[Manuel_D]

The point is, the apartment owner pays property tax and collect rent from tenants to pay for that. If property taxes go up, property owners raise rents to compensate. So the tenants are paying the property tax, albeit indirectly.

[strombofulous]

If the tenants will pay and it doesn't break any rules, why not raise rent before taxes go up and pocket the extra? (serious question)

[winstonewert]

If one landlord raises the rent, this will tend to make renters go to other landlords who are not raising the rent. But if the taxes are increased on all the landlords, they will likely all raise their rents together and renters can't simply go to another landlord who isn't raising the rent to avoid the increase.

Its actually much more complicated then that, depending on factors such as the propensity of landlords to cease renting out units if their profit decreases, the propensity of renters to shift to smaller dwellings in the face of rent increases, etc.

[neon_electro]

This happens all the time. Deciding whether a raised rent price is justification for moving out is a complicated and personal process and yet it fuels all of the response to landlords that do this.

Also, 1-year leases are typical in the U.S. (at least Philly/NYC northeast U.S.), so from that contractual perspective, your rent can go up every year and that's totally legal.

[dwallin]

Landlords are also competing with each other and tenants have limits based on what they can actually afford to pay. At some point they can be forced to move out of the city to a lower cost of living location, dropping demand. In fact it's entirely possible for a significant increase in tax rates to make rental units a poor investment, causing housing prices to plummet and rents to drop.

Your mistake is assuming that people who bought up housing stock are guaranteed future profit on their speculative investment.

[disillusioned]

Step 1) Raise taxes on rental properties astronomically.

Step 2) Force out investor class and/or repossess properties out of tax adjudication.

Step 3) Public housing!

[Manuel_D]

> In fact it's entirely possible for a significant increase in tax rates to make rental units a poor investment, causing housing prices to plummet and rents to drop.

How does this logic work? Building apartments becomes a bad investment. Then developers don't build apartments. And somehow constrained supply is supposed to result in lower prices?

[IX-103]

What if developers built too many apartments so there is no shortage? What if the builders all decided to tear down the cheap apartments and build a bunch of Luxury Condominiums when the the housing market is full broke college students who can't even afford to cover the taxes on individual units?

You can say the market won't let it happen, but the second case is the current real estate market for the town I went to school in.