The Rent Is Too Damn High
September 24, 2015 8:17 PM Subscribe
Don't sugar-coat it: Renters will continue to struggle, until they die...
posted by littlejohnnyjewel at 8:38 PM on September 24, 2015 [16 favorites]
posted by littlejohnnyjewel at 8:38 PM on September 24, 2015 [16 favorites]
Which means that I can forget about saving enough money to buy until I'm close to retirement age, at which point I'll need to start saving for my long-term care instead./bangs head on wall
posted by chicainthecity at 8:38 PM on September 24, 2015 [7 favorites]
posted by chicainthecity at 8:38 PM on September 24, 2015 [7 favorites]
Big holding companies snapped up foreclosures, and now a considerable amount of housing is in corporate hands.
The goal of a corporation is opposed to the goal of a resident. The property represents an asset that generates a cash flow. Why should they ever sell it to a resident?
posted by Repack Rider at 8:48 PM on September 24, 2015 [9 favorites]
The goal of a corporation is opposed to the goal of a resident. The property represents an asset that generates a cash flow. Why should they ever sell it to a resident?
posted by Repack Rider at 8:48 PM on September 24, 2015 [9 favorites]
It's it that renting is bad, it's that being less well off sucks more all the time, and getting stuck in a cycle of ever increasing rents for worse and worse housing is a major part of that.
posted by Dip Flash at 8:59 PM on September 24, 2015 [19 favorites]
posted by Dip Flash at 8:59 PM on September 24, 2015 [19 favorites]
Really? The goals of someone who rents out a single property is different than a "faceless corporation" that rents out multiple?
Hate to break it to you, but no one becomes a landlord as some sort of public service to the community.
posted by sideshow at 9:00 PM on September 24, 2015 [21 favorites]
Hate to break it to you, but no one becomes a landlord as some sort of public service to the community.
posted by sideshow at 9:00 PM on September 24, 2015 [21 favorites]
I've used the New York times "is it better to rent or buy?" calculator, and even though our rent is something I never thought I'd pay, it's still preferable to buying.
posted by rednikki at 9:15 PM on September 24, 2015 [11 favorites]
posted by rednikki at 9:15 PM on September 24, 2015 [11 favorites]
What a weirdly written article.
Rapid growth in the Hispanic population is one such pressure, because Hispanics tend to be disproportionately renters and are more likely to pay a large share of their incomes in rent, thus putting more pressure on the existing supply of affordable rental housing.
Burdened renters pay more than half their income in rent. In the future there will be more of these. This is because there will be more Hispanics, who ... pay more for rent. Therefore the condition will continue because the people who experience the condition the most will continue to exist. Also, Millenials.
posted by bleep at 9:35 PM on September 24, 2015 [19 favorites]
Rapid growth in the Hispanic population is one such pressure, because Hispanics tend to be disproportionately renters and are more likely to pay a large share of their incomes in rent, thus putting more pressure on the existing supply of affordable rental housing.
Burdened renters pay more than half their income in rent. In the future there will be more of these. This is because there will be more Hispanics, who ... pay more for rent. Therefore the condition will continue because the people who experience the condition the most will continue to exist. Also, Millenials.
posted by bleep at 9:35 PM on September 24, 2015 [19 favorites]
Linking is a huge pain on my phone, but other places have had better summaries of this study. I saw it first in the Atlantic.
It's an interesting study but this may not have been the ideal link.
posted by Dip Flash at 9:41 PM on September 24, 2015
It's an interesting study but this may not have been the ideal link.
posted by Dip Flash at 9:41 PM on September 24, 2015
Really? The goals of someone who rents out a single property is different than a "faceless corporation" that rents out multiple?
Often, yes. Renters of single properties often have multiple motivations, of which "getting the rent" is only one (though an important one). This isn't a matter of "public service", but it does lead to folks renting out below market rate to support a friend, relative, or community. Maybe you do this with an in-law unit to help cover your mortgage on the whole building, for example. It's a slightly different thing, but I also know of many cases here in SF where a commercial landlord rents out below market specifically in order to support long-term local businesses.
The flip side is that individual renters have all the quirks and foibles of any individual. In some cases the faceless corporation that doesn't have a personal relationship might be more reliable or less trouble.
posted by feckless at 10:01 PM on September 24, 2015 [8 favorites]
Often, yes. Renters of single properties often have multiple motivations, of which "getting the rent" is only one (though an important one). This isn't a matter of "public service", but it does lead to folks renting out below market rate to support a friend, relative, or community. Maybe you do this with an in-law unit to help cover your mortgage on the whole building, for example. It's a slightly different thing, but I also know of many cases here in SF where a commercial landlord rents out below market specifically in order to support long-term local businesses.
The flip side is that individual renters have all the quirks and foibles of any individual. In some cases the faceless corporation that doesn't have a personal relationship might be more reliable or less trouble.
posted by feckless at 10:01 PM on September 24, 2015 [8 favorites]
I for one am not surprised that snake people aren't buying houses. Who gives homeowners insurance to people resembling snakes/with that many snakes?! (I am unclear on the exact concept of "snake person".)
posted by supercres at 10:03 PM on September 24, 2015 [6 favorites]
posted by supercres at 10:03 PM on September 24, 2015 [6 favorites]
So my wife and I have been living in Japan for the past seven years or so, and every so often our families will ask us when we're planning to move back to the US. Not long ago, I did some quick back-of-the-envelope calculations and determined that, due to housing and medical care not being regulated (read: unthinkably broken) in the US, we would have to be making literally twice as much as we do (around ¥5,500,000 combined), living in a major city in Japan, to maintain a comparable quality of life in the US. We live in the outskirts of the city of Kyoto in a 45 square meter (about 450 square foot) place, with a parking space, that costs ¥70,000 a month. That's under $600 at the current exchange rate. Don't even get me STARTED on the healthcare stuff.
I still have difficulty understanding why it's so much easier to find affordable housing (especially if you're willing to live in a relatively small place) in desirable parts of one of the world's most densely populated countries, and yet in the third largest country in the world it's easy to wind up spending 50%+ of your salary on rent in a remarkable number of markets.
posted by DoctorFedora at 10:03 PM on September 24, 2015 [33 favorites]
I still have difficulty understanding why it's so much easier to find affordable housing (especially if you're willing to live in a relatively small place) in desirable parts of one of the world's most densely populated countries, and yet in the third largest country in the world it's easy to wind up spending 50%+ of your salary on rent in a remarkable number of markets.
posted by DoctorFedora at 10:03 PM on September 24, 2015 [33 favorites]
Also:
Millennials—the population currently in their mid-20s and early 30s—are also expected to grow and continue to rent in larger numbers than prior generations.
How is the number of Millenials, born between 1980 and 1993, supposed to increase? That's not how mortality works.
posted by smokysunday at 10:04 PM on September 24, 2015 [48 favorites]
Millennials—the population currently in their mid-20s and early 30s—are also expected to grow and continue to rent in larger numbers than prior generations.
How is the number of Millenials, born between 1980 and 1993, supposed to increase? That's not how mortality works.
posted by smokysunday at 10:04 PM on September 24, 2015 [48 favorites]
Snake people keep laying more eggs, burdening the rental market.
posted by Windopaene at 10:09 PM on September 24, 2015 [34 favorites]
posted by Windopaene at 10:09 PM on September 24, 2015 [34 favorites]
Hate to break it to you, but no one becomes a landlord as some sort of public service to the community.
You have a flair for the obvious.
But there is a huge difference between an individual landlord who owns a single rental property and a holding company that owns thousands, and thus is in a position to set prices unencumbered by the free market. The question becomes, what are the consequences to the economy and society when a large percentage of the population is at the mercy of a few who have a monopoly on housing?
posted by Repack Rider at 10:17 PM on September 24, 2015 [3 favorites]
You have a flair for the obvious.
But there is a huge difference between an individual landlord who owns a single rental property and a holding company that owns thousands, and thus is in a position to set prices unencumbered by the free market. The question becomes, what are the consequences to the economy and society when a large percentage of the population is at the mercy of a few who have a monopoly on housing?
posted by Repack Rider at 10:17 PM on September 24, 2015 [3 favorites]
Smokysunday,
The proportion of the population in their mid 20's to early 30's can indeed increase. Born in 79, I've been called every generation from X to Y to Millennial (!) so it's the word that moves.
posted by effugas at 10:22 PM on September 24, 2015 [8 favorites]
The proportion of the population in their mid 20's to early 30's can indeed increase. Born in 79, I've been called every generation from X to Y to Millennial (!) so it's the word that moves.
posted by effugas at 10:22 PM on September 24, 2015 [8 favorites]
I believe the most current working definition of "Millenial" is "any person under the age of 40 that doesn't have any money"
posted by permiechickie at 10:25 PM on September 24, 2015 [42 favorites]
posted by permiechickie at 10:25 PM on September 24, 2015 [42 favorites]
"Millennial" means anyone who reaches the age of majority between the year 2000 and the year 3000.
posted by Phssthpok at 10:57 PM on September 24, 2015 [26 favorites]
posted by Phssthpok at 10:57 PM on September 24, 2015 [26 favorites]
I still have difficulty understanding why it's so much easier to find affordable housing (especially if you're willing to live in a relatively small place) in desirable parts of one of the world's most densely populated countries, and yet in the third largest country in the world it's easy to wind up spending 50%+ of your salary on rent in a remarkable number of markets.
In Japan's case, it is simply a matter of demographics.
"The country lost 244,000 people in 2013 as births plunged and deaths soared. It faces the prospect of losing a third of its population in the next 50 years, raising fears about its economic prospects and labor market."
But few worries about the stock of available housing. They'll be giving the stuff away.
posted by three blind mice at 11:52 PM on September 24, 2015 [4 favorites]
In Japan's case, it is simply a matter of demographics.
"The country lost 244,000 people in 2013 as births plunged and deaths soared. It faces the prospect of losing a third of its population in the next 50 years, raising fears about its economic prospects and labor market."
But few worries about the stock of available housing. They'll be giving the stuff away.
posted by three blind mice at 11:52 PM on September 24, 2015 [4 favorites]
Well, there's more to it than demographics. Three-generation households are still very common in many parts of the country, it's not unusual to live with your parents until you get married, and there's also housing market regulation.
