Rents increasing: Let the Good Times Roll

[Lancer]

The rich are still rich. Richer in fact. Don't worry about them, they're ok.

[MrFun]

Originally posted by Lancer
The rich are still rich. Richer in fact. Don't worry about them, they're ok.

The unfair status quo is SAVED.

[Lancer]

Move along...

[MrFun]

I can't move along . . . . .




the rent is too high for me to relocate.

[Lancer]

I suggest assimilation as a viable option given your particular circumstances.

[MrFun]

I refuse to assimilate.

[Lancer]

Move along...

[MrFun]

If you're this boring in this thread, I just may have to.

[Lancer]

Compliance

[Spiffor]

Originally posted by Jaguar
LTGTR

QFLTGTR

[MRT144]

what would be the effect of a cap on housing prices, for the sake of arguement...

[Ted Striker]

Originally posted by Zkribbler
Holy Cow!

LAWL

[:) Smiley]

Originally posted by MRT144
what would be the effect of a cap on housing prices, for the sake of arguement...

you mean rent control? We have that here. Rent control is great for people who already have an apartment and sucky for people trying to find one, since demand exceeds supply.

High housing prices is generally a sign of excessive limitations on new development, such as height and density caps, lengthy permit processes, etc.

[Kontiki]

Originally posted by Timexwatch
I'm not a RE expert, but will conversions from condos to rentals by owners not wanting to take a bath on them provide more rental housing? I can think of some markets that have or will have a glut of condos that might see some expansion in the rental market....

That's actually likely to lead to rent increases, not more rental units. You typically would see more condos for rent in times of lower interest rates, because investors would purchase condos at low rates and rent them out as an investment. As rates get higher, fewer people would be willing to make the initial purchase, and those that already have will need greater revenues to offset the higher borrowing costs.

[Spiffor]

Originally posted by Smiley
High housing prices is generally a sign of excessive limitations on new development, such as height and density caps, lengthy permit processes, etc.

They're also a sign that the society relies too much on market mechanisms to satisfy the needs.

There are several significant social phenomena that bring an increase in housing prices pretty much everywhere:

- A consequence of being in a urban society is that there is an immense premium for land close to city centres. Cities will get more pressure from a rise in demographics too, because few city dwellers get rid of their city-house, and many rurals (both from within and without the country) want to live there.

- We live in a society where more people live an autonomous life alone, instead of being in a family. A cross-country student will need his own housing. A mobile worker will need his own housing, while his family remains in a stable spot. An immigrant will need his own housing. A divorcee will need his own housing.
Roommating offsets this phenomenon a bit, but not all of it.

- We are beginning to reach the limits of city-range. You can't go much further than a two-hours commute to work, and car-traffic ain't much faster now than 40 years ago. As a result, going further from the city in order to find bargain land prices isn't necessarily an obvious option at it used to be. Especially in cities where suburbian sprawl is already spread very far.

- With the price of land being what it is, and with construction standards being what they are (safety standards, environmental standards), building housing is an expansive endeavour. The only way the market can seriously raise supply isn't through individuals (who'll basically own their own house, and maybe an extra), but through big investors, who are the only ones who can build vertically, as is needed.
And in order to turn a tidy profit, investors will cater the needs of upper-class customers, because that's where a profit is to be made. The poor, those who might even not pay their rent, aren't a market worthy of such heavy investments.
This is why non-market mechanisms have to be used to increase the supply of housing that is actually affordable to the poor. Everybody benefits (except the owners who rent) in the long run, because once the poor are housed, the demanders on the private market have much less pressure from other demanders.