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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

#181

Post by encoderer »

pickleglitch wrote: post #129
gravypod wrote: post #12

Earlier quoted context omitted.

In 1970 a $300/month apartment would be ~$2000/month in today dollars. I do think rents are too high as productivity and supply chains are much more efficient. I think in the 70s we were still using black pipe for gas, iron septic lines, and copper pipes for water. But, I don't think new builds or renovations are cheaper inflation adjusted (harder to estimate). Cost of money (inflation), building, and maintenance is…

The median monthly rent for houses and apartments in the U.S. in 1970 was $108, or around $930 in today's dollars. So, in today's dollars, that would be $11,160/year. Median household income in 1970 was $9,870, or $84,714 in today's dollars. Median rent in the us today is around $1,750, or around $21,000/year. Today's median income in the us is around $89,000. So, housing cost has nearly doubled, while wages have onl…

You seem to be using family income and not household income for 1970.

https://fred.stlouisfed.org/series/MEFAINUSA672N

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

#182

Post by matips »

cpburns2009 wrote: post #137
rootusrootus wrote: post #74

Earlier quoted context omitted.

> If you remove landlords (but keep property managers, developers, etc In this scenario, who owns the property? And if you are advocating that everyone should own their home, what is the point of a property manager? What about the people who do not actually want to own their home?

This is exactly my problem with these arguments that demonize landlords. I've lived in multiple cities where I knew I'd only live there for a couple years, and I'm only interested in renting. How do you live somewhere short term without someone owning the rented property?

You could buy property and sell it later.

Of course it is not a solution to current situation when real estate are very expensive, but in theoretical discussion where real estates are affordable you can buy it and sell when you move.

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

#183

Post by littlexsparkee »

selfmodruntime wrote: post #92
e12e wrote: post #38

Earlier quoted context omitted.

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.

It originated in the US, not meant to apply to all contexts/countries.

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

#184

Post by groundzeros2015 »

triceratops wrote: post #166
groundzeros2015 wrote: post #138

Earlier quoted context omitted.

Who agreed to those terms?

https://en.wikipedia.org/wiki/Burnett_v._National_Associatio...

This lawsuit is about realtors acting against your interest (agency problem), and is not about you being forced to pay a particular commission.

You can choose your realtor. You can discuss with them.

This person just bought a 2m house!

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

#185

Post by stefanfisk »

win311fwg wrote: post #133
TrackerFF wrote: post #111

Don't live in the US, but we're facing similar problems here in Norway. One main driver is that there's not being built enough new housing. It's a combination of building being too expensive, higher interest rates, etc. So the second-hand/used market is red hot. Renting has become so expensive, that many landlords have exited - so we're likely heading into a really bad crunch in the near future for the renters. I've…

> One main driver is that there's not being built enough new housing. I recently entertained the idea of building a new house. Not terribly surprising, but worth mentioning that the time and materials to put up the structure was going cost even more than buying a used house. If nobody can afford to buy a less expensive used house then naturally nobody is going to build the much more expensive new house either. Therei…

I’ve been thinking about this quite a bit lately.

I live in an apartment in Stockholm but I also own an old forest cabin. It’s perfectly legal for me to live in said cabin permanently, but it would be strictly illegal for me to build a new house to the same simple standard. The building codes are basically making it illegal to be poor.

Similar patterns exist for student housing. The old style of student corridors with small rooms are no longer being built. Instead we are basically getting full apartments with individual huge bathrooms because the building codes mandate that everything is wheelchair accessible even when it’s practically temporary housing and they could get by with making 1/10 apartments accessible.

And that’s not even getting into how NIMBYism is enabled by laws that basically guarantee stagnation anywhere housing is in demand.

Shit’s fucked.

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

#186

Post by AlotOfReading »

hereme888 wrote: post #88

[flagged]

That's a bad take. For one, illegal immigrants are a minority of the foreign born population. Secondly, even if the statistics are by some miracle not tortured out of the numbers, still obviously not a sufficient explanation. San Francisco for example has a small undocumented population (primarily from Asia), yet also has huge affordability issues from high rental demand and income disparity. There's no world in which Mexican fieldworkers are competing with FAANG developers for $4k/mo apartments in SoMa.

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

#187

Post by _DeadFred_ »

WarmWash wrote: post #84
miltonlost wrote: post #56

Earlier quoted context omitted.

Go tell that to Oklahomans and others still making a minimum wage of $7.25 an hour

If you can find a single person still getting paid that, please give me their info and I will have them making twice that by tomorrow.

I'm making zero. I have been in IT, a developer (but out of date mostly VB and SQL), managed dev teams, managed IT departments. Unfortunately I have a record and it's hard to get someone to give me a second chance plus now I'm over 50 and too old/overqualified for the minimum wage jobs. Would love to hear your ideas.

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

#188

Post by arwineap »

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.…

> 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

This is how I know that you've never tried to run houses. If you hire out a property manager and all of your maintenance you are not making money.

I have to be an electrician, a plumber, a painter, a drywaller, an engineer, a salesman, a delivery driver, a businessman, an appliance repairman and a lawyer. And that's to make a measly 8% on my money.

> There is literally nothing to be produced! The land is there regardless!

No one rents bare land. They are renting a depreciating asset that you have to upkeep.

Yea yea yea, Henry George says that the value is provided by the citizens around your property. I call bullshit. The value is the shelter, the heat, the comfort. That's what people need.

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

#189

Post by pc86 »

amazingamazing wrote: post #174
throwaway041207 wrote: post #158

Earlier quoted context omitted.

In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we get out of it. Of course, people went nuts offering over the asking price when interest rates were super low so I understand, to some degree, that baselines were reset. But the current housing market doesn't feel sustainable. I don't understand how a proper m…

It is very simple. Housing is not built.

This is at least 80% of the problem. The system is behaving exactly as you'd expect it to with even an Econ 102-level understanding. New supply isn't being built, or is being severely hamstrung, and more people want the supply and are willing to sacrifice (often too much) to get it. Add in rent-seeking behavior, both figuratively and literally, and prices quickly double in even mediocre areas with minimal long-term prospects for growth.

Relaxed zoning requirements for SFH and MFH buildings, relaxed or eliminated height restrictions for high rise density projects in urban areas, eliminating rent control, and a laundry list of other things would help alleviate the upward pressure.

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