alt Hacker NewsI'm asking: how does a small number of landlords continue to "control the supply" of an ever-increasing supply of housing when each of their holdings is non-remunerative (and, in fact, incurs tax and maintenance costs). This seems like a pretty simple math problem, a bet that you would not take if it was laid out in front of you, but I'm waiting for someone to explain how that might not be the case.
Keep in mind: as soon as you concede that investor-owners are letting out properties, they are competing in the market: further supply of housing decreases their returns, because they compete with all other suppliers of housing, the high-order bit of which is existing owners. You have to make this math work with owners who deliberately keep their units vacant, or it doesn't even work as an idea.
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How did Uber et al. offer services below cost until they'd driven out all competition? The property holdings are not these landlords' only source of income. Why would milk producers deliberately dump millions of gallons of milk (representing a commensurate amount of labor to both produce and then dispose of)? Because they've created an oversupply that threatens to destabilize the price.
The math works, it's just heinous.
I’m not arguing they’re keeping it vacant, that’s someone else in the thread.
I reject the notion that the units are not making money, and the notion that they are competing on price. We know corporate landlords engage in cartel behavior using price setting algorithms, and there is a deep well of tax-incentives for real estate (eg 1031s) that make it a more complex math problem than you are making it out to be.