"Bob Noel" wrote in message
...
In article , "Mike Rapoport"
wrote:

If airports were managed properly, they would charge market rent for
hangars
and other space.

how is market rent set for a product/service whose supply is
restricted?

By supply and demand

It's not free supply and demand when the supply is artificially
restricted. Thus the concept of "market rent" doesn't make sense.
In the true supply and demand scenario, increased demand would
increase supply. That isn't possible (a fact you recognize below).

But virtually every "good" is restricted in supply to some degree. The
rental costs for hangars resembles the way rental costs for apartments
works; both have limits imposed by limited availability of space *where it
is most desired*. There are plenty of vacant and inexpensive apartments and
also hangars, just not where they are most desired. Rental costs will
always be higher in desireable locations. Location, location, location.
Any time there have been rent controls it has resulted in problems. It's a
nice short term gain for the renter but bad for the landlord and bad for
everyone in the long term as there is no capital for capital improvements.
Remember the rent controls in Cambridge? How about in New York City that
had landlords abandoning buildings by the dozens? Has rent control ever had
good results for an area?

Peter