What prevents my apartment complex from raising my rent $1,000?

Q: What is to stop landlords from raising rents?

If I’m a jerk landlord and everyone in my building is getting the Freedom Dividend, you might think that I could just raise the rent by $1000.

I understand businesses need to be competitive, but when one is in the business of a need such as housing, I’m skeptical of the natural reaction not to be “Yay! I’m making 1,000 dollars mo- I mean, MY TENANTS are making 1,000 more a month!”

– Parker Crochet, Facebook comment

But the reality is that people will still have bargaining power. The Freedom Dividend gives people the economic means to move more easily. That, in fact, is what keeps landlords from raising rents today, and it doesn’t go away when people have more money. Landlords charge as much as people are willing to pay, and when they charge a dollar more, people go elsewhere.

Furthermore: In the vast majority of the country, you can still buy a house relatively easily, instead of renting. You can buy a decent house in a nice neighborhood with an awesome school (US News silver rated) within commuting distance of Pittsburgh for under $100k. Even if you can’t afford a house immediately, you can save money, or pool funds together with other people to buy a house together.

That competitive pressure — those market forces — are already at work. And they continue after the Dividend is instituted. Your rent is not actually based on your ability to pay; it is based on supply and demand.

Apartment complexes have to compete with other apartments, private parties renting houses, home ownership, and low-income housing. Real estate is actually a cut-throat low margin business. [1] Competition keeps businesses in check.

Most landlords are not very wealthy. And the Freedom Dividend puts purchasing power into your hands, so you could become a landlord too. Also, if your landlord is also getting an extra $1000/mo, they can afford to charge more affordable rent too. In addition, any decent landlord will feel more secure that their tenants can pay rent on time and in full, and this improved stability will allow them to charge less overall.

Will your rent slowly increase over time, as it already does now? Perhaps by 10-20% in the first few years? Yes.

Will it go up by $1000/month? No chance. The vast majority of property owners already charge their tenants the most that they can — that’s the market at work. If your landlord tries to charge you $1000 more, the apartment down the street will gladly invite you to move there for only $100 more.

With $1,000/month, people will have the money to move. You won’t be tied to a specific job for that “foundation” of steady income, so you can even move to a different state, if needed. Money provides choices.

Also, Andrew Yang has policies that will reduce housing costs.

Q: Won’t the cost of living just go up if we are all getting $1000 UBI?

Costs may increase slightly, but the $1000 will more than make up for it, and you’ll still end up far better off. See also: Will UBI cause prices on everything to increase?

Watch more of Andrew Yang’s videos — he addresses and answers all of these questions.

References:
[1] Joel Bay
[2] Zachary Truncali, et al.
[3] Facebook

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