>"rent seeking interests"
I agree with you to a large part, but thats exactly what a host of AirBNB is after as well (seeking rent). I dont like how people try to use it as if its a bad word.
I agree with you to a large part, but thats exactly what a host of AirBNB is after as well (seeking rent). I dont like how people try to use it as if its a bad word.
https://en.wikipedia.org/wiki/Rent-seeking
It's not a very descriptive term and I see why people get confused by it.
Economic theory shows that in a perfectly competitive market the price of a good equals its marginal cost of production. So prices above marginal cost demonstrate either a lack of competition in the market or other deviations from the theoretic ideal that give producers what economists call “market power”, the ability to charge higher prices for a good than they should be able to charge in a market in which many producers compete to sell more or less indistinguishable items.
Financing costs and all other costs are included in this calculus, so economic “rents” (as a term of art) in the context of the rent charged on homes and other real-estate means something like “excess profits due to a dysfunctional market”; in this case the dysfunctionality of the market is largely the result of regulation that prevents local supply of housing to rise to the level of local demand.