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If that was really the case then all surplus would already be eaten by landlords and that clearly isn't the case. In some parts rents are absolutely very high b
by geysersam 3y ago
If that was really the case then all surplus would already be eaten by landlords and that clearly isn't the case. In some parts rents are absolutely very high but that's not everywhere. If rents increase more apartments will be built, reducing the ability of landlords to extract rent.
But I agree that inflation is likely to increase if people get more money to spend. However, I think that would mainly be over a transitional period while the economy adapts to the new demand.
- justinclift 3y ago> If that was really the case then all surplus would already be eaten by landlords ... That's what seems to be happening in at least Sydney, Australia. :(
- sudosysgen 3y agoNot all of it, but real estate does very strongly correlate with income, and for lower income quintiles it can eat the surplus.
- hansvm 3y agoLower income quintiles have the surplus eaten because their consumption of raw materials and labor is break-even with their production of raw materials and labor. Even if by magic land were free and construction costs were negligible, a 1-bed 600 sq ft living space would still take a decade for the average bottom-quintile family to pay for the raw materials in the US, saving nearly everything other than rice and beans, healthcare, and other such niceties, and assuming no major calamities on the way. Landlords charging on par with that same rate in rent isn't evidence that were the bottom quintile of incomes to increase by $1k/mo their rents would as well.