Dare we mention that even the power of Starbucks is belittled by the ultimate monopoly power of the landlord! This is why we can benefit from $10 jeans (and say a prayer for the sweatshop workers as we hand over our money) but yet we still have no real improvement in our lives. Where has all that extra purchasing power gone now that we can buy a plate for 20 cents or a bike light for $2?
The law of rent sees that landlords can simply charge a higher rent as their monopoly power enables them to. “Either pay what I say or move to the boondocks.”
This can be locally reflected in Melbourne university apartment rents. The Bradley Report on higher education recommended higher Austudy payments. They ignored the added ability of landlords to scoop up any added earning capacity. Result – rents are to increase by 8% since last semester at University House on Swanston St. Extraordinarily, they have increased by at least 5% a semester since 2007.
Was that housing improved since the last semester? No. Did the locational value of the apartments improve? Yes. Was that the result of the property owners hard work? No. Was it due to the community’s natural development? Yes
Imagine the outrage if our bosses decided to cut our wages by 8% per half year?