In less than 3 years the rent in our working class city went up 45%.
Not to mention the absurd qualifications one needs to rent.
4 times the income to rent, very good credit and background checks.
This is not sustainable for working class people.
I sympathize with that but I want to make sure people understand the dynamics. Prices are driven by supply and demand. If there's only one empty apartment in the city and you're willing to pay $2000/month, I am gonna have to pay $2100 month if I want to live there instead of you. That's sort of separate (though related to) prices of houses.
What will make rents go down? Only two things: demand goes down, meaning people aren't looking to move into / are moving out of the city. This happened in NYC rents in early covid as everyone bailed out. So one way to drive prices in your city down is to have some even that renders it undesirable (COVID, defund the police, rising crime, suburbs more attractive with work from home, etc.) The other way is to increase supply - that is to build more housing. Counterintuitively, this happens more when prices are high because it compels builders to create more housing stock.
People in NYC love to complain about all the new construction going on (or at least that was going on in the last few decades) but imagine what rents would have been without that.
there are so many problems with your post but the assumption that defunding the police is necessarily going to cause prices to collapse is probably the most obviously biased one.
the idea that you should view housing as simply a matter of supply and demand and not consider any externalities is an abominable position. All people need shelter, it's not something that people opt into for the enjoyment of it alone. By the logic you have presented, the top 1% of people banding together and buying up all of the housing and squeezing everyone else is perfectly fine if it makes the numbers look nice, regardless of how it affects people's lives. The way you have framed the problem is inhumane.
Another way to make rent more affordable is to raise the tax rate on income generated from residential rentals to the point that people are not buying up all of the housing stock for the sake of investment alone. Income from residential rentals is taxed at the same rate as ordinary income, the kind you get from actually doing something. Why would anyone work if they can just own someone else's house instead?
I don't think that's a useful framing, because it's again putting the framing in terms of market dynamics in a vacuum. People don't pick where they're born, they don't pick who their parents are, and they don't pick the socioeconomic status that they're born into or have as children. The majority of people are born somewhere and cannot really afford to leave. For example, 72% of Americans live in or near the city where they were raised (https://www.northamerican.com/infographics/where-they-grew-u...). Most people don't have the agency to pick where they live based on price alone, because other non-market factors become comparatively larger when you have less money. If you can pick where you live based on price and how interesting it sounds, congratulations, that is privileged position. That's not to shame that position or anything, I'm just saying that the problem has to be viewed from the standpoint that most people aren't in that position. People are interdependent with their relatives, their friends, and their neighbors. Moving costs more than simply the price sticker of your new home minus the price sticker of your old home: the social costs are enormous. I think that a basic right of modern societies should be that people should not be priced out of their homes because of the whims of investors. So again, I think the idea that these things should be viewed through the lens of market dynamics alone is inhumane.
> Your proposed solution will increase rent prices for people who can't afford to buy a house while pushing the housing prices down and making them more affordable to middle class.
ok maybe. My point isn't that I have the perfect solution, my point is that there are far more levers to pull than what was being suggested, and that I do not want to live in a society that considers the problem by only looking at markets and pricing.
Comrade, I am speaking about "how it works" not "what would be really nice if..."
> Income from residential rentals is taxed at the same rate as ordinary income, the kind you get from actually doing something.
I can tell you have never owned an apartment or a house. The amount of money and time that goes into maintaining a property, managing risk of bad tenants, etc is really high. Not to mention property taxes which is likely something you've not heard about (or, at least you don't mention that in your post when talking about the tax burden.)
I own my home and I pay property taxes, nice try though.
> Comrade, I am speaking about "how it works" not "what would be really nice if..."
faced with "the rent going up is a problem for working class people" you're instantly taking the side of investors and positioning it through this lens:
> I want to make sure people understand the dynamics.
the problem is not that people don't UnDeRsTaNd ThE dYnAmIcS, the problem is that the dynamics actively incentivize the creation of an investor and speculator class that owns a substantial portion of the housing stock and drives price up based on speculation and not based on any actual need to use the product. The supply is artificially held low by the investor and speculator class, my argument is that this is actively harmful and that the idea that the only way to raise supply is to build more houses is wrong, because your framing assumes a vacancy rate of zero, which no major city has.
Wouldn’t that just mean there would less rental opportunities because people wouldn’t rent out properties due to the increased tax burden?
Not really seeing how such a plan would work out since it would increase rents across the board from lack of supply and the higher taxes being passed along to renters.
One way to look at this is that a house on a piece of property can be treated as a fungible product for two different markets: it can be an investment vehicle for investors, or a place to live for homeowners.
As its value to one of those markets increases, buyers on that side suck supply out of the other market. You can get a sense of how much this is happening by looking at the vacancy rate: higher vacancy rates implies that houses are worth relatively more to investors than homeowners.
If there are any cities for which this is true, it’s cities like Seattle and Portland. Theoretically, they are not desirable to live in because of COVID, very high crime rates, not idea for working from home, huge public safety problems, etc.
But rent is higher than it has ever been.
My point is purely logical - the way to get rent down is to either increase supply or decrease demand. If crime, etc gets bad enough, demand will drop and rent with it. The argument you're making (implicitly) is that things haven't yet gotten bad enough for people to move out.
Or maybe your sources are more interested in selling fear than accuracy.
One thing to remember is that sqft != quality of life. I know where to get tons of sqft, but I will be driving an hour every day to even find food. Quality of life... maybe if you never leave the house? ha!
The main problem with all those cities is public transportation sucks.
Except the reason people in my social circle would never move to Austin isn’t about guns, it’s about women’s access to quality reproductive care, including abortion.
And I don’t think the democrats are exaggerating the extent to which that is not an option in Texas.
A big part of why Los Angeles is a living hell for most people is due to rapid recent increases in rent.
LA is this disgusting place where a very very small number of people are doing exceptionally well, and almost everyone is either homeless or half a paycheck away from that.
The only saving grace is these obscene rent increases appear to be isolated to a few select markets. In most of America you haven’t seen anything like the rent inflation normal in Los Angeles. If possible, consider moving. These issues have come about over the last 30 years, they won’t be fixed in the next three.
I moved out of LA my cost of living dropped by about 30% overnight, and it was much easier to meet nice people. I’ve long considered writing a book about just how much moving to a different city can fix your life. Most behavior is ultimately economic, if you and no one you know can get their lives together and move out, none well.
In LA this spirals into a nasty entitlement complex, leading to various yucky situations better avoided.
Until supply increases or demand drops these prices aren't going anywhere but up.
This was probably prompted by the Covid rent restrictions. Landlords (especially smaller ones) don't want to rent to someone who can avoid paying rent due to government decrees.