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Comment by robertlagrant | Hacker News Reader

Sorry I don't understand - why would they be selling units, but also deliberately pricing them too high?

It has to do with the company's balance sheet - their list of assets which they use to borrow money.

If they have 1000 units that they say are worth $1 million each, they can borrow from banks as if they are sitting on $1 billion of assets.

If they sell one of those units at $500K, they now look like they have $500 million, which not only impedes their future borrowing but can trigger obligations to their current lenders.

It would be surprising if they can just not sell things because they're too expensive, and then borrow based on that too expensive price. Why not just have a single one and price it at $1bn?

To get more money? https://en.wikipedia.org/wiki/Price_fixing

But they're standing empty. If they're empty, they're not getting any money.

They're maximizing revenue by operating at a lower quantity and higher cost. This is microeconomics 101. People get driven out of urban areas where there are good paying jobs. In an ideal market this should be undercut by competition. In reality all available housing in urban areas are owned by large corporations all using the same price-setting backend. This is an illegal trust supercharged by the internet and globalization. It's an international Pottersville rapidly sprung from nowhere. So no, big corporations don't need more government handouts to do more of the same. Incentives for not-profit-driven entities (such as humans seeking secure housing) should be given.

https://www.propublica.org/article/doj-backs-tenants-price-f...

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