But you're right that it's not exactly an apples-to-apples comparison.
posted by DoctorFedora at 1:01 AM on September 25, 2015 [3 favorites]
But you're right that it's not exactly an apples-to-apples comparison.
posted by DoctorFedora at 1:01 AM on September 25, 2015 [3 favorites]
I own a couple of rental properties in London. I don't do this to make a profit (they run at a slight loss, but of course property in London is likely to be a good investment in capital terms). I bought them because in a few years my children will want somewhere to live, and they won't be able to afford to buy unless I do this now. I appreciate I am lucky that I can do this.
It cost a lot of money. Put simply, I bought a 2 bedroom flat for £600k; put down a 25% deposit; borrowed the rest; rent it out for £2,0000 a month; and pay £2,500 on the mortgage. You will think that £2,000 pcm is lot to pay in rent, and it is - but I am not making a profit on it.
posted by Major Tom at 1:38 AM on September 25, 2015 [6 favorites]
It cost a lot of money. Put simply, I bought a 2 bedroom flat for £600k; put down a 25% deposit; borrowed the rest; rent it out for £2,0000 a month; and pay £2,500 on the mortgage. You will think that £2,000 pcm is lot to pay in rent, and it is - but I am not making a profit on it.
posted by Major Tom at 1:38 AM on September 25, 2015 [6 favorites]
Major Tom, that looks like a profit to me. You are gaining equity on the property and that's not a loss.
posted by Literaryhero at 1:53 AM on September 25, 2015 [1 favorite]
posted by Literaryhero at 1:53 AM on September 25, 2015 [1 favorite]
Yes I agree, I will make a capital gain in the long run. My point really is that I can't afford to charge less rent, because the cost of buying and owning a property to rent out is so high (and that at a time when interest rates are at an all time low). So it is the high cost of owning property that makes renting property so expensive.
posted by Major Tom at 1:59 AM on September 25, 2015 [4 favorites]
posted by Major Tom at 1:59 AM on September 25, 2015 [4 favorites]
I've been in a shitty rental situation lately (getting kicked out of our current house because the landlady died and her heirs want to sell; local rental market is brutal and the only way to get a place is to be the first to call, the first to view and then to tell them you'll take it right away), and I've been struck by a few things.
One is the difference between financial expectations when you're renting and financial expectations when you're trying to buy. Most local letting agencies work on a model that says you can afford the rent if your annual salary is 2.5x (or more) the annual rent on the property. What this means in practice is that the place we've just put down a deposit for (because we got lucky and called first, viewed first and then phoned the office from the car two minutes after the viewing was done) is being rented for £775 pcm, and the letting agency will happily rent it to you if you make around £23,000 a year. As someone who has, in the past, made roughly £23,000 a year, paying £775/month for rent would have absolutely shafted my finances. It would have been possible, in theory, but stressful and unpleasant in a wide variety of ways.
Now, to buy a house you need to be able to secure a mortgage, and you'd be lucky to get more than 3 or 3.5x your salary. The average house price in the town where we're renting is £230,000. Divide that by three and you need to be making more than £75,000/year to stand a chance of getting a mortgage. Average salary in the local area is £35,000, but that's skewed by a nearby city with a big tech industry. Most ordinary people in the small town we're renting in aren't making that much. But you can carry on renting a place where the rent is nearly half what you bring home each month. And you never stand a chance of saving enough to get yourself out of that trap. And landlords are now kicking out their tenants to sell the properties since the housing market picked up. And there's not really any new housing stock being built. When we first found out we were being evicted, it seemed entirely plausible given the state of the rental market that we could have found ourselves homeless in November. Not because we haven't got enough money, but because there aren't enough fucking houses.
There's a fundamental national mindset issue. People have internalised the idea that a house is an investment, rather than a place where you live. If that's what you believe, then of course it's reasonable behaviour to buy a few more and rent them out to people less fortunate, and less mortgageable, than you. Particularly if you managed to buy your own actual house that you lived in a couple of decades ago, when the market was less completely fucked.
And don't even get me started on the ubiquitous no pets policies. Yes, of course the superficial condition of your spare fucking house is more important than another person's sense of wellbeing and quality of life.
The more I think about it, the more being a landlord feels like a power play. Sure, you might think you're doing it to make a bit of money, but you also get way more control over a poorer person's life circumstances and sense of stability than they do. And that's all kinds of fucked up.
posted by terretu at 2:18 AM on September 25, 2015 [22 favorites]
One is the difference between financial expectations when you're renting and financial expectations when you're trying to buy. Most local letting agencies work on a model that says you can afford the rent if your annual salary is 2.5x (or more) the annual rent on the property. What this means in practice is that the place we've just put down a deposit for (because we got lucky and called first, viewed first and then phoned the office from the car two minutes after the viewing was done) is being rented for £775 pcm, and the letting agency will happily rent it to you if you make around £23,000 a year. As someone who has, in the past, made roughly £23,000 a year, paying £775/month for rent would have absolutely shafted my finances. It would have been possible, in theory, but stressful and unpleasant in a wide variety of ways.
Now, to buy a house you need to be able to secure a mortgage, and you'd be lucky to get more than 3 or 3.5x your salary. The average house price in the town where we're renting is £230,000. Divide that by three and you need to be making more than £75,000/year to stand a chance of getting a mortgage. Average salary in the local area is £35,000, but that's skewed by a nearby city with a big tech industry. Most ordinary people in the small town we're renting in aren't making that much. But you can carry on renting a place where the rent is nearly half what you bring home each month. And you never stand a chance of saving enough to get yourself out of that trap. And landlords are now kicking out their tenants to sell the properties since the housing market picked up. And there's not really any new housing stock being built. When we first found out we were being evicted, it seemed entirely plausible given the state of the rental market that we could have found ourselves homeless in November. Not because we haven't got enough money, but because there aren't enough fucking houses.
There's a fundamental national mindset issue. People have internalised the idea that a house is an investment, rather than a place where you live. If that's what you believe, then of course it's reasonable behaviour to buy a few more and rent them out to people less fortunate, and less mortgageable, than you. Particularly if you managed to buy your own actual house that you lived in a couple of decades ago, when the market was less completely fucked.
And don't even get me started on the ubiquitous no pets policies. Yes, of course the superficial condition of your spare fucking house is more important than another person's sense of wellbeing and quality of life.
The more I think about it, the more being a landlord feels like a power play. Sure, you might think you're doing it to make a bit of money, but you also get way more control over a poorer person's life circumstances and sense of stability than they do. And that's all kinds of fucked up.
posted by terretu at 2:18 AM on September 25, 2015 [22 favorites]
This recent article in the guardian suggests renters in London are now paying 60% of their gross (or 72% of their net) income in rent, which is frankly obscene. The UK average is apparently 47% of gross, which is bad enough.
posted by biffa at 2:37 AM on September 25, 2015 [3 favorites]
posted by biffa at 2:37 AM on September 25, 2015 [3 favorites]
Really? The goals of someone who rents out a single property is different than a "faceless corporation" that rents out multiple?
Oftentimes small landlords aren't hawk-like tracking the market and pushing in the maximum rent increases the market will bear.
For instance, my landlord just raises the rent $100 every year. You know it's coming, you know when it's coming, and that's all you get. This isn't tracking the actual market(which is fucking totally ridiculous and would slap at least $300 on that just this year, possibly more for location) but their logic is something to the effect of "we have good tenants who don't move often and pay rent on time, and we never have an empty unit for more than a couple days if it's on the market".
I've lived in other places owned by small time to medium(like, sub 20 properties) local landlords and their logic was pretty similar. Maybe if the place was empty and they had to go through the trouble of putting up an ad they'd figure out what the market rate was and up it, but if someones in there? Just token increases.
On the flipside, i've had friends living in big corporate owned complexes and when the leases popped they were hit with GINORMOUS increases. All of them, pretty much unilaterally, moved further out or switched neighborhoods to somewhere they could find another small landlord who at least didn't seem like they'd pull that.
I myself have had crappy experiences to that effect. I've lived in two locally held properties that got bought out by a big corporate landlord, and both times they immediately went in and maximized all they could squeeze out of every unit immediately which pushed a lot of people out. The places had been full and making bank, and now they have a ton of empty units essentially losing money until they can find tenants to pay the new massively jacked rates.
I mean, whatever the market will bear and whatnot, but it always felt like there's making money and there's sociopathically making money. And every time i bring this up most places, i inevitably get shouted down by either an anti rent control libertarian or some other free market wanker going "well if the place was renting for $1550 and someone would pay $1800 then it was obviously underpriced and bla bla bla".
All i know is if my 80something year old landlord dies, i'm going to have to move to the moon and sit in traffic.
posted by emptythought at 3:22 AM on September 25, 2015 [24 favorites]
Oftentimes small landlords aren't hawk-like tracking the market and pushing in the maximum rent increases the market will bear.
For instance, my landlord just raises the rent $100 every year. You know it's coming, you know when it's coming, and that's all you get. This isn't tracking the actual market(which is fucking totally ridiculous and would slap at least $300 on that just this year, possibly more for location) but their logic is something to the effect of "we have good tenants who don't move often and pay rent on time, and we never have an empty unit for more than a couple days if it's on the market".
I've lived in other places owned by small time to medium(like, sub 20 properties) local landlords and their logic was pretty similar. Maybe if the place was empty and they had to go through the trouble of putting up an ad they'd figure out what the market rate was and up it, but if someones in there? Just token increases.
On the flipside, i've had friends living in big corporate owned complexes and when the leases popped they were hit with GINORMOUS increases. All of them, pretty much unilaterally, moved further out or switched neighborhoods to somewhere they could find another small landlord who at least didn't seem like they'd pull that.
I myself have had crappy experiences to that effect. I've lived in two locally held properties that got bought out by a big corporate landlord, and both times they immediately went in and maximized all they could squeeze out of every unit immediately which pushed a lot of people out. The places had been full and making bank, and now they have a ton of empty units essentially losing money until they can find tenants to pay the new massively jacked rates.
I mean, whatever the market will bear and whatnot, but it always felt like there's making money and there's sociopathically making money. And every time i bring this up most places, i inevitably get shouted down by either an anti rent control libertarian or some other free market wanker going "well if the place was renting for $1550 and someone would pay $1800 then it was obviously underpriced and bla bla bla".
All i know is if my 80something year old landlord dies, i'm going to have to move to the moon and sit in traffic.
posted by emptythought at 3:22 AM on September 25, 2015 [24 favorites]
At least in London it is not difficult to let a flat if you have the money. There is a lot of available housing. Step out of any tube station and you'll see three or four estate agents advertising property to let. Walk down the street and you'll quickly loose count of the number of Foxtons' signs you pass.
