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Joined 1 year ago
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Cake day: June 19th, 2023

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  • Thank you! Nicely put. The problem isn’t people like your aunt, its massive shareholder-controlled investemet machines that own thousands or even millions of homes. Your aunt probably knows eafh renter by name - there can exist a personal relationship. There’s two things limiting your aunt becoming a money-hungry antisocial ghoul:

    1. raising the rent is a relatively large amount of work for relatively small of a reward. If she raises rent she has to write these 4-5 renters a letter explaining why she has to increase it. Those renters might disagree, have objections, ask for reasons and proofs (like the central heating bill or maintanance costs etc). If she raises the rent by lets say 2% it’s 2% of not that much money (with her single digit number if houses).
    2. she is raising the rent on people she knows. She is taking money away from people she even may like - have a personal relationship with.

    So increasing rent is a lot of hassle and her renters might like her less after that - which might be a factor.

    Now lets think of the hugr real estate company. They have thousands of renters and maybe hundreds of employees. They have lawyers employed. If they raise rent by 2% they have to send thousands of letters. But these letters are sent by people whose job it is to do so. Tyey can calculate in advance that from their renters X% will just accept the nrew rent, Y% will require some manouvering, Z% might move out and so on. They can estimate the cost of raising rent pretty well based on experience and compare to the profits they make. And with thousands of apartmants 2% is a lot of profit. The employees have no relationship to the thousands of renters. Renters are just numbers anyway. Everything is much more efficient. Also: Shareholders. They demand profits and dont’t care how. They care even less aboht the renters. They demand more profit and will just say “make it happen”. If thr ceo doesn’t raise profits - with whatever means necessary - the shareholders will replace the ceo.

    The soltion IMHO would be some progressive tax That makes it basically unprofitable to have more than 10 apartments. And to prevent legal entities owning other legal entities owning apartments in order to circumvent this. If there exists (and can reasonable exist) a personal relationship between landlord and renter everything is alright in my opinion. People usually are not animals to eaxh other if they know eaxh other personal.






  • IIRC most successful VCs invest very early and get out often early-ish too. The real enshittification that dangers the actual position of the company often happen much later. At that point the company is traded publicly and there’s a large anonymous body of shareholders - they only care about profits. VCs are actually a little smarter and care about longer time frames as in that early stage often much larger (relative) growth rates are possible.

    At a late stage (think Google, Twitter, Facebook, Reddit etc today) growth is much more difficult. How could Google grow today? They’ve saturated the search market years ago. So the only way of making more money is by sucking more money out of their existing user base. And they absolutely need to do it, as there’s huge pressure on the managerial class to do it, because the shareholders demand it. If the managerial class doesn’t do this (because often some older idealistic people know it would compromise the quality of the product), or they aren’t capable of doing it - they will get replaced by people who are more willing or capable - even if it’s detrimental for the company when viewed longer-term. VCs i would argue care all about profits, “but”. (they are smart enough to see the big picture. They are also small enough or “few enough” that they can communicate among themselves in order to agree on a more wise plan. That’s why they often get out once most of the possible (easy) growth has been achieved. They either know that now growth is much more difficult, or that the company’s value is much more stagnant - ow might decrease even. They can get out and invest their money in other more promising endeavours.

    The shareholders of large publicly traded companies are not that coordinated as they cannot really agree on anything other than just “growth”. More sophisticated strategies would have to be negotiated (and communicated) among thousands. The only unifying bond among shareholders is that they want profits. Think about it: many shareholders often don’t even know what companies they own as they are often part of other investment packages. Maybe you’re retirement plan has invested in stocks of 50 different companies, or 10 different fonds that have invested in others still. That is a form of dilution (?). It’s very difficult to communicate any strategy more sophisticated than “profits”. (a side effect is also that many people have invested indirectly or wothout knowing in endeavours that make their life more shitty/expensive when they retire - without knowing it.) There isn’t enough nuance in the wants of the masses as to want any more sophisticated strategy than simply “growth”. That’s why only short term growth can be thought.

    Of course sometimes also large companies can grow 2.5x or something like that. But it’s rare and takes more time. The exception makes the rule here. Early stage growth that VCs bank on is much more explosive i think. More like 10x or 100x.

    EDIT: sorry i typed this on mobile and it shows.