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Comment by gonzalohm | Hacker News Reader

Is it the wages or that shitty one bedroom apartments go for $2000+

In 1970 a $300/month apartment would be ~$2000/month in today dollars. I do think rents are too high as productivity and supply chains are much more efficient. I think in the 70s we were still using black pipe for gas, iron septic lines, and copper pipes for water. But, I don't think new builds or renovations are cheaper inflation adjusted (harder to estimate).

Cost of money (inflation), building, and maintenance is the floor for rents.

The 1970's median salary was $800 (so rent was 37%), the 2026 equivalent is $5220 or 49%.

Incidentally, the 1970s are when productivity kept rising, but typical worker pay stopped rising with it.

How many apartments were $300/m in 1970?

Probably not many. The median rent reported in the census was 108.

Per state breakouts: https://www2.census.gov/programs-surveys/decennial/tables/ti...

Very few, 300 USD was considered rather high in my area back then, maybe a house would be 300. That area is now in the top 5 expensive areas to rent.

In the late 80s early 90s I was paying 350 USD for a 2 bedroom.

My parents bought the home we grew up in, which is located middle of Queens/NYC for ~$30k around 1977/8. It sold most recently for $3M. Rents were typically well under $300mo. $150 in not so great areas. That was a high inflation time though.

Today, I live in a small city in a house I bought for about $200k 20 years ago. IIRC, it sold for $80k around 1992. Worth about $450k today. A decent 2BR apartment rents for like $2k here, a nice one >$2700.

Were apartments $300/month in the deep suburbs of cities though? Because I'm always surprised to hear my parents tell me rents for 1 bedrooms in the place I grew up in outside of Boston are in the $2-2.5k range (confirmed just now, not an affluent suburb). Census data seems to put the equivalent in Massachusetts at $120/month in 1970, which would be roughly $1k/month in 2026. $300/month in 1970 might even be high for what people were paying in Manhattan in 1970.

In 1970, median rent was $108 a month, utilities included.

https://www.nytimes.com/1973/04/08/archives/108-a-month-rent...

It should be noted NYC nearly went bankrupt in the '70s, the Bronx was burning - I wonder if there's any studies that account for the share of the rent increase that's explained by the higher paid jobs, decrease in crime, etc. i.e. all the ways these places have changed materially since the reference point.

Could have all the best reasons in the world,

The median monthly rent for houses and apartments in the U.S. in 1970 was $108, or around $930 in today's dollars. So, in today's dollars, that would be $11,160/year. Median household income in 1970 was $9,870, or $84,714 in today's dollars.

Median rent in the us today is around $1,750, or around $21,000/year. Today's median income in the us is around $89,000. So, housing cost has nearly doubled, while wages have only risen by about 5%. And that's just housing. I'm sure the math for healthcare and education costs is even more grim.

You seem to be using family income and not household income for 1970.

https://fred.stlouisfed.org/series/MEFAINUSA672N

What we spend on housing has doubled. That doesn't mean the cost has doubled. It means that we buy a lot more housing than we used to.

Real estate cost is local and there are parts of america where the prices have gone nuts. But there's a lot more where it hasn't and housing is affordable.

Both are true. We’ve made cheap housing illegal and we’ve demanded ever higher quality housing.

We need to allowed for revealed preferences. In developers we trust.

> But there's a lot more where it hasn't and housing is affordable

In many of those places salaries have been stagnant or work has dried up

So we have a weird situation where someone living in a big city with a large salary is priced out of real estate by high prices, and someone living in a smaller city with more reasonable real estate prices is priced out by a lower income

It's not universal of course, but it's a squeeze that a lot of people are feeling

Most of the sunbelt isn't like that. You can buy a 4 bedroom house in Atlanta for 270k and a 2/1 for like 160 and salaries are fine.

Supply of housing has not kept pace with population since then. So you have more people chasing relatively fewer houses.

Also compare a 1960s or 1970s house to one built today. Today's houses are bigger and much more luxuriously appointed, with gourmet appliances, stone countertops, multi-head showers, walk-in closets, huge bathrooms, etc.

Once the boomer generation dies off or goes into assisted living you'll see a lot of those 1970s houses coming back on the market.

