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by em-bee
5 days ago
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how is that a moral hazard if the consequence is that we avoid shops staying empty? because that's the goal from the city's perspective. and isn't investing into a property that they then fail to rent out in a profitable manner also already a failure to act within their own limits? |
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The shops staying empty is one problem. The call for bailing out or helping in any way the creditors that took loans in bad faith by relying on that kind of help (to prop them up along the way) is another problem. I very much want to address the first problem, but not by enacting perverse incentive inducing rules. A better solution (in my view), which I think was mentioned in other comments, was to disallow tax reductions for unused spaces, and maybe even rise them above the tax level for what that space is when rented. In this case the landlord may be incentivized to find ways to make their spaces (at least) look busy (if not be busy with something of real value), which may be what the cities and community think of as an improvement.
"and isn't investing into a property that they then fail to rent out in a profitable manner also already a failure to act within their own limits?"
Yes, it is "already a failure", and it was the reason behind my initial objection. The bad decisions should meet their bad consequences. A "remedy" "to find ways to change the conditions of the loan so that building owners can continue to pay off their loan" sounds to me like a measure to shield decision makers from facing their failures. It is also, in the context of imminent failure, a call for someone else to hold the bag, which is in itself unfair.