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It's all supply and demand. California is always going to be expensive to live due to very desirable climate. Bigger cities are always going to be expensive simply due to a lot of population and more people looking for housing.
Why people think politics has anything to do with it is beyond me.
: smack:
Politics has a lot to do with zoning and therefore with the supply of housing. Econ 101 tells us that the supply of housing has a lot to do with rents.
And only 1.8% of NYC apartments fall under rent control guidelines, a number that will reach zero within our lifetimes (maybe even the next 10 years.) 45.4% are rent stabilized, and the average rent on those is $1,050/month... not exactly cheap (I lived in a rent stabilized building and paid $1,200 but left the city for the suburbs a few months ago.)
$1,050 is dirt cheap relative to the market and having half the rental market effectively not exist as far as supply and demand goes for people who aren't RS incumbents has an absolutely huge effect on raising rents for everyone else.
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Originally Posted by freemkt
Yes, it's called "rent compression". What happens is, when high-end rents become unaffordable, demand shifts to lower-rent apartments, which makes the lower-rent apartments more expensive...which shifts demand downward to the NEXT lower-rent apartments...etc etc.
Whenever any rental segment becomes unaffordable, demand shifts cascade downward all the way to the ghetto.
Report: Pricey Class A Market Creating Demand for Class B Apartments
Exactly right. Brooklyn gentrification pushes people east and the people who can't afford anything at all leave the region or go to NJ. Washington heights gentrification pushes people into the Bronx who in turn displace the people there and the rent goes up pretty much everywhere. On the flip side, new construction even of high end units works its way down by relieving that pressure.
New York keeps voting Democrats.... stupid does as stupid gets...
Are Republicans going to infill the Hudson to make more buildable land? WOW. Sign me up!
Because that's the big chunk of the problem. There's nowhere more to build, so cities like Boston, San Francisco, and NYC have nowhere to expand into but over and up. Many of our suburbs in Boston were built up 100 years ago and while there's definitely an element of NIMBYism, that's not the whole problem.
If someone invests in tearing down older, lower density buildings they're going to charge for it. We see that here in Boston - every apartment complex that goes in replacing cheaper but lower density housing is far more expensive. And why wouldn't it be? It's new and had a lot invested in it, but that's not helping the very real rent inflation.
The Boston area has no rent control but rent costs in my formerly working class suburban neighborhood went from vaguely affordable to only really affordable for groups of young professionals each bringing in their own middle class income in less than 5 years, with yearly increases of $100-$150 per month common over that period.
The State Senate is Republican and has been since anyone can remember.
I think Democrats finally took over the NY State Senate, maybe around 2010. Republicans had a run of something like 40 years in control - my state senator in NYC was a Republican.
$1,050 is dirt cheap relative to the market and having half the rental market effectively not exist as far as supply and demand goes for people who aren't RS incumbents has an absolutely huge effect on raising rents for everyone else.
1,000 per month on NYC wages would be a gold mine for me. With one of the best public transportation systems in the USA, this would be great. You could save up for a house in due time.
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Exactly right. Brooklyn gentrification pushes people east and the people who can't afford anything at all leave the region or go to NJ. Washington heights gentrification pushes people into the Bronx who in turn displace the people there and the rent goes up pretty much everywhere. On the flip side, new construction even of high end units works its way down by relieving that pressure.
Alot of people just leave the Northeast altogether. Living proof of that is metro Atlanta's population explosion. Many people are getting tired of New Jersey and Connecticut as well.
Are Republicans going to infill the Hudson to make more buildable land? WOW. Sign me up!
Because that's the big chunk of the problem. There's nowhere more to build, so cities like Boston, San Francisco, and NYC have nowhere to expand into but over and up. Many of our suburbs in Boston were built up 100 years ago and while there's definitely an element of NIMBYism, that's not the whole problem.
If someone invests in tearing down older, lower density buildings they're going to charge for it. We see that here in Boston - every apartment complex that goes in replacing cheaper but lower density housing is far more expensive. And why wouldn't it be? It's new and had a lot invested in it, but that's not helping the very real rent inflation.
The Boston area has no rent control but rent costs in my formerly working class suburban neighborhood went from vaguely affordable to only really affordable for groups of young professionals each bringing in their own middle class income in less than 5 years, with yearly increases of $100-$150 per month common over that period.
Yes. I've met people who have moved to the Atlanta area from California. I've been told that it takes alot of money just to rent in the sketchy areas in parts of the Bay Area. With gentrification, the ghettos are becoming expensive. With median rent at $3600 per month in San Francisco(for a 1 bedroom) and median rent at $2400 for a 1 bedroom in Oakland, many people just leave the state altogether.
That's why I had to downgrade to a studio which is not too bad. Still have enough room for a queensize bed, soda and a separate kitchen and bathroom
I live in a West Coast city that is already expensive and last year experienced the highest increase in housing costs of any city in America.
Although the prices of apartments have gone up with respect to location and square footage, median incomes have gone up at a higher rate, and the quality of new apartments has gone up as well. I pay ~$1350/month for a new 380-sqft studio, but with it comes a lot of amenities such as a community gym, community pool, Amazon lockers, movie theater, community barbecues, a mobile app that allows me to put in a service request, armed security guards, etc. A new 1-bdrm in the trendiest of neighborhoods would be around $1800-$2200/month; it's a consumption choice to pay that much. You can get a dumpy 1-bdrm in a boring/sketchy area for $1100/month if you choose to. If you really want to save money, you can rent a tiny room in a house for as low as $500/month. I know someone who makes nearly $150k/yr and chooses a shared housing arrangement that costs $500/month.
What's crazy is the price of actual houses. The demand to live in trendy neighborhoods is so high that tiny fixer-uppers are selling for north of $800k.
What's even crazier is that my city's suburbs are hardly any more affordable. There's not much incentive to live there and commute because you're saving maybe $100-$200/month in exchange for a long commute and no social life because all your friends live in the city.
Last edited by KonaldDuth; 11-27-2016 at 01:42 PM..
As a renter, it's 100% due to rent stabilization effectively removing most existing units from the market and restrictions on building not letting supply reach demand and 0% due to foreign investors. Whether the last name of the person owning the LLC I'm writing my check to is Smith or something Chinese is irrelevant to the number on it. Vacancy rates are super low, it's not like foreign investors are leaving apartments vacant at any statistically meaningful scale.
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Yes vacancy rates are low to non-existent but if you took away the small number of rent stabilized aparments I don't see that would make any significant difference as far as new construction.
While stabilization may impact some areas the high end construction in Manhattan and now Brooklyn is having a ripple effect as middle income renters flee to places like Bedford Stuyvesant. They did a study around central park from the 90's down to the 40's and something like 40% of the condos are not owner occupied. All this influx of foreign investment in upscale units has a cascading impact.
NYS passed the 421 program in 1971 to create more affordable housing but even after increased constrution in the 80's it was retained. Builders were supposed to set aside 20 percent of any project for low income housing, I don't believe that is happening and they are enjoying the subsidies of the program to create high end real estate.
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