Competition doesn't work for necessities. Someone will rent your room at any price because it's necessary for survival. One of the major crises of our time is the fact that there are more people who need housing than there are rooms to rent to them.
Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price. Getting tenants in rooms a few months earlier at the cost of lower rent means you make less money, and are less competitive as a business.
> Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price.
is very obviously not true, otherwise prices right now would be effectively infinite. Why are prices for an apartment in SF only 3k/mo instead of 30k? Surely under your reasoning a landlord could just wait and get a tenant at any price they set?
The answer is always supply and demand. As long as the supply is constrained or demand goes up faster the price will rise. But UBI doesn't change that math at all. (I say this as someone not actually a fan of UBI)
No, because local wages cannot sustain those prices
If local wages could sustain those prices, then yes all rents would rise to that new higher local income level
That is (quite self-evidently) prices are so phenomenally high in ultra high-income areas like SF
Every single landlord is setting prices by the same metric: what can the people who would live here be able to afford? Competition between landlords is almost nil, which is why you find almost no "deals" anywhere. The market is totally efficient. Everyone agrees on how to set prices: by local wages.
In fact, collusion with the likes of yeildstar is the name of the game. Everyone is setting prices based on what the algorithm tells them to set prices and they all benefit from that uprise in prices because there's basically no competition decreasing the price.
There's also been a steady consolidation of ownership of rental units which also artificially increases prices.
There's a reason nowhere in the country at this point has affordable housing.
Most people like to live in the nicest place they can afford. This is a force pulling prices upward when many people with excess cash are competing for a limited supply of homes. Its why you'll pay more for the same size property in a wealthy neighborhood.
> Why are prices for an apartment in SF only 3k/mo instead of 30k?
Because some people in SF can only afford 3K/month. But if you added 3k/month to literally everyone's income, that number would increase.
(In case you're wondering why the many people with more than 3k/month don't crowd those people out: the wealthy depend on those 3k/month people for labor. At least for now.)
Fixing the housing shortage is a central tenet of progressive policies (regardless of whether or not they may ever actually accomplish this).
The current problems have tended to arise when desirable work is geographically limited which then leads to a much larger housing shortage in those areas despite the presence of sufficient housing across a broader territory.
High enough again to make it hardly profitable (if you're lucky) to do what you're allowed to do on that land.
There are entire businesses that just buy lots, change their zoning, then sell them. It's all priced in.
I actually got my home from a developer right after the housing bubble. They confided in me that they were giving away these homes pretty much at cost and that they had to fire a huge portion of their staff because the market was just crap at the time.
Really, the only way to actually achieve lower housing prices is through the state ownership and build out. The state could also spend a premium on building homes that it sells at a loss or rents at lower rates. But that will be pretty unpopular with the general public.
That's fine. Not everyone has to move. As long as the marginal city dweller would rather have cheaper housing than "buzzing restaurants and art galleries", there will be downward pressure on housing prices.
