San Lumen wrote:If you stopped building luxury housing for rich people with insane rents and built only affordable housing the average person could afford there wouldn't be a shortage.
Why would there be no incentive for maintenance if the rent is below the market rates? The market rate is set by building owners on a large scale. They charge ridiculous rent because all they care about is profit so why not make housing something only the rich can afford?
It is not so cut and dry, at least not in my experience. It is a pain in the ass to own rental real estate, there are so many variables to take into account to maintain profitability. It is not an easy or stable market to be in. Not all of the tenants you get will be created equal (some people are hoarders, some will trash your place), sometimes you have to defend a lawsuit, sometimes you'll have to evict someone, there are many taxes and fees, overhead, repair costs, and so on, that make being a landlord an actual job in and of itself.
You don't exactly get to sit on property and wait for the money to come in. A "good" profit margin will be 2% of acquisition cost theoretically. If the prevailing rent is $1,500 for one locale, then you need to have paid only $75,000 for that property in order to break even. Operational overhead costs will be around 50% of whatever rent you collect. You will be spending money just as much as you collect in cash flow. A lot of landlords aren't the stereotypical rich business tycoon, but rather- are upper middle class people that do well but don't live so high off the hog.
So far as luxury real estate goes, higher valued property will bring in more property tax than less valuable real estate. There probably is a place for some luxury real estate existing, but it perhaps shouldn't comprise the majority of a major city. I'd say it depends on an area's median income.