Let’s say rent is 1000$ right now and UBI gives everyone 2000$ a month.
What do you think every landlord will do next year?
What do you think every landlord will do next year?
is priced in a similar way.
>I think rent in high-COL cities is more determined by high demand there than landlords' personal assessment of the residents' average incomes.
A landlord doesn't have to personally assess the average income of the residents. The high demand will roughly do the assessment for them.
>With UBI, people would be more free to move away from areas with high rent.
This is something UBI allows, but I'm skeptical whether people will actually do that. Remote work also allows people to do that, but until the virus it hadn't really been considered as a serious option in the vast majority of workplaces.
I am a supporter of the UBI theory but I have to say I am skeptical of the implementation. People are usually incentivized to move towards the places that provide opportunity - jobs, education, etc. UBI might dampen that incentive.
Given that most leadership systems are strongly influenced by the rich I have to wonder whether a system like UBI will be implemented in such a way that people are less dependent on the rich rather than actually becoming even more dependent.
Everyone needs to live somewhere. Landlords only profit if their properties are occupied, but they can simply decide to all increase their rent by $1000 a month, knowing that eventually, the only choice for some people will be to pay it or be homeless.
I have no idea if it would actually work this way in practice.
Yes but the cruical difference is that now, if I ask for remote work to move and the company says no I have to choose between having and income and moving. With UBI they say "no" I say "ok" and have income to fall back on.
The key thing UBI enables is the ability to meaningfully make a choice to leave your current job if you want to without destroying your ability to keep yourself alive.
Also, where would people move to? Many destinations are developing countries and thus the cost of living there will rise in the long term. Also, these expats would be heavily affected by foreign exchange rates.
People might indeed cluster up in certain places, buy property there and live a leisurely livestyle. These factors would make prices rise and in the long term it would become less attractive to move there. This happened in Spain where property prices in premium locations have skyrocketed because of well-off people from other EU countries buying homes there. Depending on how much the goverments of the target countries care about this, they might think about countermeasures, such as restricting property acquisition to locals.
If the outflux of money becomes significant, it will affect relations with the target country as the origin country will seek to reverse the flow. Trade deals will be affected, and developmental aids, if there are any, might be reduced. If it works, the target country might make it more difficult for expats to stay long-term. But the most straightforward approach might be to limit the UBI based on residency, or make the expat lose perks such as voting rights.
As someone who repairs and resells $200-$2k cars I assure you it very much does.
The price floor for a running, driving vehicle pretty much never goes below 2wk of pay at whatever the local minimum wage is.
(This does, indeed, fall under "some form of socialism" that the author deems magically "unworkable." Simply a tax code of affordable taxes for personal property - i.e. a home you own and live in - and high taxes for private rental property used to make a profit, with the intent that it should make financial sense to sell to an owner who will live in it.)
Do you have any evidence to support this type of absolute claim? People have been screaming about inflation since the Fed massively expanded their balance sheet in 2007. The only things we’ve really seen inflate are assets (buying housing, stocks, etc.) we haven’t seen much inflation in non-assets (renting, commodities, consumer staples).
Edit to add some specificity, although it's not "rent". Here [1] is a 3 bed/2 bath house in a very safe Chicago neighborhood for $325k. The local public elementary school is an 8/10 and the high school a 7/10.
[1] https://www.redfin.com/IL/Chicago/4824-N-Oak-Park-Ave-60656/...
If a significant number of readers here on HN click that link, driving traffic to that specific listing, I wonder if it would cause the agent to think there's more interest in the home than there really is, giving them the suggestion that they should increase the price.
It does have a "HOT HOME" banner on the first picture. Could that be from HN readers?
Only difference is that the guy who earns $2500 right now might be able to get a better job because he can quit without immediately losing his apartment.
As for dependency, the money won't magically spawn on the table, they will be earned by state on taxes and then paid to citizens/residents. So you depend on who is in power anyway since there will be many rules, exceptions etc. It brings another new universe for corruption, leftist politicians to promise (and deliver) higher payments that next generations will have to pay back and so on...
All these mental games, me, you, everybody... we can't get the full picture of everything mixing up with everything else - economy, mentality of individual and groups, greediness, black swan events, selfishness etc. and come up with a nice simulation how it will end up all joined together. That's just wishful thinking and people pick up side which they prefer, nothing more.
Which is not the case. Hence, rent will obviously not change, as will prices of products and services.
> the money won't magically spawn on the table
Exactly!
LOL, yes it will.
The first world country I'm from has, effectively, nation-wide rent control (varies by region) and rent increases are limited to something around 1%, set each year (tracking inflation somewhat).
