They don’t need an excuse. In the absence of some other limiting factor they will raise rent to what the market can bear, and it turns out that when it comes to something with as severe a supply constraint as land has, the market can bear an awful lot.
There’s more going on in supply restriction than the scarcity of land. Zoning restrictions and things like weaponized environmental review play a massive role.
In a whopping 38% of San Francisco, a city known for its horrendous housing market, it is illegal to build anything other than single-family homes. Is it really so shocking that there’s a supply issue when you have land use policies like this?
While I support on principle the rights of lower levels of government to do what they think is best, I will admit that in practice this often leads to outcomes that are frustrating and disappointing enough that I think we probably need some limits on that power.
Ultimately, local regulation of land use is a pretty classical Prisoner’s Dilemma; by all local communities optimizing for their own blinded utility, they’re creating a net worse situation for everyone involved, including themselves. It’s really the textbook example of a case where a higher authority like a state government needs to come in and force everyone to actually collaborate.
If every community increases housing supply by a little bit, the effect on the local “character” is nearly unnoticeable but the housing market stays healthy. If they all refuse, the market melts down and we get the mess we have now (and parents have the comical audacity to then complain about how their kids can’t afford to live in the same area).
Yes…
When you raise wages the market can bear more. Say you’re paying $1,000 a month and have just enough left over for necessities. You get a raise for $200 a month, now the landlady can raise rent $200 and you’re left exactly the way you were before. She won’t figure this out right away of course, she’ll just keep playing with the rent until she hits a point where people are able to pay and she has a unit sitting vacant. Once that unit rents then she can start raising again
And the unit will rent as soon as someone–who previously couldn’t afford rent–gets a raise that makes them able to afford it. Soon the rent for everyone goes up, and now someone’s not able to afford it anymore and has to move out.
The end result is that one homeless person now has a home, one person who previously had a home is now homeless, everyone got shafted with higher rent, and everybody’s available spending money remains the same.
This is why nothing ever changes and the poor will always be poor: the system just designed to suck all excess cash out and put it in the pockets of the investors (landlords, banks, BlackRock, etc). The problem is not wages, because the market will always adjust to eat the wages. The system screws you because it was designed to screw you, and the people who have the ability to fix it don’t want to because they are the ones who benefit from it.
Even so, the problem is not capitalism, it’s our specific form of radically unregulated capitalism, combined with intentional inflation, fiat currency, and laws that favor corporations over people. No doubt that list could be made quite a bit longer!
I’m not willing to abandon capitalism but this version of it has become corrupted.
In the absence of some other limiting factor they will raise rent to what the market can bear
This is literally what I’ve been saying from the very beginning. They charge what people are able and willing to pay.
No, not even close. Housing is a necessity. It’s not a new iPhone. You can’t just say “wow housing prices are way too high I guess I’ll fuck off to the forest.” This is already in the initial stages of systemic collapse. The lords will keep squeezing and raising prices, and more and more people are being left behind. You see this all over, notably in the rise of homelessness and tent-cities.
