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Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

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Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#91

Post by shlant »

bee_rider wrote: post #61
gonzalohm wrote: post #2

Is it the wages or that shitty one bedroom apartments go for $2000+

That’s a sort of interesting question. On one hand, landlords are easy to resent, they extract a lot of income primarily by owning something rather than doing anything productive. On the other hand, wages haven’t kept up with inflation and the super-wealthy are constantly capturing more of the value. At least in the case of small-scale landlords, maybe they are just the only lower-to-middle class people who’ve manage…

Are you saying that you blame apartment prices on landlords? If you build more apartments then market rent goes down and landlords can't charge more if people can just find cheaper apartments. It's not like landlords just choose whatever price they want - it's significantly bound by the demand.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#92

Post by selfmodruntime »

e12e wrote: post #38
selfmodruntime wrote: post #3

Not really. Rent is too high. It's not a problem unique to America. Rents in Munich, for example, have also doubled since 2012. A three-room apartment often costs between €2,200 and €2,700 per month in this city. For reference, that's close to an entire net salary for many, even for someone in the top 20% of earners in Germany, where salaries are relatively low and taxes are high. The median net income here is around…

The 30% assume gross, pre tax income - not net. Ed: obviously the 50/30/20 rule sums to 100% so would need to be net - although the US is weirdly treating health insurance as a "premium service" that go into the 50% here, not into taxes like in a modern society.

This rule makes little sense for a country with an almost 50% tax rate.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#93

Post by Aurornis »

estearum wrote: post #44
whoknowsidont wrote: post #20

Landlords are the least productive class in society, and it's not even close in terms of ranking.

It's worth being precise about this because it's a really important point. Most people who we call "landlords" are simultaneously a landlord and a property manager. Property management is an important and productive job. But the vast majority of such people's financial outcome is actually from being a landlord , that is doing literally nothing except holding a piece of paper granting them monopoly on a plot of land.…

> If you remove landlords (but keep property managers, developers, etc, which are all different jobs sometimes played by the same people)

You need to be specific about what you mean by “remove landlords” because that’s a nonsensical statement by itself.

Some party must be responsible for the investment to produce the property. Some part must own the property.

The most charitable interpretation of what you’re trying to say would be that private rental contracts are forbidden and the government would have a monopoly on renting properties out. So only the government could own properties that are rented and the entire rental market would depend on how much housing the local government decided to build and manage.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#94

Post by twiclo »

groundzeros2015 wrote: post #83
WarmWash wrote: post #67

The problem is absolutley that housing is too expensive, which of course a bunch of realtors are not going to point out. Increasing wages will not fix the housing crisis, and will just drive prices higher. How convenient for a bunch of realtors...

Realtors don’t own the houses.

The get a percentage cut of the sale price of a house.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#95

Post by bigfishrunning »

JohnFen wrote: post #69
sethjgore wrote: post #30

Earlier quoted context omitted.

Does median represent the normal anymore?

When it comes to income and wealth, I don't think so. There aren't enough people in the middle ground between rich and poor for that to be a meaningful stat for most things.

If there are very few people in the middle ground, and more people are poor, then wouldn't the median be a poor person and therefore somewhat representative? I'm not sure I'm following your logic here...

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#96

Post by selfmodruntime »

lifestyleguru wrote: post #33
selfmodruntime wrote: post #3

Not really. Rent is too high. It's not a problem unique to America. Rents in Munich, for example, have also doubled since 2012. A three-room apartment often costs between €2,200 and €2,700 per month in this city. For reference, that's close to an entire net salary for many, even for someone in the top 20% of earners in Germany, where salaries are relatively low and taxes are high. The median net income here is around…

It's quite cruel how Germans still keep up appearances with applying for the apartment with elaborate portfolio, full personal and financial data, letters and so on. While the only portfolio that matters is envelope with EUR 1500 in cash, or at least was 2-3 years ago and now is probably higher. 5-8 years ago it was maybe funny but now is simply cruel.

I have never heard of someone paying cash to get an apartment tbh

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#98

Post by nullorempty »

rafram wrote: post #39
nullorempty wrote: post #17

Earlier quoted context omitted.

Not true. Rent for one bedroom apartment was 500$ in 1998, cold / hot water included other utilities are extra. I was making 35K back then and it was enough to afford relatively good living - car, groceries, gas, occasional meal for 2 at a restaurant. And gas was 35cents on the Wet Coast of Canada.

$35,000 in 1998 is $72,500 in 2026, which is still a totally fine income. I know people living pretty well on that in New York City .

well, if one bedroom now goes for 2000$ that's x4 increase

where as the 72K vs 35K is only x2 increase

So, no, your math doesn't work.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#99

Post by john_strinlai »

rafram wrote: post #39
nullorempty wrote: post #17

Earlier quoted context omitted.

Not true. Rent for one bedroom apartment was 500$ in 1998, cold / hot water included other utilities are extra. I was making 35K back then and it was enough to afford relatively good living - car, groceries, gas, occasional meal for 2 at a restaurant. And gas was 35cents on the Wet Coast of Canada.

$35,000 in 1998 is $72,500 in 2026, which is still a totally fine income. I know people living pretty well on that in New York City .

>I know people living pretty well on that in New York City.

median asking rent in 2026 for NYC is $3616/mo ($43,392/yr) meaning rent alone would be 60% of that income, assuming that the $72.5k figure is after taxes (which it probably isnt).

if you take taxes off, you're probably at like 55-60k. that means rent alone is 70%-77% of income!

"living pretty well"?

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#100

Post by nathan_compton »

phantom784 wrote: post #89
groundzeros2015 wrote: post #83

Earlier quoted context omitted.

Realtors don’t own the houses.

Realtors earn commissions as a % of the price a house sells for.

Merch has to move for them to earn a percentage. If prices are systematically too high I would guess liquidity goes down.
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