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Building and maintaining commercial properties is absurdly expensive. A landlord takes on the cost, risk, and time of building and maintaining that property in
by swighton 4y ago
Building and maintaining commercial properties is absurdly expensive. A landlord takes on the cost, risk, and time of building and maintaining that property in exchange for businesses not having to deal with that.
The idea that a landlord should invest serious capital to build a business park and then pay people to use it is nonsense. In that arrangement zero business properties would be made. People who wish to start a business would have to foot the bill to purchase or build a space for their business.
- ethanbond 4y agoLandlords != developers Landlords != developers Again, landlords != developers Some entities are both of these things, but the economics and incentives of the two modes of business are completely different.
- amflare 4y agoThe developers do not just eat the cost of building a property, they pass it on in the sale price. So yeah, landlords still end up having to deal with it, on top of the day to day maintenance.
- ruined 4y agoThe landlords do not just eat the cost of purchasing and managing a property, they pass it on in the lease. So yeah, tenants still end up having to deal with it, on top of the day to day maintenance.
- Plasmoid 4y agoLandlords aren't in the property business. They're in the liquidity business. I know it sounds weird but that's their function in society, they are one of the many "business lubricant" sellers that allow modern society to work. A liquidity provider is someone who makes transactions easier. The insurance company will insure you against risk does this. The lender who provides loans does this. The landlord who rents property does this. You can run an economy without them, but things will cost more and take longer to happen.
- ruined 4y agoliquidity matters to commodity markets that transact often. the flipside of liquidity is instability. treating real estate as a commodity, not as an intimate necessity of everyday life, helps no one except speculators and rent seekers, at the expense of everyone else doing productive work.
- s1artibartfast 4y agoThat assumes they are not doing productive work. Examine the alternative. Should small businesses purchase the space all out, from developers or brokers? If this is so much more efficient, why don't they do so? Similarly, you could ask the same of residential renters. What would happen if we simply banned all new rental contracts. Would access improve or diminish?
- deleted 4y ago[deleted]
- jjk166 4y agoYeah but who pays for the developers? Besides initial construction you also have maintenance, acquiring tenants, property management, renovations and improvements, etc. If a company has the means and desire to do all this themselves, there's nothing stopping them from buying the land themselves instead of renting, but it's generally more efficient for a business to focus on what they are good at and leave the real estate issues to a company that specializes in it.
- feet 4y agoSounds to me like the landlord is just a useless middleman. Do we really want those?
- solveit 4y agoSounds to me like they're deciding what to do with the land, and then taking on the risk for whether the developed property is economically viable. They should be taxed for the value of the underlying land, but they are absolutely not useless middlemen.
- feet 4y ago"Taking on risk for whether the property is economically viable" is a funny way of saying "bought a house that a normal person could have purchased and instead charges them a marked up rent"
- chucksta 4y agoWhat's stopping all these businesses from building their own buildings and cutting out the middle man?
- pc86 4y agoIf you can't make your point without repeating yourself, it's probably not a point worth making.