Here in Soviet Sweden one is greeted with a completely different view. The estate agents here only sell property. There is no Foxtons and no private rental market and severe shortage of rental property of any kind.
"Swedish rent controls and other housing restrictions in place since the 1960s make it almost impossible for people to lease out apartments to foreign tech workers. And a backlog of new construction means that only 10,000 new homes are expected to be built annually over the next 15 years, though Stockholm’s local government has fast-tracked some new residential developments."
The laws don't just make it hard to rent to foreign tech workers, but to anyone. On the one hand, the restrictions on renting make buying to let completely impossible so there is no private investment in rental real estate. On the other hand, the rent controls make it equally unattractive for corporations and institutional investors. The backlog of "new construction" is of course a direct consequence of all of this. It's not rocket science to anyone but a socialist.
posted by three blind mice at 3:51 AM on September 25, 2015 [2 favorites]
Here in Soviet Sweden one is greeted with a completely different view. The estate agents here only sell property. There is no Foxtons and no private rental market and severe shortage of rental property of any kind.
"Swedish rent controls and other housing restrictions in place since the 1960s make it almost impossible for people to lease out apartments to foreign tech workers. And a backlog of new construction means that only 10,000 new homes are expected to be built annually over the next 15 years, though Stockholm’s local government has fast-tracked some new residential developments."
The laws don't just make it hard to rent to foreign tech workers, but to anyone. On the one hand, the restrictions on renting make buying to let completely impossible so there is no private investment in rental real estate. On the other hand, the rent controls make it equally unattractive for corporations and institutional investors. The backlog of "new construction" is of course a direct consequence of all of this. It's not rocket science to anyone but a socialist.
posted by three blind mice at 3:51 AM on September 25, 2015 [2 favorites]
Terretu, I'm part of the problem. One of those people, like you say, who bought before the 2000's property boom and now rent out. This is my point of view.
I bought in 1999 and my flat is now worth x5 its purchase price. I live in my partner's place and rent the flat out at a rate similar to similar flats on the market.
I could sell and pay off my partner's mortgage but the money from the rent outweighs the money we'd save. I don't have a pension and with interest rates so low I don't intend to sell and invest in one. With that in mind I want to keep the flat in as good a condition as possible and do not rent out to people with pets or smokers.
I'd be more likely to sell if people with interest only mortgages (like me) were forced off them; if interest rates went a lot higher; if the taxes for rental income went up; if the government enforced some kind of land rent cap or if what appeared to be a property bubble was happpening.
The Bank Of England is supposed to be independent of government but it's not independent of financial institutions like other banks or people in the country who owe debt. The BoE keeping interest rates low has protected lots of landlords with much lower levels of equity to keep hold of their properties. If rates went up there'd be a tipping point and lots of people would be forced to sell or foreclose, which the banks would presumably lose out on in some way.
I could, I suppose, rent out my flat at a rate below the market rate to people who need it more than the affluent young people who are in it now. All the uncertain things about choosing The Right People coupled with the loss of income make this completely untenable.
I am a lucky beneficiary of this situation. I feel pessimistic about the situation for young people but working into old age without any pension looks far worse to me as an individual, so I'll keep hold of the flat. Reading your post made me feel ashamed but I've rationalised it as survivors guilt and will go back to my complacent hole.
posted by Brian Lux at 4:04 AM on September 25, 2015 [7 favorites]
I bought in 1999 and my flat is now worth x5 its purchase price. I live in my partner's place and rent the flat out at a rate similar to similar flats on the market.
I could sell and pay off my partner's mortgage but the money from the rent outweighs the money we'd save. I don't have a pension and with interest rates so low I don't intend to sell and invest in one. With that in mind I want to keep the flat in as good a condition as possible and do not rent out to people with pets or smokers.
I'd be more likely to sell if people with interest only mortgages (like me) were forced off them; if interest rates went a lot higher; if the taxes for rental income went up; if the government enforced some kind of land rent cap or if what appeared to be a property bubble was happpening.
The Bank Of England is supposed to be independent of government but it's not independent of financial institutions like other banks or people in the country who owe debt. The BoE keeping interest rates low has protected lots of landlords with much lower levels of equity to keep hold of their properties. If rates went up there'd be a tipping point and lots of people would be forced to sell or foreclose, which the banks would presumably lose out on in some way.
I could, I suppose, rent out my flat at a rate below the market rate to people who need it more than the affluent young people who are in it now. All the uncertain things about choosing The Right People coupled with the loss of income make this completely untenable.
I am a lucky beneficiary of this situation. I feel pessimistic about the situation for young people but working into old age without any pension looks far worse to me as an individual, so I'll keep hold of the flat. Reading your post made me feel ashamed but I've rationalised it as survivors guilt and will go back to my complacent hole.
posted by Brian Lux at 4:04 AM on September 25, 2015 [7 favorites]
The dynamics of housing in the UK are very different than the US. Historically the US paid a smaller percentage of their income on housing and the market built homes to satisfy demand. Right now we are at s cyclical low in new homes relative to household formation. Maybe it's structural because of zoning changes - I don't really know.
In the UK peak home building was 1968 and strict land use regs make it rational for home builders to build the fanciest homes they can over a long time rather than cheaper homes a bit more quickly.
posted by JPD at 4:21 AM on September 25, 2015
In the UK peak home building was 1968 and strict land use regs make it rational for home builders to build the fanciest homes they can over a long time rather than cheaper homes a bit more quickly.
posted by JPD at 4:21 AM on September 25, 2015
I still have difficulty understanding why it's so much easier to find affordable housing (especially if you're willing to live in a relatively small place) in desirable parts of one of the world's most densely populated countries, and yet in the third largest country in the world it's easy to wind up spending 50%+ of your salary on rent in a remarkable number of markets.
Effective Public Transit is your answer.
Unfortunately that requires the absence of an ongoing subterranean civil war.
posted by srboisvert at 4:28 AM on September 25, 2015 [6 favorites]
Effective Public Transit is your answer.
Unfortunately that requires the absence of an ongoing subterranean civil war.
posted by srboisvert at 4:28 AM on September 25, 2015 [6 favorites]
Behind the issue of renting and/or buying is the bigger issue: the growing gap between haves and have much less. As people prospered--middle class--in a world of manufacturing, families moved to burbs, communicated to cities. Now, with jobs more often than not located in cities but not in manufacturing, the young, living in cities, find prices skyrocketing in cities. Boston, San Francisco, Berlin, London, Amsterdam, N.Y., etc have become places for those with hefty incomes. Gentrification taking place to make more room for those who can afford those cities. The split between those with substantial incomes and those merely getting by seems to grow. Is this subject to change, a fix, or is it symptomatic of rampant capitalism.
I note, in an aside, that the CEO of VW, guilty it seems of transparent fraud for his company on a massive scale>/b>, just resigned as will walk away with 32 million dollar package...You supply the cuss words
posted by Postroad at 4:29 AM on September 25, 2015 [7 favorites]
I note, in an aside, that the CEO of VW, guilty it seems of transparent fraud for his company on a massive scale>/b>, just resigned as will walk away with 32 million dollar package...You supply the cuss words
posted by Postroad at 4:29 AM on September 25, 2015 [7 favorites]
How is the number of Millenials, born between 1980 and 1993, supposed to increase?
They're talking about household formation: moving out of a shared home and starting a new one.
This is because there will be more Hispanics, who ... pay more for rent. Therefore the condition will continue because the people who experience the condition the most will continue to exist. Also, Millenials.
More Hispanics, who tend to rent, will increase demand. Demand pushes prices up.
Oftentimes small landlords aren't hawk-like tracking the market and pushing in the maximum rent increases the market will bear.
For instance, my landlord just raises the rent $100 every year.
That's not necessarily altruistic. The cost of rerenting, between marketing, cleaning, repairs, and foregone rent, can easily exceed the net present value of future increased rent.
posted by jpe at 4:30 AM on September 25, 2015 [2 favorites]
They're talking about household formation: moving out of a shared home and starting a new one.
This is because there will be more Hispanics, who ... pay more for rent. Therefore the condition will continue because the people who experience the condition the most will continue to exist. Also, Millenials.
More Hispanics, who tend to rent, will increase demand. Demand pushes prices up.
Oftentimes small landlords aren't hawk-like tracking the market and pushing in the maximum rent increases the market will bear.
For instance, my landlord just raises the rent $100 every year.
That's not necessarily altruistic. The cost of rerenting, between marketing, cleaning, repairs, and foregone rent, can easily exceed the net present value of future increased rent.
posted by jpe at 4:30 AM on September 25, 2015 [2 favorites]
For instance, my landlord just raises the rent $100 every year
Your rent goes up $100 a month every year? Do your wages go up that much, absent a promotion? This year I got a post-tax $16/month wage increase, for instance, and if my landlord were raising my rent $1200 per year every year, I would be priced out in no time flat. I think I could swing it for about two years, but if I started renting at $700/month (for a professional person's studio around here - in reality I'd be renting a room in a group house) and it went up to $1000/month in three years, I'd be doomed. Are annual $100/month increases a real thing in most places? How do you end up not sleeping on the streets?
posted by Frowner at 5:07 AM on September 25, 2015 [9 favorites]
Your rent goes up $100 a month every year? Do your wages go up that much, absent a promotion? This year I got a post-tax $16/month wage increase, for instance, and if my landlord were raising my rent $1200 per year every year, I would be priced out in no time flat. I think I could swing it for about two years, but if I started renting at $700/month (for a professional person's studio around here - in reality I'd be renting a room in a group house) and it went up to $1000/month in three years, I'd be doomed. Are annual $100/month increases a real thing in most places? How do you end up not sleeping on the streets?
posted by Frowner at 5:07 AM on September 25, 2015 [9 favorites]
Are annual $100/month increases a real thing in most places? How do you end up not sleeping on the streets?
It's a thing. I was about to agree with you by recounting that my roommates and I moved out of a place over a ~$60/mo rent increase...and then I remembered it was $60 per person, so almost $200 for the whole apartment. At my current place, we just re-signed a lease at a $125/mo overall increase, which we were grimly pleased with given the realities of the Cambridge-Somerville rental market.
posted by threeants at 5:23 AM on September 25, 2015
It's a thing. I was about to agree with you by recounting that my roommates and I moved out of a place over a ~$60/mo rent increase...and then I remembered it was $60 per person, so almost $200 for the whole apartment. At my current place, we just re-signed a lease at a $125/mo overall increase, which we were grimly pleased with given the realities of the Cambridge-Somerville rental market.
posted by threeants at 5:23 AM on September 25, 2015
Yes I agree, I will make a capital gain in the long run.
