[10023]

Originally Posted by jbermingham123

Because landlords are a specific example of a much broader problem in economics known as rent-seeking, where you have people getting something, rent, for doing nothing. This problem is not solved by doing away with landlords.. because taking the properties away from the landlords without compensation and giving them to some other group leads to, well, the same thing; people getting something for nothing.

The solution, in my view, is to enforce a maximum profit margin, something like 5%. If a landlord makes more than that, they have to either give it back directly or invest it in improving the living space for their tenant(s). The other option obviously would be to lower their rent so that profits stay at 5%.

This way, it still makes economic sense for property owners to provide living space for renters (because theyre still making a profit), but it ensures that most rent money goes to either improving the living space or back into the tenants' pockets.

This would also solve the problem of property owners sitting with vacant housing waiting for more profitable tenants.

To prevent such a system from deterring new development, you could make it so that the profit control doesnt kick in until a building is 20 years old.

How will you measure this profit margin?

And if you think that’s a simple question to answer then you’re already out of your depth.