> There is no future for capitalism
My honest opinion -- We don't need an efficient market. We don't need extreme capitalism. We need housing for everyone.
We need government to step in and cap housing prices, build more housing, and drive away the 80-year-old farts with 15 houses still trying to extract money from poor college students.
Housing should be built to LIVE in, not as an investment.
Taxing land value -- this unfortunately leads to them passing on the taxes to renters, and rental housing becomes ever more unaffordable
It incentivizes multi-unit construction, as the more productive the land is, the less onerous the land taxes become. (Wheres currently, developing land normally increases the land tax.)
Increasing units per land both provides more housing, and reduces the tax/renter pass through.
It disincentivizes holding unproductive land as an investment, since unproductive land gets taxed as highly as productive land.
All these benefits probably accrue, from good economic alignment, because a land tax, instead of total property value tax, reflects that it is land, not its development, which is the finite resource.
Land is finite, yet we all absolutely need land, along with food, air, and water. (Finite in a soft way, given different land is more or less usable). We only "own" land in passing. So those holding it shouldn't be lightly excluding better uses of an absolutely necessary resource.
Also, as other comments said, it incentivizes increased density.
No, this is not how this works. Rent is set by demand and (very insufficient) supply.
If landlord could increase rent by $X - they would have increased it already (software in TFA speeds up the process, but doesn't set market clearing price). A simple thought experiment would be something akin "98% tax on rental income". "Pass it to renter" would imply 50x increase in rent to preserve existing income.
Bottom line: make it easier to build more housing. it doesn't have to be subsidized/affordable/below market rate[0]. Any addition of units has downward effect on rent across all range of prices.
[0] > [In Helsinki] The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run.
From "City-wide effects of new housing supply: Evidence from moving chains" https://ideas.repec.org/p/fer/wpaper/146.html
This software can affect the market price beyond just accelerating the speed at which it reaches equilibrium. The software can help create an inefficient market where suppliers of housing are no longer competing against each other and instead all, together, take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units.
Similar to OPEC when OPEC was overwhelmingly dominant (before shale oil/shale gas explosion in USA/Russia).
In a competitive market without this software, each individual player would try harder to reach 0% vacancy because each marginal unit sold would be nearly pure profit, and this could drive prices lower than leaving any units empty.
Right, if one can get majority of the landlords to collude and government doesn't crack on collusion - this software would create such market.
Until we're in such dire situation: software is expediting price discovery, discovered prices are high because we don't build enough, we don't build enough because there's ridiculous amount of red tape, and doing anything that doesn't lead to more housing being built is spending time and effort on wrong problem.
How about we just build a lot more housing and let the chips fall where they may. Shouldn't even need to tax empty housing, either, if we build enough then the market can fix the rest pretty easily.
The whole reason we have a housing problem to begin with isn't capitalism, it's government restrictions on building. Urban grown boundaries, zoning, you name it.
Look, if you want more housing we have to let developers build more housing. Many areas in the country put in restrictions like limiting the height of new buildings because it's 'nice' not to have the views of the sky by blocked by a new building.
Well nice costs something, and in this case it's housing scarcity.
Not if you have the government build housing.
We need something like Singapore's Housing Development Board (HDB) which keeps reusing the same architectural designs and elements for simple, functional, repeatable housing that just works.
Singapore also has private-built condos, for those who want luxury, but the HDB flats are perfectly functional, dignified, clean, and comfortable. About 80% of Singaporeans live in government-built housing. Homelessness is almost nonexistent.
First of all, no one is going to benefit if 25% of US population moves to NYC.
Second, if we build millions of houses and they stay vacant, we just wasted a ton of money.
Third, if we just give away all those houses for free, we're going to destroy the real estate market, which will have a cascading effect and cause a huge crisis in all sectors (and if you think that only billionaires will be affected, think harder).
Fourth, due to misaligned incentives, governments are known to be way less efficient than private companies.
So our best option is to be smart: build only so many houses to meet the demand and so that the utility they provide is roughly equal to their cost, and let private companies build those houses. Now we only need two things: a tool to measure the utility of something, and some incentives for private companies.
I guess we all know where this is going.
There's no need for coercion. The landlords themselves are greedy (I don't think any more so than any other investor class).
Landlords being greedy isn't really a problem. They're going to try to get the highest rent. That's capitalism.
It's supposed to work in a COMPETITIVE market.
RealPage fixing prices breaks that. It's clearly causing consumer harm and anti-competitive.
I suspect there’s a lot of other price coordination schemes going on under the surface of our society just like this. The pandemic gave them cover, but the coordinated effort to raise prices destroys the efficient market hypothesis as does the gargantuan nature (and influence) of single actors within industries.
There is no future for capitalism without harsh enforcement and trust-busting on this front.