Rents (Seattle, Tacoma, Vancouver: middle-class, renting, townhouses)

[PhoenixSomeday]

Capitalism and my profit my profit my profit and free economy and working perfectly and 'well, what are you going to do, it is what is it', etc etc etc blah blah blah. Nothing is wrong, everything is working fine, nothing to see here.

Originally Posted by Sockeye66

Not the situation I'm seeing as a larger Puget Sound employer. Can't argue real estate values but wages have increased significantly the past year.

Except wages have not gone up 15-20x in the last 40 - 50 years, like housing has. Not. Even. Close. The system is broken. Pretty soon, you're going to have to be born into home ownership through inheritance, basically. People just starting out, without parental help, are going to be more and more screwed if this crap continues.

[oregonwoodsmoke]

I just did the figures. For a decent, clean, average size, average neighborhood house, the monthly payment would be just north of $2,900.00 a month. Nobody is going to buy that house, make $2,900.00 a month house payments on it, and rent it to a deserving working class family that can only afford $500 a month.



That is in North Idaho where real estate prices are a lot cheaper than they are in Seattle. Stuff costs what it costs and people who are getting left behind need to put some effort into keeping up, or they do get left behind and no landlord is going to carry them and pay their way for them.


The grocery store isn't going to ring up your groceries and then tell you to pay whatever you can afford and forget about the rest of the cost. The car dealer isn't going to let you have a new car for a $100 car payment because that is what you can afford. You have to either get your incopme up or figure out how to cut your expenses without expecting strangers to support you.

[CrazyDonkey]

Originally Posted by Ruth4Truth

No, Economics 101 is no longer in play in much of the greater Seattle area. REIT-owned buildings set what they consider to be "market rate", and hold firm to those rates, even though many of their buildings are only half full, and have been for years, decades, even, in some instances. There appears to be price fixing going on. It needs to be investigated.

We've had decades of "affordable" units being replaced by, or being "reno'd up" into, "luxury" units. Virtually no non-subsidized "workforce" housing has been added and new subsidized housing units don't come close to filling the gap. So, new supply has primarily been added at the top of the income scale, while old supply has been eliminated from the bottom of the income scale, causing "average rents", which landlords use to set their rents, to escalate (even double?) relative to inflation. Where did the demand come from to fill that housing? From new higher-wage IT workers moving into the city, a spigot, however, which has largely been shut off by the pandemic and the "Amazon" exodus.

One sector where rents seem to have fallen is micro-apartments of less than 400sf, with 78 units currently being advertised for $581 to $1,100, primarily in the "downtown" core neighborhoods.

https://www.zillow.com/seattle-wa/ch...oom%22%3A13%7D

[Hemlock140]

There are many reasons for high rent here, some already mentioned, but here is what I see after 29 years in the area:

Demand, many people moving here, and most for good paying jobs at employers like Amazon, Microsoft, Google, Expedia.

Investors - Foreign (and American) investors buying properties just to take advantage of the exploding values, not concerned about whether units are filled, so rates set high.

Covid bans on evictions, requiring landlords to raise prices to recover losses over the last two years.

[fassopony]

Originally Posted by Hemlock140

There are many reasons for high rent here, some already mentioned, but here is what I see after 29 years in the area:

Demand, many people moving here, and most for good paying jobs at employers like Amazon, Microsoft, Google, Expedia.

Investors - Foreign (and American) investors buying properties just to take advantage of the exploding values, not concerned about whether units are filled, so rates set high.

Covid bans on evictions, requiring landlords to raise prices to recover losses over the last two years.

Also, at the accounting firm I work at, the vast majority of landlords who are mom/pop owners are or have already sold. They just could not take the hit that nonpayment for COVID dealt them. Most sold to either primary residence type buyers or to corporate rental companies. So, the rental is gone if the new owners live there or the rent will not be flexible from a corporate rental agency.

We also did advise selling to those considering it last year due to the uncertainty of the capital gains tax in WA. We still feel strongly that the tax may very well go through the WA supreme court unscathed and will be a huge impact in coming years.

[CrazyDonkey]

Originally Posted by Sockeye66

Not the situation I'm seeing as a larger Puget Sound employer. Can't argue real estate values but wages have increased significantly the past year.

The wage stagnation dates back decades:




while productivity has skyrocketed:


This past year we're experiencing Covid-related:

1) labor shortages due to "workers" unwilling/unable to return to the workforce, particularly mothers of young children, or quitting in search of better opportunities, forcing employers to increase wages to attract needed workers;

2) high inflation due to massive Federal stimulus spending juicing demand during supply-chain shortages;

along now with spiking fuel- and commodity-prices due to the war in Ukraine.

[fassopony]

The wage increase is 2020 forward, not 2018.

This, while seemingly odd, is pretty normal. Whenever there is a large disparity in wages such as we see between bottom and top earners, the market adjusts.

The "losers" in this are those employees who are working for the same pre-2020 wages and have been carrying more than just their workload due to shortages. Nursing/medical seems really affected as they run their business model on bottom line labor to production. The company Davita is a prime example, they prey on younger/cheaper labor that they pay 2007/2008 wages for. The place is a real meat grinder and **** payer. It's what happens when you let bean counters who do not understand production make production decisions. A younger CPA we just hired (no longer here) had that problem, and I think it is quite common in accounting and finance/upper management.

A good thing is I see a lot of new business start-ups that are actually outsources to what used to be done by W2 employees. Bigger corporations are hiring subcontractors to perform the work- and they set their own rates take it or lose it. Most companies take it because they have no choice. It's a good thing.

[CrazyDonkey]

Originally Posted by fassopony

The wage increase is 2020 forward, not 2018.

This, while seemingly odd, is pretty normal. Whenever there is a large disparity in wages such as we see between bottom and top earners, the market adjusts.

The "losers" in this are those employees who are working for the same pre-2020 wages and have been carrying more than just their workload due to shortages. Nursing/medical seems really affected as they run their business model on bottom line labor to production. The company Davita is a prime example, they prey on younger/cheaper labor that they pay 2007/2008 wages for. The place is a real meat grinder and **** payer. It's what happens when you let bean counters who do not understand production make production decisions. A younger CPA we just hired (no longer here) had that problem, and I think it is quite common in accounting and finance/upper management.

A good thing is I see a lot of new business start-ups that are actually outsources to what used to be done by W2 employees. Bigger corporations are hiring subcontractors to perform the work- and they set their own rates take it or lose it. Most companies take it because they have no choice. It's a good thing.

I'm aware of that, but it is likely a mere blip compared to decades of wage stagnation - while a part of the current increases is due to labor shortages, another part is simply due to inflation and is, thus, not an increase at all. Clearly, those with skills in demand have greater leverage to increase their wages (including "job hopping"), while those with skills in supply, or only their labor to offer, have less or no leverage, and may actually lose ground relative to inflation.

[fassopony]

Information must be timely and relevant to matter.



The labor shortage is from non-skilled to highly skilled. Job hopping is having a big effect on fast food joints.

Inflation will have a bigger impact on those on unemployment and other fixed rate income.

[margaretBartle]

Originally Posted by missc123

Why so high?

Because so much low-cost housing has been destroyed and replaced by high-cost housing.
There used to be zillions of duplexes that rented for $1600/month. They were knocked down and replaced by 4 or 5-story buildings with apartments that rent for $3000/month.
Likewise, small apartment buildings and older units were also targetted for take-down.


The city's antagonism to small landlords also made the landlords want to sell to big developers.


I know several people who had to leave the city because the affordable housing they were living in was bought up, torn down, and replaced by new construction. Which is what the city and the Low Income Housing people want.