Wednesday, September 18, 2019

I "negotiated" with a leasing company today

Here's the scoop:

In the face of a recession, my leasing company X has shared their preference to gouge students on apartment leases in the 2020-2021 contract season. My building specifically, is no gem. If I had to compare the likeness of my apartment complex to another spot on Grounds, it would be pre-renovated Clem 1. But amidst a landlord attempting to create a stream of revenue larger than that of an apartment that comes with a rooftop pool, airpods, and a pool table (in the apartment of course), he did offer an additional parking space on the lease. My inner economist screamed side-hustle. I could rent out my additional parking pass to make supplementary income. Though I may not have considered this an optimal trade at first, I soon realized an opportunity to conduct a parking service that would offset the increase in my rent.

The goal:  Sell the use of a parking spot to sketchy individuals on a daily basis to limit my personal losses on the higher cost of rent. Acquire a clientele basis that significantly drives up the social cost of my business, by royally upsetting my neighbors. Maybe these people tune up their muscle car at 3am, or maybe they have a drum circle that forms around their car. Ideally the consumer's presence should be so aggravating that people in the building don't want to live here anymore and seek further action.  As long as the consumer of the parking spot bothers my neighbors, I will profit from an intentionally formed negative externality. (There is the chance that I would also be negatively impacted by their behavior but I assume that I am not, for the sake of keeping this brief.) If this negative externality gains the attention I intend, X will take action due to complaints from my neighbors. It is quite possible they could find a state ordinance against treating students as first class citizens, but with Coase solutions on my mind I really am banking on the fact that they would be willing to reach an agreement. As one of their residents, if I were evicted or sued in court, I could wreck their yelp reviews. I imagine a Coasian solution to this problem could be X offering to lower my rent, in order for me to end my business practice, which terrorizes my neighbors. They could go further, and begin putting a clause in their leasing agreements that ban side-hustles from taking place in the complex, or a fee that detracts businessmen from operating out of their building.

Sure, it would be less of a hassle for me if I were just given a lower lease price and the leasing company could keep an extra parking spot to sell to another resident who needs it, but if I am given an extra parking spot, you can bet that the hedonist within me is willing to sacrifice the happiness of my neighbors, to minimize the increase in rent by renting out my additional parking spot.

On a sadder note, the landlord just called and is willing to shave $100/month off the lease for that parking spot. As he just internalized the uncertainty I would face in a new business venture by keeping the investment and offering money instead, I am prone to take the side bargain over my business venture. Who would have thought that blackmail encouraged a side bargain.


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