I'm personally most worried about increases in general income levels being soaked up by real estate holders. It's what we've seen happen in the SF bay area rents in response to tech fortunes. I don't see UBI actually increasing welfare much without a tax on land value to make landholding less profitable and redirecting the value of land into the UBI fund.
I don't think capital has any special attachment to real estate specifically. It's just that we have policies that essentially require your money to be invested into something (because inflation); and we turned real estate into a safe investment asset through policies that create perpetual scarcity.
You can probably come up with policies that penalize real estate investments, but (a) it will just cause the investors to chase some other asset class, instead of redistributing wealth; (b) unless scarcity is addressed, it's unlikely that housing prices are going to drop. Landlords extract profits from the assets they hold, but they don't cause there to be fewer homes or apartments available.
Why wouldn't they? It's an easy and profitable way to pump their property values. Obviously they make an exception when they stand to profit, but I invite you to attend any county zoning meeting ever if you think this doesn't happen. The meetings are nothing but catfights of this exact description.
I've always marveled at how it's 100% accepted to talk about poor people employing six dimensional chess and dubious strategies to scrape undeserved pennies from the system, but it's somehow unthinkable to even so much as contemplate the possibility that rich people are pulling obvious levers to extract millions. The double standard is absolutely wild.
Rent is charged monthly, and everyone consumes the value at the exact same pacing of 1/30th the rent per day. Consumers has no leverages, save for weak protections that won't be statistically significant, against price hikes. I think it's reasonable to assune it's more efficient at capturing UBI than regular commodities that can be rationed or splurged on.
> I don't think capital has any special attachment to real estate specifically
It's one of the few things that are real (ba-dum-tss). And given that demand for housing is inelastic, it'll absolutely absorb any extra money injected into the system as UBI.
Put differently: whatever you set UBI to, it'll always be just barely enough to cover rent on a shack today and not enough tomorrow.
One workable version of UBI was Communism (as implemented in the Soviet Union, not in modern-day China). There you explicitly take the fundamentals like housing out of the economic system and make it a crime to exchange them for money. Prices of staples are tightly controlled, and excess income is to be used for aspirational expenses. It turns out though that it's hard to implement in practice because without a way to regulate demand - the supply side tends to fall over.
what if UBI led people to think "i can go live wherever i want, regardless of job/market conditions"?
herds of young idealists and artist-types deciding to take over cheap realestate in rust-belt towns and rural areas because they no longer need to be next to a big urban center to 'make it'.
we started to see this during covid WFH, but true UBI would be even bigger
This only seems to be an issue if the marginal cost of building is too high to expand supply, though, right? Otherwise if people have more money, they bid up housing, then new stuff gets built, and supply profits decline.
Of course, restricting supply is a problem. I also think this logic might break down in tightly restricted areas that are already vertically built out - Manhattan, for example, because costs per housing unit tend to follow a U curve with respect to height, where they decline with density but start increasing again at very high density, but that's not an issue in most places.
This can broadly be alleviated by regulations that make it far cheaper and easier to build.
Currently, demand is the only access by which housing markets are dictated in heavily NIMBY areas like SF. Supply is an underused level due to cost and permitting issues.
The human nature. The moment UBI is set at X amount, the cheapest rents will jump, so will the price of a coffee, of a burger & fries in a fast-food, etc.
Greed will take over and try to get the _most_ out of the UBI as if we/you/they owe it to those people.
Wouldn't reducing the profitability of landholding via taxation discourage the creation of apartment buildings, thus reducing the supply of housing and making it more expensive?
It would make land cheaper and improve the profitability of doing the conversion. Paying people to sit on land is hilariously inefficient. Welfare for the rich.
> increases in general income levels being soaked up by real estate holders
More than 200 million Americans own their home. They are your real estate holders. So what if they absorb some of these increases?
If your concern is housing for those who don't own a home yet then say that, and the solution to that isn't not doing basic income, but to relax the obsolete local zoning laws that require e.g. 1 acre per home in rural area or "nothing higher than 30ft" in suburban areas, basically flat out banning any density increases.
I don't think "most economists" have a favorable view of it. It is a fringe theory from the 1800s that has never been implemented.
It is super regressive and effectively replaces everything with a housing tax and food tax.
It would be a massive tax break for the rich. IP, stock, and service income would be tax free.
It is primarily popular with a narrow band of white collar technology workers because it would benefit them immensely as their 500k SWE salary become tax free to be picked up by some poor school teacher living next door.
Teacher can’t afford to live next door because a retired couple that bought for 2 times their salary in 1975 live in a million pound house. They instead rent an hour away and already pay a tax for land use, just they pay it to the land owner.
i haven't read much about this, but i think that the point is that land taxes should incentivize people to make their land work ad produce an income. the problem is that this only works if you have lots of land that can be meaningfully exploited. if the tax is applied equally to every one then small landowners will suffer because you can't make a profit from a house and a garden that you live in yourself.
