Unless you’re a landlord, the economics of the US rental market aren’t pretty: renters’ real median income fell by 7.6% from 2007 to 2012, while the number of renters rose by roughly 11% from 2007 to 2011, Bloomberg reports.
Rents are greatly outpacing job growth in some big cities, according to Trulia economist Jed Kolko. In San Francisco, Portland, and San Diego rents have risen roughly 10% in the last year, as job growth has ranged from 1.5% to 2%. “We are in the midst of the worst rental affordability crisis that this country has known,” HUD secretary Shaun Donovan said in December. A recent Harvard study showed that some 11.8 million renters with extremely low incomes are chasing 6.9 million affordable housing units. “Half of all renters now spend 30% of their income on rent, and a quarter spend more than 50%. This is an unprecedented squeeze on the people who can least afford the shelter they need,” Felix writes.
Things are particularly troubling for renters in NYC, where average rents are just over $3,000. (Note: I’m biased because I live here). Between 2002 and 2011, the city lost 40% the total number of housing units that were affordable to low-income families, per one recent calculation. New York City’s long history of rental wars may be heating up again -- the city’s new mayor has called for a limited rent freeze. New York Governor Andrew Cuomo has called for an as-of-yet undefined tax break for renters who make less than $100,000 per year, which would apparently increase by family size.
The rent needn’t be too damn high, even in financial and cultural capitals like New York City, Reihan Salam wrote in August. One idea Salam suggests is “tax-increment local transfers” that would give local residents a cut of the income tax revenues attributable to new housing tracts. Josh Barro has a more classically conservative case for solving New York’s rental problem: more housing units, simplified zoning laws, and cuts to rent-control regulations, which he argues raise rents overall. Most research suggests rent controls aren’t actually great at protecting low income citizens, Peter Tatian writes.
Apartment renters like me are a part of a larger generational shift, according to a new paper by Kansas City Fed economist Jordan Rappaport. Classic suburban single-family home construction will level out as Baby Boomers retire, Rappaport writes, and more Americans move to multi-family buildings. This will boost demand not just for new apartments, but for “restaurants, city parks, and high-quality public transit” . -- Ryan McCarthy
On to today’s links:
Deals
Japan's Suntory buys Jim Beam for $13.6 billion - DealBook
Charter offers to buy Time Warner Cable for $61.3 billion - Bloomberg
Google acquires Nest for $3.2 billion in cash - Re/code
Must Read
"A classic economic death spiral": poverty and misery in Appalachia - National Review
Vicious Circles
Inequality is feeding on itself - Robert Frank
Regulations
Banks are fighting the Volcker Rule by challenging the meaning of "own" - Bloomberg
A government agency was set up to try to work outside bureaucratic boundaries. What happened next won't surprise you - Lydia DePillis
Crisis Retro
The safe asset crash and the financial crisis - John Carney
Profiles In Capital
Our congenial web overlords: The father-and-son Lerer Ventures empire - Jessica Pressler
EU Mess
"It takes an almost heroic act of denial to look at this chart and see a success story" - Paul Krugman
"Home is where the heartache is: in the domestic economy outside the gated community of high-tech multinationals" - Fintan O’Toole
Head of Greek bank rescue fund charged with money-laundering - FT
Equals
"Slouching toward gender equity": 4 charts showing how the recession made men worse off - Matt Yglesias
Oxpeckers
David Foster Wallace, Standard Written English, and journalism's declining linguistic authority - Tech Crunch
Charting how much the readers of different newspapers care about Twitter - Mashable
Lessons
Why Medicare overpays at the pump - Jordan Weissmann
FWIW
“S&P 500 valuation is lofty by almost any measure” - WSJ
Legal Arcana
$100 bills “were named defendants in a lawsuit called US v. $4,245,800 in Mutilated US Currency" - Bloomberg
The Fed
"The Fed is independent only in a very narrow sense" - Randall Wray
Alpha
CMBS for a homeless shelter - Tracy Alloway
Corrections of the Day
"The information was fed into trading algorithms, not into logarithms" - NYT
Check Your Bias
The IKEA effect, or people value not being alienated from their labor - Wikipedia
Says Science
Why French kids don't get ADHD - Psychology Today
The point of sleep is brain cleaning - NYT
Old Normal
Documenting Brooklyn apartments, circa 1978 - Messy Nessy
Innovation
The internet of things: making making your refrigerator obsolete and hackable - Ars Technica
Follow Counterparties on Twitter. And, of course, there are many more links at Counterparties.
| |||||||||||||||||||||
No comments:
Post a Comment