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Comment by thehappypm | Hacker News Reader

I think you have this backwards. Landlords increase housing supply, not increase demand. Also they charge what the market bears; they're exactly as parasitic as people are willing for them to be.

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> Landlords increase housing supply

Housing supplies increase when developers build new housing. Landlords would seem to be a fairly small component in that equation.

I own a condo in Boston. Someone new comes to Boston and sees there are 100 rental units on the market. I decide to move and become a landlord. Someone new comes to Boston and now sees 101 rental units on the market. By moving away and becoming a landlord I've put another rental into the supply side.

That's a pretty good example of near negligible impact.

> By moving away and becoming a landlord I've put another rental into the supply side.

The supply didn't increase. Demand reduced, because you moved away.

By your logic, if I stop eating hamburgers I've increased the supply of hamburgers.

Not really - in London (and the rest of the UK) over the last few years large corporate landlords have been building huge developments of thousands of apartments, called the "build to rent" sector. It's unlikely all of these developments would have went ahead without them.

Even in the 'normal' development sector, landlords buy a significant proportion of the apartments available from new build developments. I would estimate that 30-40% of the apartments in my building were bought by landlords ahead of the development starting. This adds liquidity to the market and allows developers to build knowing they are taking less risk on selling them when the building is (more) complete.

Anecdotally, I see a lot of "small time landlords" opposing upzoning around the PNW, so in that sense they are very much not increasing housing supply.

> Also they charge what the market bears; they're exactly as parasitic as people are willing for them to be.

That is very similar to this quote of Smith:

> The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give. (Adam Smith, op. cit., p. 131)

> Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. (Adam Smith, op. cit., Vol. I, p. 130)

That's true in a fair market. But when you are born into a system where all the housing is owned and the asset pricing is kept inflated at the expensive of your purchasing power. That's a different situation.

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