Comment on two of your classmates\' posts. Give responses to the Landlord and th
ID: 1132797 • Letter: C
Question
Comment on two of your classmates' posts. Give responses to the Landlord and the Renter as if you were the Renter or Landlord, respectively. A. Landlords View: The Video I just saw may have some valid information, but it has nothing to do with the business of property ownership and management. The cost of living in San Francisco has gone up throughout the years, but that is not due to any one landlord. The video fails to mention that San Francisco is primarily made up of single family homes, making the space limited. The city has no more room for new construction, unless those single-family home are torn down and replaced with high rise apartments. With the additional information I provided anyone can see that with limited space and housing available within the city the demand had nowhere else to go, but up, over the last one to two decades. As far as my properties go, I couldn’t be happier. Limited housing means great profits for land owners. No matter the price I ask for a unit there is pretty much always someone who is able and willing to pay it in this city. People take what they can get to live within the city limits. Renters View: The Video is spot on about showing what San Francisco has turned into. Greedy landlords have been hiking up rent prices for years. The landlords are pricing regular people out of the city. I understand that housing is limited, and many people want to live in the city. If landlords priced their units and rental homes in a manor where middle class incomes could afford it, their properties would never be empty, and they would still be well off. The government could implement a rent control policy to help some people with lower incomes get into or stay in the city. But, because landlords do not benefit from a rent price ceiling they are more likely to find loopholes to get tenants out. Landlords may fail to keep maintenance up on their rental or even forgo renting out altogether. B. Landlord Yes, the video is fair on projecting the realization of the economy in San Francisco. The Middle class is now been push away. In order to live in San Francisco, your income has to be more than $100k. You need a suitable income that can cope with the way our economy here is growing. We have the best tech jobs in our city. The best of the best want to live in the best place. As a landlord, I want to have the best people with no money problem renting my properties. In some locations, we offer the best view and with a nice view comes a big tag. 2. Renter As a renter, I do see the video been fair because it's the truth of the economy in San Francisco. I don't like that a middle-class worker can't afford to live in this beautiful place. I also know that in order to survive I need to be making or getting paid a good income and that only comes with having a real career that can pay for my expensive taste. I do believe that you get what you can afford, I can say it's not fair but if I can't afford it I should move and find me a job in another city or state. 3. I don't think the government should get involved to regulate some control over the value of properties. Income is a big factor, and as long the best techs jobs are part of the growing economy in San Francisco we might only see demand for Real Estate in this city.
Explanation / Answer
Response to lender as landlord: Key Economics concepts: Wants, scarcity, opportunity costs, allocation and distribution of resources, skilled labour, earnings, private cost and benefit, Inflation, Law of demand and supply.
San Francisco is one of the key cities in USA. The average rents have gone out of limit for people with medium level of income. Middle class people are blaming owners for this as those people believe that even when many apartments are empty, owners do not reduce the rents and artificially increase the rent and cost of living. Facts should be considered before making theses allegations:
1. High tech jobs are created in the city and this requires skilled labour. Skilled labour get highly paid and often like to stay nearby the job location to reduce travelling time and compensate this with increased work and further higher earnings.
2. As city expansion has limits and higher demand from tenants. As per the law of supply and demand deficit of place is created and hence average rent has risen.
3.This is happening due to natural progression in an ecnomy. Hence. It is obvious that rents are rising.
Response to the landlord as renter: Key concepts: social costs and benefits, government intervention through price ceiling, public welfare, economic growth and development.
This higher rents are created by greedy landlords as they are taking benefit of information asymmetry between potential tenants and property owners. Many properties are empty and hence rents should come down. Government should apply price ceiling to keep rising rents in check. This will also help middle class people to stay in city limits and contribute to its development positively. It is true that high tech jobs have increased income and some people may be ready to pay higher rents but for economic welfare of people from all strata of economy, rents should be checked.