The house I live in has one small bathroom. It was probably built before there was indoor plumbing. (Early 1800s.) A back of the mind concern when the day comes I end up selling but not much I can do about it. The house has had a lot of upgrades over time but some things can't be easily changed.

> Once the boomer generation dies off or goes into assisted living you'll see a lot of those 1970s houses coming back on the market

But will they be affordable? Or will they be bought up by real estate conglomerates to be rented to the younger generations?

More supply should make them more affordable. Buying a house was never "easy." Some people seem to think that minimum wage workers were buying houses back in the 1970s and that wasn't the case. At all.

> So, housing cost has nearly doubled

That is in line with expectations:

1. The average house is ~60% larger than in 1970. More house equates to higher costs.

2. In 1970, the typical working-class man would spend time in a public house 5-6 nights a week. Today, third places are nearly nonexistent. Houses, largely driven by the internet opening it up to the world, has become more than a place to eat and sleep. Monetary spending is naturally directed to where one spends their time and energy.

This is only part of the picture. Part of the reason houses are so much larger today is cultural, but I would argue a larger part is that economies of scale scale make it more profitable to build larger houses, so that's what developers build.

Also, the average cost of raw, undeveloped land in 1970 was about $197/acre, or about $1690/acre in today's dollars. Today the average cost of raw, undeveloped land is about $4,350/acre.

All of the other costs associated with building a house are higher as well. There are more regulations, materials are more expensive, etc. Labor is probably the only part of the equation that isn't much different after adjusting for inflation.

So it's not just that we all decided to buy larger houses and that's why they are more expensive. There are a lot of structural issues at play.

> So it's not just that we all decided to buy larger houses

If we haven't all decided to buy larger houses, who is buying them? Are you suggesting that they all sit empty? That data doesn't support that. Life isn't like Field of Dreams. If you build it, they won't necessarily come. You have to offer what the buyer wants, else they'll say "no thanks".

Listening to NPR yesterday, they mentioned it’s a renters’ market in the Sunbelt [1]. Lots of new supply here in Texas and I just signed a lease recently with 2 months free in DFW. Bringing me down to ~$1550/month. Lots of places are offering 2-3 months for free.

[1] https://www.zillow.com/rental-manager/market-trends/tx/

$1,550 a month for what? A three bedroom, 1.5 bath duplex with a garage maybe. For a flat though? Shoot me.

H1-B crackdown is cooling the housing market in cities like Dallas

https://news.ycombinator.com/item?id=48399957

That’s a sort of interesting question. On one hand, landlords are easy to resent, they extract a lot of income primarily by owning something rather than doing anything productive.

On the other hand, wages haven’t kept up with inflation and the super-wealthy are constantly capturing more of the value. At least in the case of small-scale landlords, maybe they are just the only lower-to-middle class people who’ve managed to defend the deal they had in the 90’s, proportionally speaking…

Are you saying that you blame apartment prices on landlords? If you build more apartments then market rent goes down and landlords can't charge more if people can just find cheaper apartments. It's not like landlords just choose whatever price they want - it's significantly bound by the demand.

It's largely landlords causing trouble building housing where it's needed because it would limit how much they can make.

are you referring to NIMBY homeowners? because yes, people who own houses are the most likely to prevent more housing from being built (although not the only reason more housing isn't being built)

Yep, referring to NIMBYs.

Landlords don't care. You put a 5/1 beside their slum and they're ecstatic because that means the land under their slum is now worth "build a 5/1 here" money.

don't forget about algorithmic collusion

https://www.justice.gov/opa/pr/justice-department-requires-r...

what proportion of the housing crisis do you think is because of what you linked, and what would be your evidence?

> RealPage widely touts the impact of its products, publicly advertising revenue increases of 2-7%.

https://oag.dc.gov/release/attorney-general-schwalb-sues-rea...

it's a component but not central afaict. of course it's localized and depends on housing market concentration, major metros see a large share of units held by relatively few entities like Greystar.

Markets aren’t magic, they are the result of people pushing back and forth on each other.

What do you mean by “blame?”

I felt like my post was generally in the less-finger-pointing direction.

I guess I'm just confused why your entire comment is about landlords and the super-wealthy when the article and message you are responding to don't mention either.

Landlords and rent are obviously related.

The line of thought that links super-wealthy people and wages is described in my first post. If you want to argue against it that’s fine, it isn’t a perfect link. But I’m not sure what to do with general confusion.