In the US, this will work very poorly: a landlord can just bump your rent by exactly the UBI amount and get away with it. Otherwise, they would have to wait for a vacancy to set the rent. But eventually, I agree that the rent would just absorb the UBI in many cases.
What is the incentive for the owners of small apartment complexes? It seems clear. They need to renovate their apartments so that they can capture the new up-market demand. Successful, mid-tier apartments could buy up cheaper complexes to renovate them and charge higher prices (this happens even now).
The low-demand, low-price alternatives will fade away, because the land owners can make more money with slightly nicer, more expensive units.
They'll move to better neighborhoods? What's going to happen to the people living in those neighborhoods? It's not like there are houses sitting vacant...
A typical mortgage payment on that mortgage is $1,100.
Adding $1,000/month will put many renters above the minimum income they'd need. Keep in mind, a married couple will be getting $2,000/month.
There will be vacancies for the same reasons. People moving up-market.
Highest end homes will also increase in value. Everybody moves up, and homeless folks who are homeless due to loss of income will have a place to live.
Everybody moves up- meaning more homes being built- so you'd expect this to increase house production in the US, correct?
So, despite a disincentive for low payed laborers (like those who do construction) to go to work, the housing market will not just continue, but actually become more productive?
That $1100 a month- doesn't include home insurance, doesn't include property taxes, and assumes a $60k down payment, correct? Seems like a charitable number to pick.
They are already paying rent, and if married, they get $2,000.
If their rent is $600, they would have $2,000/month to save a down payment and then have $2,600 to buy a median priced home. That's enough to cover insurance and property taxes.
The standard down payment is 20%, so a $226k home would be $45,200.
Only if there are empty houses because people can't afford them will that scenario be able to play...
With an ability to command higher rent, renting becomes profitable on properties that were previously not profitable to build on. In the long run, I expect rent to fall relative to the current state of affairs as housing is overprovisioned (using the added income from more rent) and moves more towards a buyer's market. Furthermore, with UBI workers are in a stronger negotiating position so we'll see more work from home which also lowers rent by reducing competition in the cities.
It’s also illegal / breach of contract to increase rent based upon a person’s increased income as well unless it’s outside a lease period. I was told this as a landlord and I was mostly interested in getting a good tenant rather than trying to get the most dollars anyway. A bad tenant costs you far, far more than whatever you’d have increased your rent by.
What you are saying would work perfectly for a young college graduate, without much family or friends, who has no dependency or no one dependent on them.
Now imagine a young single mother or father that depends on their family for babysitting or caring for the child while they try to become functioning member of society.
Imagine someone with some health condition that needs access to certain medical facilities.
People live in cities and migrate to cities because they can access schools, colleges, entertainment, public transport, medical facilities, better opportunities, parks etc etc. They can't just pick and move and uproot themselves.
I think people who work in technology do not have enough exposure to the poor and struggling members of the society. I grew up in a really really poor family and when I talk to my coworkers it is very apparent that they don't understand poor people.
I am not a young graduate, uprooting now would be a big deal for various reasons. Neither are my friends in their 30's raising families - some of which are living with their parents for the kind of reasons you describe.
My point is that without being so close to the financial edge all the time, even less well off families can take a step back and make decisions that work best for the future. The stress associated with risk (like quitting a job) results in a scary amount of lock in for many people I know.
I actually think that would be a better solution than UBI, figure out what American public housing has done wrong (namely the idiotic towers in a park idea) and fix it, say by producing lower density functional neighbourhoods that have proper streets, places for business, community services, etc. and just build masses of them. Housing is the biggest cost after all and it's a large public works project that could be carried out everywhere. You'd have to fix the problem of corruption in projects of that nature though and that's unfortunately a much bigger challenge.
There was an article on here a while ago about a successful undertaking in Greece to build massive amounts of new housing without major public investment, maybe just do that? https://www.bloomberg.com/news/features/2020-07-15/the-desig...
I think an issue with this approach is that it's top down, as as mentioned in the article, "those at the top can’t manage all the information about the economy".
A counter-argument may be to just let towns and cities decide what to develop then, since local people have the best information about their neighborhoods. However, 1. this is already the default method and has resulted in housing crises where NIMBYism is rampant. 2. UBI would also help in this case as you're increasing the demand for housing while increasing competition between people living there and not (assuming people want to move to the area in the first place).
This is a pretty privileged perspective to have and shows that you may not fully grasp what it's like to be poor.
Do you understand the costs of moving (both monetary and time spent)? Do you understand the cost of most likely having to quit and find a new job (if they are available)? do you understand the costs (socially and mentally) of having to leave your community/family of support?
