Comment by bijowo1676
2 days ago
renters dont rent land.
renters rent apartments/houses, and these things are very elastic.
the cost increase is shared between renters/landlords in the ratio of their elasticities. Whoever is more inelastic, will eat the cost.
Inealstic renters will pay up increased rent (like techbros in SF are eating up all rent increases).
Elastic renters will get up and move to Texas, if renter swill hike rent.
Elastic landlords will lever down and decrease number of low margin properties like rent-controlled properties, or unprofitable properties.
Inelastic landlords will eat the taxes and take a hit to profitability.
LVT doesn't change the profit maximizing rent of apartments, or the quantity supplied.
You can feel free to solve the profit maximization problem of the apartment owner if you want.
https://en.wikipedia.org/wiki/Profit_maximization
if there are apartments on the margin of profitability, the cash outlay of LVT will have impact in either landlords quitting the market or deferring/stopping maintenance and such
Nope. If it was most profitable to quit the market or stop maintenance before LVT, it would be most profitable after.
A conversation with an LLM where you paste this exchange into the context is likely to clear up the reasons for your misconception.