&quot;<i>b) The Economic Theory</i><p>&quot;<i>Quite simply: any tax is borne by whoever is less price sensitive, the quantity demanded by consumers or the quantity supplied by suppliers&#x2F;producers.</i><p>&quot;<i>So a tax on tobacco (demand is little changed by increases in the total price, but suppliers have a minimum price which they need to receive in order to stay in business) is borne by smokers.</i><p><i>[...]</i><p>&quot;<i>Tenants are price-sensitive, they don&#x27;t want to waste all their money on rent and will tend to choose the cheapest accommodation and will share if necessary. And the landlord? He cannot vary his output one jot, one home is one unit, either he rents it out at anything up to market rates (and we can safely assume that most of them do) or he demands more and receives nothing. If he is has fixed costs associated with that home (be it mortgage repayments or LVT) then he does not have the luxury of withdrawing the home from the market and leaving it empty, he has to rent it out for as much as he can (market rates).</i><p>&quot;<i>This is often expressed with supply-demand curves, see e.g. Wiki.</i>&quot;<p>...But of course the landlord can vary his output---in aggregate. He can take the home off the rental market. (If he actually is <i>losing</i> money at current rental rates, he will have no choice to do otherwise, luxury be damned.) He can tear down the house and run livestock on the property. He can convert it to commercial use. He can sell it to someone as a primary residence (which does take the house out of the rental market while taking &lt;1 tenant out of the market). Further, he can not buy or build further rental property. And at some point, rental rates will rise because tenants are hardly perfectly price-flexible: the maximum duration of a daily commute is significantly less than 12 hours.<p>Section b), &quot;The Economic Theory&quot; seems to be selectively ignoring economic theory.<p>&quot;<i>c) Logic</i><p>&quot;<i>We also know that rents are dictated by local average wages (after deducting PAYE and so on), plus extra if it&#x27;s a nice area minus a bit if it&#x27;s a grotty area. That is the beginning, middle and end of the matter. The landlord&#x27;s actual cash costs are more or less completely irrelevant. As long as the actual or potential landlord can collect more in rent that it costs to provide and maintain the building he will rent it out (if not, he will abandon it).</i><p>&quot;<i>If the rent is more than the maintenance costs, the balance is the site premium (or the location rent or whatever you want to call it), so the tenant pays rent sufficient to cover the cash costs and the site premium on top. If the government now decides to tax away the site premium, that is between the government and the landlord, this does not increase the rental value of the home by a single penny; the amount of rent which the tenant will pay is the same and so the landlord bears the tax. His remaining rental income after tax is, by definition, still enough to cover the maintenance costs and so he stays in business.</i>&quot;<p>But consider:<p>* &quot;<i>Workers in the San Francisco-San Mateo-Redwood City Metropolitan Division had an average (mean) hourly wage of $33.34 in May 2014, about 47 percent above the nationwide average of $22.71, according to the U.S. Bureau of Labor Statistics.</i>&quot; [1]<p>* &quot;<i>As of December 2015, average apartment rent within 10 miles of San Francisco, CA is $3484.</i>&quot; [2] (10 miles from San Francisco appears to include a bit of Oakland and about halfway to San Mateo.)<p>* &quot;<i>Median monthly gross residential rent in the United States was $905 in 2013 according to the Census ACS survey.</i>&quot; [3]<p>So workers are paying roughly 40 hours in residential rent in the US and 105 hours in the San Francisco area. (Must be a really nice area.)<p>And for &quot;The landlord&#x27;s actual cash costs are more or less completely irrelevant,&quot; I believe that&#x27;s a corollary of my conclusion to b). In fact, this entire article seems to be predicated on the idea that a rental property owner will continue to be a rental property owner no matter the economic consequences, although it does admit that &quot;abandoning the property&quot; is an option.<p>In fact, this discussion leads me to believe that LVT  is designed to <i>raise</i> rent prices by reducing the availability of rental property.<p>[1] <a href="http:&#x2F;&#x2F;www.bls.gov&#x2F;regions&#x2F;west&#x2F;news-release&#x2F;occupationalemploymentandwages_sanfrancisco.htm" rel="nofollow">http:&#x2F;&#x2F;www.bls.gov&#x2F;regions&#x2F;west&#x2F;news-release&#x2F;occupationalemp...</a><p>[2] <a href="https:&#x2F;&#x2F;www.rentjungle.com&#x2F;average-rent-in-san-francisco-rent-trends&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.rentjungle.com&#x2F;average-rent-in-san-francisco-ren...</a><p>[3] <a href="http:&#x2F;&#x2F;www.deptofnumbers.com&#x2F;rent&#x2F;us&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.deptofnumbers.com&#x2F;rent&#x2F;us&#x2F;</a>