It doesn’t depend on how it’s paid for. If I am a landlord and I know that my tenants now earn an additional $600/mo, and every other tenant in my market is also earning an additional $600/mo, I would be an idiot not to raise my rents by $600/mo, and so would every other landlord.
"Well, I'm a [store, café, bar, gym, etc] owner and I know that my customers now earn an additional $600/mo, and every other customer in my market is also earning an addition $600/mo, I would be an idiot not to raise my prices by $600/mo, and so would every other owner."
"Oh, also, I'm building a new set of apartments and I discovered that when I set the rent to today's price + $300/mo then suddenly everyone was interested since everyone else on the market now takes +$600/mo."
Yes, inflation is a real concern which should be discussed, but "duh, all the money will just go to X" is far too a simplistic argument.
Store, cafe, bar, gym owners will try to raise their prices, and they’ll succeed (obviously not everyone independently by the $UBI amount).
But then ya know what will happen? The store, cafe, bar, and gyms’ landlords will raise their rent accordingly and eat approximately all of the gains that came from their price increases.
Why on earth do you think rent is so expensive near high-productivity? The buildings aren’t better. The land itself isn’t higher quality. The landlords aren’t better. It’s more expensive because it can be due to the market’s productivity, and corollary ability to pay high prices.
True, instead of just the low-income earners dropping out now that they have an unconditional deposit in their bank every week, now you also have a significant number of middle and high income earners consciously choosing to earn less because of the crushingly high taxes.
Well, you have the UBI increasing incomes at the lower end of the economy, which does apply upward pressure on lower-cost rents. But on the other side, you'd be decreasing the income/wealth at the top, which applies downward pressure at the high end of the market. The ultimate effect is not a straightforward calculation. I think the total size of the money supply is probably the most significant factor, and that wouldn't change if the UBI is funded by taxes.
It’s not that great of a natural experiment given all the other dynamics of inflow/outflow from cities, money supply changes, and eviction moratoriums.
Rent is higher than pre-COVID basically everywhere and they continue to rise faster than inflation so I’m not sure what this “experiment” shows.
Rents are set by only two things: 1) the tenant markets’ ability to pay and 2) competition with other landlords.
If every single landlord knows with certainty (2) that every single tenant in their market has increased their ability to pay (1) by $1000/mo, then every landlord independently will come to the conclusion that they can raise rents by $1000/mo.
They know the tenants are able to sustain it, and they know other landlords know the same thing.
The landlords will still be in competition, anyone who breaks with the conventional wisdom will have an easier time getting tenants. It would probably raise prices, but the laws of supply and demand don’t just go away.
Huge amounts of the demand just moves $x up the price curve, but that doesn’t suddenly conjure supply into existence, so you have the same demand willing to pay higher prices across the same supply: that’s just higher prices. In HCOL areas the vast majority of rent prices stem from land rent, and that supply is not just less elastic than demand, it’s totally fixed.
Most insidiously: the demand that will move most aggressively up the price curve is lower income people seeking better lower/middle income housing. So those prices will move the fastest.
Can you link to some study that confirms it? This sounds far too simplistic to be true, especially for something as complex and unpredictable as the economy.
This says public investment will just increase aggregate land rents to at least the cost of that investment. UBI is effectively a gigantic “public investment” that is everywhere. It’ll get baked into land rents, which will then propagate into actual rents.