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Manhattan rents cross $5k threshold for first time

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Re: Manhattan rents cross $5k threshold for first time

#101

Post by spaniard89277 »

ctvo wrote: post #91
spaniard89277 wrote: post #36

Housing and land is a non-transable good, and therefore there should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding >40% of the renting stock and charging according to income, and renting to a representative distribution of tenants so to prevent guettos. Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost…

> CMV Questions more than anything else: - How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building? - With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarant…

> How does the system decide which applicants out of multiple get the unit? Lottery? How does the system decide which units get rented first (so the owners get income) e.g. 3 identical units on the same floor, in the same building?

I don't know if I understand your question. We're talking about public housing, the owner is a public entity. For every building there are slots by income and they're filled by a FIFO system if you will.

I know in the US this is more difficult but in most euro countries the administration can check what you earn yearly. It's semi-automated already.

> With a sliding scale on price base on income, is there a price floor for the owner? E.g. low income tenant pays 500 euros, but the system guarantees 1000 euros to the owner so the system pays the difference?

The owner is the public housing company. No guarantee for anyone. There are different proposals, for me 20% for annualized income is simple & good enough, I wouldn't want to make it very complicated, but I'm sure it can be.

> Has supply increased with this system in Vienna? Why would say an invesntor take the risk of putting capital into apartments or condos construction with this system in place?

Overall supply did, but due to political factors the public housing system didn't expand at enough rate to keep up with demand.

Re: Manhattan rents cross $5k threshold for first time

#102

Post by sempron64 »

Victerius wrote: post #3

Averages are skewed. Still. To meet the requirement of many landlords to earn in excess of 3x rent, one would have to earn 15k a month after tax, or 180k a year after tax. To earn 180k after tax in NY, you need to earn 300k pre tax. Your Income Taxes Breakdown Tax / Marginal Tax Rate / Effective Tax Rate / 2021 Taxes* / Federal 35.00% / 25.05% / $75,152 FICA / 2.35% / 4.70% / $14,104 State / 6.85% / 6.12% / $18,356 L…

This is a little excessive, you are not taking into account the standard deduction, and taxing the entire income at the highest bracket.

Edit: I take that back, I see you used an effective tax rate including the standard deduction for a single filer instead of the marginal rate. This would be slightly better if you’re married filing jointly or have other deductions.

Re: Manhattan rents cross $5k threshold for first time

#103

Post by nickles »

cies wrote: post #66
spaniard89277 wrote: post #36

Housing and land is a non-transable good, and therefore there should be heavy state intervention on it, preferably by doing the same as Vienna, which is holding >40% of the renting stock and charging according to income, and renting to a representative distribution of tenants so to prevent guettos. Rent is the main detractor of disposable income which hurts the rest of the economy, and property owners provide almost…

Totally agree. It is one of the perfect resources to extort people with. Unlike food the price of houses rarely drop to zero, and often go up. Like food, it is very essential to people. What you propose is a very socialist solution. I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal (as they calculated that's what housing would cost using cost-based-pricing).

> I've read somewhere that in the USSR paying more than 4% of your income to housing was considered criminal

Fortunately that was the only criminal activity in the shining beacon of freedom and prosperity that was the USSR.

Re: Manhattan rents cross $5k threshold for first time

#104

Post by runako »

ricardobeat wrote: post #70
TOMDM wrote: post #56

Earlier quoted context omitted.

> CMV Rent is high because the demand in large cities majorly out strips supply. All policies that attempt to address housing costs that don't increase supply are treating a symptom and not the underlying cause.

Increasing the supply alone does not counter the gentrification / ghetto effects the parent comment talked about, in fact it might amplify them. A gross oversimplification, but if you somehow make ten thousand new apartments available in Manhattan at $1k/month, they will eventually fill up with low-income tenants, which will make them undesirable. Pressure on all the existing $5K properties will remain the same.

Are you suggesting that people paying $5k are doing that because of some inherent property of a $5k rental, and that they would not prefer to pay the year 2000 rent on the same unit, say $3000?