The opportunity cost of what you are suggesting makes it much less feasible than you make it seem
I don't have a good answer either... I just agree that UBI seems like a net positive.
It is, of course, possible to implement a UBI that is too low to make it practical to move, but I would argue that in that case, it is missing the "Basic" part, because it does not provide enough to meet real people's Basic needs.
Sure, that would definitely be one area where UBI would assist with but as I mentioned in another comment - it would kind of defeat the purpose of the UBI if people had to spend it on mitigating the consequences of people taking advantage of them receiving UBI
The thing that gives "Capital" power is that you have it, no one else does, and you're trying to transform it into some arrangement that over time creates more value than it consumes.
The transformation applied can absolutely be done incorrectly, making subsequent capital value transformations more difficult to accomplish profitably given greater constraints on the means the capital allocator can bring to bear.
Nothing about UBI substantially changes the nature of that system, therefore, the real problem to be solved, (the asymmetry of means between capital allocators) given a system that optimizes toward capital control centralization (more capital fewer hands) without also being paired with wealth ceilings via tax extraction at the top and reinjection at the bottom.
Poor people don't have functional families or communities of support in a lot of cases, that's why they're poor.
it would kind of defeat the purpose of the UBI if people had to spend it on mitigating the consequences of people taking advantage of them receiving UBI
It would kind of defeat the purpose of making money with a job if people had to spend their earned money on mitigating the consequences of people taking advantage of them receiving money.
So... the takeaway is strive to earn less so you get preyed on less?
I don't agree. Jobs are much more than just income. They provide purpose, skills (possibly for life and future work), experience (in general and for acquiring future work), possible medical or investment benefits, connections (social and for future work) etc. All these things mean that there are many situations where earning less or having to move would be outweighed by the benefits.
This is not the case in my example - UBI is JUST income. If the providing of UBI creates more problems and negates the income, then it loses its benefit and purpose (not saying this would be a guaranteed problem inherent to UBI, but that was the premise of the OP)
I'm pretty lefty but I sure wouldn't go so far as that. Tell them not to bleed the tenants totally dry. Try making rules. Try enforcing rules. If that doesn't work, THEN we can talk along 'kill all the landlords' lines, but I am just not convinced it's that simple.
I think there is room in a liberal market capitalist system with social supports (such as UBI, which is nothing more than a lower overhead social welfare system) to allow people to have property and stuff without it automatically going to Mao's worst nightmares. Yes, people are greedy, but that's not the only thing in the system.
That makes no sense at all. UBI is just an income redistribution scheme, thus it can only work if it's linked to productivity. Otherwise you create a system that's bound to fail and collapse in the times it's needed the most: an economic crisis.
With food stamps, and other welfare programs that already exist to cover your other costs you don't have to work to be able to afford living anymore. Sure you can't go anywhere or have a fancy new phone or car but your income from work could pay for those things instead of just barely being able to stay alive.
I don’t like this solution because it is a pretend-solution. What are the causes of poverty? Prevent them. What are the barriers to mobility in the job market? Alleviate them.
UBI helps but in my opinion it is just sweeping the problem under the rug.
Value capture by capitalists. Perverse incentives of means-tested welfare programs. Making choices that are suboptimal from an expected value perspective because they are better from a risk perspective when you can't afford to take risks.
> Prevent them.
UBI prevents or reduces all of those causes.
> What are the barriers to mobility in the job market?
People not having the resources to take time off their current job to retrain, either via formal training program or taking temporary lower-paid work in a different field, among others.
> Alleviate them.
UBI does.
I don't get why this one fear "omg rents will skyrocket!" gets trotted out as The Reason UBI will fail.
Prices will go up by some percentage of the basic income amount, but that percentage will be less than 100% of the difference. The landlord might raise rent from $1000 to $1600, but not to $3,000.
But what I am saying is that theoretical value for the new rent amount in that pricing model is $3000, not $2000 like the other poster was saying. Thus their arguments don't work.
Provide them access to the education you received (starting with primary school, not college).
Prevent their exploitation by the companies. Especially those that we often work for!
I would bet a better effect can be realized by investing in public education at the primary-high school levels. Make teacher salaries competitive with engineers. Enable all schools to have the equipment and teacher qualities they need.
The main issue in the world at the moment is income inequality, the things that you are listing stem from that, you can't fix education inequality without first addressing the income issue - UBI proposes that we tackle the source of the problem rather than trying to patch things up downstream
I'm assuming you accept that the poor are getting poorer and the wealthy are getting wealthier - how do you propose to stop that without UBI?
I do agree with the regulating capitalism better part. I just wish I had a better idea than repeating Paris 1794.