Shrinking market means prices move towards average
Rents for the rich are going down, rents for the poor are going up. Why?
11–20 of 257 posts
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#12I think affordable-level housing will always be competitive, and super-luxury stuff will be white elephant stuff that's subject to compromises. It's kind of amazing that they raised the rent. Is it because people stopped paying rent and they tried to get it from other renters?
Landlords in big cities always raise rent because they can. They'd rather push a current tenant out than work with them, because with the high turnover they are sure to get a new tenant pretty soon at the higher price anyway. Its this sort of unscrupulous taking, of maximizing profit because its 'leaving money on the table' to not do so, is why we have rent control ordinances which work by capping the maximum yearly % increase in many of our big cities (although this cap is typically higher than the median wage increase so landlords still beat the economy with their investment and with rent control ordinances applied, despite some sentiments online about rent control).
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#13It's not "rents for the rich" it's "rents for higher priced apartments" and it's basic supply & demand. This headline stokes unnecessary class conflict. WaPo should be ashamed.
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#14I think affordable-level housing will always be competitive, and super-luxury stuff will be white elephant stuff that's subject to compromises. It's kind of amazing that they raised the rent. Is it because people stopped paying rent and they tried to get it from other renters?
Landlords in big cities always raise rent because they can. They'd rather push a current tenant out than work with them, because with the high turnover they are sure to get a new tenant pretty soon at the higher price anyway. Its this sort of unscrupulous taking, of maximizing profit because its 'leaving money on the table' to not do so, is why we have rent control ordinances which work by capping the maximum yearly…
>because with the high turnover they are sure to get a new tenant pretty soon at the higher price anyway
Only if coupled with insufficient construction of new housing.
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#15It is a huge risk right now to take on someone that is poor as a renter because of the moratorium. It is completely unsurprising to me that landlords have priced this risk factor in.
There was an article a saw a few weeks ago about some guys based out of Oakland (maybe someone else can find it) who has accumulated 5 figures worth of rental debt. It talks about how he had just moved into an expensive place at the beginning of the pandemic, got laid off, then couldn’t pay for the whole year.
IIRC, he eventually moved, but still couldn’t pay rent and started accumulating even more rent debt there. I can’t imagine who would rent an apartment to that guy.
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#16Earlier quoted context omitted.
Landlords in big cities always raise rent because they can. They'd rather push a current tenant out than work with them, because with the high turnover they are sure to get a new tenant pretty soon at the higher price anyway. Its this sort of unscrupulous taking, of maximizing profit because its 'leaving money on the table' to not do so, is why we have rent control ordinances which work by capping the maximum yearly…
>because with the high turnover they are sure to get a new tenant pretty soon at the higher price anyway Only if coupled with insufficient construction of new housing.
Which is pretty inevitable with our system of housing development. If you're a large property owner and you want to make more money, you have two options:
A) Build more housing, to create more units you can rent out.
B) Don't build more housing, and use the reduced supply to raise the rent on your existing properties.
Since option B has a lower risk and a higher return on investment, is it really surprising that most metro areas have a big housing shortage?
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#17While the article is interesting, there is one dynamic it missed: tech debt.
Starting around 1975, housing supply stopped keeping up with the growth of housing demand. It picked back up fifteen years later, around 1990: https://www.brookings.edu/research/the-goldilocks-problem-of...
(But that is on a national level: in the West, in comparison, housing growth hasn't been sufficient to house the new households formed at any time in the last 70 years and so the problems run deeper.)
Normally, cheap housing is housing that was expensive housing 30-100 years ago. Think of all of the post-war apartments in NYC, or the Boston multi-family houses built around the previous turn of the century.
Since many cities currently lack the recently-aging housing that would normally be filtering down market right now, the elasticity at the top is affecting housing too new for developers to be out of debt on, and thus we are unlikely to see it translate into lower prices on the low end until another 20-25 years pass and we get out of this housing doldrum.
(Not the West, though. Sorry San Francisco: you just have to build more places where people can live.)
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#18this kind of thing will never end until there's national zoning laws that override local ones. however something like that would be challenged probably up to the supreme court.
it's a tough hill to die on.
it's a never ending cycle -> if you're poor you're more likely to rent -> if you rent you're more likely to be affected by a recession -> if you're laid off others are also laid off -> landlord risk increases so rent increases commensurately -> repeat.
the only way to end this vicious cycle is to just buy your house as you're more insulated from rent increases and moratoriums are a bit more generous, but zoning laws...
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#19Earlier quoted context omitted.
Landlords in big cities always raise rent because they can. They'd rather push a current tenant out than work with them, because with the high turnover they are sure to get a new tenant pretty soon at the higher price anyway. Its this sort of unscrupulous taking, of maximizing profit because its 'leaving money on the table' to not do so, is why we have rent control ordinances which work by capping the maximum yearly…
>because with the high turnover they are sure to get a new tenant pretty soon at the higher price anyway Only if coupled with insufficient construction of new housing.
Don't worry; they have laws to ensure that.
Re: Rents for the rich are going down, rents for the poor are going up. Why?
#20Because by definition rich means “can buy house”, and poor means “no choice but to rent”. What sort of rich person rents a house, except whilst between selling old and new? It’s a strange question to ask .... who doesn’t see this as self evident?
There's a high percentage of "rich" people in the Bay Area who rent because even a run-down, small, shitty house is $1mm+.