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This is a severely under-appreciated point about housing costs. I live in a college town and rents have been climbing to the degree where the ratio of income to
by rm_-rf_slash 11y ago
This is a severely under-appreciated point about housing costs. I live in a college town and rents have been climbing to the degree where the ratio of income to housing expenses is the highest in the nation, leaving New York and San Francisco in the dust.
Every once in a while there will be more proposals to build condos over existing houses or apartments. We've been here before: housing stock is considerably increased while rents around town are given an implicit "go" to be raised across the board. If you're a financially struggling student at an Ivy League school you're not just gonna up and leave cause your rent went up another $100-$200. You're just gonna take out more debt. It doesn't help that aside from campus housing there are like 3 landlords in the whole city
Building housing in a bull market is almost always the right choice, but let's not pretend rents are going to magically fall. Or stop rising. Housing is one of the most elastic goods one can find. Everyone has to sleep somewhere.
- xxpor 11y ago>I live in a college town Boulder? Because if so, PLEASE vote down the land use issues on the ballot. http://www.citylab.com/housing/2015/10/they-are-coming-for-our-neighborhoods/408994/ http://www.citylab.com/housing/2015/10/they-are-coming-for-o...
- rm_-rf_slash 11y agoIthaca, where we don't have the luxury of flatness so everything's hemmed in by the lake and the hills, like a reverse geography San Francisco
- mahyarm 11y agoYou can build on hills. I've lived on a hill.
- roymurdock 11y agoMinor point, but I think you mean inelastic goods. The only solution I can see to solve my rent problem is to move to a very low-demand market. Looking into hunkering down in a cabin in Alaksa for a while because rents in the Boston area are just dumb for a recent grad.
- ceras 11y ago> Building housing in a bull market is almost always the right choice, but let's not pretend rents are going to magically fall. Or stop rising. Housing is one of the most elastic goods one can find. Everyone has to sleep somewhere. It doesn't matter if it's inelastic if demand can meet supply. The econ 101 example is diamonds (expensive but useless) vs. water (dirt cheap but necessary): https://en.wikipedia.org/wiki/Paradox_of_value https://en.wikipedia.org/wiki/Paradox_of_value If the theory's not enough for you, I don't have it on hand but there's empirical research that shows this relationship holds for housing like it does for any other good.