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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

#311

Post by voidhorse »

ponow wrote: post #288
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…

Let them charge what they want if it's theirs. Otherwise, your demands on what they charge amount to asserting that what is theirs isn't really. And, to put responsibility on the actor in question, you're asking that the lost potential value be stolen from the owner, for the benefit of non-owners. Can people own stuff, or not?

If you’re renting out basic needs like housing I’d argue the terms of ownership should change.

We all have dependencies on one another to get access to our basic needs. If your ISP, gas or whatever provider decided to suddenly charge you double for no apparent upgrades you would not be happy. You might have to option to go to another provider. If you didn’t, you’d have to move somewhere that has cheaper services. Moving is not zero cost. It both financially and emotionally affects people depending on how tied they are to their communities. The problem with rentals is that this is happening to long term residents that have no other option because the overall market price for the area is crazy. People are being removed from their communicates because there are no restrictions on landlords that make money will producing nothing the vast majority of the time. Capitalism is supposed to reward production, products. In most cases renting is a parasitic form of raising capital that doesn’t contribute to any material improvements, it just uses existing scarcity of resources of basic needs and exploits the fact to make capital without producing anything.

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

#312

Post by nickles »

eatsyourtacos wrote: post #202
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…

>When supply is less than demand, prices go up Question though... why, exactly does that have to be the case? Especially with something like housing where say there is mostly a fixed supply at any point and you can't just turn a machine on/off to produce more. The only reason the prices go up is because of greed basically- because people say "hey I can just charge more and people will pay more!". And there in lies th…

> Question though... why, exactly does that have to be the case? Especially with something like housing where say there is mostly a fixed supply at any point and you can't just turn a machine on/off to produce more.

Supply/demand is a basic tenet of economics. You can visualize the model with supply/demand graphs [0], which help make the model more intuitive.

The issue of the fixed supply is known as 'stickiness'. Most things in the economy lag policy, and data that we use to observe the economy also tends to lag. This is why it's really bad to have poorly designed policy; course correction is difficult, and people are hurt in the meantime.

> Every word of what you said is based on greed and squeezing the most you possibly can from people. Please realize that.

It could be fun to channel Gordon Gecko, but I disagree that this is about greed. I care about well designed economic policy because I care about people's well-being.

[0] https://www.edrawmax.com/article/supply-and-demand-graph.htm...

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

#313

Post by rcpt »

dukeofdoom wrote: post #257
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 provide almost no value I think you have no idea how much things break and need fixing. I have a friend that owns a few houses that he rents out, and it's a part time job just keeping up with fixing things. Between them, there's a few thousand items that can and do break and need maintenance. He would not be profitable if he hired out to fix things. Outside Labour can easily be $100/hour and if you…

That's property management, not property ownership.

Maintaining and improving structures is work. Nobody disagrees with that. Simply owning the thing is not work. Churchill said it best:

https://www.landvaluetax.org/history/winston-churchill-said-...

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

#314

Post by bobthechef »

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…

> charging according to income

Perhaps only as part of a way to ease those with low income. But this is no good in general. You are charging one person more than another for the same good simply because of higher income. This is price discrimination and is unjust. Usury can work in an analogous way, such as when someone raises prices to exploit increased need even though the cost of production of the good sold is the same.

> property owners provide almost no value

They provide shelter and must maintain that property. Problems occur when they begin to charge unjustly for services rendered. This calls for regulation, not state ownership. No need to go to extremes.

> The current setup creates guettos [sic] by default, by siloing people with different monetary and social capital into different building and areas, hurting social mobility

Social mobility isn't the only consideration and not the summum bonum and it exists precisely to allow people to sort themselves into social classes (otherwise, why have social mobility in the first place). People of a given social class tend to live closer to each other because they share class cultural similarities, concerns, and affinities. That doesn't mean there is no contact between people of different classes, but the solution isn't to mix everyone up into a uniform mass. There's a middle way between the hermetically sealed ghetto and uniform distribution, and it doesn't involve violating the principle of subsidiary.

Ultimately, it is poverty that is a problem, not having a lower or higher income as such.

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

#315

Post by aluminussoma »

Aunche wrote: post #182
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 This doesn't make sense to me. Rate hikes decrease spending overall, so why would rent be any different?

The increased rates make home mortgages unaffordable. This pushes housing demand to rents because people need to live somewhere. Rental prices increase while home prices decrease - bad, bad stagflation.

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

#316

Post by ponow »

eatsyourtacos wrote: post #202
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…

>When supply is less than demand, prices go up Question though... why, exactly does that have to be the case? Especially with something like housing where say there is mostly a fixed supply at any point and you can't just turn a machine on/off to produce more. The only reason the prices go up is because of greed basically- because people say "hey I can just charge more and people will pay more!". And there in lies th…

Activity guided by rational self-interest causes rapid improvement to the things that people value (_exchange_ value, not some other value for which people don't trade scarce things).

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

#318

Post by TOMDM »

voidhorse wrote: post #268
TOMDM wrote: post #238

Earlier quoted context omitted.

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 (w…

I mostly agree.

First off, city limit property is already seeing this effect.

Tenant protections in the USA suck. Big Time.

However landlords raising rates are a great signal that your infrastructure is failing somewhere. This is useful because it means you can look for and address the problem.

Some locations are going to be incredibly desireable and thus expensive, and that's okay, as long as there are options available for everyone else who can't afford them.

And as far as regulation solutions, removing mixed zoning restrictions would be a massive step forward in allowing development of construction that could address some of these issues. Being able to live within a minutes walk of groceries, restaurants etc. is such a freeing experience that is taken from too many due to zoning restrictions. Regulatory reform could fix that.

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

#319

Post by dragonwriter »

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.

> All policies that attempt to address housing costs that don't increase supply are treating a symptom and not the underlying cause.

So are the ones that do increase supply, so long as they are not doing it in a way which deliberately undercuts the fact that there are positive feedback loops at work (and cutting those positive feedback loops means reducing quality of life and economic opportunity in ways no one wants.)

Among the thing that drives demand for housing is available work (demand for labor). Increasing housing supply so more of that demand is met increases demand for local services, and thereby available work, increasing demand for housing. That's not the only positive feedback loop involved, but it's one of them.

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

#320

Post by [deleted] »

101008 wrote: post #39
bigyikes wrote: post #23

I’ve had this thought floating around in my head for a while, and it seems wrong, but I’m not completely sure why. I’m hoping someone more knowledgeable might be able to set me straight. Prices on the coasts — like 5k rent — are astronomically high compared to prices in, say, the midwest. This shocks many people. You could easily make the same comparison between the midwest and some non-developed nation. The differen…

I think the comparison with other places makes no sense if you compare nominal prices. What I think you have to compare is (among other things) how much of your salary you spend on rent. Yeah, a non-developed nation you may get a 3 room apartment for 400 USD - but your salary may be not higher than 1k USD per month. If the average salary in Manhattan would be 300k per year I think no one would care. But it is not.

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