This depends entirely on how far you intend to run, not to say where you started from. Best of luck, I'm sure, but even if I could afford it, I wouldn't touch either London or NYC real estate, not at this time.
posted by IndigoJones at 5:27 AM on September 25, 2015
This depends entirely on how far you intend to run, not to say where you started from. Best of luck, I'm sure, but even if I could afford it, I wouldn't touch either London or NYC real estate, not at this time.
posted by IndigoJones at 5:27 AM on September 25, 2015
Er... Frowner, the amount charged in monthly rent is increased by $100 once per year, not once per month.
posted by slkinsey at 5:34 AM on September 25, 2015 [1 favorite]
posted by slkinsey at 5:34 AM on September 25, 2015 [1 favorite]
Often, yes. Renters of single properties often have multiple motivations, of which "getting the rent" is only one (though an important one). This isn't a matter of "public service", but it does lead to folks renting out below market rate to support a friend, relative, or community.
A few folks, maybe; I once rented from a lovely academic who basically subsidised graduate students and other scholars by offering a house under market rent.
But the vast majority of small, non-professional landlords that I have dealt with (having searched for apartments in a city abounding with basement apartments and chopped up houses, that is a lot of small landlords) are asking the higher rents on the market, while offering rental accommodations in worse conditions and with illegal restrictions (like discriminating by family status, income origin or race). I have seen illegal apartments without fire exits, mis-advertised apartments (claiming two rooms are three), moldy apartments, apartments with 5'6" ceilings - all for the same rate as a decent apartment in a building run by a professional. (But usually in a better location that doesn't allow tower blocks).
A friend of mine even just started renting from someone who is going to drop by monthly to monitor them, making sure they are not "ruining her floors by allowing a dog to walk on them". (She's renting at the high end of the incompetent landlord market; I was at the other end).
posted by jb at 5:44 AM on September 25, 2015 [2 favorites]
A few folks, maybe; I once rented from a lovely academic who basically subsidised graduate students and other scholars by offering a house under market rent.
But the vast majority of small, non-professional landlords that I have dealt with (having searched for apartments in a city abounding with basement apartments and chopped up houses, that is a lot of small landlords) are asking the higher rents on the market, while offering rental accommodations in worse conditions and with illegal restrictions (like discriminating by family status, income origin or race). I have seen illegal apartments without fire exits, mis-advertised apartments (claiming two rooms are three), moldy apartments, apartments with 5'6" ceilings - all for the same rate as a decent apartment in a building run by a professional. (But usually in a better location that doesn't allow tower blocks).
A friend of mine even just started renting from someone who is going to drop by monthly to monitor them, making sure they are not "ruining her floors by allowing a dog to walk on them". (She's renting at the high end of the incompetent landlord market; I was at the other end).
posted by jb at 5:44 AM on September 25, 2015 [2 favorites]
slkinsey, yeah. So say you're paying $700/month now, and in three years you'll be paying $1000. That's untenable, as your pay raises ($16/year in Frowner's example) don't come close to keeping up.
posted by domo at 5:46 AM on September 25, 2015 [1 favorite]
posted by domo at 5:46 AM on September 25, 2015 [1 favorite]
Are annual $100/month increases a real thing in most places?
Yup. Mine isn't so bad...only $50 per month, per year. But it still eats away at my income.
How do you end up not sleeping on the streets?
You don't. The 2020's will be the Decade of Middle-Class Homelessness.
By 2030, people who own houses (or immobile property of any kind) will be considered "wealthy" by default.
posted by Avenger at 5:47 AM on September 25, 2015 [2 favorites]
Yup. Mine isn't so bad...only $50 per month, per year. But it still eats away at my income.
How do you end up not sleeping on the streets?
You don't. The 2020's will be the Decade of Middle-Class Homelessness.
By 2030, people who own houses (or immobile property of any kind) will be considered "wealthy" by default.
posted by Avenger at 5:47 AM on September 25, 2015 [2 favorites]
I still have difficulty understanding why it's so much easier to find affordable housing (especially if you're willing to live in a relatively small place) in desirable parts of one of the world's most densely populated countries, and yet in the third largest country in the world it's easy to wind up spending 50%+ of your salary on rent in a remarkable number of markets.
What's to understand? The United States as a polity is disintegrating, broken, circling down the drain. Cynical, perhaps, but not all that complicated.
posted by blucevalo at 5:51 AM on September 25, 2015 [1 favorite]
What's to understand? The United States as a polity is disintegrating, broken, circling down the drain. Cynical, perhaps, but not all that complicated.
posted by blucevalo at 5:51 AM on September 25, 2015 [1 favorite]
Brian Lux, I feel ashamed myself that because of unexpected life circumstances (half my family died in the last year), I'm going to be in a position to buy a house a lot sooner than most of my contemporaries. I felt guilty last night when we viewed the place we're going to rent and the person in the office had to call the people who had booked the second viewing that night and tell them it was gone, because I've been on the receiving end of that phone call seven times this week and each one of them ended up with me spluttering and crying about how impossible the situation seemed. And now I'd been partly responsible for that happening to someone else.
It's a sick system, and many of us are casualties of it to some extent. This incarnation of capitalism pits people against one another for survival. There doesn't seem to be any point in rejecting it - if I don't buy a house even though I could, I'm not helping anyone and to some extent I'm hurting myself, as the instability of renting has a huge impact on my sense of security and various mental health problems. If I don't jump on the first decent rental place I find, someone else will.
The only option seems to be to go along with it, and feel guilty all the while.
posted by terretu at 5:54 AM on September 25, 2015 [2 favorites]
It's a sick system, and many of us are casualties of it to some extent. This incarnation of capitalism pits people against one another for survival. There doesn't seem to be any point in rejecting it - if I don't buy a house even though I could, I'm not helping anyone and to some extent I'm hurting myself, as the instability of renting has a huge impact on my sense of security and various mental health problems. If I don't jump on the first decent rental place I find, someone else will.
The only option seems to be to go along with it, and feel guilty all the while.
posted by terretu at 5:54 AM on September 25, 2015 [2 favorites]
Bernal Heights (SF) tenant faces 130% rent increase (i.e., from a barely sustainable $2500 per month for a 2-bedroom apartment built in 1926 to an unsustainable $5250)
posted by blucevalo at 5:56 AM on September 25, 2015
posted by blucevalo at 5:56 AM on September 25, 2015
Avenger, I have a theory that we'll eventually end up with a "landed gentry" living off of investments and rent like Pre-Industrial Europe. We may be in a new Gilded Age now, but we're headed toward a new Victorian Era. Time's moving backward.
posted by domo at 5:57 AM on September 25, 2015 [12 favorites]
posted by domo at 5:57 AM on September 25, 2015 [12 favorites]
Yeah, my rent has gone up about $50-100/month per lease renewal for the past three years. So when I was dumb enough to rent my first place for six months, my rent hiked $60/month at the end of that. I'm in an eighteen month lease now pretty much entirely in the hopes of avoiding another tent increase.
Meanwhile my salary is static, as a grad student, and we just got the first cost of living increase in seven years. It works out to an approximately $150/month raise. So it's not even enough to account for the rent increases since I started grad school 3 years ago. When the same shitty apartment I moved into at the start of grad school cost $529 when I moved into it and $779 3 years later... With zero improvement in living conditions and shit like a murderer fresh from killing his family committing suicide by cop on the grounds...
Well. I have NO fucking clue how I'm going to get by long term. Especially since this 'raise' comes with a mandatory pay cut of about $250/month if I don't manage to graduate 1.5 years earlier than our current program average. Fucking yippeee there.
posted by sciatrix at 6:02 AM on September 25, 2015 [1 favorite]
Meanwhile my salary is static, as a grad student, and we just got the first cost of living increase in seven years. It works out to an approximately $150/month raise. So it's not even enough to account for the rent increases since I started grad school 3 years ago. When the same shitty apartment I moved into at the start of grad school cost $529 when I moved into it and $779 3 years later... With zero improvement in living conditions and shit like a murderer fresh from killing his family committing suicide by cop on the grounds...
Well. I have NO fucking clue how I'm going to get by long term. Especially since this 'raise' comes with a mandatory pay cut of about $250/month if I don't manage to graduate 1.5 years earlier than our current program average. Fucking yippeee there.
posted by sciatrix at 6:02 AM on September 25, 2015 [1 favorite]
Oh excuse me I just checked the rents at that place (I moved in January) and they start at $813 now. Christ almighty.
posted by sciatrix at 6:05 AM on September 25, 2015
posted by sciatrix at 6:05 AM on September 25, 2015
You don't. The 2020's will be the Decade of Middle-Class Homelessness.
The version of this I see are middle class people I know who have adult children (often with partners and/or children of their own) living with them on and off depending on work and other factors, and who are increasingly helping to support an aging parent. Middle class home insecurity seems to come in the form of doubling and tripling up in single-family housing, and in better-off family members subsidizing less well-off parts of the family.
That family support is the key buffer; once that is eroded (or if you just don't have a supportive family), you are down to the same minimal safety net as the rest of the poors get, which isn't much. It intersects with renting in that owning a house means that there is no landlord who can come by and evict you for having too many people living with you, and you can borrow against the property if you need to in order to get through an emergency.
posted by Dip Flash at 6:06 AM on September 25, 2015 [2 favorites]
The version of this I see are middle class people I know who have adult children (often with partners and/or children of their own) living with them on and off depending on work and other factors, and who are increasingly helping to support an aging parent. Middle class home insecurity seems to come in the form of doubling and tripling up in single-family housing, and in better-off family members subsidizing less well-off parts of the family.
