4 ms·

Slightly off topic, but this has been my fear with the push for UBI, it feels like rents/costs will just go up as they did with gov't backed student loans..

zjaffee 8y ago
This is exactly what will happen with UBI. Throwing more money at a problem through consumers only works when it results in an equal supply increase (such as food stamps and food production).
Xcelerate 8y ago
The difference is that additional housing can be created in most places that aren’t the Bay Area.
anonymous5133 8y ago
UBI is slightly different because UBI would not be enough to live in an expensive city. So if you plan on living purely on UBI then you would need to move to the outer city or rural areas where COL is low.
- itchyouch 8y ago
  I'd imagine that with UBI, the incentive to stay in a low CoL area increases and for a subset of the population, they will seek out a low CoL area. Then there will be the subset of the population that takes their UBI and goes to an expensive city for the "opportunities" and pay the higher rents for said opportunity. If it doesn't work out, they can take their UBI and go back to a low CoL area. Of course this mobility gets harder once one has a family.
mjevans 8y ago
Related: Hypothesis: The most effective way to increase (effective) minimum wage (and quality of life for anyone not in the top (small) n%) is to increase the SUPPLY and quality of all basic quality of life items.
- andrewflnr 8y ago
  I'd label this as less a "hypothesis" than a "fact obvious from the last couple centuries of economic development". Optimizing commodities is something capitalism is pretty good at.
jonnycomputer 8y ago
Except that UBI is/was supported by realllly savvy economists. Like Milton Friedman. A similar argument could be made about public spending on education, that it only creates inflation. But of course education is a great way to increase productivity. Similar effects would probably follow from universal healthcare and a UBI: namely healthy, financially secure people can do things that have short-term costs but long-term benefits, like starting a new business, or doing a low-paid internship, learning new skills, and so on. Also, fewer sick-hours leads directly to increased productivity.
- GhostVII 8y ago
  There are also lots of great economists who oppose UBI, so I don't think that is a great argument.
  - jonnycomputer 8y ago
    Yes, but did they oppose it on grounds that it was inflationary?
- mifreewil 8y ago
  > A similar argument could be made about public spending on education, that it only creates inflation. But of course education is a great way to increase productivity Uh yeah, but that doesn't make it a good thing. If the expense of education puts you into a debt hole that is so deep that it's impossible to make up for it with increased productivity, that is a net negative. And what does this have to do with housing? Increased housing costs is like the exact opposite of increased productivity. Limiting supply of housing is a rent-seeking behavior.
  - jonnycomputer 8y ago
    Its made it good enough a thing that nearly every nation on earth has made in a priority. Seeking to limit supply is not necessarily rent-seeking (which is a motivational state), but sure. The comment was directed toward the issue of whether UBI is inflationary, not whether housing supply should be increased.
jayd16 8y ago
The dream is UBI might slightly increase the cost of some things but it will greatly increase the buying power of those at the bottom. It won't help you afford a city apartment but you can now afford a place to live somewhere. This isn't proof or anything, I just don't think the bay area disproves anything.
- ryandrake 8y ago
  If I’m a rational landlord and the market is efficient: I figure out what percent of income is typically spent on rent (P). If people suddenly get $N more, I immediately raise rent by N x P because the market will now bear exactly that much more. Assume all landlords are as rational and we are back where we started.
  - jayd16 8y ago
    You're ignoring any concept of competition.
joejerryronnie 8y ago
I am staunchly opposed to Universal Basic Income because inflation will simply rise to meet the UBI. But Universal Basic Assets is an interesting concept.
baq 8y ago
Makes sense. Perhaps UBI should be packaged with a free/constant price flat/cheap house depending on area.

zjaffee 8y ago

This is exactly what will happen with UBI. Throwing more money at a problem through consumers only works when it results in an equal supply increase (such as food stamps and food production).

Xcelerate 8y ago

The difference is that additional housing can be created in most places that aren’t the Bay Area.

anonymous5133 8y ago

UBI is slightly different because UBI would not be enough to live in an expensive city. So if you plan on living purely on UBI then you would need to move to the outer city or rural areas where COL is low.

itchyouch 8y ago
I'd imagine that with UBI, the incentive to stay in a low CoL area increases and for a subset of the population, they will seek out a low CoL area. Then there will be the subset of the population that takes their UBI and goes to an expensive city for the "opportunities" and pay the higher rents for said opportunity. If it doesn't work out, they can take their UBI and go back to a low CoL area. Of course this mobility gets harder once one has a family.

mjevans 8y ago

Related: Hypothesis: The most effective way to increase (effective) minimum wage (and quality of life for anyone not in the top (small) n%) is to increase the SUPPLY and quality of all basic quality of life items.

andrewflnr 8y ago
I'd label this as less a "hypothesis" than a "fact obvious from the last couple centuries of economic development". Optimizing commodities is something capitalism is pretty good at.

jonnycomputer 8y ago

Except that UBI is/was supported by realllly savvy economists. Like Milton Friedman. A similar argument could be made about public spending on education, that it only creates inflation. But of course education is a great way to increase productivity. Similar effects would probably follow from universal healthcare and a UBI: namely healthy, financially secure people can do things that have short-term costs but long-term benefits, like starting a new business, or doing a low-paid internship, learning new skills, and so on. Also, fewer sick-hours leads directly to increased productivity.

GhostVII 8y ago
There are also lots of great economists who oppose UBI, so I don't think that is a great argument.
- jonnycomputer 8y ago
  Yes, but did they oppose it on grounds that it was inflationary?
mifreewil 8y ago
> A similar argument could be made about public spending on education, that it only creates inflation. But of course education is a great way to increase productivity Uh yeah, but that doesn't make it a good thing. If the expense of education puts you into a debt hole that is so deep that it's impossible to make up for it with increased productivity, that is a net negative. And what does this have to do with housing? Increased housing costs is like the exact opposite of increased productivity. Limiting supply of housing is a rent-seeking behavior.
- jonnycomputer 8y ago
  Its made it good enough a thing that nearly every nation on earth has made in a priority. Seeking to limit supply is not necessarily rent-seeking (which is a motivational state), but sure. The comment was directed toward the issue of whether UBI is inflationary, not whether housing supply should be increased.

jayd16 8y ago

The dream is UBI might slightly increase the cost of some things but it will greatly increase the buying power of those at the bottom. It won't help you afford a city apartment but you can now afford a place to live somewhere. This isn't proof or anything, I just don't think the bay area disproves anything.

ryandrake 8y ago
If I’m a rational landlord and the market is efficient: I figure out what percent of income is typically spent on rent (P). If people suddenly get $N more, I immediately raise rent by N x P because the market will now bear exactly that much more. Assume all landlords are as rational and we are back where we started.
- jayd16 8y ago
  You're ignoring any concept of competition.

joejerryronnie 8y ago

I am staunchly opposed to Universal Basic Income because inflation will simply rise to meet the UBI. But Universal Basic Assets is an interesting concept.

baq 8y ago

Makes sense. Perhaps UBI should be packaged with a free/constant price flat/cheap house depending on area.