So, I often have very nuanced housing ideas that enrage a lot of lefties. And I always explain how I don't think landlords are the big problem behind housing, but supply and demand. However, I have stated that I would be open to discussing the concept of landlords being price gougers, and that's kind of what I'm here to discuss today.
So, I want to repeat facts I often feel like I have to, first of all. Housing isn't actually super profitable. When banks sell houses, they make around a 1% profit margin, only making a profit in bulk. Landlords make a higher profit margin of 13%, and only make around $200-300 in profit per apartment. But the left acts like landlords are evil capitalists who sit around and do nothing all day, and and that they are exploiting people and if only landlords didn't exist, housing would be affordable.
But if they only make 13% net profit, and we got rid of that, then housing would only be around 11% cheaper. Instead of paying $3000 for an apartment in NYC, you might end up paying $2670. Don't get me wrong, saved money is saved money, but let's be honest, this doesn't solve the issue with rising rents in the first place.
The big problem with landlords among leftists comes from the fact that the left adopts the so called labor theory of value. Basically, it's the idea that all value comes from work and labor, and workers are entitled to all that they create. Marx talked about this, to explain how capitalists hose workers, making tons of profit off of workers that rightfully belongs to workers, and that workers should be entitled to the true value of their labor.
While I understand what Marx is saying here, and it's a good demonstration of explaining exploitation within the system, when this is taking as an ideological extreme like leftists often do, it becomes problematic. If the amount of work determines worth, then that actually encourages inefficiency. There's an anecdote that goes around involving Milton Friedman visiting China or some other place. And he witnesses workers building roads with shovels. And he asked where all the modern equipment is. And the person guiding him around said "oh but this is a job's program", and then Friedman said "well why don't you give them spoons instead of shovels then?" I mean, if value is derived purely from labor, then that encourages working hard but inefficiently, since stuff is worth more when it's done inefficiently. This...flies in the face of the ideals of all social progress. As I've said, being "anti work" on this blog, the way you get to an anti work future is through automation and technology. But, it seems like, if work determines value, then automating jobs is a bad thing. Not working is a bad thing. All value should go to those who WORK. WHO WORK. WHO WORK. I'm really hammering this home here. This is why, while I see value in Marx's theory from a perspective of explaining exploitation, I feel like leftism is a terrible ideology that is in no way anti work. They glorify work. They want everyone to work. All the time. And that actually explains a lot for why their systems end up being so crappy.
And that's their core issue with landlords. The way they see it, it was the workers who built the houses. And now landlords are exploiting their labor by making a profit off of housing? They hate landlords because landlords don't "work" for their income. They sit back, they own, and they collect. It's also their problem with capitalists too. This causes them to want to strip landlords of their property and force them to get a real job.
NOW, to be fair, there is a problem here I see that the left is right about. If left unchecked, allowing people to monopolize something as important as land/housing and rent it back to the populace for a profit has something wrong with it. Not because I have anything against landlords not working. But because I think that ownership can be problematic here. Think in indepentarian terms here. Think in terms of the big casino. The idea of being born into a world divided up into property, not having anywhere to call yours, and being forced into the service of others just to survive.
If we allow landlordism to remain unchecked, that CAN happen. And that's the core problem here. It's not the concept of property per se, it's the concept of propertylessness. It's the fact that some people own excessively, to the point that they make a profit off of owning, and others don't own, and can't own (due to not having the right credit to buy a house, etc.), etc. And people are forced to work to pay landlords for a place to live, while the landlords don't work. You see, it's not necessarily the fact that landlords don't work that's inherently the problem for me. It's that they dont work, but they force OTHER people to work, just to be able to survive.
And honestly? if allowed to monopolize land, and deny it to others, that violates my own ideological principles. No one should be forced to work ideally. And being denied property and being coerced to work is evil to me. So that said, I think that maybe landlordism should be kept in check somewhat.
Now, to be fair, landlords far from monopolize property. The majority of people OWN their own home. Only around 1/3 rent. And the average landlord has 3 properties. That's not to say trusts that own far more don't exist, they absolutely do, but the problem isn't as big as it's made out to be. Again, if landlords didn't exist, rent would only go down a few hundred dollars at most. The vast majority of those costs are driven up by supply and demand. The fact is, too many people want to live in some areas and when a housing shortage happens, it drives rent sky high. The solution here is to have more supply and less demand.
Would a UBI help address the homelessness crisis? Absolutely. While some demand would increase which would raise rent, if UBI raises rent by 10%, and UBI increases poor americans' livelihoods by say, 50% on average, they still win. And they can pool money with each other to find places to survive. The problem with rent in a lot of cases is that people decide to live ALONE because they have more money, when the housing market can't sustain that, due to there only being so many units. That's a lot of what drives housing costs.
Like...I know a lot of communists love to talk about how in the USSR everyone was housed and rent was only 4% of their income, as if this is an improvement over capitalism, but what they dont' tell you is most people lived in communal apartments with like 7 other families. And then toward the end of the USSR they started making single family apartments finally, but they were very low quality and considered slums. And while freedom of movement was allowed, people would not be permitted to live in an area if they could not find housing or work.
So let's be honest, the reason communism "worked" in the USSR for example was because they crowded tons of people into spaces they shouldn't be forced to live together in, then built low quality apartments considered slums, and they basically controlled where you could and couldn't live based on the availability of housing and employment.
In the US, we have housing problems because we give people more freedom. You CAN move wherever you want, but this causes excessive housing costs in many areas. Rather than the state weeding people out, the market does it. And most people desire to live alone. I mean, single family dwellings are common and preferred, with many people even desiring to live relatively spread out in suburbs for extra privacy.
I mean, you COULD choose to live like someone in the USSR did now. Wanna find a house to rent with 20 other people? You could pay like $50-100 a month that way. No takers? None? Yeah. Didn't think so.
The reason I bring that up is because the left loves to talk crap about our system, but this is what THEY end up doing. They have the same shortages too. They just solve them in different ways. And I don't see them as desirable.
I mean, like it or not, capitalism gives people freedom, and freedom has drawbacks. I mean, we could try to go after landlords, limit how much housing they can own, reform the system to allow more people to buy homes, encourage more housing to be built, encourage people to spread out more via financial incentives (I think UBI actually could help with that as it would make living in lower housing cost areas more attractive since jobs would be less central).
Honestly, my ideal solution to housing would be a combination of UBI resolving poverty and probably relieving the burden of housing somewhat. Even if rent goes up the effect would still be positive, and as I just said, people can move out of high cost areas to lower cost areas. And then I would support building more units.
Georgists would support a land value tax...but given my indepentarian orientation, I think that just turns everyone into renters. i hate the idea of taxing housing, because it's basically coercing people to work, although I could see it being a thing among people who try to monopolize property. LVT for homeowners? No. LVT for landlords? Sounds like a good idea to me. So, that would be my way of discouraging landlordism. Taxing it. While not taxing regular home ownership. That and building more housing.
I get it. There are serious housing problems in this country. The rent is too damn high, and there are many structural issues making it expensive. But, idk, landlordism isn't the BIG issue in my opinion. It would be worth pursuing in the form of taxation in my opinion, to discourage excessive ownership and monopolization of property, but the best way to deal with housing is still, to me, a combination of UBI and building more housing. Capitalism seems to win the day for me. We discussed what the socialists did. Let's not do that. And yeah. That's my opinion on landlords. Thanks for coming to my ted talk.
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