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Is the rent a function of minimum wage, or is it a function of land prices? Because it's homeowners, landlords, and firms who use real estate as an investment
by klyrs 5y ago
Is the rent a function of minimum wage, or is it a function of land prices? Because it's homeowners, landlords, and firms who use real estate as an investment vehicle who are driving up the land prices and also setting rents. You and I can negotiate a higher wage based on cost of living, and then participate in that bubble. Somebody making minimum wage, not so much.
- dcolkitt 5y agoThey’re both a function of general anti-market policies of their local government. The City government of San Francisco opposes free markets in both labor and housing. Therefore it has a gigantic housing shortage because developers are shackled from meeting demand. That same anti-market outlook also leads lawmakers to thinking workers are incapable of negotiating their own fair wages, and hence they set very high minimum wages. Homeowners and landlords in Houston also use housing as an investment. However the cost is not nearly anywhere as high because the local government in Houston is much more friendly to free market policies towards property developers.