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>What happens next? We'd revert to the state that applied for most of human history: 99% of humans will be serfs renting from 1% hereditary landlords. We'll ha

>What happens next? We'd revert to the state that applied for most of human history: 99% of humans will be serfs renting from 1% hereditary landlords. We'll have shown the American mid-century home-owning middle-class phenomena to be an historical anomoly. Average living standards will plummet and equity barons will never have lived so well. Any short-term rental rate drops will quickly be erased by a combination of growing population and well-known market manipulation, in particular further wealth consolidation. Mere millionaires think they are safe; they are not. We live in a world that has a ~10 OOM wealth scale; being at level 7 does very little to protect you from 8s 9s and 10s, just as 2s are powerless to 4s and above. To a 10 a 7 may as well be a New Dehli beggar.

tptacek 1y ago
I was thinking more along the lines of a simple math problem and less along the lines of an outline for a dystopian novel. Like, show the work.
- simpaticoder 1y ago
  If capital returns 5% and the economy grows at 1%, where does the extra wealth come from? Spoiler: it's a transfer from the poorest to the wealthiest. Asset classes include stocks, bonds, real-estate, art, and metals. So if artists make more art, will this make art ownership more accessible to the average person? Or will it be a small transient soon erased by the monumental financial forces pulling all assets into the ownership and control of a tiny few? That art that your grandparents bought for $500 is now work $100k; you have student debt and high rent, so of course you sell it. The house your parents bought for $18k is worth $1M and they need end-of-life care, and you're own kids are expensive, so of course you sell it. The movement is irrestable.
  - spankalee 1y ago
    tptacek is asking how investors buying properties to rent them out, which clearly leads to increased rental supply, then somehow supposedly leads to higher, not lower, rents.
    - wyre 1y ago
      Increased rental supply at the cost of decreased home ownership. There is already price manipulation with rental properties. If a cartel is in control of enough of the supply they can set their prices as high as the market can afford. There is already a nationwide shortage of affordable housing in desirable places with jobs and the idea ITT is that it will only get worse as the investment class are the only people that can afford desirable property.
      - chii 1y ago
        > they can set their prices as high as the market can afford. which is the correct price - because you dont need a cartel to set the price at as high as the market can afford; each individual landlord chooses to price their rental at the highest profit they can, with the lowest chance of a vacancy. A cartel makes it possible to set the price _higher_ than the market can afford. Which is why a cartel is illegal.
    - cocaclub 1y ago
      Recognizing your frustration with reality's failure to adhere to the academic: the fact is that rent rates for corporate-owned units generally don't go down. At least, not in recent history. In the rare cases where cartel behavior doesn't work to cement rates, and owners have to respond somehow to market conditions in order to avoid cash-flow disruption, they will offer "specials" that lower the out-of-pocket cost, but not the on-paper rental rate, for a unit. Your oft-found "1 month free"-type deals (that are actually a monthly bill credit for the initial lease term). Upon renewal, your increase is based on that paper rate, not what you were actually paying.
      - MobiusHorizons 1y ago
        Recent history has been corporate rents not decreasing amid tight supply, the question being asked repeatedly (and repeatedly not answered) in this thread is “how exactly would landlords continue seeking high rents if housing were no longer scarce?” The only answer so far has been “by buying up the supply and renting it out” which completely ignores the obvious fact that renting out housing may reduce the supply of purchasable properties, but increases the supply of rental properties. There is no reason to assume collusion among a set of landlords would be enough to keep rental prices high if supply is no longer tight. So how exactly would landlords continue seeking be able to keep prices high if supply continues to increase?
  - skinnymuch 1y ago
    Nice points. And of course your first reply in this thread is anlredy light grayed. Classic Hacker News
  - raincole 1y ago
    Can you at very least try to answer the comment you're replying to?

tptacek 1y ago

I was thinking more along the lines of a simple math problem and less along the lines of an outline for a dystopian novel. Like, show the work.

simpaticoder 1y ago
If capital returns 5% and the economy grows at 1%, where does the extra wealth come from? Spoiler: it's a transfer from the poorest to the wealthiest. Asset classes include stocks, bonds, real-estate, art, and metals. So if artists make more art, will this make art ownership more accessible to the average person? Or will it be a small transient soon erased by the monumental financial forces pulling all assets into the ownership and control of a tiny few? That art that your grandparents bought for $500 is now work $100k; you have student debt and high rent, so of course you sell it. The house your parents bought for $18k is worth $1M and they need end-of-life care, and you're own kids are expensive, so of course you sell it. The movement is irrestable.
- spankalee 1y ago
  tptacek is asking how investors buying properties to rent them out, which clearly leads to increased rental supply, then somehow supposedly leads to higher, not lower, rents.
  - wyre 1y ago
    Increased rental supply at the cost of decreased home ownership. There is already price manipulation with rental properties. If a cartel is in control of enough of the supply they can set their prices as high as the market can afford. There is already a nationwide shortage of affordable housing in desirable places with jobs and the idea ITT is that it will only get worse as the investment class are the only people that can afford desirable property.
    - chii 1y ago
      > they can set their prices as high as the market can afford. which is the correct price - because you dont need a cartel to set the price at as high as the market can afford; each individual landlord chooses to price their rental at the highest profit they can, with the lowest chance of a vacancy. A cartel makes it possible to set the price _higher_ than the market can afford. Which is why a cartel is illegal.
  - cocaclub 1y ago
    Recognizing your frustration with reality's failure to adhere to the academic: the fact is that rent rates for corporate-owned units generally don't go down. At least, not in recent history. In the rare cases where cartel behavior doesn't work to cement rates, and owners have to respond somehow to market conditions in order to avoid cash-flow disruption, they will offer "specials" that lower the out-of-pocket cost, but not the on-paper rental rate, for a unit. Your oft-found "1 month free"-type deals (that are actually a monthly bill credit for the initial lease term). Upon renewal, your increase is based on that paper rate, not what you were actually paying.
    - MobiusHorizons 1y ago
      Recent history has been corporate rents not decreasing amid tight supply, the question being asked repeatedly (and repeatedly not answered) in this thread is “how exactly would landlords continue seeking high rents if housing were no longer scarce?” The only answer so far has been “by buying up the supply and renting it out” which completely ignores the obvious fact that renting out housing may reduce the supply of purchasable properties, but increases the supply of rental properties. There is no reason to assume collusion among a set of landlords would be enough to keep rental prices high if supply is no longer tight. So how exactly would landlords continue seeking be able to keep prices high if supply continues to increase?
- skinnymuch 1y ago
  Nice points. And of course your first reply in this thread is anlredy light grayed. Classic Hacker News
- raincole 1y ago
  Can you at very least try to answer the comment you're replying to?