7 ms·

It depends on how UBI would play out. For example, let's say UBI gives everyone $40,000 a year. In much of the non-coastal US, that's enough to live on. But, pr

It depends on how UBI would play out. For example, let's say UBI gives everyone $40,000 a year. In much of the non-coastal US, that's enough to live on. But, pricing might still be based on everyone having a job. So prices now reflect the assumption people have 40k + whatever their salary is. I could see the rent-seekers adjusting their charges accordingly. A slumlord could now price their rents on a poor person making $60k a year (40k + 20k from their job) instead of just on the $20k alone. Doubling or tripling the rent. Consumer goods would possibly follow the same pattern. Maybe UBI would come with some sort of rent or price controls. Or maybe the fear of massive inflation would temper the greed of the rent-seekers. I don't know how it would play out. And I have to say I'm generally in favor of UBI. Just thinking out loud about how it might not be as helpful as it could be.

Retric 6y ago
Slumlords require a limited supply of local housing to gain leverage. If people on UBI are free to move then slumlords are competing with each other, so the same market forces that keeps prices low everywhere else are in effect. Some people on UBI would happily trade worse living conditions for more spending cash. But that freedom of choice is what enables efficient resource allocation.
- EricE 6y ago
  "Slumlords require a limited supply of local housing to gain leverage. " Indeed - if you want to get rid of slumloards then how about getting government out of the way of new housing being created? San Francisco is the poster child for how utterly draconian zoning laws screw everyone, but lower income people disproportionately.
  - WealthVsSurvive 6y ago
    It wasn't "getting government out of the way." It was literally government working in tandem with the trade-union interests of finance, insurance, and real-estate to preserve the value of the "asset," real estate. The problem is BOTH the government AND allied private industry working AGAINST the interests of their constituents and clients. The correction here will be MASSIVE.
thebean11 6y ago
Not sure if I'm convinced, assuming pricing is based on supply and demand. UBI might increase demand a little bit (as the homeless can now afford housing), but probably not by much.
mjmahone17 6y ago
If everyone had $40k/year of guaranteed income, all of a sudden opportunities to go around slumlords opens up: they can buy land and new-build or redevelop housing with UBI-Backed mortgages (so the bank knows they’re getting the money back). Renters almost by definition aren’t capable of amassing enough capital to build new housing, so are at the mercy of the existing supply. If it is guaranteed that everyone has a capital-amassing stream of income available to them, they gain an ability to turn that stream into something longer term. Sure, this still may not be possible in areas with strict housing regulations, but a guaranteed, portable stream of income also provides people the means to move.
- Udik 6y ago
  > they can buy land and new-build And why would they sell you land for less if they know you have $40k more of income? Everyone can pay that extra money, if I am a seller I am raising my prices accordingly.
  - fragmede 6y ago
    Is there a reason other than naked greed, why you (philosophical 'you', not you personally) would raise your prices accordingly? Keep in mind that even as a multi-millionaire slumlord you would also receive UBI (or else it ain't universal) which is enough to cover basic food and shelter.
    - three14 6y ago
      Because you don't directly set real estate prices based on the buyer's income. You simply sell to the highest bidder. The bidders look at their own income and decide what to pay. If all the bidders have more money, the price will tend to rise.
      - thejynxed 6y ago
        The prices will rise without fail, as seen in every real estate market from Shanghai and Toronto to London and the San Francisco Bay area.
notSupplied 6y ago
You've touched on a great point about rent. The article talks about an overabundance of CONSUMER GOODS, but no amount of deflating TV prices can make up for the fact that Rent, Healthcare, and College is what's putting pressure on the lower and middle class right now. UBI will inflate rent the same way cheap student loans inflate tuition.

Retric 6y ago

Slumlords require a limited supply of local housing to gain leverage. If people on UBI are free to move then slumlords are competing with each other, so the same market forces that keeps prices low everywhere else are in effect. Some people on UBI would happily trade worse living conditions for more spending cash. But that freedom of choice is what enables efficient resource allocation.

EricE 6y ago
"Slumlords require a limited supply of local housing to gain leverage. " Indeed - if you want to get rid of slumloards then how about getting government out of the way of new housing being created? San Francisco is the poster child for how utterly draconian zoning laws screw everyone, but lower income people disproportionately.
- WealthVsSurvive 6y ago
  It wasn't "getting government out of the way." It was literally government working in tandem with the trade-union interests of finance, insurance, and real-estate to preserve the value of the "asset," real estate. The problem is BOTH the government AND allied private industry working AGAINST the interests of their constituents and clients. The correction here will be MASSIVE.

thebean11 6y ago

Not sure if I'm convinced, assuming pricing is based on supply and demand. UBI might increase demand a little bit (as the homeless can now afford housing), but probably not by much.

mjmahone17 6y ago

If everyone had $40k/year of guaranteed income, all of a sudden opportunities to go around slumlords opens up: they can buy land and new-build or redevelop housing with UBI-Backed mortgages (so the bank knows they’re getting the money back). Renters almost by definition aren’t capable of amassing enough capital to build new housing, so are at the mercy of the existing supply. If it is guaranteed that everyone has a capital-amassing stream of income available to them, they gain an ability to turn that stream into something longer term. Sure, this still may not be possible in areas with strict housing regulations, but a guaranteed, portable stream of income also provides people the means to move.

Udik 6y ago
> they can buy land and new-build And why would they sell you land for less if they know you have $40k more of income? Everyone can pay that extra money, if I am a seller I am raising my prices accordingly.
- fragmede 6y ago
  Is there a reason other than naked greed, why you (philosophical 'you', not you personally) would raise your prices accordingly? Keep in mind that even as a multi-millionaire slumlord you would also receive UBI (or else it ain't universal) which is enough to cover basic food and shelter.
  - three14 6y ago
    Because you don't directly set real estate prices based on the buyer's income. You simply sell to the highest bidder. The bidders look at their own income and decide what to pay. If all the bidders have more money, the price will tend to rise.
    - thejynxed 6y ago
      The prices will rise without fail, as seen in every real estate market from Shanghai and Toronto to London and the San Francisco Bay area.

notSupplied 6y ago

You've touched on a great point about rent. The article talks about an overabundance of CONSUMER GOODS, but no amount of deflating TV prices can make up for the fact that Rent, Healthcare, and College is what's putting pressure on the lower and middle class right now. UBI will inflate rent the same way cheap student loans inflate tuition.