Landlords are responsible for two original costs, the fixed and the variable costs, including the costs of original construction and those of maintenance. A landlord may be the original builder, may contract out to someone else, or may compensate a previous owner, but the landlord bears the original cost of the structure. Similarly, a landlord may do the work him or herself, or may hire a property manager, or pay individual specialists for particular tasks, but bears the original cost of this, before leasing their property.
It is important to understand that the individual I am describing may colloquially be called a landlord, but that the individual in question will not only own and let the land, but also a structure or more upon it. As such, the landlord is also a capitalist, because the structure is not bare land, but a mixture of land and labor, which we know as capital. This being so, one must understand that while we use the term landlord we are doing so in a qualified sense, which we will not always be sticking with, because including also the role of capitalist.
In the landlord’s lease, the landlord asks for a price that is commonly called rent. This, again, needs some qualification, because it also includes the interest on the capital of the “landlord.”
To make this clear, rent is the payment for the use of land to a landlord, interest is the payment for the use of capital of a capitalist, and wages is any payment for doing any kind of work, mental or manual, excepting for profit, a return to labor that overcompensates it. These are the definitions in economics anyway, but you are right to notice this is not the common use, which speaks differently of what we call contract rent, such as the lease money paid to the landlord, contract interest, the payment for a loan, or contract wages, such as the payment made by an employer to an employee, which are real, colloquial uses, but different. We’re taking a scientific look, so we will be using the economic definitions.
Applying this to our future landlord, the contract rent that the landlord will be asking in their lease includes not only payment for the use of the land, the rent, but also payment for the use of the structures, the interest, as well as any labor that is performed by the landlord, his or her wages. In other words:
Before scoring a tenant, the landlord pays for all costs him or herself, the fixed and variable, either by performing the work him or herself or by paying others for it. The costs include the landlord’s labor and the work of others, the wages of the economy. These are included in the expenses, which include those costs as well as surpluses, the profit and interest. Wages, that is, are cost, but profit and interest are surplus, meaning that while they come ultimately from wages, they are not themselves products of the holder’s labor. As such, the landlord pays for the land, the structure, and all maintenance, which includes the landlord’s wages, the wages of others, and any surplus the landlord pays to others (including interest or profit), as well as taxes.
When the landlord finds a tenant, the landlord passes all of the expenses down to the tenant, such that the tenant, or a chain of tenants more likely, pay for all of the expenses over a period of time. A landlord who performs their own labor will receive wages and profits, wages equal to the cost of a property manager, and profit a return above that for having an exclusive (monopoly) right to bargain for the job. The landlord will also make interest on their structure and rent on their land as property values rise. As such, the tenant pays all costs and surpluses, the entirety of expenses.
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- Henogenic Volution Out-of-Everywhere: An Alternative Approach to Evolution
- Ambiarchy: An Alternative to Neo-Anarchism
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