āensuring that even families with solid double incomes can barely afford to rentā
Not to deflect away from the housing overlords, but I have a secondary theory about dual income households causing inflation.
What happened to the time when it was common for a single income to support a family and own a home? Did women entering the workforce cause additional consumer buying power, and in turn drive up the cost of goods? Unfortunately, my idea is usually debated on the women in the workforce issues and not necessarily what it has meant for the economy.
Or, perhaps families back then didnāt require as much material crap as we need today?
I have, for quite some time, wondered if inequality leads quite directly to unaffordable housing.
It seems like it should, right?
The amount of land to live on is somewhat fixed (it isnāt really completely fixed because its really about land near enough to jobs and services, which is why you can still pick a spot way out in Alaska for free, and multistory buildings let more people live on the same land or make more land close to jobs and servicesā¦ but it is more fixed than most things).
Land is basically priced in a bidding war, so the higher the inequality the more of the land will be owned by the rich and the higher prices will appear to everyone else.
The end state is present in large parts of the world. The vast majority of the land owned by a tiny elite, and the bottom X% of the population living in slums which are actually owned by some rich person, but not worth the trouble of trying to collect rent from a bunch of people with insignificant income.
On top of that you have envy effects.
An economist commenting on similar thinking:
Decades of increasingly neoliberal economic policies combined with an assault on labor = bye bye good paying jobs. The fact that most American jobs are now minimum wage, part timey McJobs was by design.
I think some āon the groundā evidence of the rich outbidding the rest is when you see X homes replaces with smaller number Y homes in desirable locations. Usually X being >1 and Y being 1ā¦ but not always.
Whenever that happens one richer person has outbid two (or more) less rich people for the land.
I once toured a āgreen homeā in San Francisco and was grimly amused at how it had very likely been built on the former location of a 6-8 unit apartment building (which was what all the surrounding buildings were). I rather doubt that the fly ash concrete and toy windmill negated the half dozen other people now commuting into the city for low wage jobs.
We as a human community screwed up the chance we had with egalitarian workplace entry. We should have moved to everyone working twenty hours a week to prevent available worker hour inflation from collapsing the value of labor, you can see the disruption of additional available workers gave. Hint, women āgotā to go to work too but at this point it doesnāt appear that the second workers are actually getting much take home for the 2x40 vs 1x40 man-hours once adjusted for inflation. The way it worked out seems more like a trap that worked out great for the makers(1% who take rent on everything but make nothing) but screwed the takers 99% who actually do all of the work and now bring along a partner into the economy to work for free.
I for one welcome our alien landlords.
I think you have that reversedā¦
This is how it works in Austin (ymmv):
Older house in desirable neighborhood goes on market. Developer outbids families who are looking for a fixer-upper as a way to get into neighborhood. Developer a) guts house, or b) tears down house, essentially having at this point paid top dollar for a lot. Developer a) does a quick shoddy remodel, oftentimes without permits or b) puts up a huge house that pushes coding limits on size. Developer charges outrageous amount of money, claiming they need to do so so they can see a reasonable return on their investment (ignoring they fact they spent too much to begin with). Someone who sold a house in one of those expensive cities buys said house thinking they got a great deal in a cool neighborhood they heard about from a friend back home. Repeat.
If you would just accept my lord and saviour Big Brother into your heart you would understand.
About 7 years ago, we had 3 people leave our company to move from Los Angeles to TX because they could sell their house here and get a bigger one for a fraction of the price. After ~1-2 years of being under-employed in TX they all moved back (and all are back with our company again).
Thatās the Texas Economic Miracle at work for you! Remember that when Rick Perry touts it in his second try to become Prezdint.
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