So...as you guys know, I actually have a nuanced view on the concept of landlords. In principle, while I understand they're essentially the scalpers of housing, I have done my research and concluded that for the most part, they are not responsible for the vast majority of the cost of housing. Supply and demand is. And while I've seen conflicting information, landlords generally only make between 13-22% profit margins depending on what source I use, and earn maybe about $200-300 per property rented out. While you could argue those properties would be a bit cheaper if not rented out, well, they wouldn't be that much cheaper. We wouldn't go from having say, $2000 rent to $500 rent or even $1000 rent. You would go down to having about $1700 rent. Which is better, but again, it's not like suddenly housing got MASSIVELY more affordable, just SLIGHTLY more affordable. And even then, if that did happen, well, there are downsides of owning too. You might only want to rent a house temporarily as you don't plan on living in an area or specific living situation long. You might like having your utilities lumped in with your rent payments. You might prefer to have someone else take care of mundane work that comes with owning a home. And let's not forget, buying means passing credit checks and getting the go ahead from a bank. So renting is the only way some can get housing at all. I'm not saying renting is always a good thing either, just that there are pros and cons to both.
But, on the other hand, let's be honest about markets. Markets only work properly when there's adequate competition that drives prices down. If you have 100 people on an island wanting to rent from 100 landlords, those landlords will have to compete to get renters. They won't be able to extort renters for insane sums of money because the renters would walk and find some place cheaper to live. But say that there is one company renting 100 properties to those same renters. Couldn't they just say, well, we're the only game in town, you have to rent from us or not at all? Of course they could. And if they decided to keep say, 20 properties off the market so they can drive up rent to insane levels, with those 100 renters competing for those 80 properties, well, that would be profitable for them. So if you have one company renting properties out to people, then they can reap obscene profits ripping off consumers.
This seems to be roughly how people view the housing market as working, especially from a leftist perspective. And while my research has told me that your average landlord only owns 3 properties, there are companies who may own a lot more housing companies like Blackstone often own more. A LOT more. And some worry that companies like that, who are aggressively buying up housing, might lead to a less competitive housing market, and thus, higher rent prices.
And that's a problem. Even as a non "socialist", I see a problem here. After all, in my indepentarian ideology, I believe that people deserve a place to live. I believe people deserve access to their basic needs regardless of their contribution to society. Because if people are coerced into the labor market just to live, that leads to wage slavery. And generally, absent market failures, like in healthcare and education, a UBI is generally the best way to handle this. But, housing is tricky. While I am skeptical of a socialist housing system that would work, and believe such things are best left to the market, if the markets don't work because you have a few companies buying up tons of housing so they can screw consumers by price gauging, well, that presents a clear problem. Generally speaking, we need more competition in the housing market, provided by more housing. So if companies get large enough that they literally can act as badly as leftists claim that they do, well, that means the government is going to have to step in to stop a market failure. I'm not sure that socialized housing is the best way to do this. But breaking up firms that buy up massive amounts in an attempt to control and corner the market might be a thing that should happen. Perhaps making renting illegal for companies over a certain size, so as to allow it for mom and pop landlords, but not for huge commercial goliaths.
Or maybe, like my previous research indicated, this just isn't a problem yet? According to the atlantic, large companies only own about 300,000 of 15 million rental properties, with Blackstone owning 80,000. This is less than 1% of the market, not really cornering it. If you had that island with 100 properties on it, Blackrock would only own one of these. According to the atlantic, the big problems are governments with outdated zoning policies, and NIMBYs blocking the construction of new housing. So despite having tons of land for homes, political pressures on the many local levels of government are stopping more from being built, causing a relative housing shortage. I actually believe it. I mean, I'm a data driven person, and nothing else I read seems to indicate that landlords are the big problem. They're a minor nuisance who happens to get most of the blame. The bigger problems are the millions of Americans who treat their homes as investments intended to appreciate in value. And when homes appreciate in value, well, that literally means housing is becoming more expensive. Maybe housing should be seen as a commodity to be USED rather than an INVESTMENT to make money from?
And before people suggest a land value tax again, keep in mind I already discussed georgism, and did not find it particularly convincing. It would just replace "rent" with a "land value tax" causing potentially massive displacement and undermining the very UBI I seek to create. While a targetted LVT toward landlords might help incentivize companies like Blackstone to tear down current construction and build up new properties that are far more efficient, I do NOT support a blanket LVT in any "georgist" capacity, because I believe it would be counterproductive to my indepentarian goals. So maybe it could help, but it's a double edged sword. I certainly wouldn't want to punish owners of existing homes that they currently live in with such a tax. The fact is, we just need people to build more housing in general. We need laxer zoning, we need NIMBYs to stop being NIMBYs, and we need to actually somehow incentivize the construction of new housing.
Anyway, if anyone wants to know my thought process for making this post, i didn't even know the answer going into it. I just heard some people complaining about blackstone buying all the housing and decided to make a blog post about it, while researching it in real time while writing. I just thought this would be an interesting thought experiment, and then researching it, I just ended up solidifying my previous conclusion. That no, landlords just aren't the big problem. There are other systemic factors with the housing market that make is hard to afford housing. Any language that begins with "the big bad landlords are gauging everyone" is missing the forest for the trees. Not to say that landlords can't be jerks, or that housing shouldn't be more affordable, but yeah. Leftists seem to be wrong about the root causes of things once again on this issue.
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