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Everything hits affordability ceiling. Houses, rentals, cars, food, etc. If you can't afford it you can't afford it. A LL can ask as much as they want for rent. If it's priced too high it simply wont have any takers. The LL must lower rent in order to get a tenant.
Problem is that shelter is regarded in North America as a necessity and most people will give up almost everything else before they give up the roof over their head. That's why half of all low-income renters spend at least half their income for shelter, even though they really can't sustainably afford it. They are the people who go to food banks and who go without insurance.
Problem is that shelter is regarded in North America as a necessity and most people will give up almost everything else before they give up the roof over their head. That's why half of all low-income renters spend at least half their income for shelter, even though they really can't sustainably afford it. They are the people who go to food banks and who go without insurance.
Doesn't really detract from the main point though. Suppose landlords jack rent up to the point no one can pay. They will then be wasting money in evictions court, because they're trying to get rid of someone in order to find a paying replacement, who as a matter of fact does not even exist. At this point the only direction for rents to go is down.
I doubt rents can go up much faster than inflation over a long period without wages doing the same. Eventually something has to give. You don't really think 50% of the population will be homeless in 10 years, do you?
Over the entirety of the US, no. But let's not forget housing construction is not a free market, I can't just buy a lot and build and apartment building there to house people. Everyone that owns property around that lot has a vested interest in me not developing that lot, and will politically stop it.
Wages will keep increasing on average at a steady clip, but that is on average for the people living there, it doesn't mean people don't move in and out. But humanity is not one homogeneous group, the jobs that pay well will be enough to lure people to this location, doesn't mean that the people already living there will get a big boost in income, they will just move further out or to smaller accommodations as rents rise, as those with better incomes come and replace them in the inner suburbs, this has been the trend for the last 30 years, I doubt it will much change, at least here. There is a similar pattern in East Coast cities and other West Coast cities.
The other trend is for people to move to the central part of the country where they can rent apartments cheaply in new suburbs. People move to cheaper places even if their incomes are not as great, because they can rent an apartment there, and a lot of people do so.
So no I don't think 50% of the population will be homeless, for one 60% of people own their homes (or have an arrangement with a bank where they have a title and have to pay the bank back for the money they used to purchase the property), the other 40% will likely move further and further from job centers, or to central states in the US as they get older, or buy themselves, or move up in their careers. I'm just saying I don't think that couple will necessarily move up in their careers fast enough to adjust for rent increases, the trend during economic booms is usually the opposite, with people with more lucrative careers moving to the places with lucrative job markets.
US population keeps expanding and most construction is in the center areas of the country, supply and demand basically mean that supply restricted areas will go up faster than inflation. Most everyone else ends up in Texas.
From the Wall Street Journal:
Eventhough the dot-com bubble ended ages ago, rents never really reverted back to inflation rates.
Over the entirety of the US, no. But let's not forget housing construction is not a free market, I can't just buy a lot and build and apartment building there to house people. Everyone that owns property around that lot has a vested interest in me not developing that lot, and will politically stop it.
Wages will keep increasing on average at a steady clip, but that is on average for the people living there, it doesn't mean people don't move in and out. But humanity is not one homogeneous group, the jobs that pay well will be enough to lure people to this location, doesn't mean that the people already living there will get a big boost in income, they will just move further out or to smaller accommodations as rents rise, as those with better incomes come and replace them in the inner suburbs, this has been the trend for the last 30 years, I doubt it will much change, at least here. There is a similar pattern in East Coast cities and other West Coast cities.
I think if the crisis gets so bad that young professionals are fleeing and local employers cannot find workers, eventually they will put pressure on the city to relax the zoning a bit. How bad will they let it get?
Quote:
Originally Posted by cardinal2007
The other trend is for people to move to the central part of the country where they can rent apartments cheaply in new suburbs. People move to cheaper places even if their incomes are not as great, because they can rent an apartment there, and a lot of people do so.
Assuming they can find a new job at the same pay rate in the new city.
Quote:
Originally Posted by cardinal2007
So no I don't think 50% of the population will be homeless, for one 60% of people own their homes (or have an arrangement with a bank where they have a title and have to pay the bank back for the money they used to purchase the property), the other 40% will likely move further and further from job centers, or to central states in the US as they get older, or buy themselves, or move up in their careers.
Given the decline in the rate of marriage, childbearing, and car ownership among my generation (Millennials), at least some of that 40% will likely just shack up with more roommates and stay in the city. Or in some cases simply take the money saved by not having kids, and use the money to pay the increased rent.
