> If everyone in my town gets 100€/month on top of their regular income, how will that not drive all rents/mortgages 100€/month up?
Because the issuer of UBI is going to pay for it somehow, and pretty much every plausible mechanism makes it, in net, a downward redistribution of wealth, not a flat increase. If you could guarantee everyone will rent only and exactly the same unit they rent before the policy, so that competitive forces weren't a factor, it would simply compress rents and, sure, even though it would be a flat increass, the opportunity for monopoly rents you just assumed would allow landlords to capture it all.
But realistically you don't have that kind of lock in, and local competition does play a role in pricing, so not only won't any induced increase be a flat across the board amount, it also won't capture the full amount of the increases (or decreases, depending on where you look) due to UBI, leaving the net income change still resulting in net change in what people can afford in the same direction (though not the same magnitude at pre-policy price levels) that the change in net income would suggest.
I think I understand what you mean, but I am unsure rents are competitive. There is finite space around good locations (where "good" can roughly be defined as close to hospitals, groceries, services, transportation, high-speed Internet, parks and jobs). Wherever I lived I encountered two ways of setting rents:
* "Real" market pricing (e.g., France, Germany), where rent prices can pretty much go as high as needed (subject to some regulatory constraints). My experience is that rents eventually converge to 1/3 of the average income of people that want to live there. If you cannot pay up, you need to head for "worse" locations.
* Controlled market pricing (e.g., Sweden), which essentially means that you need to wait forever to get to the "good" locations or hope that a new "good" location will be built. The former is inaccessible to most people, the latter usually starts rents at 1/3 of the average income of people that could move in.
All-in-all, I suspect that UBI would eventually lead to increased prices in "good" locations, so the net benefit is negligible. Maybe people living in "less good" locations could benefit from UBI, but I feel that would still not help with the "flattening of wealth" that UBI tries to achieve.
Because the issuer of UBI is going to pay for it somehow, and pretty much every plausible mechanism makes it, in net, a downward redistribution of wealth, not a flat increase. If you could guarantee everyone will rent only and exactly the same unit they rent before the policy, so that competitive forces weren't a factor, it would simply compress rents and, sure, even though it would be a flat increass, the opportunity for monopoly rents you just assumed would allow landlords to capture it all.
But realistically you don't have that kind of lock in, and local competition does play a role in pricing, so not only won't any induced increase be a flat across the board amount, it also won't capture the full amount of the increases (or decreases, depending on where you look) due to UBI, leaving the net income change still resulting in net change in what people can afford in the same direction (though not the same magnitude at pre-policy price levels) that the change in net income would suggest.