From LOS ANGELES to STOCKHOLM: a HOUSING crisis? – VisualPolitik EN


I’m sure you all have had this discussion
with your friends at some point… Why are flat rents getting so expensive? It
doesn’t matter if you live in Los Angeles, San Francisco or
London: we are talking about a global problem. Then again,
we should first question… is this an actual problem or is it
just normal economics? Whatever it is, we’re talking about a phenomenon
that’s happening in all the big metropolises. For example, in the
city of Los Angeles, the average rent has risen 15% in the
last 3 years. And let’s be honest here… if you have
a decent salary, this is more of an inconvenience
than a real problem. But let’s imagine that you’re a shop assistant
in L.A. Even better, let’s imagine that ERIK is a shop
assistant in L.A. What would happen to you? Even better, let’s imagine that XANDER is
a shop assistant in L.A. What would happen to you? If I were a shop assistant in L.A. I would
probably be making around 2000 USD a month. A 540 square foot
single room apartment in South Los Angeles, which is a
very cheap neighbourhood, can cost 1200 USD a month. That’s 60% of my salary. The rest would go to basic needs
like food and clothing. And yes, I would have a hard time
saving any money in that situation. In an ideal situation, you would only spend
a third of your salary on your rent or your mortgage, so you’d
have enough to live comfortably and to save. Spending 60% of your
income on the rent means that just a small increase in
prices could knock you below the poverty line. And yes, that
risk is more real than we might want to believe. Los Angeles homeless population hits 36,000
in dramatic rise
But this is not the end of the story! Think about this: here at
VisualPolitik, we always say that the world is getting better. We are wealthier, healthier and have better
lifestyles. This
is, partly, because… stuff is getting cheaper! Here’s an
example: during the 70s, only 20% of Americans had ever
flown on a plane. Why? Because a Los Angeles-New York
trip cost 1500 of today’s dollars. Now, this very same flight
is just 200 USD. Thanks to this, I’m sure all of you have
already travelled more than your grandparents did in their
entire Lifetimes. The same goes for other goods. Everything
is becoming more and more affordable… except houses! No matter if you rent or buy: you have to
make the same, if not more, sacrifices than your grandparents’
generation. Today, in 2019, there are people in Stockholm
living in 150 square meter flats. In fact, it’s not uncommon to meet
couples in Sweden who want to divorce but are waiting for
their spouse to find another flat. Do you call that welfare? But the real question here is… Why are flat rentals going so
sky high? Can we solve this problem with better policies? Today we are going to answer these questions
but, before we do, let’s take a look back at history. SUPPLY, DEMAND AND… THE REST
It is a universal and logical fact: the population grows in
every country. Just a decade ago, America had 300 million
people. Now they have 27 million more. But not all cities
grow equally. If you’re watching this video from Detroit
or Cleveland, you’ve probably noticed that
there are less and less people. Most of your friends are leaving the city. And
where are they going? Exactly! To more prosperous cities
like L.A. or New York. So what does this mean? It means
that the demand for living in those cities keeps growing
higher. This is totally OK and it’s natural. But here is the real problem! If we’re talking about a normal
market, supply can rise to satisfy the demand. For example,
let’s look at oil markets. We told you a million times here at
VisualPolitik, how Saudi Arabia decreases or increases its
oil barrel production depending on the market’s needs. It’s
easy. They can increase production from one month
to the other. But when it comes to real estate, increasing
supply means building more houses… and this takes
time. Besides, the investment for a new block of
flats is huge and the profit margins are around 3%. And the truth is that we
need many, many houses to cover demand. California would need to build 3.5 million
housing units by 2025 to close its housing gap –Extract from
a report from McKinsey Global Institute, October 2016
But why do developers have so many problems building
homes? We are talking economics. With so much demand,
you could make a great business with housing in California,
right? Well… of course you can. There’s just one problem! Zoning laws. You see, the real estate market is actually