That family support is the key buffer; once that is eroded (or if you just don't have a supportive family), you are down to the same minimal safety net as the rest of the poors get, which isn't much. It intersects with renting in that owning a house means that there is no landlord who can come by and evict you for having too many people living with you, and you can borrow against the property if you need to in order to get through an emergency.
posted by Dip Flash at 6:06 AM on September 25, 2015 [2 favorites]
Frowner - annual increases are highly dependent on where you live. I have had 1 increase of $90/month in the 6 years I have been living in my apartment in center city Philadelphia and I had none in the 4 years I lived in Chicago prior to that [admittedly I moved to a new place in the middle of those 4 years].
posted by nolnacs at 6:22 AM on September 25, 2015
posted by nolnacs at 6:22 AM on September 25, 2015
I own a couple of rental properties in London. I don't do this to make a profit (they run at a slight loss, but of course property in London is likely to be a good investment in capital terms). I bought them because in a few years my children will want somewhere to live, and they won't be able to afford to buy unless I do this now. I appreciate I am lucky that I can do this.
I can appreciate your position, but I hope you see the terrible irony. By buying up property and becoming a private landlord you're denying the possibility of other people getting on the property ladder right now, which is precisely what you don't want for your kids in the future.
People choosing to use housing as an investment is a huge factor in the current London housing crisis.
posted by urbanwhaleshark at 6:25 AM on September 25, 2015
I can appreciate your position, but I hope you see the terrible irony. By buying up property and becoming a private landlord you're denying the possibility of other people getting on the property ladder right now, which is precisely what you don't want for your kids in the future.
People choosing to use housing as an investment is a huge factor in the current London housing crisis.
posted by urbanwhaleshark at 6:25 AM on September 25, 2015
Started reading this thread expecting it to be depressing.
Found it to still be depressing, but oddly a little less than expected.
posted by nogoodverybad at 6:28 AM on September 25, 2015
Found it to still be depressing, but oddly a little less than expected.
posted by nogoodverybad at 6:28 AM on September 25, 2015
There's a reason why the phrase "rent-seeking" does not have positive connotations.
posted by domo at 6:35 AM on September 25, 2015 [1 favorite]
posted by domo at 6:35 AM on September 25, 2015 [1 favorite]
I wish I could say this surprised me.
My rent currently seems to go up $100 on the years when the landlord remembers, which is not terrible. But all the new housing going up in town is of the $2400/month for a fancy 816-square foot one-bedroom variety, and the older housing is either more expensive than mine (and often much crappier) or in a reeeeeeeally bad complex (and often much crappier).
Given house prices in town, I think I may actually be priced out of the rental market before I'm priced out of the housing market, which is disturbing.
I had no rent increases in my old place, for nine years (!), and the rent didn't increase at all when I moved out (!!), but that was because the landlord really, really valued being able to hand-pick tenants (and lived in the building, so realistically, he could get away with being very picky on any criteria he liked).
posted by pie ninja at 6:52 AM on September 25, 2015
My rent currently seems to go up $100 on the years when the landlord remembers, which is not terrible. But all the new housing going up in town is of the $2400/month for a fancy 816-square foot one-bedroom variety, and the older housing is either more expensive than mine (and often much crappier) or in a reeeeeeeally bad complex (and often much crappier).
Given house prices in town, I think I may actually be priced out of the rental market before I'm priced out of the housing market, which is disturbing.
I had no rent increases in my old place, for nine years (!), and the rent didn't increase at all when I moved out (!!), but that was because the landlord really, really valued being able to hand-pick tenants (and lived in the building, so realistically, he could get away with being very picky on any criteria he liked).
posted by pie ninja at 6:52 AM on September 25, 2015
When people say, "well, why don't you move to a smaller city and you can afford to rent/buy a house?", they often forget that the high-paying or decent jobs tend to be in large cities and there is a reason people want to live in them. High earners will be fine, if struggling; it's those who work in retail/food industry I worry about most.
posted by Kitteh at 6:56 AM on September 25, 2015 [5 favorites]
posted by Kitteh at 6:56 AM on September 25, 2015 [5 favorites]
I've stayed in more than one rental where the landlord(s) were kids who had inherited the properties from their parents but really didn't enjoy the hassles that came with managing renters/aging houses. But I've also stayed in one of those corporate rental nightmares where you never get anything fixed and there is no way to pay them except a fucking cashier's check once a month.
This article scares but doesn't surprise me; I always knew renting was only a temporary shelter from the madness of the housing squeeze. No idea what my kid will do in twenty years to not be homeless.
posted by emjaybee at 7:03 AM on September 25, 2015 [1 favorite]
This article scares but doesn't surprise me; I always knew renting was only a temporary shelter from the madness of the housing squeeze. No idea what my kid will do in twenty years to not be homeless.
posted by emjaybee at 7:03 AM on September 25, 2015 [1 favorite]
Avenger, I have a theory that we'll eventually end up with a "landed gentry" living off of investments and rent like Pre-Industrial Europe. We may be in a new Gilded Age now, but we're headed toward a new Victorian Era. Time's moving backward.
This is exactly what "Capital in the 21st Century" is about -- this kind of economy is likely to arise when r > g, i.e. the rate of return on capital (like land and bonds) is more than the growth rate of the economy as a whole. It's a good book! Lots of discussion of Austen and Balzac to sweeten the pages and pages of discussion of national accounting.
posted by vogon_poet at 7:08 AM on September 25, 2015 [1 favorite]
This is exactly what "Capital in the 21st Century" is about -- this kind of economy is likely to arise when r > g, i.e. the rate of return on capital (like land and bonds) is more than the growth rate of the economy as a whole. It's a good book! Lots of discussion of Austen and Balzac to sweeten the pages and pages of discussion of national accounting.
posted by vogon_poet at 7:08 AM on September 25, 2015 [1 favorite]
Kitteh, we actually did move to a smaller city explicitly to find a place where we could buy a house, and it was a really difficult thing to do. We gave up a lot of the amenities we liked about our previous city (more food variety, concerts and events, etc). My one-way commute went from ten minutes to about 50. And all the usual stresses of moving and finding new friends and everything else.
And the thing is that we know we are privileged to have been able to do this at all! I was able to find a job without too much trouble in the new city, and without losing income. We don't have children and didn't have family in our old city, so we had to give up less of a support network than most. And of course we could afford to buy a house at all, anywhere.
For us the whole thing was both worthwhile and possible, but "move to a smaller city" is far from a universal solution.
posted by fencerjimmy at 7:13 AM on September 25, 2015 [4 favorites]
And the thing is that we know we are privileged to have been able to do this at all! I was able to find a job without too much trouble in the new city, and without losing income. We don't have children and didn't have family in our old city, so we had to give up less of a support network than most. And of course we could afford to buy a house at all, anywhere.
For us the whole thing was both worthwhile and possible, but "move to a smaller city" is far from a universal solution.
posted by fencerjimmy at 7:13 AM on September 25, 2015 [4 favorites]
fencerjimmy, I was explicitly saying that is not a universal solution, but it is one people bandy about when people rightfully bemoan being able to afford the cities they live in.
I too live in a smaller city where we have been able to afford to purchase a house. Actually, pretty much all of your comment applies to us as well. Where we live is pretty charming and cute, but there is the very possibility of moving back to a large city in the future, especially once I finish my degree and start looking for work in my field. I don't hold out too much hope that I will find work I want where I am now since the pond is too small.
posted by Kitteh at 7:19 AM on September 25, 2015
I too live in a smaller city where we have been able to afford to purchase a house. Actually, pretty much all of your comment applies to us as well. Where we live is pretty charming and cute, but there is the very possibility of moving back to a large city in the future, especially once I finish my degree and start looking for work in my field. I don't hold out too much hope that I will find work I want where I am now since the pond is too small.
posted by Kitteh at 7:19 AM on September 25, 2015
we would have to be making literally twice as much as we do (around ¥5,500,000 combined), living in a major city in Japan, to maintain a comparable quality of life in the US.
Indeed. Passing through Okayama City, the capital of Okayama Prefecture, on a trip to Japan last week, I stumbled on an ad for a 11.67 square meter one-room apartment--unfortunately "limited to women," a phrase that would set off legal sirens in the US--for ¥19,000, or $158 per month in US dollars at today's rate.
In the central ward of Kita-ku with a 10-minute walk to the train. With a full "unit" bath contained in the apartment, along with lighting and a "cushion floor" (not sure what this means, but it has a positive ring).
Reading further, I discovered that the ad doesn't describe a unit in a rusty, broken-down, two-story walk-up with a clanging metal staircase and dodgy residents downstairs, but a studio in a newish, five-story building with an elevator, hookups for air con, and optical fiber.
In a suburb of a bustling prefectural capital city with exquisite parks and buildings and office space.
At $158 per month.
Color me gobsmacked.
posted by Gordion Knott at 7:20 AM on September 25, 2015 [5 favorites]
Indeed. Passing through Okayama City, the capital of Okayama Prefecture, on a trip to Japan last week, I stumbled on an ad for a 11.67 square meter one-room apartment--unfortunately "limited to women," a phrase that would set off legal sirens in the US--for ¥19,000, or $158 per month in US dollars at today's rate.
In the central ward of Kita-ku with a 10-minute walk to the train. With a full "unit" bath contained in the apartment, along with lighting and a "cushion floor" (not sure what this means, but it has a positive ring).
Reading further, I discovered that the ad doesn't describe a unit in a rusty, broken-down, two-story walk-up with a clanging metal staircase and dodgy residents downstairs, but a studio in a newish, five-story building with an elevator, hookups for air con, and optical fiber.
In a suburb of a bustling prefectural capital city with exquisite parks and buildings and office space.
At $158 per month.
Color me gobsmacked.
posted by Gordion Knott at 7:20 AM on September 25, 2015 [5 favorites]
Hate to break it to you, but no one becomes a landlord as some sort of public service to the community.
I didn't become one out of civic-mindedness, but I rent the unit I own at a break-even rate to allow someone who otherwise could not afford to live in my neighborhood (and who I want to) to have a place. I know several other folks who are doing the same.
Real estate can be treated as some kind of winner-takes-all commodity, or you can see it as a place to live, and the foundation of a community. Never going to happen on a grand scale, but everyone who rents out a place has the opportunity to do their bit.
posted by ryanshepard at 7:25 AM on September 25, 2015 [3 favorites]
I didn't become one out of civic-mindedness, but I rent the unit I own at a break-even rate to allow someone who otherwise could not afford to live in my neighborhood (and who I want to) to have a place. I know several other folks who are doing the same.
Real estate can be treated as some kind of winner-takes-all commodity, or you can see it as a place to live, and the foundation of a community. Never going to happen on a grand scale, but everyone who rents out a place has the opportunity to do their bit.
posted by ryanshepard at 7:25 AM on September 25, 2015 [3 favorites]
domo: So say you're paying $700/month now, and in three years you'll be paying $1000. That's untenable, as your pay raises ($16/year in Frowner's example) don't come close to keeping up.
