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Food is crucial as well. Do you believe that grocery stores and farmers should be forced to sell their goods at a reduced price because low-income folks need to eat?
If shelter is crucial to survival, then it's on the individual to make sure they can afford that shelter.
Great point which I'll rep. In my college years telephone company regulation was a somewhat hot topic. This was around 1977-8-9. My professor, who was actually somewhat left-wing, said "poor people need money, not cheap payphone call rates." About the only situation where I favor price regulation are monopoly products, or ones that ought to be monopoly, such as electric power or landline phone service.
I reluctantly support "price gouging" statutes, and even there I have mixed views. During the aftermath of Superstorm Sandy, one gasoline station on the Hutchinson Parkway raised its price from $4.29 to $4.85 per gallon. There were other stations that put through similar increases. The NY Attorney General started a few price gouging cases, most of which were settled. What I don't know is whether the higher prices were successful in attracting supply that would not have arrived or if they simply enabled gasoline retailers and others on the supply chain to "make bank." Given my uncertainty I give two cheers for such laws. On the other hand there are ripoff artists who take advantage of a bad situation.
It depends, of course, on the price elasticity of demand and the price elasticity of supply -- the slopes of those demand and supply curves.
Some costs are eventually passed on, but rarely all costs, and rarely zero costs.
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Originally Posted by Pub-911
It is often heard that homeowners have all those repair and maintenance costs to worry about, but renters pay those costs as well. They are incurred by a landlord but net after-tax costs are simply tacked onto rents.
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Originally Posted by Pub-911
In other and perhaps more useful words, landlords tend to pass on every penny of costs that they possibly can.
In other and definitely more useful words, as this is the Economics forum, it depends, of course, on the price elasticity of demand and the price elasticity of supply -- the slopes of those demand and supply curves. Some costs are eventually passed on, but rarely all costs, and rarely zero costs.
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Originally Posted by Pub-911
Landlords are better at writing sob-story letters to tenants explaining how sorry they are that they have no choice but to raise rents due to recent increases in something or other than they are at actually eating any portion of those increases themselves.
This is the Economics forum, not the politics forum.
This is where "living wage" arguments come from. If people are spending 50% of their income on shelter (as against a recommended upper limit of 30%), it is not because rents are too high, but because wages are too low.
Or because people voluntarily choose not to participate in income-generating activities in the first place.
Though Perma Bear has been widely excoriated for a petulant refusal to adapt and to manage his expectations, something in his lament resonates with me. 20-25 years ago, I was in a position similar to his. I exchanged a vibrant coastal locale for a sleepy Heartland burg, not to chase cheap real-estate, but to pursue my career. Now I find myself trapped. Sure, the 401K is doing alright (assuming that the stock market doesn't crash again!). But other aspects of life haven't exactly blossomed. There's much to be said about broadening oneself, taking risks, accepting temporary reversals in favor of longer-term gains, and so forth; let the platitudes and bromides accumulate. There's certainly an aspect of truth to them. But it's also true, that low-cost places are low-cost for a reason; and that reason isn't merely fashion and caprice and the herd-mentality of so-called elites and their hipster spoiled offspring.
So, yes, folks earning $70K in the Bay Area would need to relocate if they insist on buying a house. But there's a tradeoff in all such moves. Is there net benefit in buying your little piece of heaven, in the middle of hell?
I agree with this. There are costs to just picking up and moving to the sticks. The sticks are called sticks for a reason.
Financially it might be a good move, but is that the only benefit to gain and what are the costs of that?
Living in a place is kind of like being in a relationship. And as they say, "money can't buy me love."
However, Perma Bear seems to be in an abusive relationship with San Francisco. He can't let it go, even though it's not good for him. Although like in any relationship problem, both partners are at fault, so I wonder what Perma Bear's doing wrong?
This is the Economics forum, not the politics forum.
Try to stick to actually sensible and meaningful economics then. Claiming that somewhere between 0% and 100% of landlord costs will be passed on to tenants is a "sun rises in the east" sort of thing that adds no new information and does not really qualify as either one.
Living in a place is kind of like being in a relationship. And as they say, "money can't buy me love."
However, Perma Bear seems to be in an abusive relationship with San Francisco. He can't let it go, even though it's not good for him. Although like in any relationship problem, both partners are at fault, so I wonder what Perma Bear's doing wrong?
Not getting out more and seeing more of the US, for starters? He's irrationally convinced that life anywhere outside the Bay Area would be hellish. Sure, the Bay Area's nice, but it's not the only nice place in the US to live, and what's the point in staying there if he's just going to feel constantly impoverished and not actually enjoy the place?
It's not fun to leave a place you love, but sometimes it's necessary for your long-term future to be better.
There is no such thing as price gouging. It cannot be defined because it does not exist.
Many states and localities have anti-price-gouging laws on the books to protect local consumers. These laws have been held as constitutional, since state and local governments have the authority to preserve order and protect the common good during an emergency.
No point in arguing with people who bought when home prices were a fraction of today, and now they are counting on those high market prices to cash them into retirement. They are on the plus side. refuse to see that there are many people who desire to be like them, but don't have the same environment to do so. Of course that class who owns and have owned for years wants to keep prices higher, and going up from there. I'm a homeowner, and i don't want to see houses drop in value. But it wasn't long ago that I was shopping for a home, and I may do so again in the future.
On the other hand, smart money says "don't buy at the top". So, soon-to-be-retiree, looking to cash out of your home and sail away, you can keep it.
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