“I have seen people technically meet the 30% rule and still feel financially strained,” shares Linda Grizely, a certified financial planner and financial wellness speaker. “The pressure isn’t the rent alone; it’s the combination of rent plus everything else in their financial life."

dual income expectations raising costs for everyone, plus work culture necessitating clustering in metros - everything conspires against affordability

Can both be true?

one bedroom (and living alone) is a luxury and always has been

Many localities will have co-living restrictions for single-family homes.

Apartments exist everywhere with a population over 100. Does no one rent an apartment with roommates anymore?

They avoid it because it sucks

Not true.

Rent for one bedroom apartment was 500$ in 1998, cold / hot water included other utilities are extra.

I was making 35K back then and it was enough to afford relatively good living - car, groceries, gas, occasional meal for 2 at a restaurant.

And gas was 35cents on the Wet Coast of Canada.

$35,000 in 1998 is $72,500 in 2026, which is still a totally fine income. I know people living pretty well on that in New York City.

well, if one bedroom now goes for 2000$ that's x4 increase

where as the 72K vs 35K is only x2 increase

So, no, your math doesn't work.

Who said a one-bedroom is $2,000?

I'd say at least 2K. But the poster above says it's over 3K.

The poster above was quoting the median for all apartments in New York City, the (second-?)most expensive market in the country. Nationally it’s about $1,600 for a 1br: https://www.apartments.com/rent-market-trends/us/

You mentioned NY - logical to look at NY then no?

>I know people living pretty well on that in New York City.

median asking rent in 2026 for NYC is $3616/mo ($43,392/yr) meaning rent alone would be 60% of that income, assuming that the $72.5k figure is after taxes (which it probably isnt).

if you take taxes off, you're probably at like 55-60k. that means rent alone is 70%-77% of income!

"living pretty well"?

Yes, because you really don't have to pay that much. Those expensive apartments go to people who aren't very price sensitive (either because they actually have the money, or because they want to live it up in their 20s/30s and are spending beyond their means) or who are willing to live with enough roommates to make it affordable. If all you can find is a $3.5k unit, you'll need to get a roommate. But you can find better if you put in the work and look beyond StreetEasy.

The median household income in New York City is only $81,000 per year! People make it work!

Stop this race to the bottom stuff. You know what else is a luxury and always has been?

HVAC, transportation, anything beyond maybe emergency medicine, Internet access, education, drinkable tap water, …

The fact that the bulk of the US population has these things is what makes us a first world country.

Actually the US is a first-world country because it's allied with the US. Russia is a second-world country because it's allied with Russia, and Switzerland is a third-world country because it's allied with neither.

Is this true? I think SROs were very common in the US in metropolitan areas.

It was common plot point in media to: 1) kick your kids out at 18, 2) if two men lived together they were assumed to be dating.

I think SRO's are very different from "One bedrooms" and even from studios? a studio or a one bedroom has a kitchen, a bathroom, and some living space... I think SRO's typically have a bed, a chair, and sometimes a desk. Bathrooms were shared, I'm not sure how kitchen/cooking space worked?

yep, a ton of SROs have been lost in cities like SF https://ccsroc.net/s-r-o-hotels-in-san-francisco/

also - gentrification of apartment housing stock over time raising the price floor and phasing out of public housing

I would think greed is a luxury and always has been, more than a simple adobe and living alone.

Why not both? Wages are too low and rents are too high.

The common factor: the capital class screwing over the working class.

Look at real, median household income. It's been going up and up. The things that have gone up in relative cost are housing (because we heavily regulate building it) and premium services like healthcare and education because of Baumol.

Probably also doesn't help that to many people want/need to live in the same few areas. If you could take your office job (which in most cases would work perfectly fine) and move to a less popular area, 30% might be rather high.

That's the thing or at least one thing. These discussions aren't about most small towns and cities in the Midwest. They're about prime areas on the coasts for the most part. Heck where I live about an hour west of Boston/Cambridge is a lot cheaper than the metro itself for the most part.

Housing prices in the Midwest have also inflated greatly.

I'm paying 28% of my net income for rent and utilities on a one bedroom apartment. I could find a cheaper place too and it would be just as nice, just not in as desirable part of town. Not sure I'll ever be able to afford a house though.

