zlacker

> We must have a rent holiday if those businesses and their workers are to survive.

We'll get a lot of rent forgiveness naturally. If a strip mall has some tenants who cannot make rent in this crisis, who are they going to get who can pay? The pragmatic approach is to keep your existing tenants, because their survival is your strip mall's survival.

>>Walter+(OP)
A cynical, calculating strip mall landlord might think they're more likely to get a government cash handout (or a cash handout to their tenants who then hand it to them, which is effectively the same thing) if they prove their tenants will go bankrupt without it.

>>Walter+(OP)
Will that happen for housing? The businesses will lose all their workers during that time, and everyone will go work in an amazon warehouse.

>>Walter+(OP)
We might get a lot, but it likely won’t be enough.

Many land owners would already prefer to leave their buildings empty for years over even considering negotiating on rent. I doubt anything can change their minds.

>>fiblye+32
It’s odd but really true. Does anyone have insight why this is the case?

>>social+M2
According to Strong Towns, it's because the building can borrow money based on the projected value of rent. If they lower the rent, they can't borrow as much money.

https://www.strongtowns.org/journal/2017/11/27/the-paradox-o...

>>fiblye+32
We need taxes on vacancies. Encourage people to let property go to people who can put it to some use. Prevent blight and crime, etc, too.

>>fiblye+32
Not if they're short on cash, which they will be with this panic.

>>michae+Y1
It simply does the landlord no good at all to evict them.

>>majorm+u7
Ah yes, the California solution to everything - tax it.

>>umeshu+Z9
Honest question - should taxes be abolished?

>>umeshu+Z9
Even the most die-hard libertarian economist believes in Pigouvian taxes to address externalities. If vacant buildings are an externality cost, they should be taxed.

>>umeshu+Z9
smh California has had a rigid cap on property taxes since like the late 70s. That decision is largely why the rest of California's taxes are so high.

>>social+M2
At an aggregate level it can make more sense to leave X% of units vacant than to lower prices (which could have effects on the rate you can charge with the rest of your units). I think it’s an example of our financial system not working as intended.

For example let’s say I have a 100 unit apartment building. If I maintain a 20% vacancy rate target I can charge an average of $1000/mo/unit. But to set a price at which my vacancies get filled very quickly, to hit a 5% vacancy rate, maybe I need to charge $700/mo/unit. In that case I’m making less money than before - $80k/mo vs $66.5k/mo.

>>umeshu+Z9
Quite literally the opposite of the situation in California, but go off.

>>majorm+u7
Put a land value tax in place, and then the incentive to hold property for speculation goes away, in favour of selling it to people who can use it productively.

>>maest+rb
Honest answer: No, because that would mean to return to Hobbesian world.

Taxes are a way to pay for communal goods. We don't pay enough of them - our obsession with cutting them is part and parcel of the disastrous response to SARS2-CoV.

I very much like having a government that can step in during emergencies and distribute the load. I like living in a society where we care about other people to.

Abolishing taxes is strictly "me first, fuck the rest". I suggest people who like this approach try living in Somalia for a while, that's their desired end state.

>>fiblye+32
they prefer to leave the building empty in anticipation of a higher priced long-term lease in the future. if you're already renting space to a profitable business that was stable before the crisis, the incentives are probably to work out an arrangement with the business that helps it not go under. now if you're already unsatisfied with the current tenant, you might see now as a good opportunity to kick them out and wait for someone willing to pay a higher price.

>>opport+Io
why wouldn't you just price discriminate through short-term concessions to fill the remaining 20% and increase revenue? this seems to be what most apartment buildings around me actually do.

>>Walter+(OP)
If you think the mall won't survive anyway, then this calculation changes though and instead you look to recoup as much as you can in the short term. Ordinarily this is a good thing because it forces unviable businesses to cease trading and the people and resources can be redeployed into something more productive (and in many countries at an individual level the people will receive help from the government to do this without ruining their lives).

The idea here is to minimise the long term damage caused by people being forced into liquidation as a route to recoup losses and increase protection for individuals who are also temporarily affected.

>>lmm+BJ
> Put a land value tax in place

We already have that. I pay huge property taxes every year and so does everyone else who owns land.

>>leetcr+9u1
That is what people do sometimes (esp. in SF where you'll get "2 months free rent"). But I think in commercial real estate the math is a bit different because leases tend to be longer - so you really don't want to budge on the actual monthly rate and even 1-2 months free doesn't end up helping the prospective tenant that much

>>Walter+yt2
Not the same thing. Property taxes based on the improved value of the land create a perverse incentive to avoid making improvements, and California prop 8 and similar laws encourage people to hold property as long as possible rather than sell to people who could make better use of it.