From: stephen@sprunk.org   
      
   On 31-Mar-15 12:14, Adam H. Kerman wrote:   
   > Stephen Sprunk  wrote:   
   >> On 31-Mar-15 07:42, Adam H. Kerman wrote:   
   >>> A tenant simply doesn't care about the landlord's operating   
   >>> expenses. He won't pay more than the place is worth to him. Two   
   >>> buildings of approximately the same quality (ignoring location   
   >>> value) should be rented for similar amounts.   
   >>   
   >> It's not a matter of tenants caring.  If every landlord's land   
   >> values (and thus taxes) go up 3%/yr due to general inflation, then   
   >> they will all increase their rents at least 3%/yr so they don't   
   >> lose money.  The tenants either pay the higher rents or become   
   >> homeless.   
   >   
   > There's no such thing as a pass-through expense that's 100% paid by   
   > the tenant. You understand why sales and excise taxes aren't paid   
   > 100% by consumers, right?   
      
   I assume that's because it upsets the supply/demand curve, but only in a   
   minor way unless the tax rate is outrageous.  For the purposes of this   
   discussion, the gap is not large enough to be relevant.   
      
   >> Slumlords don't fail to maintain their properties due to taxes on   
   >> improvements; _the tenants_ provide the disincentive.  Why spend   
   >> $10k remodeling a house in the slum when the tenant will just cause   
   >> $10k in damages when you evict them the next month?   
   >   
   > One can't be the only one fixing up one's property; the first to do   
   > something is taking a huge chance that none of his neighboring land   
   > owners won't be encouraged to do the same thing.   
   >   
   > If the place is no longer a slum, the landlord has the opportunity   
   > not to look for slum tenants.   
      
   I addressed gentrification of entire neighborhoods in a prior post.   
   Other than that case, it's not a relevant factor.  Slumlords aren't   
   usually interested in gentrification; it's not their business model.   
      
   S   
      
   --   
   Stephen Sprunk         "God does not play dice."  --Albert Einstein   
   CCIE #3723         "God is an inveterate gambler, and He throws the   
   K5SSS        dice at every possible opportunity." --Stephen Hawking   
      
   --- SoupGate/W32 v1.03   
    * Origin: LiveWire BBS -=*=- UseNet FTN Gateway (1:2320/1)