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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

#261

Post by charliea0 »

toto444 wrote: post #214
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.

My two cents : I believe that if you increase supply and allow more affordable housing in a city, it will only marginally decrease prices but will mainly attract more people to this city. I think the solution to housing cost is to make smaller cities, towns and the countryside more attractive by having higher local tax rates in cities. This source of income could be used to build better infrastructure in the rest of…

NYC has substantially higher taxes than most of its suburbs. It also has a much higher draw due to its dense population supporting fancy bars, arts, and other world class amenities. The network effects of living close to other interesting, cosmopolitan, or just niche social group people are also valuable.

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

#262

Post by ChuckNorris89 »

cpascal wrote: post #213
ChuckNorris89 wrote: post #133

Earlier quoted context omitted.

How did that work for Berlin? Try moving there today and tell me how affordable it is for newcomers. Rent control is basically subsidizing existing grandfathered tenants by fleecing those new wishing to move in, without fixing the underlying housing shortage in any way. The solution is always, always, having (building) more supply than the demand, yet nobody seems to get it.

> The solution is always, always, having (building) more supply than the demand, yet nobody seems to get it. It is easy to hand wave "more building supply", but that's a medium to long term solution. What do we do in the short term? Are we supposed to just allow landlords to hike people's rent anywhere between 10-40% year-over-year forcing them to be displaced? There needs to be some middle ground.

>It is easy to hand wave "more building supply", but that's a medium to long term solution.

YES! It's the long term solution which if it were implemented in a timely manner in the past, would have saved us today, but even though we are in a mess today, it's not being implemented even to this day due to bureaucracy, NIMBYism and various political issues which beat around the bush, instead of saying it straight: "Build more today so we can live easier tomorrow!"

>What do we do in the short term?

Also, build more. If you don't build in the short term, there will be no long term.

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

#264

Post by dionidium »

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…

> and property owners provide almost no value, but to provide access to housing for people who has no capital for it, which is service that could be perfectly provided by a state entity.

Property of course requires maintenance and management, so the sleight of hand here is to define away all those aspects of ownership so that by definition all that's meant by "landlord" is "old guy who cashes checks."

But somebody has to maintain the property, somebody has to prioritize upgrades and improvements, somebody has to cut the grass, somebody has to pay the taxes, somebody has to -- yes -- collect and cash the checks. Somebody has to respond to tenant requests and emergencies. Somebody has to advertise the property when it's vacant. Someone conducts showings and screens tenants. And, maybe most important, somebody assumes the risk of a bad tenant or a down market or a declining neighborhood. And so on and so on.

Whether all this is done by the owner personally or hired out is irrelevant. There's no reason to believe government can perform these functions better than private owners in a market.

A simple proof that landlording is not free/easy money is to realize that millions of middle- and upper-middle class Americans who -- if not today, certainly 5 years ago before this most recent run-up in prices -- could, if they wanted to, afford to buy property and become landlords, but they mostly do not do it. And since nobody turns down free/easy money, landlording simply cannot be free/easy money. QED.

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

#265

Post by gpt5 »

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.

>Year over year inflation is 9.3% and Fed interest rate is only 1.5%, while it should be 2% points over inflation.

This ignores the realities of the market. A much lower rate than 11.3% (e.g. a 4%) would lead to a deep recession due to a shrinking money supply, which in turn would "counteract" inflation.

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

#266

Post by mym1990 »

5350-uiop-1130 wrote: post #242

i think remote work goes a long way in resolving this problem. governments are not interested in building new affordable property (at least in the UK). so those of us who can afford to rent in these cities, but not buy, we should all leave these places...let the landlords default on their speculative house of cards.

Remote work is essentially what created a large housing cost increase in other cities. Also for cities like NYC, reducing demand will be difficult. NYC has always been a city where lots of people want to live(maybe not you or me, but it does attract a lot of attention). It is historically significant, vibrant, and many parts are beautiful. People will flock there, even as others are leaving.

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

#267

Post by jmilloy »

fartsucker69 wrote: post #215
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…

Property owners providing almost no value is just factually wrong. Their function is similar to insurance. You pay rent to live somewhere because you don't want to take the risk or can't get the loans to buy a property yourself. And it costs real money and time (i.e. real resources) to build those homes and maintain them. In return property owners (or insurance runners) can get rich off your monthly payments as well…

It's easy to agree that property owners provide value, some more than others. Anyone who thinks otherwise is not seeing the big picture. On the other hand, you seem to be ignoring the realities of supply and demand, which can quite simply allow rental costs to increase well above the value that owners provide.

Obviously I don't know, but I suspect you might be seeing a king of survivorship bias. Many people I know were in fact displaced from the place they want to live, including careers and communities they were a part of, due to cost of living. Housing is a big part of that. Are you surrounded by people who can afford it, and perhaps unaware of the people who can't?

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

#268

Post by voidhorse »

TOMDM wrote: post #238
voidhorse wrote: post #210

Earlier quoted context omitted.

Sure that’s the capitalist narrative explanation. The actual, human, explanation is that landlords see that they can get away with charging absurd rates because consumers are willing to make dumb decisions to get what they want, so they do it. I’m sick of these economic abstractions that constantly try to explain away our problems, and take away the responsibility from the human actors that cause these effects. It’s…

I mean sure, if you want to address it from the demand end of things that would work if there were a viable solution. The hard fact is that people want to live in large cities. Even if you were to legislate that all landlords had to provide housing at cost + 5%, there would still be a demand for more housing as people desperately bid to enter those areas. Further more, you'd see people never give up those rentals bec…

That’s fair, but I don’t see how it would prevent similar effects from eventually spidering out to those city limit properties once the demands propagate to those areas.

I think the solution will require a mix of infrastructure solutions (building more homes) and regulatory solutions. I’m not saying landlords can’t make money, but there should definitely be greater restrictions around how much they can raise rates (which did exist, but which NYC is steadily removing) and renters need to be afforded more rights and protections too.

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

#269

Post by HPsquared »

TOMDM wrote: post #56
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 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.

High rent reduces demand and reflects an equilibrium between supply and demand. That, and people in Manhattan simply can afford to pay more, so are able to bid up the prices higher than tenants in other places.

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

#270

Post by jeffbee »

fny wrote: post #233

This is a price signal. Anyone who's calling for intervention needs to wake up. The proper response is for people to leave . If you drive across America, you'll find economically, depressed areas which have suffered from brain drain. Many aspire to attend an out of state college, go work in the Valley, join some VC-funded startup, megacorp, consulting firm, and strike it rich. In all likelihood, you will (1) not stri…

Maybe, but you are also advocating for climate arson. Every person who leaves NYC for any other American city other than Berkeley is raising their carbon footprint, dramatically in the case of most cities. So that isn't great.

The other perspective that you need to consider is there are huge populations who simply will not consider living in the cities you mentioned. Women, for example, do not want to move to Ohio. Homosexuals would rather not live in Oklahoma. People who are not white can rule out a happy existence in 90% of American cities. It's true that a single, straight, white male with no children can pick up and move anywhere, but that's a relatively small fraction of the people.

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