A lot of this depends on what you're earning and what you're already paying. Raising the rent on a $700 apartment by $100 each year would be around a 14.3% increase, which would be huge and unreasonable. But the person who posted that comment lives in Seattle where the average rent is $1,897, meaning that a $100 increase is 5.2%. That is not a tiny increase, by any means, but it's a lot smaller on a percentage basis. Needless to say, the larger the base rent the lower the percent increase represented by a $100 rise. If the increase has the same dollar value each year, the percent increase becomes smaller and smaller over time. Meanwhile, people who live in areas where the average rent is around $2,000 tend to make more money for the same job compared to people who live in areas where the average rent is around $700. A typical cost of living salary increase is somewhere in the neighborhood of 2-3%, but of course someone who gets a raise of around 25 bucks in monthly pre-tax income is either not getting a meaningful cost of living increase and/or has an income that would make affording even a $700 rental difficult.
posted by slkinsey at 7:44 AM on September 25, 2015
A lot of this depends on what you're earning and what you're already paying. Raising the rent on a $700 apartment by $100 each year would be around a 14.3% increase, which would be huge and unreasonable. But the person who posted that comment lives in Seattle where the average rent is $1,897, meaning that a $100 increase is 5.2%. That is not a tiny increase, by any means, but it's a lot smaller on a percentage basis. Needless to say, the larger the base rent the lower the percent increase represented by a $100 rise. If the increase has the same dollar value each year, the percent increase becomes smaller and smaller over time. Meanwhile, people who live in areas where the average rent is around $2,000 tend to make more money for the same job compared to people who live in areas where the average rent is around $700. A typical cost of living salary increase is somewhere in the neighborhood of 2-3%, but of course someone who gets a raise of around 25 bucks in monthly pre-tax income is either not getting a meaningful cost of living increase and/or has an income that would make affording even a $700 rental difficult.
posted by slkinsey at 7:44 AM on September 25, 2015
Good lord. Sometimes the universe just slaps my self pity right back in my own face and I am much the better for it.
I have been doing a lot of woe-is-me navel gazing lately about the pros and cons of moving, pursuing a career in a different region, pondering if should I try to find the mythical "better" schools for my kids, etc.
I have mostly been wondering if I am willing to give up being surrounded by all this natural beauty.
I live in a remote, rural, aging area that's desperate to attract the non-retired. There are million dollar properties here (though they are usually bed and breakfast style hunting lodges on hundreds of waterfront acres) but you can buy a nice little house on a nice little street in a nice little town for the price of a two year old car. A colleague who happens to be a single dad pays rent of $375/mo, utilities included, for a two bedroom house for himself and his daughter. The house is on a couple of acres and has a pond. "I think about buying but I don't think it would be a better deal, and my little girl has room to run," he told me, thoughtfully, last week.
Where I work (the biggest employer in the county, and is always looking for help), the lowest tier workers start off at $14.22/hr. The neighboring county, the most populous of my region, has a prevailing higher cost of living and lower wages (I believe their largest employer starts out at $13.25) but a lot more cultural amenities, and people are largely willing to make that trade, particularly the younger/childless.
This area still has active mines, and a long tradition of mining, so it's home to a tough, union minded workforce, which I suppose is unusual for a backwater. Everyone I know is in favor of a $10-15 minimum wage.
I like where I live. Thank god, because I don't know if I could make a go of it anywhere else.
posted by Athene at 7:46 AM on September 25, 2015 [8 favorites]
I have been doing a lot of woe-is-me navel gazing lately about the pros and cons of moving, pursuing a career in a different region, pondering if should I try to find the mythical "better" schools for my kids, etc.
I have mostly been wondering if I am willing to give up being surrounded by all this natural beauty.
I live in a remote, rural, aging area that's desperate to attract the non-retired. There are million dollar properties here (though they are usually bed and breakfast style hunting lodges on hundreds of waterfront acres) but you can buy a nice little house on a nice little street in a nice little town for the price of a two year old car. A colleague who happens to be a single dad pays rent of $375/mo, utilities included, for a two bedroom house for himself and his daughter. The house is on a couple of acres and has a pond. "I think about buying but I don't think it would be a better deal, and my little girl has room to run," he told me, thoughtfully, last week.
Where I work (the biggest employer in the county, and is always looking for help), the lowest tier workers start off at $14.22/hr. The neighboring county, the most populous of my region, has a prevailing higher cost of living and lower wages (I believe their largest employer starts out at $13.25) but a lot more cultural amenities, and people are largely willing to make that trade, particularly the younger/childless.
This area still has active mines, and a long tradition of mining, so it's home to a tough, union minded workforce, which I suppose is unusual for a backwater. Everyone I know is in favor of a $10-15 minimum wage.
I like where I live. Thank god, because I don't know if I could make a go of it anywhere else.
posted by Athene at 7:46 AM on September 25, 2015 [8 favorites]
Yo, slkinsey, I just posted my own experience of yearly rent increases happening in apartments that were $600ish in 2012. Trust me, that squares perfectly well with the rent experiences of my friends. This is not only happening to people in places where cost of living wage increases are keeping pace with rent.
posted by sciatrix at 7:51 AM on September 25, 2015
posted by sciatrix at 7:51 AM on September 25, 2015
Gordion Knott, that is a pretty inexpensive apartment. But it's worth noting that it's effectively 11 feet by 11 feet, which I assume includes bathroom facilities but probably not kitchen facilities.
posted by slkinsey at 7:52 AM on September 25, 2015
posted by slkinsey at 7:52 AM on September 25, 2015
sciatrix, I'm sure it's happening in all kinds of places. I was just pointing out that it's not necessarily terrible. But, yea, being in a situation where the university system on the one hand and landlords on the other hand are taking advantage of a "captive market" to pay little and charge a lot clearly sucks. It certainly makes me glad to live in a NYC rent-regulated apartment.
posted by slkinsey at 8:01 AM on September 25, 2015 [1 favorite]
posted by slkinsey at 8:01 AM on September 25, 2015 [1 favorite]
But it's worth noting that it's effectively 11 feet by 11 feet, which I assume includes bathroom facilities but probably not kitchen facilities.
Yes, by European standards, it's tiny. By Japanese standards, not so much. I'm guessing that it's slightly larger than the six-tatami mat space that constitutes traditional Japanese studio apartments, many of which, until recently, lacked bathtubs (entailing a walk through icy winter winds to the public bathhouse every night).
The add depicted a kitchen counter in the room with a hook-up for a portable two-range gas stove, and space for a cutting board and toaster-oven. Not enough room for gourmet cookery, but probably sufficient for a single person.
posted by Gordion Knott at 8:11 AM on September 25, 2015
Yes, by European standards, it's tiny. By Japanese standards, not so much. I'm guessing that it's slightly larger than the six-tatami mat space that constitutes traditional Japanese studio apartments, many of which, until recently, lacked bathtubs (entailing a walk through icy winter winds to the public bathhouse every night).
The add depicted a kitchen counter in the room with a hook-up for a portable two-range gas stove, and space for a cutting board and toaster-oven. Not enough room for gourmet cookery, but probably sufficient for a single person.
posted by Gordion Knott at 8:11 AM on September 25, 2015
Living in Portland, Ore has gotten very interesting in the last year. Property values had been climbing for awhile, but rents were relatively stable. Over the last 12 months it's like the entire city has lost its collective mind. My rent jumped almost 50% from the end of my last lease to my current one.
What seems to be the pattern locally is long time landlords are selling their properties. The new owners are then raising the rents up to "market" which seems to be code for "comparable to Seattle." Meanwhile the kinds of jobs associated with high rents haven't materialized. Underneath the quirky TV persona and growing Tech industry, most of Portland is still... Portland. It's a struggling inland port city that depended on light manufacturing and natural resources - both of which have largely dried up.
My guess is Portland as it was once known, a fun but affordable West Coast city, is all but over. It's going to be notable how much impact the price of rent has on a city's culture.
posted by elwoodwiles at 8:11 AM on September 25, 2015 [5 favorites]
What seems to be the pattern locally is long time landlords are selling their properties. The new owners are then raising the rents up to "market" which seems to be code for "comparable to Seattle." Meanwhile the kinds of jobs associated with high rents haven't materialized. Underneath the quirky TV persona and growing Tech industry, most of Portland is still... Portland. It's a struggling inland port city that depended on light manufacturing and natural resources - both of which have largely dried up.
My guess is Portland as it was once known, a fun but affordable West Coast city, is all but over. It's going to be notable how much impact the price of rent has on a city's culture.
posted by elwoodwiles at 8:11 AM on September 25, 2015 [5 favorites]
The thing is, every Average Joe I know who owns a home* is being bled dry by that as well. There's just really no good way to go except "earn just boatloads of cash, forever, uninterrupted."
*Correction: every Average Joe I know who bought a home in the last 10ish years. Obviously the folks who bought 30+ years ago and are paid off have a different situation.
posted by We put our faith in Blast Hardcheese at 8:12 AM on September 25, 2015 [3 favorites]
*Correction: every Average Joe I know who bought a home in the last 10ish years. Obviously the folks who bought 30+ years ago and are paid off have a different situation.
posted by We put our faith in Blast Hardcheese at 8:12 AM on September 25, 2015 [3 favorites]
What seems to be the pattern locally is long time landlords are selling their properties. The new owners are then raising the rents up to "market" which seems to be code for "comparable to Seattle." Meanwhile the kinds of jobs associated with high rents haven't materialized.
So who are the people that are paying these newly raised rents? I assume there must be demand out there willing to pay those prices.
posted by gyc at 8:36 AM on September 25, 2015
So who are the people that are paying these newly raised rents? I assume there must be demand out there willing to pay those prices.
posted by gyc at 8:36 AM on September 25, 2015
> no one becomes a landlord as some sort of public service to the community.
My landlord has almost 100 properties. I'm in a very hot real estate market - and yet we don't even get rent increases every year, and and when we do, they're less than what is allowed. He fixes things promptly, and he lets the people next door, who've been there for 40 years, stay when they can't even manage to pay their ridiculous rent (1/3 of mine, which is about 2/3 the going rate of the area!) most of the time.
