I’m simply paraphrasing Ricardo’s law of rent. It’s pretty straightforward microeconomics.
Worst rent free location just refers to the next-best-alternative, so yes, homelessness, or subsistence farming in a marginal location, etc.
Both demand and supply straightforwardly affect housing rent; it is not just “productivity” that determines what the cost of physically residing in a certain area will be. For example, if a different city close by suddenly becomes much more attractive, demand will (at least in the short-term) slightly go down in the initial city, which will push rent down a bit, even though the productivity in this city has stayed the same.
Sure, I already said housing is subject to supply and demand.
Even in a hypothetical word that looked like ours except there was no technological improvement, rents would still change over time because of demand & supply factors, governmental regulation and deregulation, etc.
Obviously true. And?
If we give all renters in a city $10k (say, by a tax cut, which is mostly functionally equivalent to UBI anyway, at least for our purposes here), are you predicting that this will not actually result in them retaining more dollars in their pockets after paying rent to their landlords?
Landlords will raise prices until the value of living in that city with $10k tax cut = the value of living in the next city with no tax cut, modulo friction. People will want to move into the tax cut city, raising rents.
Local cafes, bakeries and hair salons etc. will raise their prices a commensurate amount, and the improved “productivity” of these local businesses will result in an increase in competition for those locations, raising rents for businesses as well.
The nominal incomes of renters and local business owners increase, but in the end the rentiers benefit.
The nominal incomes of renters and local business owners increase, but in the end the rentiers benefit.
Rentiers may benefit, but they need not be the only ones who benefit. That was the essence of my comment above, and why I objected to the statements above that “all UBI” is sucked up by rent and that “UBI is simply a handout to rentiers.” The nominal incomes of non-rentiers indeed increase, and I claim that for some of them, the real income increases as well.
I’m not sure if there is any leftover disagreement here?
I’m simply paraphrasing Ricardo’s law of rent. It’s pretty straightforward microeconomics.
Worst rent free location just refers to the next-best-alternative, so yes, homelessness, or subsistence farming in a marginal location, etc.
Sure, I already said housing is subject to supply and demand.
Obviously true. And?
Landlords will raise prices until the value of living in that city with $10k tax cut = the value of living in the next city with no tax cut, modulo friction. People will want to move into the tax cut city, raising rents.
Local cafes, bakeries and hair salons etc. will raise their prices a commensurate amount, and the improved “productivity” of these local businesses will result in an increase in competition for those locations, raising rents for businesses as well.
The nominal incomes of renters and local business owners increase, but in the end the rentiers benefit.
Rentiers may benefit, but they need not be the only ones who benefit. That was the essence of my comment above, and why I objected to the statements above that “all UBI” is sucked up by rent and that “UBI is simply a handout to rentiers.” The nominal incomes of non-rentiers indeed increase, and I claim that for some of them, the real income increases as well.
I’m not sure if there is any leftover disagreement here?