Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Rent Is So High and Pay So Low

lareviewofbooks.org

Post reply on HN
Print view View original

41–50 of 229 posts

Re: Why Rent Is So High and Pay So Low

#41

Post by khuey »

danieltillett wrote: post #29
withdavidli wrote: post #15

Earlier quoted context omitted.

Not exactly true, back in feudal times just being able to read was quite a privilege. They also had a lock on information. We're much more on equal footing in terms of ability to gain information. Whether we act on the information is another issue.

In order to have an effective meritocracy you have to have universal education. You then pick the top 0.1% and invite them to join you and marry your son or daughter. The whole economic system is designed to identify the very clever no matter their background and bring them into the ruling class.

If you banish any of the smart/clever/etc to the underclass they might just start a revolution. Much easier to invite them to join the party.

Re: Why Rent Is So High and Pay So Low

#42

Post by im3w1l »

So this article gives an explanation for why people would want to push up rents and property values.

Anyone know the how of it? Rising rent compared to wage would normally lead to increased building, so this must be prevented somehow.

Re: Why Rent Is So High and Pay So Low

#43

Post by josephpmay »

happytrails wrote: post #11

How many people died during WW2? It all seems like supply and demand to me. If we want lower housing prices in major cities we need more supply. Anecdotal, L.A. is built to the max horizontally. If L.A. would allow more vertical space to be used prices would drop.

But LA is building vertically. Have you been downtown recently?

Re: Why Rent Is So High and Pay So Low

#44

Post by jihjijbjib »

nostromo wrote: post #6

This article doesn't answer the question and seems primary based on nostalgia. My theory: the Fed's zero interest rate policy is very good at inflating asset values: S&P500, housing, you name it. Rising income is a second-order effect: we hope that rising asset values will lead to increased wages. That used to be the case, but no longer is. Why? Because of automation and globalization probably. So, the Fed has the pe…

How about allowing markets to operate as markets instead of a government handout to the wealthy and powerful? fed policy only encourages malinvestment and inefficiency.

How about tax and regulatory reform instead of the current corrupt regime of barriers to keep out the innovative and new for the old and established.

There's so much which would help, but completely corrupt status quo serves the powerful at everyone else's loss, things are this way because the powerful want it this way.

Re: Why Rent Is So High and Pay So Low

#45

Post by AnimalMuppet »

happytrails wrote: post #21

Labor has been on the decline for years. The union corruption and bashing seems never ending. The ignorance in the general populace allows this to happen, as people will vote against their own best interests. I would assume that the populace movement that is gaining steam with sanders and warren will start to expand if the inequality continues.

If the unions are corrupt, why do you assume that it's in my best interest to join one?

Re: Why Rent Is So High and Pay So Low

#46

Post by tomp »

The money quotes:

"If house prices fall, the middle aged and middle class will be in an uproar. [...] Perhaps even more critically, banks need house prices to rise, or at least not collapse."

"More quality housing would increase its stock, and with supply rising to meet demand, prices would fall. This would be great for young renters, bad for middle-aged property owners, bad for banks. Thus it is not likely to happen. Property prices, at an all time high, are not likely to fall, and if they do, expect the government to put a floor under them."

I couldn't agree more. I'm young and capital-poor, so this fact is a huge problem for me. I don't see a solution.

Re: Why Rent Is So High and Pay So Low

#47

Post by enraged_camel »

danieltillett wrote: post #10
nostromo wrote: post #6

This article doesn't answer the question and seems primary based on nostalgia. My theory: the Fed's zero interest rate policy is very good at inflating asset values: S&P500, housing, you name it. Rising income is a second-order effect: we hope that rising asset values will lead to increased wages. That used to be the case, but no longer is. Why? Because of automation and globalization probably. So, the Fed has the pe…

This is not a bug it is a feature. The rich are a lot smarter today than when they were the descendants of feudal landlords - 100 years of meritocracy combined with assortative mating makes for a very clever ruling class. Edit. Spelling.

Counter-data: Paris Hilton.

Re: Why Rent Is So High and Pay So Low

#48

Post by adam419 »

nostromo wrote: post #6

This article doesn't answer the question and seems primary based on nostalgia. My theory: the Fed's zero interest rate policy is very good at inflating asset values: S&P500, housing, you name it. Rising income is a second-order effect: we hope that rising asset values will lead to increased wages. That used to be the case, but no longer is. Why? Because of automation and globalization probably. So, the Fed has the pe…

Here's another solution:

Respect the wisdom of markets. Allow corrections to take place and don't bury malinvestment under the rug only for it rear it's ugly head worse later on by acting as if you have a better intuition on what the price of money should be.

Most people accept the virtue of free markets. Yet many don't see that the actions the Fed has been taking destroys the concept of a market by artificially supplementing supply or demand in an unbounded way based on a perceived sense of greater understanding.

The problem is it's really hard for most of these policy makers to build a platform based on "Let's do nothing and let the markets correct themselves". In such complex domains like an economy the action bias is very real, problematic, and the best thing to eliminate if you want to renormalize markets.

Re: Why Rent Is So High and Pay So Low

#49

Post by akamaka »

Can anyone recommend further reading that gives an in-depth analysis of housing costs?

There's no end to articles exploring the various political angles, but what good are those without understanding the underlying economic constraints?

I'd be most interested in sources that use raw data, introduce mathematical models, and take into account measurable factors such as land availability, construction costs, incentives to invest, transportation, and so forth.

Re: Why Rent Is So High and Pay So Low

#50

Post by thoward »

im3w1l wrote: post #42

So this article gives an explanation for why people would want to push up rents and property values. Anyone know the how of it? Rising rent compared to wage would normally lead to increased building, so this must be prevented somehow.

I would point the finger at NIMBYism and the fact that new developments in places like San Francisco, London, and New York have to hop through many many hoops to get built (and pass muster with a surprising number of "stakeholders").

Here is just one example...

http://www.bizjournals.com/sanfrancisco/blog/real-estate/201...

The TL;DR of this article is that a large new apartment block in SF is being held up by a construction union because the developer is refusing to hire union labor for every contractor role in the project.

Maybe we should reduce the red tape around building new structures and see how far that gets us before plowing more money into public housing and other government interventions.

Post reply on HN