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hdgvhicvtoday at 6:02 AM1 replyview on HN

The tennant pays now anyway. Of a landlord could charge more rent they would.

Two identical properties, one under mortgage and one that isn’t, have identical rental prices. The costs to the landlord are irrelevant.


Replies

bruce511today at 8:59 AM

I understand where you are coming from here. And there are multiple levers in play here.

The cost of a mortgage underpins the rental value. If there are multiple units for rent then there will be a "going rate" and that's certainly a part of the equation. In that sense some landlords get more cream than others, but that's capitalism in action.

There are however other costs that go into rental calculations. Perhaps the building has a supervisor, or rental agent. Perhaps utilities are included. There are typically property rates and taxes. There may be sectional title levies. That's before we talk about insurance, maintainence and so on. For a group of similar dwellings these costs will tend to be similar, and so the floor is set not just by the mortgage, but by including these costs as well.

If a extra cost comes along, which affects all the properties together, then that will just become part of the rental-floor equation. And yes, it's possible for that to be higher than people will pay, but that tends not to be the driving factor. People have to live somewhere and ultimately will pay whatever keeps them off the streets.

Of course people who own their own home will simply have an extra cost burden every year. There's no upside at all, and will result in more people not purchasing, but rather staying on the rental ladder. Indeed making purchase less attractive allows rents to get higher.

This is the problem with all economics. There are butterfly effects all over the place so "simple solutions" tend to have lots of unwelcome consequences. Trying to solve problems with taxes seldom ends well.