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Minimum wage workers cannot afford rent in any U.S. state

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Re: Minimum wage workers cannot afford rent in any U.S. state

#101

Post by pariahHN »

cameronbrown wrote: post #53
centimeter wrote: post #38

Earlier quoted context omitted.

Not all 40-hour-a-week jobs are valuable enough to support a high adult standard of living. If adults are still doing those jobs, it’s not a problem with the jobs.

This is the real issue. Imo: there's not enough upwards mobility in jobs because people are retiring later in life. We need to make it cheaper to retire and for workforces to move up the ladder. I know this sounds elitist, but when I worked in a shop, I didn't expect to be able to afford a house.

This is an interesting point I have not contemplated in my musings on the issue so far. Something I should have thought of earlier since my dad came out of retirement and thus is taking up a position that otherwise could have been occupied by the promotion of someone who graduate more recently.

Thanks for sharing it.

Re: Minimum wage workers cannot afford rent in any U.S. state

#103

Post by thephyber »

bonestormii_ wrote: post #92
thephyber wrote: post #86

Earlier quoted context omitted.

Regulation isn't always about rent price caps. In the US, cities frequently have "zoning requirements" so it's very difficult to get a new high-density structure built in a neighborhood of 1-floor single family homes. Also, NIMBY groups usually have a veto vote of sorts, which makes it more expensive for a real estate developer to come into a pre-existing neighborhood and make more units (because it's a gamble and us…

> Even when there is a rental price cap, that tends to only work in the short term and exacerbates supply/demand problems long term. San Francisco, for example, implemented a rent control system in ~1980. Since then, only 40% of rental units are eligible for rent control and lots of potential rentals stay off the rental market. There are loopholes which allow conversion of a rent-controlled unit to a market-priced re…

I guess I'm just approaching the policy issue from a practical perspective (the US isn't going to be able to craft anything close to a theoretically perfect policy, especially right now with our tribalism, NIMBYs and corporate lobbying) rather than a theoretical policy which is more pure.

I'll admit that the assumptions I make about rent control assume that the policy is far from well crafted and probably assume that it gets worse over time because US policy makers tend to get worse at upkeeping existing systems the longer they last.

These assumptions probably shouldn't be attributed to a perfect rent control policy.

Re: Minimum wage workers cannot afford rent in any U.S. state

#104

Post by bonestormii_ »

gltchkrft wrote: post #79
bonestormii_ wrote: post #52

Earlier quoted context omitted.

How can that be, exactly? If it's "extensively regulated", then why is it so expensive? Can you point to a relationship between capping the price and inflating it? They seem to be inversely related.

When prices are capped, it's not like supply increases, so in practice you end up with waiting lists that can be several months to years long. I knew people who moved from Stockholm to Berlin and kept on paying their rent in Stockholm, just so they don't lose their apartment. That's how hard it is to get one. Berlin also had a rent cap, so instead of competing on price, you had to compete on intangibles like: letters…

Agreed, it doesn't provide an answer for lack of supply, and growth needs to be controlled to pace with things like public and private infrastructure, and even jobs.

However, it doesn't justify the runaway inflation of the entire housing market. Also, I'd point out that generally speaking, the population of an area will be limited by the jobs available in that area, so there is an external limit on the demand for housing to at least some extent. There are jobs and money to be made in development of additional housing to meet the demand. Supply issues are not insurmountable, and should be addressed as such.

I'll also note that in the USA, all of the "intangibles" you listed are already typically collected by the landlord along with the leasing application itself. This isn't a result of rent caps, just high demand and standard tenant screening practices.

To solve problems, you may actually have to try. Obstacles don't justify problems, they just need to be addressed.

Re: Minimum wage workers cannot afford rent in any U.S. state

#105

Post by rayiner »

bonestormii_ wrote: post #52
rayiner wrote: post #49

Earlier quoted context omitted.

Countries and places with the most extensive housing regulation have some of the most unaffordable housing. Stockholm’s housing market, for example, is a basket case.

How can that be, exactly? If it's "extensively regulated", then why is it so expensive? Can you point to a relationship between capping the price and inflating it? They seem to be inversely related.

https://www.spglobal.com/marketintelligence/en/news-insights...

In Stockholm, decades of rent regulation has created a massive undersupply of housing. That means there is a 9-year wait list for apartments. The way rent regulation usually works is it caps rent increases for a given tenant. Tenants thus never leave their apartments, so the prices for the few openings (and newly built apartments) is astronomical.

> Another legacy of Sweden's post-war efforts to develop a more equal society — known as "Folkhemmet" or "the people's home" — is rent regulation, which applies to both municipal and privately owned properties. While millions of Swedes have benefited from the highly affordable rent levels set since the 1960s, the caps have had a damaging effect on the provision of new housing.