Quote:
Originally Posted by cardinal2007
I'm just saying I don't think that couple will necessarily move up in their careers fast enough to adjust for rent increases, the trend during economic booms is usually the opposite, with people with more lucrative careers moving to the places with lucrative job markets.
US population keeps expanding and most construction is in the center areas of the country, supply and demand basically mean that supply restricted areas will go up faster than inflation. Most everyone else ends up in Texas.
From the Wall Street Journal:
Eventhough the dot-com bubble ended ages ago, rents never really reverted back to inflation rates.
Over the entirety of the US, no. But let's not forget housing construction is not a free market, I can't just buy a lot and build and apartment building there to house people. Everyone that owns property around that lot has a vested interest in me not developing that lot, and will politically stop it.
Wages will keep increasing on average at a steady clip, but that is on average for the people living there, it doesn't mean people don't move in and out. But humanity is not one homogeneous group, the jobs that pay well will be enough to lure people to this location, doesn't mean that the people already living there will get a big boost in income, they will just move further out or to smaller accommodations as rents rise, as those with better incomes come and replace them in the inner suburbs, this has been the trend for the last 30 years, I doubt it will much change, at least here. There is a similar pattern in East Coast cities and other West Coast cities.
The other trend is for people to move to the central part of the country where they can rent apartments cheaply in new suburbs. People move to cheaper places even if their incomes are not as great, because they can rent an apartment there, and a lot of people do so.
So no I don't think 50% of the population will be homeless, for one 60% of people own their homes (or have an arrangement with a bank where they have a title and have to pay the bank back for the money they used to purchase the property), the other 40% will likely move further and further from job centers, or to central states in the US as they get older, or buy themselves, or move up in their careers. I'm just saying I don't think that couple will necessarily move up in their careers fast enough to adjust for rent increases, the trend during economic booms is usually the opposite, with people with more lucrative careers moving to the places with lucrative job markets.
the trend is not sustainable for many low earners; downsizing has its limits. At $4 gas I saw a huge problem on the horizon with low earners being squeezed by high rents (which cause them to move further from their jobs in order to afford the rent) and high commuting costs (incurred in the process of finding cheaper rent).
I downsized from a 400-sf studio to smaller studios to a room. Not much 'room' left for downsizing. Thousands of low earners have been pushed to the outer edges of Portland, what do they do next?
I think if the crisis gets so bad that young professionals are fleeing and local employers cannot find workers, eventually they will put pressure on the city to relax the zoning a bit. How bad will they let it get?
Assuming they can find a new job at the same pay rate in the new city.
Given the decline in the rate of marriage, childbearing, and car ownership among my generation (Millennials), at least some of that 40% will likely just shack up with more roommates and stay in the city. Or in some cases simply take the money saved by not having kids, and use the money to pay the increased rent.
Does the chart adjust for square footage?
What good is increased square footage if you are sharing it with more people?
Problem is that shelter is regarded in North America as a necessity and most people will give up almost everything else before they give up the roof over their head. That's why half of all low-income renters spend at least half their income for shelter, even though they really can't sustainably afford it. They are the people who go to food banks and who go without insurance.
When will you understand? It's not that the rent is high, it's that their income is low.
the trend is not sustainable for many low earners; downsizing has its limits. At $4 gas I saw a huge problem on the horizon with low earners being squeezed by high rents (which cause them to move further from their jobs in order to afford the rent) and high commuting costs (incurred in the process of finding cheaper rent).
I downsized from a 400-sf studio to smaller studios to a room. Not much 'room' left for downsizing. Thousands of low earners have been pushed to the outer edges of Portland, what do they do next?
Well, "The other trend is for people to move to the central part of the country where they can rent apartments cheaply in new suburbs. People move to cheaper places even if their incomes are not as great, because they can rent an apartment there, and a lot of people do so."
A lot of people move to Phoenix, or Las Vegas, or more likely Texas because it has a better job market. These places for the most part have less restrictive building and zoning, so housing tends to be more in line with income, rather than supply constrained.
There is always a small portion of the population that is unable to find lucrative enough jobs anywhere to afford decent housing, and they become homeless, there are plenty of homeless people in the Bay Area with jobs, they are less visible than the other homeless people since they may even have cars, go to shelters, use cheap gym memberships to take showers, wash clothes at laundromats, but if you look at reports they exist, probably afraid to be too far from other relatives, or afraid they can't find a job in other areas.
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