[Manuel_D]

I think you misunderstood what the above commenter meant when they wrote that risk of squatters makes it "less profitable to buy and rent out apartments".

Because of the additional risks of squatters, landowner will either have to take additional security measures (and make up the costs with higher rent) or accept the risk of squatters (and make up that risk with higher rent). In either case, the rent getsor expensive.

[harperlee]

No, I got it. I just think that would mainly mean investors exit the market.

If it is less profitable, they either further raise the prices or they get out of the market; the ratio of those two options depends on price elasticity. And prices don't have a lot of room to grow further in my opinion... unless of course the wages grow quickly (and minimum wage indeed has done it in the last 5 years). But then the country needs to be more productive or people get poor (fired!), which is also not good for the renting business, etc.

At the end of the day you're betting on the spanish market either squeezing people further, or gaining productivity real quick. And real estate is not very liquid, yet is typically long-term, and those investors are risk averse. So... there will be some that will exit the market.

[Manuel_D]

And what happens when people leave the rental market? Fewer apartments for rent. And what happens to rental prices when there's a scarcity of apartments to rent? Prices go up.

[harperlee]

Well, no one can pack the apartment and leave the country. At worst they are left unoccupied, but that's a lot of money to have it parked, and can be discouraged with taxes; so alternatively people sell them... so buy and rent eventually go down.

[Manuel_D]

And what will the buyers do with the apartments? Rent them? Well, then they'll either have to spend money on security or price the risk of okupas into the rent. In either case rent goes up.

This is as nonsensical as the proposals in San Francisco to prohibit the construction of apartments to try and reduce rent. Dissuading people from renting out apartments reduces the supply apartments. There is zero possibility this results in better rental prices.

[zrn900]

> And what will the buyers do with the apartments? Rent them?

Yes.

> This is as nonsensical as the proposals

Its not nonsensical. Its what is happening. Use it or lose it. Works. Find a good tenant, rent it for decades - like how it is supposed to be.

[Manuel_D]

Again, the comment you responded to explains how this makes it more risky and less profitable to rent out apartments. It's dissuading people from renting:

> you're also making it more risky and thus less profitable to buy and rent out apartments

When something becomes riskier, fewer people do it unless there's some other incentive.

A vacancy tax could incentivize renting, buy enabling squatters does nothing but making rentals more risky. The only thing that can solve a shortage is increased supply or reduced demand. The latter is not feasible since people need housing. The former requires that land owners take the risk on renting out apartments, and anything that increases the risk means less people will do it.

> Find a good tenant

That's easier said than done. The better way to convince prospective renters to rent out their property is to make it easier to kick out bad tenants. If evictions are backlogged, then a landlord risks being stuck with a non paying tenant for a long time.

[peter335]

Yes, exactly. This is what I was getting at!

[Manuel_D]

You think a lot of Spaniards want higher rental prices?

Edit: ah, sorry I had mixed you up with the previous commenter.

[peter335]

Of course not, I think misguided policies like the one we’re talking about lead to higher rental prices

[zrn900]

> No, I got it. I just think that would mainly mean investors exit the market.

Great. They should get the hell out asap.

[carlosjobim]

> Because of the additional risks of squatters, landowner will either have to take additional security measures (and make up the costs with higher rent) or accept the risk of squatters (and make up that risk with higher rent). In either case, the rent getsor expensive.

When renting becomes less profitable, real estate prices fall as landlords want to get rid off their bad investments. That means people can buy instead of rent, which means more rentals become vacant as renters become owners, which means that rents go down.

> and make up the costs with higher rent

This is not how it works. Landlords will always extract maximum rent possible from tenants.

[f33d5173]

> Landlords will always extract maximum rent possible from tenants

Landlords are competing in a market. The maximum possible rent has to do with how much the rest of the market is charging. That in turn is capped from above by how much a would be landlord would pay to buy a unit and start renting it out. If that price goes up, then landlords can charge more.

There is also a maximum amount that people can pay, but they have little choice but to pay whatever the market is charging, or else live on the street.

[carlosjobim]

Renters are already paying the maximum they can. No landlord would let that juicy money go unmolested.

If landlords prefer to let their investments sit empty instead of selling, because their profits from renting aren't enough, then that is a foolish decision. But you shouldn't annihilate a whole nation because of such folly.