How do you control what other landlords do? Why won't any undercut you by $200 and get your tenants?
Competition doesn't work for necessities. Someone will rent your room at any price because it's necessary for survival. One of the major crises of our time is the fact that there are more people who need housing than there are rooms to rent to them.
Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price. Getting tenants in rooms a few months earlier at the cost of lower rent means you make less money, and are less competitive as a business.
> Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price.
is very obviously not true, otherwise prices right now would be effectively infinite. Why are prices for an apartment in SF only 3k/mo instead of 30k? Surely under your reasoning a landlord could just wait and get a tenant at any price they set?
The answer is always supply and demand. As long as the supply is constrained or demand goes up faster the price will rise. But UBI doesn't change that math at all. (I say this as someone not actually a fan of UBI)
No, because local wages cannot sustain those prices
If local wages could sustain those prices, then yes all rents would rise to that new higher local income level
That is (quite self-evidently) prices are so phenomenally high in ultra high-income areas like SF
Every single landlord is setting prices by the same metric: what can the people who would live here be able to afford? Competition between landlords is almost nil, which is why you find almost no "deals" anywhere. The market is totally efficient. Everyone agrees on how to set prices: by local wages.
In fact, collusion with the likes of yeildstar is the name of the game. Everyone is setting prices based on what the algorithm tells them to set prices and they all benefit from that uprise in prices because there's basically no competition decreasing the price.
There's also been a steady consolidation of ownership of rental units which also artificially increases prices.
There's a reason nowhere in the country at this point has affordable housing.
Most people like to live in the nicest place they can afford. This is a force pulling prices upward when many people with excess cash are competing for a limited supply of homes. Its why you'll pay more for the same size property in a wealthy neighborhood.
> Why are prices for an apartment in SF only 3k/mo instead of 30k?
Because some people in SF can only afford 3K/month. But if you added 3k/month to literally everyone's income, that number would increase.
(In case you're wondering why the many people with more than 3k/month don't crowd those people out: the wealthy depend on those 3k/month people for labor. At least for now.)
Fixing the housing shortage is a central tenet of progressive policies (regardless of whether or not they may ever actually accomplish this).
The current problems have tended to arise when desirable work is geographically limited which then leads to a much larger housing shortage in those areas despite the presence of sufficient housing across a broader territory.
Yes, bad places at bad times.
Can you name good ones?
When NYC had a housing surplus in the late 1970s, many people considered it to be a bad place. But even as they did so, a new generation of artists were moving into it. So was it a bad place at a bad time? Or a good place at a good time?
When Seattle had a housing surplus in the late 1970s ("Will the last person to leave Seattle please turn out the lights?" said the billboard in I5), many people considered it to be a bad place. But that was actually the beginning of a slow and steady population growth that now sees it as an incredibly desirable and expensive place to live.
Clearly, there are plenty of people for whom both cities were, at those times, "bad". But equally clearly, there are lots of other people for whom the very same places were, to some degree, just what they were looking for.
And these effects occur on even smaller scales. The neighborhood in London where I was born was basically a slumlords dream in the 1960s. Tons of empty housing, all very cheap (so cheap that my grandparents could afford a large home there). By the late 80s, it had become incredibly desirable and rather expensive. You can say "it was a bad place at a bad time in the 60s", but a bunch of people considered that an ideal place to be.
If we had completely equal distribution of financial resources, this sort of thing might be less of a factor. But as long as there are people looking for "value" and others looking for "luxury", the good/bad distinction doesn't really describe the world very usefully.
Artists don’t move into neighborhoods because they’re cool, they move in because they’re cheap. They’re cheap because, by definition, people don’t want to live there.
High enough again to make it hardly profitable (if you're lucky) to do what you're allowed to do on that land.
There are entire businesses that just buy lots, change their zoning, then sell them. It's all priced in.
If people were allowed to build as they wished, they'd build a lot of housing, much of the housing crisis would subside and then the profitability of building house would equalize with the profitability of other uses. But stable point would give a lot more people housing.
It's like... Taxation or similar things can reduce X use of resource Y. Remove taxation and eventually X use isn't any more profitable than other uses but a tautology of markets/economics, not an argument the taxation isn't limit the production involved in X use.
You seem to be under the impression that building housing isn't already a nearly-unprofitable venture. There's no room to for "them to build a lot of housing" – builders are already pulling back on more construction because we have too much. Not "too much" as in everyone is amply housed, but "too much" to be able to do it profitably despite the fact that we still have a shortage.
Cost of inputs is the problem, full stop.
I actually got my home from a developer right after the housing bubble. They confided in me that they were giving away these homes pretty much at cost and that they had to fire a huge portion of their staff because the market was just crap at the time.
Really, the only way to actually achieve lower housing prices is through the state ownership and build out. The state could also spend a premium on building homes that it sells at a loss or rents at lower rates. But that will be pretty unpopular with the general public.
That's fine. Not everyone has to move. As long as the marginal city dweller would rather have cheaper housing than "buzzing restaurants and art galleries", there will be downward pressure on housing prices.
Sure a few folks will drop out of the highly competitive professional job market to go homestead somewhere. They will be a rounding error, since they have already expressed revealed preference that "bare minimum lifestyle" is not enough. Someone capable of holding down a $350k/yr white collar job is already qualified to go make $70k/yr remotely in some random city anywhere in the US they want to live but they choose not to.
As we've seen with COVID remote work, the desirable "cheap" places to live will very rapidly have price appreciation because they are starting from such a low floor to begin with.
A $300/mo increase in some 30,000 population city in the midwest is a lot more material to the market than a $300/mo decrease for a $3k/mo apartment in a top 10 city core.
It also ignores the folks who want to live in the superstar cities but cannot currently afford to. If UBI is high enough to really matter, there will simply be a reshuffling. I'd expect upper-end to perhaps go down (largely due to increased taxes and thus less disposable income for the high earning group), but the lower-end to be raised eating up basically all the UBI surplus.
Also this totally ignores the third and fourth (and more!) order effects. If people are less incentivized to work, and work carries a much higher tax load (as it must for UBI to be worth even considering) - pay for high-end jobs must increase since working is going to have less net-benefit for an individual who now has a choice to totally drop out of the workforce and have others pay for everything. Who knows? Maybe prices actually increase in those superstar cities as they become even more winner-take-all environments?