7 ms·

I'm not sure why this isn't common sense but I see this problem happening in the town I live in right now. Average rent these days seems to start at around $20

I'm not sure why this isn't common sense but I see this problem happening in the town I live in right now. Average rent these days seems to start at around $2000 Canadian for a 1 bedroom/bachelor suite. Minimum wage is $15/h. Wage for an average job is between $15-$20/h. $15/h is $2400/m gross and like $1600-$1800 net depending on your employer's accountant. It's literally not possible to afford even a bachelor suite on minimum wage where I live. I see homeowners complain on facebook about tenants not paying rent. Many of these homeowners are also business owners paying their employees minimum wage. The homeless population in town has expanded exponentially over the last year. Homeowners complain about that. There's a huge disconnect I just don't understand. You can't pay people less than what average rent cost per month then complain there's homeless people. Either jobs need to pay more or rent needs to go down. It's just not reasonable at all currently. You can't draw blood from stone as it were.

runarberg 5y ago
Indeed. Homelessness is about housing like living is about breathing. Yes, OP makes a point with their empirical data plotted neatly on a scatterplot demonstrating a nice correlation between housing availability and homelessness. So OP found a nice variable that they can fit in their models. Great. But OP cannot conclude that this is the whole story. Ignoring wage stagnation leaves a pretty big hole in their explanation on what homelessness is about.
- grawprog 5y ago
  I'm not entirely sure why models are necessary. It's basic math. if (job_pay < food + rent + basic_living_expenses){ ++homelessness } else{ sustainable_society() } Real basic logical shit honestly.
  - nly 5y ago
    In reality there are way more loops than this, since markets tend to be self correcting. One problem right now is some wealth variables are being incremented in loops that you can only break in to if you have assets, like in the property market.
    - imtringued 5y ago
      If you are talking about land prices, that's not wealth, that's the ability to extort wealth out of other people.
      - nly 5y ago
        No, I'm referring to this: - Person A and Person B have the same income and live in similar properties. - Person A rents at $1800/mo and is able to save $1000/mo - Person B owns a $700K property, has $140K of equity (20%), and therefore pays down a mortgage of $560K at a rate of ~3.6% (makes the numbers work, and pretty accurate), totaling repayments of ~$2,800/mo over 25 years. On paper these two have the same disposable income and it seems that Person B's net worth is 'only' $140K higher. But, consider what happens over 5 years, even without house prices going up - Person A will have saved $60K overall - Person B will have have $74K in additional equity (now owe $486K), and can now refinance at 70% LTV instead of 80% LTV. This gain is because they saved interest on the debt repaid over 5 years. Person A would have had to invest their $1000/mo savings in to something yielding a massive 8%/year and pay no tax on their returns to reach a $74K balance in that time. Now consider that if house prices even go up 2%/year over that 5 years (inline with inflation), that Person B will also have an additional $70K of equity. Meanwhile Person A is only $60K to $70K (depending on the performance of their own investments) of their way to a $150K deposit, on a now $770K property. Once you have hard assets and leverage, you have a huge engine of wealth behind you.
        tehwebguy 5y ago
        Also, Person A's rent will increase every year no matter what happens
        nly 5y ago
        Yep, potentially contractually by some measure of inflation.
        grawprog 5y ago
        The problem is, both person A and Person B have more money than the original $15-$20/h wage earner I spoke of in my original post. The amount of money you are describing >Person A rents at $1800/mo and is able to save $1000/mo Is unimaginable for someone making $15-$20/h. Sometimes the people on HN really don't seem to grasp the reality of being an average working person. Everything you said in your post is nonsense that means nothing to a person literally living pay cheque to pay cheque with unchangeable expenses greater than income.

runarberg 5y ago

Indeed. Homelessness is about housing like living is about breathing. Yes, OP makes a point with their empirical data plotted neatly on a scatterplot demonstrating a nice correlation between housing availability and homelessness. So OP found a nice variable that they can fit in their models. Great. But OP cannot conclude that this is the whole story. Ignoring wage stagnation leaves a pretty big hole in their explanation on what homelessness is about.

grawprog 5y ago
I'm not entirely sure why models are necessary. It's basic math. if (job_pay < food + rent + basic_living_expenses){ ++homelessness } else{ sustainable_society() } Real basic logical shit honestly.
- nly 5y ago
  In reality there are way more loops than this, since markets tend to be self correcting. One problem right now is some wealth variables are being incremented in loops that you can only break in to if you have assets, like in the property market.
  - imtringued 5y ago
    If you are talking about land prices, that's not wealth, that's the ability to extort wealth out of other people.
    - nly 5y ago
      No, I'm referring to this: - Person A and Person B have the same income and live in similar properties. - Person A rents at $1800/mo and is able to save $1000/mo - Person B owns a $700K property, has $140K of equity (20%), and therefore pays down a mortgage of $560K at a rate of ~3.6% (makes the numbers work, and pretty accurate), totaling repayments of ~$2,800/mo over 25 years. On paper these two have the same disposable income and it seems that Person B's net worth is 'only' $140K higher. But, consider what happens over 5 years, even without house prices going up - Person A will have saved $60K overall - Person B will have have $74K in additional equity (now owe $486K), and can now refinance at 70% LTV instead of 80% LTV. This gain is because they saved interest on the debt repaid over 5 years. Person A would have had to invest their $1000/mo savings in to something yielding a massive 8%/year and pay no tax on their returns to reach a $74K balance in that time. Now consider that if house prices even go up 2%/year over that 5 years (inline with inflation), that Person B will also have an additional $70K of equity. Meanwhile Person A is only $60K to $70K (depending on the performance of their own investments) of their way to a $150K deposit, on a now $770K property. Once you have hard assets and leverage, you have a huge engine of wealth behind you.
      - tehwebguy 5y ago
        Also, Person A's rent will increase every year no matter what happens
        nly 5y ago
        Yep, potentially contractually by some measure of inflation.
      - grawprog 5y ago
        The problem is, both person A and Person B have more money than the original $15-$20/h wage earner I spoke of in my original post. The amount of money you are describing >Person A rents at $1800/mo and is able to save $1000/mo Is unimaginable for someone making $15-$20/h. Sometimes the people on HN really don't seem to grasp the reality of being an average working person. Everything you said in your post is nonsense that means nothing to a person literally living pay cheque to pay cheque with unchangeable expenses greater than income.