this post was submitted on 20 Jun 2024
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It's not just another cost of doing business though, it's specifically a cost of not doing business.
So imagine someone has been buying up homes to rent them. Market rate for rent is $1000 and they own 1000 units (just to make the math easy). That means they would profit $1 million every month with every unit filled, and lose $1 million every month for leaving every unit empty.
Now imagine they have half the units filled, so they are getting $0 each month. They could try and raise the rent over market rate to cover the cost, but that would make it harder to fill the empty units and encourage their tenants to leave. If they lower the rent a bit though, they could fill the empty units and erase the cost entirely. Now imagine every landlord is in this dilemma; it puts the pressure onto them to appeal to prospective tenants. They could even increase profit by housing people for free, just filling units with the homeless to reduce costs.
If they don't change behavior and just eat the cost, then that's more money for the state to invest in housing programs.