> Historically, the low returns from rents for private landlords have made the investment case for building new rental properties difficult to justify, the Swedish bank analyst said.

> The love for rent-capped municipal properties among the Swedish people is strong. Almost 500,000 people were on Stockholm's waiting list for public housing, according to figures released in 2015, double the number from seven years prior. In 2014, the average waiting time to get an apartment in Stockholm was 9 years. Once a person is given an apartment, they often stay there for life. "People are sitting in 300 square-meter apartments because they are so cheap that they can't leave them," said Pelles.

Re: Minimum wage workers cannot afford rent in any U.S. state

#106

Post by thephyber »

bonestormii_ wrote: post #92
thephyber wrote: post #86

Earlier quoted context omitted.

Regulation isn't always about rent price caps. In the US, cities frequently have "zoning requirements" so it's very difficult to get a new high-density structure built in a neighborhood of 1-floor single family homes. Also, NIMBY groups usually have a veto vote of sorts, which makes it more expensive for a real estate developer to come into a pre-existing neighborhood and make more units (because it's a gamble and us…

> Even when there is a rental price cap, that tends to only work in the short term and exacerbates supply/demand problems long term. San Francisco, for example, implemented a rent control system in ~1980. Since then, only 40% of rental units are eligible for rent control and lots of potential rentals stay off the rental market. There are loopholes which allow conversion of a rent-controlled unit to a market-priced re…

> You can't just add 15,000 people to a neighborhood and not add parking or public transit capacity.

That's exactly why suburbs in Silicon Valley are stressing the large cities and the cities are suing each other to ensure they alleviate traffic congestion as they grow the residential units.

Those who live in the burbs and commute into the cities don't want city dwellers to be able to make the reverse commute to come to their neighborhoods. In the 1960s, the Bay Area Rapid Transit (a light rail system) was designed to be a loop between San Francisco, Oakland and the South Bay. The NIMBYs rejected plans to close the loop in the South Bay, so it became much less valuable at reducing street traffic as it otherwise could have.

Re: Minimum wage workers cannot afford rent in any U.S. state

#107

Post by user5994461 »

rayiner wrote: post #96
user5994461 wrote: post #94

Earlier quoted context omitted.

A one bedroom is around 600€ a month in all the major French cities. The country is very homogeneous with salaries tightly coupled to the minimum wage. Paris might be around 1200€ I think for a similar 1 bedroom but I am not very familiar with Paris. Maybe 1000-1500 depending on commute and location.

So 600 euros is more than 30% of the French minimum wage. Is it expected that a minimum wage worker in France can live alone in a 1 bedroom apartment?

I think it's generally doable and done, except in Paris where you couldn't afford any sort of accommodation at all.

There is little left at the end of the money. You're not going to holidays or restaurants any time soon. Hope the car doesn't break or you're in serious troubles. Assuming you were handed a car by your parents because you certainly can't acquire one by yourself (3000 or 4000 upfront!).

Re: Minimum wage workers cannot afford rent in any U.S. state

#108

Post by bonestormii_ »

gremlinsinc wrote: post #89
bonestormii_ wrote: post #36

Earlier quoted context omitted.

Having worked a lot in a rental market with a very active housing subsidy program, I agree that the administration of such programs is an actual nightmare, but you really are missing the point I think. Start with the assumption that people need to be able to afford a place to live, and that a full time job should be able to achieve that. Do you agree? Now, if we both agree that a housing subsidy program is an adminis…

or just institute a UBI program specifically covering housing that is the average rent cost for a 2 bedroom apartment in the locale in which you live. So you always have rent covered, regardless of your paycheck. They could maybe double that, and have it cover food stamps too, to cut out some of the administrative costs to manage both programs. This works for married couples too, because you'd get double that, which…

I agree, but I also believe housing regulation and health care reform must accompany these things. Allowing these markets to buoy with the increase in everyone's income will negate the positive impact, having the effect of routing the additional income into the hands of the same people who already hold all of the wealth.

Re: Minimum wage workers cannot afford rent in any U.S. state

#109

Post by [deleted] »

centimeter wrote: post #38
standardUser wrote: post #10

Earlier quoted context omitted.

Look at it from the other direction. Is working 40 hours per week but not being able to afford a 1 or 2 bedroom apartment a goal we want to set? If so, we have achieved it! I think most of us like the idea that if you put in 40 hours of work every week, regardless of the specific job, you are able to afford a basic standard of living.

Not all 40-hour-a-week jobs are valuable enough to support a high adult standard of living. If adults are still doing those jobs, it’s not a problem with the jobs.

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