I know he didn't get into it for public service reasons but if he were a soulless corporation I'd be paying 40% more and my neighbors would be homeless.
posted by lupus_yonderboy at 8:39 AM on September 25, 2015 [3 favorites]
My landlord has almost 100 properties. I'm in a very hot real estate market - and yet we don't even get rent increases every year, and and when we do, they're less than what is allowed. He fixes things promptly, and he lets the people next door, who've been there for 40 years, stay when they can't even manage to pay their ridiculous rent (1/3 of mine, which is about 2/3 the going rate of the area!) most of the time.
I know he didn't get into it for public service reasons but if he were a soulless corporation I'd be paying 40% more and my neighbors would be homeless.
posted by lupus_yonderboy at 8:39 AM on September 25, 2015 [3 favorites]
Also, I'm perceiving at least around here - Williamsburg, Brooklyn - that there's going to be a bit of a housing collapse coming. The amount of new construction around here is astonishing - and who's going to buy them? - but what's also interesting is the amount of new construction that has been cancelled and the discounting of already-constructed new units.
(My feeling also is that all the new units are build out of cardboard and baling wire, but that's a separate issue...)
posted by lupus_yonderboy at 8:42 AM on September 25, 2015
(My feeling also is that all the new units are build out of cardboard and baling wire, but that's a separate issue...)
posted by lupus_yonderboy at 8:42 AM on September 25, 2015
lupus_yonderboy: Certainly a part of what's happening in NYC -- although this probably applies more to Manhattan construction than Williamsburg -- is that superluxury apartments are being bought by super-rich people from Dubai and whatnot who maintain it as a pied a terre that they occupy for perhaps 15 to 30 days a year. Unfortunately, NYC doesn't currently charge a pied a terre tax.
posted by slkinsey at 8:45 AM on September 25, 2015
posted by slkinsey at 8:45 AM on September 25, 2015
Another person here who moved across town because the landlord wanted to increase the rent $85 a month on a $630 rent. It's not exactly uncommon, anecdotally.
posted by Zalzidrax at 8:49 AM on September 25, 2015
posted by Zalzidrax at 8:49 AM on September 25, 2015
That massive 5-bldg complex where St Vincent's used to be sold half of its units within a month; there are currently 10 (out of 200) left and the lowest priced one is like 6mil. People are definitely buying new luxury units. Who knows if anyone will actually ever live there though.
posted by poffin boffin at 8:52 AM on September 25, 2015
posted by poffin boffin at 8:52 AM on September 25, 2015
> superluxury apartments are being bought by super-rich people from Dubai and whatnot who maintain it as a pied a terre that they occupy for perhaps 15 to 30 days a year.
Sure, we have one on our corner - but there really aren't that many super-rich people even if you take the entire world, and more, most of the apartments being constructed aren't at that level.
The fact that they're giving serious incentives for existing inventory and that I see a huge number of units coming on the market in the next eighteen months is what I think will result in a "softness". Perhaps rents won't actually come down, but see the exponential growth stopping for a while...
posted by lupus_yonderboy at 9:01 AM on September 25, 2015
Sure, we have one on our corner - but there really aren't that many super-rich people even if you take the entire world, and more, most of the apartments being constructed aren't at that level.
The fact that they're giving serious incentives for existing inventory and that I see a huge number of units coming on the market in the next eighteen months is what I think will result in a "softness". Perhaps rents won't actually come down, but see the exponential growth stopping for a while...
posted by lupus_yonderboy at 9:01 AM on September 25, 2015
So who are the people that are paying these newly raised rents? I assume there must be demand out there willing to pay those prices.
"Willing" is a misleading term. In many cases people are "willing" to pay more in the sense of still preferring it to homelessness or relocation, they are "willing" in the sense of "barely able and aware that it is necessary."
posted by We put our faith in Blast Hardcheese at 9:01 AM on September 25, 2015 [3 favorites]
"Willing" is a misleading term. In many cases people are "willing" to pay more in the sense of still preferring it to homelessness or relocation, they are "willing" in the sense of "barely able and aware that it is necessary."
posted by We put our faith in Blast Hardcheese at 9:01 AM on September 25, 2015 [3 favorites]
not getting a meaningful cost of living increase and/or has an income that would make affording even a $700 rental difficult.
Not getting a meaningful COLA, here! My wages have been eroding over the past few years for this very reason.
posted by Frowner at 9:02 AM on September 25, 2015 [1 favorite]
Not getting a meaningful COLA, here! My wages have been eroding over the past few years for this very reason.
posted by Frowner at 9:02 AM on September 25, 2015 [1 favorite]
Property is theft, no? It requires/d primitive accumulation at some point. I realize that at this point in the game it's sort of silly to bring that up...nevertheless it seems to me as though the financial crisis has been capitalized upon by the rich (as individuals/investors/corporations) as a new primitive accumulation bonanza, with almost no intervention from the state to stop this new round of theft.
It also seems as though every corporation has come to the conclusion that pure rent seeking is its ultimate goal (not sure this is a new thing but it sure does appear to be more pronounced).
posted by nikoniko at 10:41 AM on September 25, 2015 [2 favorites]
It also seems as though every corporation has come to the conclusion that pure rent seeking is its ultimate goal (not sure this is a new thing but it sure does appear to be more pronounced).
posted by nikoniko at 10:41 AM on September 25, 2015 [2 favorites]
Japan's real estate market has another caveat that bears mentioning though: the Japanese don't buy used houses. [1][2]
posted by fragmede at 12:22 PM on September 25, 2015
posted by fragmede at 12:22 PM on September 25, 2015
Related: Approx. 100 empty storefronts in Greenwich Village.
posted by ursus_comiter at 12:24 PM on September 25, 2015
posted by ursus_comiter at 12:24 PM on September 25, 2015
I can't help but feel incredible lucky to have been born at the tail end of Generation X. My college debt is very manageable, I was able to get a full-time job with benefits right out of college, was able to rent cheaply for years in a major city, and put away some savings which ultimately went towards buying a home.
When I talk to my friends and family members who are about a decade later, it's hard to grasp just how much they missed out on merely by being born in the wrong decade. They are paying high rents, have lots of student loan debt, and often work jobs without benefits.
posted by cell divide at 12:57 PM on September 25, 2015 [1 favorite]
When I talk to my friends and family members who are about a decade later, it's hard to grasp just how much they missed out on merely by being born in the wrong decade. They are paying high rents, have lots of student loan debt, and often work jobs without benefits.
posted by cell divide at 12:57 PM on September 25, 2015 [1 favorite]
I still have difficulty understanding why it's so much easier to find affordable housing (especially if you're willing to live in a relatively small place) in desirable parts of one of the world's most densely populated countries, and yet in the third largest country in the world it's easy to wind up spending 50%+ of your salary on rent in a remarkable number of markets.
The short answer is that Japan allows multifamily housing nearly everywhere, and the US forbids it nearly everywhere.
Zoned in the USA has a lot of information comparing American land-use policy to other countries (including Japan), and The Making of Urban Japan goes into Japanese land use regulations in detail.
posted by ripley_ at 2:08 PM on September 25, 2015 [5 favorites]
The short answer is that Japan allows multifamily housing nearly everywhere, and the US forbids it nearly everywhere.
Zoned in the USA has a lot of information comparing American land-use policy to other countries (including Japan), and The Making of Urban Japan goes into Japanese land use regulations in detail.
posted by ripley_ at 2:08 PM on September 25, 2015 [5 favorites]
I'm perceiving at least around here - Williamsburg, Brooklyn - that there's going to be a bit of a housing collapse coming.
I think you may be right. I noticed in the WSJ today that the real estate section was advertising rentals. I may have missed it in the past, but I don't recall ever having seen that before. (I'm not in market, BTW. I also read about travel I can't afford and foody joints I can't patronize.)
Certainly a part of what's happening in NYC -- although this probably applies more to Manhattan construction than Williamsburg -- is that superluxury apartments are being bought by super-rich people from Dubai and whatnot who maintain it as a pied a terre that they occupy for perhaps 15 to 30 days a year.
Perhaps their accountants are telling them that they can't afford that anymore....
posted by IndigoJones at 2:41 PM on September 25, 2015
I think you may be right. I noticed in the WSJ today that the real estate section was advertising rentals. I may have missed it in the past, but I don't recall ever having seen that before. (I'm not in market, BTW. I also read about travel I can't afford and foody joints I can't patronize.)
Certainly a part of what's happening in NYC -- although this probably applies more to Manhattan construction than Williamsburg -- is that superluxury apartments are being bought by super-rich people from Dubai and whatnot who maintain it as a pied a terre that they occupy for perhaps 15 to 30 days a year.
Perhaps their accountants are telling them that they can't afford that anymore....
posted by IndigoJones at 2:41 PM on September 25, 2015
FWIW I've been seeing articles on blogs that at least in Brooklyn the rise in rents is slowing and that rents are actually supposed to go down this winter. I would guess that's largely because of all the new construction. I've been wondering what (if anything) the crash in the Chinese stock market is going to do to the real estate market, if the high-end properties are no longer (or not as much) being purchased by foreigners. Only time will tell I guess, but I can't see how rents can continue to rise like they have been.
posted by matcha action at 3:02 PM on September 25, 2015
posted by matcha action at 3:02 PM on September 25, 2015
Your rent goes up $100 a month every year? Do your wages go up that much, absent a promotion?
Nope. No ones do really. The only people i know getting meaningful raises at least that i've heard about were making below the now $15 minimum wage, which still isn't a lot.
but if I started renting at $700/month (for a professional person's studio around here - in reality I'd be renting a room in a group house) and it went up to $1000/month in three years, I'd be doomed. Are annual $100/month increases a real thing in most places?
And i'm lucky, it's more almost everywhere in town. I've moved out of multiple places because the lease would expire and the rent would go up say, $500. A friend of mine moved because their rent was going to go up like $1000. It's not unusual for a place to refactor the rent at the end of a lease, or just randomly, and have it go up $200 one year then $500 the next.
Or more.
How do you end up not sleeping on the streets?
Idk, everyone just puts up with more and more of their income going to rent. I don't know a single person who lives alone unless they live in a truly horrific place in an awful building in a sketchy part of a sketchy part of town where it's genuinely unsafe to walk around at night. Everyone i know either has roommates or moved in with an SO, even people with Big Boy Professional Jobs.
