This article doesn't propose a meaningful solution. If a shortage of rental properties is driving up the cost of rent, wouldn't moving more people into the city make demand and therefore rent even higher?
One could argue that this imbalance between wages and rent cost will ultimately be self-stabilizing. Take a city with an acute shortage of rental properties. Rents will spike, which will make apartment buildings an attractive investment. There will be a boom in building construction, and after a few years rent rates will stabilize as more rental properties come online. Wages should also gradually adjust to reflect the local cost of living. The problem is that it will take time. For building construction the process of design, land procurement, permitting, not to mention the actual construction takes years. Wage adjustments also takes time as we all know. I don't think rent control is a viable answer as it would kill private investment in the construction of rental properties and exacerbate the shortage. Subsidies for the construction of affordable housing would help spur investment but again, construction takes years.
I don't know if moving out of the city in the short term is as bad as advertised. Yes, there are major costs in relocating but its not insurmountable. Why not move out of the city if the reduced cost of rent and the cost of living more than offsets the cost of commuting?
This article doesn't propose a meaningful solution. If a shortage of rental properties is driving up the cost of rent, wouldn't moving more people into the city make demand and therefore rent even higher?
I agree. The article's premise seems to suggest that if we just pray to the Free Market Fairy that increased demand will ultimately lower costs instead of allowing owners of finite resources to jack up the prices even more. Yes, more renters will increase the need to build more housing but the last ten years should have demonstrated to anyone paying attention that this is no guarantee of lower costs. If they can build more and jack up the prices because of high demand then they win in both directions.
However, the article serves to highlight a significant problem to wealth disparity that people seem content to ignore: the cost of living is skyrocketing in ways that we can't or sometimes won't track and housing costs is one of them. Moving to more affordable areas typically means accepting huge cuts in pay, negating the reason why you moved in the first place. I hear housing prices in Detroit are really cheap, but I wouldn't hold out hope of finding much work there. Long commutes aren't very healthy or feasible either if you're struggling for money, especially with the way public transportation is starved for funds and resources.
I think ultimately the problem is that in society the middle and working class do not have a powerful voice representing their interests. In the old times they had unions. The threat of work stoppage was enough to guarantee that wages would keep pace with the cost of living. Now unions are marginalized and the middle class is fighting among themselves for table scraps. If wages had kept pace with productivity gains the high cost of rent wouldn't be nearly as acute as it is now.
This article doesn't propose a meaningful solution. If a shortage of rental properties is driving up the cost of rent, wouldn't moving more people into the city make demand and therefore rent even higher?
One could argue that this imbalance between wages and rent cost will ultimately be self-stabilizing. Take a city with an acute shortage of rental properties. Rents will spike, which will make apartment buildings an attractive investment. There will be a boom in building construction, and after a few years rent rates will stabilize as more rental properties come online. Wages should also gradually adjust to reflect the local cost of living. The problem is that it will take time. For building construction the process of design, land procurement, permitting, not to mention the actual construction takes years. Wage adjustments also takes time as we all know. I don't think rent control is a viable answer as it would kill private investment in the construction of rental properties and exacerbate the shortage. Subsidies for the construction of affordable housing would help spur investment but again, construction takes years.
I don't know if moving out of the city in the short term is as bad as advertised. Yes, there are major costs in relocating but its not insurmountable. Why not move out of the city if the reduced cost of rent and the cost of living more than offsets the cost of commuting?
I agree. The article's premise seems to suggest that if we just pray to the Free Market Fairy that increased demand will ultimately lower costs instead of allowing owners of finite resources to jack up the prices even more. Yes, more renters will increase the need to build more housing but the last ten years should have demonstrated to anyone paying attention that this is no guarantee of lower costs. If they can build more and jack up the prices because of high demand then they win in both directions.
However, the article serves to highlight a significant problem to wealth disparity that people seem content to ignore: the cost of living is skyrocketing in ways that we can't or sometimes won't track and housing costs is one of them. Moving to more affordable areas typically means accepting huge cuts in pay, negating the reason why you moved in the first place. I hear housing prices in Detroit are really cheap, but I wouldn't hold out hope of finding much work there. Long commutes aren't very healthy or feasible either if you're struggling for money, especially with the way public transportation is starved for funds and resources.
I think ultimately the problem is that in society the middle and working class do not have a powerful voice representing their interests. In the old times they had unions. The threat of work stoppage was enough to guarantee that wages would keep pace with the cost of living. Now unions are marginalized and the middle class is fighting among themselves for table scraps. If wages had kept pace with productivity gains the high cost of rent wouldn't be nearly as acute as it is now.