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Every dollar paid in rent increases the value of property in support of those who already own it. It's a double whammy. I myself benefit from this situation, b
by pontifier 8y ago
Every dollar paid in rent increases the value of property in support of those who already own it. It's a double whammy.
I myself benefit from this situation, but see it's vicious cycle.
As long as people keep paying rent, rents will rise and property values will rise as well. It's not sustainable indefinitely, and I see problems on the horizon as people change their priorities.
- rajnathani 8y agoThe only direct variable which has an inverse relation to the vicious cycle is the property tax rate, as higher property taxes increases the effective price for property ownership. In California due to Prop 13, the property tax rate (of ~1% of the initially appraised market value of the home) gets negated by inflation, and it's further countered in regions such as the Bay Area by the sustained increase in demand from the influx of residents and higher wage growth.