6 ms·

I hope this bubble bursts. In less than 3 years the rent in our working class city went up 45%. Not to mention the absurd qualifications one needs to rent. 4

I hope this bubble bursts. In less than 3 years the rent in our working class city went up 45%. Not to mention the absurd qualifications one needs to rent. 4 times the income to rent, very good credit and background checks. This is not sustainable for working class people.

jdhn 5y ago
>Not to mention the absurd qualifications one needs to rent. This was probably prompted by the Covid rent restrictions. Landlords (especially smaller ones) don't want to rent to someone who can avoid paying rent due to government decrees.
- seanmcdirmid 5y ago
  Ya, you can’t restrict the market and still keep it capitalist. In Seattle, new regulations on price increases along with an indeterminate moratorium on evictions is definitely going to make landlords really careful on credit checks. I also wouldn’t be surprised if the low end rental markets disappear completely as they become too risky to operate in as landlords.
  - nradov 5y ago
    At the very low end there will still be a market for Section 8 housing.
    - seanmcdirmid 5y ago
      Ya, but it is going to suck for those who don't qualify for section 8 yet can't afford high end rents. Probably the government will come in fill those gaps long term.
- fish_phrenology 5y ago
  Having rented in Seattle for 6+ years at essentially the lowest non-subsidized price point, these existed before, along with a variety of other problems.
xyzelement 5y ago
> In less than 3 years the rent in our working class city went up 45%. I sympathize with that but I want to make sure people understand the dynamics. Prices are driven by supply and demand. If there's only one empty apartment in the city and you're willing to pay $2000/month, I am gonna have to pay $2100 month if I want to live there instead of you. That's sort of separate (though related to) prices of houses. What will make rents go down? Only two things: demand goes down, meaning people aren't looking to move into / are moving out of the city. This happened in NYC rents in early covid as everyone bailed out. So one way to drive prices in your city down is to have some even that renders it undesirable (COVID, defund the police, rising crime, suburbs more attractive with work from home, etc.) The other way is to increase supply - that is to build more housing. Counterintuitively, this happens more when prices are high because it compels builders to create more housing stock. People in NYC love to complain about all the new construction going on (or at least that was going on in the last few decades) but imagine what rents would have been without that.
- nsv 5y ago
  This is true, but it's important to consider also things which might artificially constrain supply, such as laws that make it harder to build housing or policy which incentivizes buying homes as an investment. A commonly repeated statistic, there are more empty homes than there are homeless persons in the US (around 17 million empty homes vs. around 600,000 homeless).
- zemo 5y ago
  > one way to drive prices in your city down is to have some even that renders it undesirable (..., defund the police ...) there are so many problems with your post but the assumption that defunding the police is necessarily going to cause prices to collapse is probably the most obviously biased one. the idea that you should view housing as simply a matter of supply and demand and not consider any externalities is an abominable position. All people need shelter, it's not something that people opt into for the enjoyment of it alone. By the logic you have presented, the top 1% of people banding together and buying up all of the housing and squeezing everyone else is perfectly fine if it makes the numbers look nice, regardless of how it affects people's lives. The way you have framed the problem is inhumane. Another way to make rent more affordable is to raise the tax rate on income generated from residential rentals to the point that people are not buying up all of the housing stock for the sake of investment alone. Income from residential rentals is taxed at the same rate as ordinary income, the kind you get from actually doing something. Why would anyone work if they can just own someone else's house instead?
JohnWhigham 5y ago
For areas where stable jobs/people are moving to (much of the South/SW), I don't see it ending any time soon.
driverdan 5y ago
It's mostly driven by real demand. I just bought a house and the market was absolutely insane. It seems like everyone is trying to buy right now. Every house I looked at had multiple offers the day of the listing. I'm sure speculators have an impact in some markets but that's not what I saw here. Until supply increases or demand drops these prices aren't going anywhere but up.
_fat_santa 5y ago
It's worse in some areas. I was trying to rent a place in Denver, it was a 1bd going for $1,300 but the landlord wanted someone with 5X net earnings. I told the landlord he was delusional. 5X net earnings to qualify for that place would be close to $160k pre-tax and anyone earning that much isn't looking at a place like this.
thesausageking 5y ago
It's not a bubble. New housing construction fell by ~30% when the pandemic hit and still hasn't yet recovered to fill the deficit. At the same time, the US has been printing money like crazy and keeping interest rates at zero, which makes housing prices rise. This is why Blackrock and other PE funds have starting buying housing. They know that, in this market, it's a great bet to make. It unfortunately means your rent isn't going to come down or even stop going up anytime soon.
999900000999 5y ago
Where ? A big part of why Los Angeles is a living hell for most people is due to rapid recent increases in rent. LA is this disgusting place where a very very small number of people are doing exceptionally well, and almost everyone is either homeless or half a paycheck away from that. The only saving grace is these obscene rent increases appear to be isolated to a few select markets. In most of America you haven’t seen anything like the rent inflation normal in Los Angeles. If possible, consider moving. These issues have come about over the last 30 years, they won’t be fixed in the next three. I moved out of LA my cost of living dropped by about 30% overnight, and it was much easier to meet nice people. I’ve long considered writing a book about just how much moving to a different city can fix your life. Most behavior is ultimately economic, if you and no one you know can get their lives together and move out, none well. In LA this spirals into a nasty entitlement complex, leading to various yucky situations better avoided.

