[roenxi]

> literal rent-seeking

Ironically, although literally they are seeking rent they are not necessarily, economically speaking, literal rent-seekers. The economists' abuse of language remains an unfolding tragedy.

Economic rent seeking is characterised by seeking a cut of the profits without creating any new value. If you buy a new house and rent it out, you have just caused new wealth to be created and you are recovering the capital costs, so a reasonable argument can be mounted that it isn't technically rent seeking.

If you want to clamp down on rent seeking, the best and potentially only reasonable way is a land tax, so people can't profit off controlling an irreplaceable asset that doesn't require maintenance.

> This drives prices up for homes in the city...

One of several factors. Credit availability is also a big deal.

[vageli]

> Economic rent seeking is characterised by seeking a cut of the profits without creating any new value. If you buy a new house and rent it out, you have just caused new wealth to be created and you are recovering the capital costs, so a reasonable argument can be mounted that it isn't technically rent seeking.

These houses already exist though. What new wealth is being created by purchase with intent to rent vs purchase with intent to occupy vs the builder offering the building for rent?

[roenxi]

If someone doesn't have enough money to buy a house, they can move in and rent it. They get to live in a house that is nicer than what they can afford right now.

I don't know much about the housing market, but arguing from theory, if the new build market is restricted to _only_ people who can afford to buy a house, that might be a much smaller group of people than individuals who want to live in the area but just cannot afford the cost of building a house. Renting is good for that not-enough-to-buy group.

For example, I couldn't afford to live in a city if I had to own my own home. I don't have that much money on hand. I'd rather rent land from a landlord than money from a bank. At least the landlord is carrying the risk.

[ricardobeat]

In the current Dutch market your rent will be a lot higher than mortgage payments for a similar house.

[t_dunks]

well... when your renting you know that your rent payment is the top of what you will pay a month. If you own the house, you also need to pay its taxes, repairs, upgrades, etc.. so it makes sense that you must pay more than just the mortgage payment to rent, its less risk.

[lordalch]

> What new wealth is being created by purchase with intent to rent vs purchase with intent to occupy vs the builder offering the building for rent?

There is value being created here in the market for risk, flexibility, and capital allocation. Residents who prefer to rent rather than take on the commitment of ownership also capture some of this surplus.

[devit]

The "wealth" created is that there is a new house up for rent, and thus more options for those who want to rent.

The advantage of renting compared to buying is that you can occupy an house for a limited amount of time without being financially exposed to changes in the value of the house, without having to find a new buyer when you move out and without needing upfront capital or credit to buy it (there are of course also disadvantages to renting, so some prefer to buy instead).