jake from state farm
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jakefr0mstatefarm.bsky.social
jake from state farm
@jakefr0mstatefarm.bsky.social
220 followers 160 following 8 posts
Upholding eco-georgist social democratic thought. Light the beam?
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jakefr0mstatefarm.bsky.social
(1/3) Interesting.... Basically, the proposed explanation in the paper is that long-time landlords are more inattentive to the rental market, and are therefore more likely to charge rent that is below-market compared to landlords that just bought a property.
Quote from paper: "The pass-through result presented in this paper suggests an important question: How are different rent levels sustained in similar apartments? I propose and empirically motivate a model in which incumbent, long-term landlords are inattentive to market-rate rents due to a lack of informative tax cost shocks. Property taxes for these landlords are not informative about a property’s market value or its potential rents, causing these landlords to set below-market rents based on a property’s current tax bill. These below-market rents create an opportunity for high-sophistication landlords to purchase properties from inattentive landlords, increasing both property taxes and rents. Thus, upon sale, the new landlord corrects the below-market rent by updating to the correct market-rate rent, but will herself become inattentive over time. This model explains 1) the positive relationship between rent and property taxes, and 2) why below-market taxes lead to below-market rents. Further, this model implies a novel mechanism for pass-through via landlord churn."
November 14, 2024 at 3:23 AM
jakefr0mstatefarm.bsky.social
Just incredible screenwriting
November 12, 2024 at 4:41 AM