Well, it doesn't help but that's where the money is and as a society we should want people to move where they are most productive. Geoffrey West shows in Scale that social outcomes like GDP, patents, etc. but also crime grow with a factor of 1.15 while infrastructure needs like pipes, wires, heating cost, gas stations, etc only shake with a factor of 0.85. So it should be highly desirable to have larger, denser cities. Unfortunately, it seems that once the boomers had stepped into adult hood and bought there first homes, we decided that cities are complete now and existing neighborhoods shall not change anymore.

Does median represent the normal anymore?

When it comes to income and wealth, I don't think so. There aren't enough people in the middle ground between rich and poor for that to be a meaningful stat for most things.

If there are very few people in the middle ground, and more people are poor, then wouldn't the median be a poor person and therefore somewhat representative? I'm not sure I'm following your logic here...

If you look at income distribution over time you'll see that the middle indeed shrunk. However, they moved to high income.

The median alone doesn't paint the whole picture. We need to compare the spread as well. The median doesn't care if you make just under the median, or $1 a month.

Certainly better then the mean....

It depends on the distribution. The reason it is often used is when there are extremes in the distribution like a handful of people paying $1B per year on a property pulls the mean upwards.

Also depends whether you can about the middle more than the 10-20% of the people most struggling who can earn much less than the mean or median

Link for the curious:

https://en.wikipedia.org/wiki/Baumol_effect

Baumol plus zoning and NIMBY driven real estate hyperinflation basically explain the modern economic malaise among especially the young.

I’ve also heard this called “in-deflation.” Inflation in everything you need, deflation in everything you make.

Thank you for linking what I was too lazy to link.

To add, politics usually responds to Baumol by subsidizing demand and/or more regulation. Needles to say both make it worse. Article: https://www.niskanencenter.org/cost-disease-socialism-how-su...

so many projects got nerfed by NIMBYs during good economic times and now are infeasible. there's more political will for change now but i'm still skeptical things will change much given the cost of construction in major metros.

Deporting or deterring much of the construction workforce certainly doesn't help either

People who are able to restrict housing development (e.g. existing home owners) have too much political power on a topic that shouldn’t be up for a vote.

Imagine if current hospitals could object to opening new hospitals. Or grocery stores could object to competitors getting permits.

> Imagine if current hospitals could object to opening new hospitals

LMAO

They can! It sucks!

https://en.wikipedia.org/wiki/Certificate_of_need

This literally is how it works. You need a certificate of need to open a hospital and existing hospitals lobby heavily against granting new ones

Yes, of course, but consider the source. Who do you think this article, about literal rent seeking behavior is representing? Certainly not the working class...

> The common factor: the capital class screwing over the working class.

This thought terminating cliche is getting real old. What are your solutions? and what evidence do you have that those solutions will solve the problems? Shaking your fists at "the elites" and regurgitating populist slop is not going to

It's the opposite of a thought-terminating cliche. It refers to an entire world and body of work, which include solutions.

You could start by reading Marx, who laid a lot of the groundwork.

> Shaking your fists at "the elites" and regurgitating populist slop is not going to

I like the way you trailed off halfway through your knee-jerk reaction, underscoring just how much your response is an automated result of indoctrination.

> It's the opposite of a thought-terminating cliche

> You could start by reading Marx, who laid a lot of the groundwork.

Are you aware that you just responded with another? You did the "read theory" meme lol

> I like the way you trailed off halfway through your knee-jerk reaction, underscoring just how much your response is an automated result of indoctrination

so you don't have solutions or evidence is what I'm gathering? just another lefty populist spouting tired platitudes?

Kapital describes the problem well. His proposed solutions were awful.

It’s that wages have not risen with inflation.

Aside from less than a quarter point (0.24) from Covid, wages have in fact risen with inflation and that small difference is also likely to disppear soon.

https://usafacts.org/answers/are-wages-keeping-up-with-infla...

It is in fact rents, especially with mandatory add-ons. The actual cost of renting a place is a lot more than the direct rent payment.

Frankly the statistics do not feel right - I remember jobs that were easily found at $15 per hour in 2012 and cost of everything was insanely low. One bedroom / 750, McDonald burger, $1, McDonald soda $1, a pack of beer $7. Now eveything is easily double or triple and the basic jobs are still at $15.

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