If people paying $5k would prefer to pay $3k for their units, why would this logic not also apply to people who are currently paying $3k?

If lower rents would make the city become undesirable, why did people want to move there in the year 2000, when rents were much lower?

Re: Manhattan rents cross $5k threshold for first time

#107

Post by ricardobeat »

nickles wrote: post #98
ricardobeat wrote: post #96

Earlier quoted context omitted.

Why would housing become unaffordable if the state intervenes? The purpose is precisely to control affordability. Prices are controlled for social housing, and flexing supply allows you to influence the free market prices. Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified. Like what we are seeing in thi…

> Supply is always less than demand in dense cities/countries, leaving it for the 'invisible hand' only ensures that the whole market is unaffordable and/or gentrified Is that the case in Detroit? I’d wager there’s substantially more supply than demand. > It isn't perfect (massive bubble right now) but seems to work well enough. If there’s a massive bubble then it seems like that system didn’t control prices.

> If there’s a massive bubble then it seems like that system didn’t control prices.

The bubble mostly affects new home buyers, which are the ones who need the least protection.

Rent is inflation-adjusted and can't be raised at will, so there is a very long delay between market prices increasing and most tenants actually bearing the cost. Everyone living in social housing still has a home, and won't be evicted so that another person can come in to pay 2x the rent. Seems pretty good to me.

I don't know much about Detroit but it seems to demonstrate that the simple supply-demand model does not reflect reality. Prices should have dropped significantly, but instead it followed the same curve as the rest of the USA, with those $500 properties being a localized phenomenon.

Re: Manhattan rents cross $5k threshold for first time

#108

Post by shankr »

asciiresort wrote: post #21
anovikov wrote: post #2

Is this an average for newly signed rent, or for the average one already paid now? If former, it looks incredibly low. I mean, this is what you pay for an above-average (but not posh) place in East Europe capitals, and for pretty much average ones in old European cities like Paris or Munich.

For a 1-2 bedroom apartment ? Those prices would mean a software engineer in Europe would not even have money for rent after paying taxes, much less anything else.

> Those prices would mea a software engineer in Europe would not even have money for rent after paying taxes, much less anything else.

Very much the story of lot of South European engineers. I used to pay 800 euros as rent when I was earning 1200 euros/month fresh out of university in Madrid.

Re: Manhattan rents cross $5k threshold for first time

#109

Post by chii »

slaw wrote: post #5

> The big picture: This points to a conundrum. The Fed is raising rates to cool inflation. But rate hikes are driving higher rents, which are fueling inflation. Why everyone and their dog says Fed is raising rates, when Fed just barely raised rates. Year over year inflation is 9.3% and Fed interest rate is only 1.5%, while it should be 2% points over inflation.

> But rate hikes are driving higher rents, which are fueling inflation.

how is higher rents fueling inflation? People paying higher rents (but on the same income) will have to forego some spending, thus reducing demand for some goods/services. So you'd actually expect that higher rents would drive _down_ inflation!

Re: Manhattan rents cross $5k threshold for first time

#110

Post by v7p1Qbt1im »

danjac wrote: post #54
afavour wrote: post #43

As a New Yorker myself I do wonder where this ends up. Me and my relatively well paid friends can afford to live here but we depend on a lot of lower paid folks for the city to function. Grocery store clerks, delivery drivers, coffee baristas, all that sort of thing. Maybe right now they have a half hour subway ride to work and that’s acceptable. But as they get pushed further and further out it’s going to break down…

Moreover artist communities flourish in urban spaces with cheap rent, like New York in the 1970s, Paris in the 1920s, Berlin in the 1990s and so on. Without that you just end up with Dubai or Monaco with shittier weather.

Exactly. Wealthy residents should at some point realize that culture and entertainment venues/options are (often) created by lower income residents. If that disappears you get soulless places which are dramatically less fun to live in. Not to mention the service industry workers, who also need to come from somewhere.
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