Apartment rent growth is declining, shifting the market to the tenant’s favor

I would argue that it's just okay. You're right about being safe, tho. Man, the US is violent.

Being close to work is the biggest benefit. Especially for young professionals who don’t need a lot of space and are looking to grind in their careers. Also, when they’re not working, being able to have fun is a plus.

I think some of that for sure.

I can't speak for others, but for me, I actually like big cities. Watching people. Don't need to own cars to get around. Food variety. Interesting buildings. Cultural stuff.

I guess that's why people in NY pay almost 45% of their after tax income towards housing related expenses, which is the highest in the U.S.

yup, when you're on a roll into the wee hours and you're hungry...

there's no where else where I can have a tasty hot sandwich made for me at 2am

without it being a big deal

I suspect it's because most Americans don't want to live in a little box; culture is just different here. And not having a kitchen seems like a deal-breaker for many people (myself included; even when I was in my 20s and ate out most of the time, I don't think I would have tolerated that). And I believe some municipalities in the US won't consider a space legal to rent out if it doesn't include access to a kitchen.

Of course, the real reason you have to be rich to afford a decent space in our biggest cities is because there isn't enough housing to satisfy the demand. Build more (and, critically, make it not incredibly expensive to build more), and prices will go down.

IIRC most of the houses in Japan are on leasehold. If you actually wanna buy land it costs more than in NZ.

sad but probably true, everybody in charge is invested

The BoC is relatively technocratic and they won't lower interests purely to help homeowners. However, given how much leverage Canadians carry, a shock to the housing sector would probably bring about a recession, which would force the bank to cut rates... at which point you do have to wonder whether house prices would just head back up to the stratosphere in short order.

There might be some corporate actors in favor of this, but housing as an investment is wildly popular among most Americans. I wouldn't be surprised if most renters support it because they see it as a vehicle to wealth rather than what prices them out of the market.

Housing affordability is not an American issue though, it's happening in any major developed city across the globe. There is something else to it that isn't purely zoning laws, building codes or whatever.

My personal opinion is that it's the culmination of policies incentivising housing as an investment vehicle, I know plenty of people who bought a first house when interest rates were low (or negative like here in Sweden), taking a loan as large as possible, which in turn pushed prices up, with the assumption that house prices always grow in value. When they grow in value the plan is to sell the first house, use the gains as a down payment springboard for their next loan on a larger house, rinse and repeat until you've built wealth.

Cheap loans inflated the price of housing very fast, building new housing got anchored on that price point, and now loans are not that cheap and developers don't want to build more if prices are crashing.

I have no idea how to break this cycle without a crash/bubble popping. If a government intervenes to create cheap housing (such as Sweden's Miljonprogrammet in the 60s-70s [0]) it will crash prices. It's a massive political issue because no one who has bought on inflated prices want to see their assets devalue, no politicians would survive in their career by implementing policies that would crash house prices.

Corporate landlords are just another facet of this imbalance, they can play around with their stock of vacant homes to keep inflated prices (something that a private landlord with a few units on mortgage really can't afford to do for long), they have money to scoop up houses selling below their target price, etc.

It's happening everywhere I see, everywhere where my friends and family live at, in multiple continents... There's something broken, and the correction is going to be very painful.

[0] https://en.wikipedia.org/wiki/Million_Programme

Thx still not understanding. Some Google Fu is telling me people aren't happy with Vanguard because they invest in fossil fuel industry and they don't vote enough for social based shareholder resolutions. Sorry but that is how passive investing works.

I'm assuming OP means a pizza restaurant not a factory?

Not a restaurant owner but I'm curious how a pizza place consistently sells 15 pizzas/hour @ 8 hours a day... let alone more

More likely what's going to happen is you have "bursty" rush times where you need more people to scale up and dead times where you have minimal sales?

Restaurants in many ways suffer from the same thing: high rents on commercial spaces drive a lot of their cost.

I think the GP meant that their pizza job paid so poorly, if their wage had been increased enough for them to be able to buy a home, the cost of the pizza itself would have to be increased quite a bit in order for the pizza shop to stay afloat.

You have it backwards. Labor is the single largest cost of running a restaurant, followed by lease. Cost of ingredients is usually the lowest cost of running a restaurant. I know you are trying to divide all those costs up by dish, but it doesn't work that way.

Source: me. I used to co-own a restaurant.

>Restaurant labor usually works out to a small percentage of the price of the food.

I don't see how this is true. It's more than 20%, since that's what you're expected to tip in the US, and that just covers the server.

> but the American dream wasn't fiction

Something tells me it's still possible to live with a 1950's "American Dream" standard of living off of a $15 to $20 an hour job.

No computers, no cell phones, clothes washing by hand, no eating out, etc. Generous 1000 ft. square foot house with two small bedrooms and a single car. Note that houses in Levittown ("America's First Suburb") were 750 square ft. [1]

I understand GenZ wants to live in McMansions full of amenities, close to the trendy areas of town, eating out more often than they cook, as is their aspirational lifestyle. But there's nothing wrong with living small-ish, rural-ish, within your means, and building equity instead of throwing money away.

I'm sure this is an unpopular opinion here. But hey, I started small, lived in some "trashy" areas of town (moved up from a trailer) and now 30 years into my career I live comfortably in a very nice place. It takes time and patience folks.

[1] https://www.theatlantic.com/past/docs/issues/91feb/9102house...

Additionally the driver of rent is ultimately an arbitrage argument. If I can buy a home and rent it out for more than the prevailing mortgage costs then rents must drop and home prices must rise, otherwise people will buy more property to rent out. Likewise the opposite is true. Home prices are dropping, so rent should drop too. Except for the fact that leveraged home costs are rising due to interest rates rising quickly. The article mentions some regions are seeing lots of new supply on the market so they can definitely impact the dynamic - but I don’t think coastal cities are seeing any new supply to speak of, so I doubt seriously rents are dropping in those cities. I would expect as costs to buy go up, rents will also rise assuming supply stays constant.

I assume it sort of balances out, if properties don’t sell, they may go on the rental market. Another thing is that the renters pool has some elasticity built-in: renters may move with relatives or roommates/significant other.