, but is recouped by the LVT, which cannot be passed in reverse from the landlord back to the tenant. |
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