My friends who work in foodservice or whatever, even ones who do relatively well paying and high tipping jobs like bartenders or sushi chefs STILL have roommates and see no real path out of that. Some of them could definitely afford their own place, but no place will rent to them solo because so much of their income is cash tips.
I haven't gotten a raise in 4.5 years, and i'm finally looking for a new job and will hopefully land one in the next few days if nothing else goes wrong. So not only due to inflation, but also actually rising rent, my not-housing income has been going up.
Oh, and of course utilities have been going up too. And everything else(my fucking internet bill is like $70 now! and the only other options are save $10 or so and have slow internet, or save a little bit more and have awful garbage internet) is too.
I pretty much survive by buying EVERYTHING used besides socks underwear and food, and the only people i know who don't are software developers making like 70-90k a year.
And most of them live in relatively crappy places for making that much, too.
Oh, and i forgot to say, no non-corporate landlord will EVER sign a lease after the first one. Corporate landlord slap you with one big rent increase and try and get you to sign another lease, with the stick being a BIGGER one if you go month to month. Independent landlords just go month to month forever after your lease is up, so you never know when the rent raise is coming beyond the 60 day required city notice. I'm just lucky that it's been a fixed schedule.
The version of this I see are middle class people I know who have adult children (often with partners and/or children of their own) living with them on and off depending on work and other factors, and who are increasingly helping to support an aging parent. Middle class home insecurity seems to come in the form of doubling and tripling up in single-family housing, and in better-off family members subsidizing less well-off parts of the family.
I'm 25, and a noticeable portion of my peers have moved back home either at some point(for an extended period!) or are just sort of stuck there. Some of them, for various mental health or other reasons just can't deal with having roommates and see no near-term path to having the income to live in even an awful place on their own. Others are in school, or in some other transitional period where they see themselves eventually being able to move out(waiting on a friend or S.O. to be in a position to share a place, etc).
I also know quite a few people who haven't done that, but live in fucking squalor in a shitty old sketchy falling apart rental house with 6 people in a "4 bedroom" with someone using the attached garage as a room, etc. For quite a few people this is literally all they can afford, and have no idea how they'd ever get away from it.
But the person who posted that comment lives in Seattle where the average rent is $1,897
This is the average, but there's a weird(and huge) class disconnect.
There's $2400 "luxury" 700 sqft one bedrooms, of which an assload of new buildings have popped up. There's also $1000 "micro studios" for people who just moved to town. Everyone renting these makes like, 75-150k at amazon/microsoft/google/etc
Then there's places like mine, which is about $1200 for a one bedroom in a building that as far as i can tell, predates electric wiring since it's all conduit on the outside of the walls and is so old civil war veterans probably lived here at one point. The city calls these "class B apartments" for whatever reason but yea, prewar and "quirky". Like, i had to buy a line interactive UPS because the wiring was so bad it kept destroying my computers.
Beyond that, there's not-fancy-craftsman rental houses that are say, $1500-2500 in a way that adds up to 400-600 per bedroom, and everyone who can't split a one bedroom with whoever they're dating lives there.
If you see someone working in a bar or restaurant, that's probably where they live. Even if they're 40. I actually had some great neighbors who were all in their late 30s who lived in a house like that.
Sigh.
posted by emptythought at 12:26 AM on September 26, 2015
Nope. No ones do really. The only people i know getting meaningful raises at least that i've heard about were making below the now $15 minimum wage, which still isn't a lot.
but if I started renting at $700/month (for a professional person's studio around here - in reality I'd be renting a room in a group house) and it went up to $1000/month in three years, I'd be doomed. Are annual $100/month increases a real thing in most places?
And i'm lucky, it's more almost everywhere in town. I've moved out of multiple places because the lease would expire and the rent would go up say, $500. A friend of mine moved because their rent was going to go up like $1000. It's not unusual for a place to refactor the rent at the end of a lease, or just randomly, and have it go up $200 one year then $500 the next.
Or more.
How do you end up not sleeping on the streets?
Idk, everyone just puts up with more and more of their income going to rent. I don't know a single person who lives alone unless they live in a truly horrific place in an awful building in a sketchy part of a sketchy part of town where it's genuinely unsafe to walk around at night. Everyone i know either has roommates or moved in with an SO, even people with Big Boy Professional Jobs.
My friends who work in foodservice or whatever, even ones who do relatively well paying and high tipping jobs like bartenders or sushi chefs STILL have roommates and see no real path out of that. Some of them could definitely afford their own place, but no place will rent to them solo because so much of their income is cash tips.
I haven't gotten a raise in 4.5 years, and i'm finally looking for a new job and will hopefully land one in the next few days if nothing else goes wrong. So not only due to inflation, but also actually rising rent, my not-housing income has been going up.
Oh, and of course utilities have been going up too. And everything else(my fucking internet bill is like $70 now! and the only other options are save $10 or so and have slow internet, or save a little bit more and have awful garbage internet) is too.
I pretty much survive by buying EVERYTHING used besides socks underwear and food, and the only people i know who don't are software developers making like 70-90k a year.
And most of them live in relatively crappy places for making that much, too.
Oh, and i forgot to say, no non-corporate landlord will EVER sign a lease after the first one. Corporate landlord slap you with one big rent increase and try and get you to sign another lease, with the stick being a BIGGER one if you go month to month. Independent landlords just go month to month forever after your lease is up, so you never know when the rent raise is coming beyond the 60 day required city notice. I'm just lucky that it's been a fixed schedule.
The version of this I see are middle class people I know who have adult children (often with partners and/or children of their own) living with them on and off depending on work and other factors, and who are increasingly helping to support an aging parent. Middle class home insecurity seems to come in the form of doubling and tripling up in single-family housing, and in better-off family members subsidizing less well-off parts of the family.
I'm 25, and a noticeable portion of my peers have moved back home either at some point(for an extended period!) or are just sort of stuck there. Some of them, for various mental health or other reasons just can't deal with having roommates and see no near-term path to having the income to live in even an awful place on their own. Others are in school, or in some other transitional period where they see themselves eventually being able to move out(waiting on a friend or S.O. to be in a position to share a place, etc).
I also know quite a few people who haven't done that, but live in fucking squalor in a shitty old sketchy falling apart rental house with 6 people in a "4 bedroom" with someone using the attached garage as a room, etc. For quite a few people this is literally all they can afford, and have no idea how they'd ever get away from it.
But the person who posted that comment lives in Seattle where the average rent is $1,897
This is the average, but there's a weird(and huge) class disconnect.
There's $2400 "luxury" 700 sqft one bedrooms, of which an assload of new buildings have popped up. There's also $1000 "micro studios" for people who just moved to town. Everyone renting these makes like, 75-150k at amazon/microsoft/google/etc
Then there's places like mine, which is about $1200 for a one bedroom in a building that as far as i can tell, predates electric wiring since it's all conduit on the outside of the walls and is so old civil war veterans probably lived here at one point. The city calls these "class B apartments" for whatever reason but yea, prewar and "quirky". Like, i had to buy a line interactive UPS because the wiring was so bad it kept destroying my computers.
Beyond that, there's not-fancy-craftsman rental houses that are say, $1500-2500 in a way that adds up to 400-600 per bedroom, and everyone who can't split a one bedroom with whoever they're dating lives there.
If you see someone working in a bar or restaurant, that's probably where they live. Even if they're 40. I actually had some great neighbors who were all in their late 30s who lived in a house like that.
Sigh.
posted by emptythought at 12:26 AM on September 26, 2015
Solution: Move to Cleveland! My apartment in the south side suburbs in less than $600 a month for a one bedroom in a wooded area. I have about a 20-minute commute south away from the city; the rental market where my job is less than desirable. Although my job doesn't pay much, I couldn't be able to live on my own many other places. As much as I'd like to live in some big city for awhile, it doesn't seem to be worth spending my meager savings.
posted by greatalleycat at 8:56 AM on September 26, 2015
posted by greatalleycat at 8:56 AM on September 26, 2015
Related: Approx. 100 empty storefronts in Greenwich Village.
This has been happening for the past 10 years I've lived here and it's horrible but satisfying at the same time. If small businesses that were longtime neighborhood favourites are going to be driven out by shockingly huge rent increases then by god I want to see those properties sit vacant for years at a time while the landlords gnash their teeth and rend their garments.
posted by poffin boffin at 9:25 AM on September 26, 2015 [4 favorites]
This has been happening for the past 10 years I've lived here and it's horrible but satisfying at the same time. If small businesses that were longtime neighborhood favourites are going to be driven out by shockingly huge rent increases then by god I want to see those properties sit vacant for years at a time while the landlords gnash their teeth and rend their garments.
posted by poffin boffin at 9:25 AM on September 26, 2015 [4 favorites]
I am increasingly grateful for Ontario's rent control, and my awesome landlord after reading this thread. Rents here can only go up by a few % annually (unfortunately this only applies to buildings built before 1990-something). I moved into my neighbourhood about 10 years ago, just before it started to gentrify, and my landlord has never increased my rent. Market rate for a place like mine is probably at least 50% more than what I pay now. I don't know how I'd manage if I had to move out.
posted by sevenyearlurk at 9:51 AM on September 26, 2015
posted by sevenyearlurk at 9:51 AM on September 26, 2015
I make a 6-figure salary and rent in the SF Bay Area close to work, by myself, and expect to be priced out in the next few years.
posted by raw sugar at 3:04 PM on September 27, 2015
posted by raw sugar at 3:04 PM on September 27, 2015
Major Tom upthread describes the problem: the only way to make your savings keep track with house price inflation nowadays is to actually physically invest them in housing. And he describes paying £2,500 a month on a £450,000 mortgage, which I guess (being in the UK) is a 25 year mortgage and thus at about 4.5% APR. Which means that in the first month of that loan, the bank's getting £1,700 worth of interest to service a debt which it can cover with borrowing from the Bank of England at an annual rate of 0.5%. And 10 years down the line it's getting £1200 of interest for a debt that costs £135 to service. So over the 25 years, the bank makes £265,000 pure margin.
posted by ambrosen at 1:48 PM on October 10, 2015
posted by ambrosen at 1:48 PM on October 10, 2015
I have a theory that we'll eventually end up with a "landed gentry" living off of investments and rent like Pre-Industrial Europe.
This never went away.
posted by Steely-eyed Missile Man at 3:58 PM on October 12, 2015
This never went away.
posted by Steely-eyed Missile Man at 3:58 PM on October 12, 2015
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posted by natasha_k at 8:26 PM on September 24, 2015