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Comment by samstave | Hacker News Reader

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Just think logically about this for a second.

If landlords determined rent, why isn't rent infinite?

There is some force that pushes rent down from the infinite amount of dollars that landlords would love to have. That force is competition from other landlords.

Supply and demand.

Think logically for one more second. Very similar logic applies for health insurance/cost of college/rent, because those are “unavoidable” in some ways if you want to live (with dignity, because homeless people are still alive I guess).

The only reason health insurance/college/rent costs near infinite dollars rather than actual infinite dollars is because price hikes work best when they are hiked slowly every year instead of all at once. Health insurers/bloated college admins/landlords would (rationally) love to have infinite dollars, as they have a stranglehold on a necessary resource, except that’s probably a quick path to the guillotines coming out.

> those are “unavoidable”

This myth has been reviewed by economists over and over. You can always economize and it naturally occurs on both the demand and supply side. I'm not saying these outcomes are good, but people WILL do them.

Housing demand: live in a smaller place, live with more people, live further away than you want to, live in a van

Housing supply: rent out your extra room, try to build a rental (collect sweet premium)

College demand: community college + transfer, alternative education, maximize credits/minimize time

College supply: offer online degrees, price discriminate (financial aid) ,make cheaper offerings (undergrad only universities, etc).

Health Demand: don't go to the doctor, follow insurance incentives (urgent care vs ER), seek alternative treatment (chiropractors, neighbors, etc).

Health supply: maximize services can be performed by less trained workers (nurse practitioner vs MD, Offer lower end services (Telehealth, etc).

> "unavoidable"

When you see how many choices you have this starts to sound like "I have become accustomed to my quality of life, and I am unwilling to accept economic reality and consider alternatives." This is a natural response to declining standards of living.

So our choice is to either legally discourage rent seeking behavior in certain necessary parts of our life (health, housing, education) OR “live in a van… don’t go to a doctor … go to community college” just so the overlords could keep making profits on their investments. I wonder why not more people are signing up for the latter.

No. The point is that these actions at the margin put pressure on prices. People do have an alternative and will not just pay any price. I suspect you're feeling what I described at the end.

No they don't. The market determines rent. Lower demand or raise supply and watch prices drop, regardless of what the landlords want.

Market determines rent the same way market determines the cost of health insurance: people need a place to live the same way they need a doctor when they’re sick. If all the landlords are using collusion software to raise rent in tandem [0] what is your alternative, live in the streets until they give in?

[0] https://www.propublica.org/article/yieldstar-rent-increase-r...

This is not a good analogy. When you are sick, you need to get treatment, you're time constrained and usually space constrained too (you wouldn't travel 3 states out if you need an urgent procedure).

With housing it's more flexible: you can commute longer each day. You can just not move to a city where you know the "salary/cost of living" is not working in your favor. You can also time these decisions: go to NYC when you are in your 20s, live with some roommates to get some savings and then when you get older you can move to a more spacious city. You can be flexible about the space you need too: from 1 bedroom in a shared apartment, to a 3 beds detached house in a quiet suburb in another city, there is a lot of flexibility.

In a city there is a constraint on how much you can build, and everybody wants to be there. You can let the free market set the price, or you can try to distort the market with rent controls and then you end up with black markets, illegal payments, people holding on to their apartment for way longer they would normally do etc. Why would a 1 person ever move out of a large apartment if they have a low rent? They don't care that the same apartment would be a god-send for a family of 4...

> With housing it's more flexible: you can commute longer each day. You can just not move to a city where you know the "salary/cost of living" is not working in your favor. You can also time these decisions: go to NYC when you are in your 20s, live with some roommates to get some savings and then when you get older you can move to a more spacious city. You can be flexible about the space you need too: from 1 bedroom in a shared apartment, to a 3 beds detached house in a quiet suburb in another city, there is a lot of flexibility.

You _really_ think people aren’t already doing that, huh. Rents are too damn high AFTER all these options have been exhausted, and not because (as Fox News will happily tell you) people are lazy and entitled.

I am a renter myself, and I don't watch Fox. I much rather prefer living in cities(and I lived in expensive ones) where I can budget my rent on the free market, rather than be at the mercy of black markets, wait lists of 20 years and decrepit buildings that barely pass code.

> If all the landlords are using collusion

The market for housing in a metropolitan area cannot be organized. Everyone is a landlord. If rent spikes to 100k a year, I'm going to throw away shit so I can rent my 2nd bedroom for 50k, and the cycle continues down.

Why would you rent for 50K if you can rent for 100K? Are you an economically irrational actor?

Same applies for landlord who could either undercut the competition or join the “app” (aka collusion ring) to make higher profit.

In that scenario it's a shared place vs your own.

> collusion ring

Once again, markets for such a commonly desired good are not 5-10 or even 100 participants. They are unstructured webs of opportunities and favors.

The problem is that the market determines the rent but the government determines that building houses is mostly illegal.

“Government” isn’t a magical boogeyman coming out of a magical swamp to make magical laws. It’s literally NIMBYs, which are largely current property holders which are also in large part landlords. They’re playing the game to the full extent, and it’s high time they are contested in the same game.

Landlords can ask for any amount, but supply and demand determines how much they can get.

To the exact same extent that you determine your salary. Full stop.

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