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Comment by toong | Hacker News Reader

Are there any studies out there about the second order effects ?

If everyone is getting BI, I'm expecting rent to go up. Like, waaaaaaay up. Up to the point where no one can live from BI anymore.

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Then the third order effect is that it becomes more profitable to supply housing, and rents come back down.

Right, that's what you're seeing in SF or London right now ?

When people don't have to pick their housing based on the location of low-wage jobs (dense cities), I would expect the rent to go down due to better utilization of the total housing supply.

I don't think that's how rent is set right now. I believe people charge rent based on what people can bear to pay - so as long as another person with BI comes along willing to pay the higher rent, the landlord will sell to him instead!

It's not the house that's valuable to a renter, though. Most of the price variation for a given floor space comes from location-driven land cost. If someone on basic income plans to live solely on their BI for a bit, maybe to work on a personal project, maybe just to play videogames, they won't be location-bound and can seek cheaper housing in the suburbs or a rural area. There is a lot of underutilized land in America that could become very attractive to developers if the pool of available consumers suddenly included a subgroup that didn't care about commute time. That's not just greenfield developments, either; it would also apply to major cities, like in the Rust Belt, where housing and land are incredibly cheap because there are no jobs available.

Currently, if you are on minimal-wage pay, you need to spend all your money on basic necessities.

With BI, you increase the purchase power of a whole bunch of poor people. People that didn't live in the city before, now think they have a shot and can afford rent for a while and get a job in the city!

Demand goes up, prices go up. If you still want to live in the city, you will need to spend all of your BI-income AND all of your pay on the VERY SAME basic necessities.

Sounds pretty obvious to me and I can't really see it turn out any other way.

Moving back to the country side, where it's cheap ? Ok, you can live from BI, but you still don't have a job, your kids don't get a proper education and their future looks just like yours. Barely getting by and sitting around watching tv.

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