4 ms·
> But here you have people being irresponsible with what they're willing to spend on rent. Irresponsible how? Rent goes up the most in places with good paying
by helen___keller 4y ago
> But here you have people being irresponsible with what they're willing to spend on rent.
Irresponsible how? Rent goes up the most in places with good paying jobs. As rent goes up, generally the people without the good paying jobs have to move out. This process of low income residents competing with high income residents on housing and subsequently being displaced is called gentrification. It’s an example of a negative externality in a supply-constrained housing market where all players are acting rationally.
- silisili 4y agoWhere gentrification exists, absolutely correct. But there are a ton of areas not gentrifying, just turning the screws. One can see rent prices rise even in areas with a declining population, for example. And as long as enough people are willing to just pay more, everyone has to pay more. I'm not really proposing unionized renters, I don't know what the solution really is. The free market sounds nice on paper, until things crash ever so often. It's not just rent, it happened with house prices, too. You had/have a sizeable amount of people out there willing to spend the absolute max the bank would approve them for, to compete. I was watching the RealEstate/REBubble subs over the last two years, and the number of people living outside their realistic means seemed insane to me. This in turn made more competition, driving prices higher. A reasonable person who say, wouldn't try to buy a 500k house on a 100k salary was left with no choice(area dependent, of course).