jdhn 5y ago

>Not to mention the absurd qualifications one needs to rent. This was probably prompted by the Covid rent restrictions. Landlords (especially smaller ones) don't want to rent to someone who can avoid paying rent due to government decrees.

seanmcdirmid 5y ago
Ya, you can’t restrict the market and still keep it capitalist. In Seattle, new regulations on price increases along with an indeterminate moratorium on evictions is definitely going to make landlords really careful on credit checks. I also wouldn’t be surprised if the low end rental markets disappear completely as they become too risky to operate in as landlords.
- nradov 5y ago
  At the very low end there will still be a market for Section 8 housing.
  - seanmcdirmid 5y ago
    Ya, but it is going to suck for those who don't qualify for section 8 yet can't afford high end rents. Probably the government will come in fill those gaps long term.
fish_phrenology 5y ago
Having rented in Seattle for 6+ years at essentially the lowest non-subsidized price point, these existed before, along with a variety of other problems.

xyzelement 5y ago

> In less than 3 years the rent in our working class city went up 45%. I sympathize with that but I want to make sure people understand the dynamics. Prices are driven by supply and demand. If there's only one empty apartment in the city and you're willing to pay $2000/month, I am gonna have to pay $2100 month if I want to live there instead of you. That's sort of separate (though related to) prices of houses. What will make rents go down? Only two things: demand goes down, meaning people aren't looking to move into / are moving out of the city. This happened in NYC rents in early covid as everyone bailed out. So one way to drive prices in your city down is to have some even that renders it undesirable (COVID, defund the police, rising crime, suburbs more attractive with work from home, etc.) The other way is to increase supply - that is to build more housing. Counterintuitively, this happens more when prices are high because it compels builders to create more housing stock. People in NYC love to complain about all the new construction going on (or at least that was going on in the last few decades) but imagine what rents would have been without that.

nsv 5y ago
This is true, but it's important to consider also things which might artificially constrain supply, such as laws that make it harder to build housing or policy which incentivizes buying homes as an investment. A commonly repeated statistic, there are more empty homes than there are homeless persons in the US (around 17 million empty homes vs. around 600,000 homeless).
zemo 5y ago
> one way to drive prices in your city down is to have some even that renders it undesirable (..., defund the police ...) there are so many problems with your post but the assumption that defunding the police is necessarily going to cause prices to collapse is probably the most obviously biased one. the idea that you should view housing as simply a matter of supply and demand and not consider any externalities is an abominable position. All people need shelter, it's not something that people opt into for the enjoyment of it alone. By the logic you have presented, the top 1% of people banding together and buying up all of the housing and squeezing everyone else is perfectly fine if it makes the numbers look nice, regardless of how it affects people's lives. The way you have framed the problem is inhumane. Another way to make rent more affordable is to raise the tax rate on income generated from residential rentals to the point that people are not buying up all of the housing stock for the sake of investment alone. Income from residential rentals is taxed at the same rate as ordinary income, the kind you get from actually doing something. Why would anyone work if they can just own someone else's house instead?

JohnWhigham 5y ago

For areas where stable jobs/people are moving to (much of the South/SW), I don't see it ending any time soon.

driverdan 5y ago

It's mostly driven by real demand. I just bought a house and the market was absolutely insane. It seems like everyone is trying to buy right now. Every house I looked at had multiple offers the day of the listing. I'm sure speculators have an impact in some markets but that's not what I saw here. Until supply increases or demand drops these prices aren't going anywhere but up.

_fat_santa 5y ago

It's worse in some areas. I was trying to rent a place in Denver, it was a 1bd going for $1,300 but the landlord wanted someone with 5X net earnings. I told the landlord he was delusional. 5X net earnings to qualify for that place would be close to $160k pre-tax and anyone earning that much isn't looking at a place like this.

thesausageking 5y ago

It's not a bubble. New housing construction fell by ~30% when the pandemic hit and still hasn't yet recovered to fill the deficit. At the same time, the US has been printing money like crazy and keeping interest rates at zero, which makes housing prices rise. This is why Blackrock and other PE funds have starting buying housing. They know that, in this market, it's a great bet to make. It unfortunately means your rent isn't going to come down or even stop going up anytime soon.

999900000999 5y ago

Where ? A big part of why Los Angeles is a living hell for most people is due to rapid recent increases in rent. LA is this disgusting place where a very very small number of people are doing exceptionally well, and almost everyone is either homeless or half a paycheck away from that. The only saving grace is these obscene rent increases appear to be isolated to a few select markets. In most of America you haven’t seen anything like the rent inflation normal in Los Angeles. If possible, consider moving. These issues have come about over the last 30 years, they won’t be fixed in the next three. I moved out of LA my cost of living dropped by about 30% overnight, and it was much easier to meet nice people. I’ve long considered writing a book about just how much moving to a different city can fix your life. Most behavior is ultimately economic, if you and no one you know can get their lives together and move out, none well. In LA this spirals into a nasty entitlement complex, leading to various yucky situations better avoided.