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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

#111

Post by BlargMcLarg »

ricardobeat wrote: post #96
nickles wrote: post #51

Earlier quoted context omitted.

> 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 This is great policy if you want to make housing unaffordable. When supply is less than demand, prices go up. Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechani…

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…

>It isn't perfect (massive bubble on the free market right now) but seems to work well enough.

No it doesn't. We have massive wait lists for social housing, and being middle class arguably leaves you in a worse state due to social housing eligibility only applying to very low incomes, and anyone with an office job close to the city will easily earn too much for social housing, but not enough for private norms. Meanwhile those with social housing are incentivized to stay as the costs are far lower than private, and the repercussions are lacking.

The problem has been obvious for decades, yet the government felt zero incentive to do anything when it was possible. To top it off, there's a general reluctance to build due to emission limits. And our government is actively bending over to the farmers making things even worse.

The Netherlands is the perfect example of what not to do when trying to intervene.

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

#112

Post by lumost »

autaut wrote: post #53
eushebdbsh wrote: post #14

Earlier quoted context omitted.

people have taken on all this cheap debt and are just realising they have to pay for it

Do you really think that rents in New York are because of cheap debt and not because a tiny island has been captured by billions and billions of corporate luxury development, while at the same time the supply of appartamenti is choked by there being more Airbnb places than places being rented. Covid has been the greatest transfer of wealth upward in our lifetime, but sure it’s cheap personal debt.

I'm curious how viable permanent AirBnBs will be once interest rates rise. It's easy to make ends meet when the house rises at 20% per year, and 2 weekends pays for the mortgage. If the same house's mortgage costs 4x and doesn't sell for 6 months it's a less attractive deal.

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

#113

Post by vultour »

moonchrome wrote: post #34
anovikov wrote: post #25

Earlier quoted context omitted.

Obviously. But because price change is so small over so many years, i am inclined to think it's average of existing contracts, not of newly signed ones, and vast majority are regulated rentals signed 30-50 years ago, that are super low maybe 1000-2000 per month, and drive down the average.

What ? Your numbers sound 2x above what I'm seeing casually browsing ads. Or you have super inflated expectations of what's "above average but not posh" - like penthouses with views and things.

One of his comments from 2016 says he spends all of his 100k/year living in Vilnius. I don't know what kind of mansion he is living in but this guy is clearly completely detached from reality. Most people in eastern Europe barely break 2k a month, in many countries less than half that. No chance average rent is anywhere close to 5k.

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

#114

Post by runako »

rpadovani wrote: post #72
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…

> Income After Taxes: $181,196 What? I thought that in U.S. taxes would be so much lower than in EU! In Bavaria, Germany, the income after taxes on €300,000 euros is €168.131,35 in the highest contribution bracket, and €178.251,07 in the lowest!

This is a common misconception also held by many Americans! The total tax burden paid by many Americans is very comparable to other industrialized nations.

(Yes, NYC has a higher burden than most places, but the cities where many Americans live tend to have higher tax burdens in general, regardless of the politics of the leadership.)

The major difference is that instead of comprehensive social services, our taxes buy us the world's most expensive military.

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

#115

Post by oogali »

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…

Half hour? That's been debatable for some time now. As an example, it takes 20-30 minutes to commute from the Upper East Side to Midtown West, barring any subway issues.

There are very few grocery store clerk, delivery drivers, and coffee baristas who live in UES. They've already been pushed out to the edges of Manhattan and other boroughs.

The 20-30 minute commutes have been snapped up by younger people who have been priced out of the 10-15 minute commutes. You currently see a lot more ads for rentals that seem to stretch the boundaries of neighborhoods (e.g. West 110th Street == "Upper West Side").

The wait lists for rent stabilized apartments are incredibly long, so the chances of a grocery store clerk, delivery driver, or coffee barista getting into more affordable housing closer to their place of work is pretty slim.

And good luck if you're an hourly employee with a long commute when the MTA lets you down in the form of a delayed train, or express-turned-local, etc. You're either penalized by your employer (or angry customers) for arriving late, or you penalize yourself by leaving the house 30-45 minutes earlier and sitting around unpaid until it's time for your shift to start (ignoring any cost of leaving the house earlier, e.g. cost of extra child care, or risk of being unreachable on the subway by a dependent).

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

#116

Post by spaniard89277 »

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).

IDK if it's a very socialist solution, provided that it aims to increase disposable income and savings, that will pour into consumption, people starting their own businesses, etc.

Think also that the program can avoid deficit by not having only low-income tenants, providing more opportunities for social mobility and allowing more consumption which means more VAT taxes, specially if you're smart enough to provide your tenants with supermarkets, bars, etc, which isn't difficult if you pack enough people and provide space for bussiness in the ground floors.

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

#117

Post by Victerius »

sokoloff wrote: post #27
Victerius wrote: post #15

Earlier quoted context omitted.

That's the point? That's what I did using a calculator: https://smartasset.com/taxes/new-york-tax-calculator

No. The ratio is pre-tax, not post-tax. > 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. The ratio is on pre-tax income. To pay $60K/yr in rent, you need 3x that in pre-tax income, or $180K/yr pre-tax. To earn $180K/yr pre-tax, you have to earn $180K/yr pre-tax,…

Ah yes. My mistake.

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

#118

Post by akvadrako »

spaniard89277 wrote: post #101
ctvo wrote: post #91

Earlier quoted context omitted.

> 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 syst…

FIFO is terrible since that often means waiting 15 years for a flat.

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

#119

Post by nickles »

ricardobeat wrote: post #107
nickles wrote: post #98

Earlier quoted context omitted.

> 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…

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

So now you (or more generally the government) get to decide who is more deserving of appropriately priced housing? Why do new home buyers need less 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.

This is precisely the problem with this policy. When price doesn’t feed through to the market, the market can’t adjust. People simultaneously argue that the free market doesn’t work while endorsing policies that prevent the market from working.

> it seems to demonstrate that the simple supply-demand model does not reflect reality

The population dropped from its peak by 1.2mm people. Prices subsequently fell so much that it was possible to buy houses for $500. That’s exactly what the supply/demand model would predict.

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

#120

Post by namelessoracle »

mattzito wrote: post #90
ricardobeat wrote: post #70

Earlier quoted context omitted.

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.

Why would they fill up with low income tenants? Why would that make it undesirable?

Because low income anywhere (rental area or even just low income suburban areas) typically has a population that is less able to invest into their area (in time or money), and historically has shown that they seek an extractive relationship with their environment rather than invest in it.
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