4 ms·
That's interesting. My econ understanding is pretty wimpy, so excuse the basic question here: is the broader theory here that "rising rents + increasing housing
by BadassFractal 8y ago
That's interesting. My econ understanding is pretty wimpy, so excuse the basic question here: is the broader theory here that "rising rents + increasing housing prices" = some sort of rent-seeking capitalism, whereas consumption of the not-real-estate kind is actually sustainable, desirable and beneficial long term?
- opportune 8y agoI’m no economist either, but it’s not rocket science to figure out that when rents increase on housing without improvements, you are losing quality of life (if we account for inflation) - though theoretically the rent increase could actually reflect the area becoming nicer / more convenient. Consumption of real estate is fine when it means building real estate that will actually be used (which China is doing a lot of, even though some is unused). It’s bad when it essentially becomes speculation on property values, and I would argue that it’s also bad when property values rise and that wealth creation is only captured by incumbents / people that got in the market at the right time. Other consumption can be non sustainable, but at least it often directly leads to some quality of life improvement that a rent hike may not.
- BadassFractal 8y agoI guess you could argue that increases in rent increase the spending power of landlords benefitting from it, who now spend more money on goods, which in turn energizes the economy etc etc. I have no idea how that actually plays out in the real world. The whole "trickle down" theory seems very ideologically charged.