tightly regulated by city halls. If you want to build in L.A.,
you need a permit that can take more than 3 years to get. And all of this happens because city corporations
are the ones who choose where and how to build. So how does the
City hall know how many dwellings they need? Mainly, they
look at population growth. If you check the data, you’ll see
that the housing census in L.A. has mirrored its
demographic growth. And although it makes sense on the
surface, this is a huge mistake. Because population is one
thing and demand is another. For example, imagine a
couple who lives in one house. If they get divorced, all of a sudden, they need an extra home. So, there you go! With
the same population, we just created twice as much
demand. And the reality is that we have a higher and
higher single and divorced population. This is not happening just in
L.A. but also in Madrid, Berlin and almost any other city. Many experts say that the solution is to build
more houses. Others advocate for abolishing zoning laws. But, in Europe,
many cities bet on price controls. Do you think these
policies are working? Is this a good or a bad idea? Let’s
have a look, shall we? THE OTHER STOCKHOLM SYNDROME
Usually, when we talk about Sweden, it’s because we’re
using them as a model. Swedish people enjoy a large
welfare state alongside a dynamic economy with innovative
companies. Among those, there’s Europe’s most famous
startup… even though it might not stay in Sweden for much
longer. Check this out! Spotify threats to leave Sweden spur startup
protest in Stockholm
So why do startups want to leave Sweden? Is it because of
the high taxes? Not really! The main reason is that they
can’t hire foreign talent. And you might be saying… Come
on, Simon! Everybody knows that Sweden is very open to
immigrants! And yes, they are! But good luck moving to
Stockholm and finding a flat! While we were making this
video, we spoke to a man who worked for a Swedish
startup for a year and a half. He made a salary of 2900
euros a month, but more than half of that went toward
paying the rent on a 500 square foot flat. And believe me,
this was not the worst case. Finding a flat in Stockholm is
so hard that some people spend months in an AirBNB. And
you might wonder… why? It all started in the 50s. Sweden
needed houses. So the social democratic government
created the Million Houses Policy. The idea was to build
public houses for rent at very cheap prices. During those
years, every Swedish person could apply for a public house
and pay rent at prices equivalent to 400 or 300 euros today. But things changed in the 90s. During those years, Sweden
suffered one of the worst debt crises in their history. No
money meant no more houses. But the rent regulations
remained. So you either went for a public house or you
had to find a place in an extremely scarce rental
market. Basically, in Sweden they have the so-called
first hand market. Those are the public houses. If you’re Swedish, the first thing you do
when you turn 18 is apply there. If you’re lucky, in 13 or so years, you’ll
get a 2 bedroom apartment for just 600 euros a month. In other
words, what you don’t pay with money, you pay with time. This explains why 25% of Swedes live with
their parents until they turn 30. And also, it explains why this society is
turning from renting to owning. With low rates for mortgages, most Swedes
buy as soon as they can. But the real question is… what happens with
the people who aren’t born in Sweden? What happens if you just
moved there and have no family to stay with? Well… in that
case… welcome to the wonderful world of the second hand
market! Basically, Sweden believes that you shouldn’t
make money from renting. The law has lots of ways to ban people
from renting. And long term rentals are forbidden. But even
if you are allowed to have a tenant for a one year contract,
the community of the building can deny you permission. Yes, you heard that right. Your neighbours can say that you
can’t rent out your place or that you have to kick out your
tenant. This explains why, with so many restrictions,
there are almost no available flats. So, despite the great welfare
system, many people live in 200 square meter flats. But,
again, the worst problem is not the inconvenience. It’s this. Sweden probes riot in mainly immigrant Stockholm
suburb Exactly! The poor immigrants who have no startup to
find a flat for them have to go to the worst neighbourhoods. And
this is how they form ghettos. And… yes, OK, I know that all
of you have seen those conspiracy videos where they
exaggerate the gang violence in Sweden. But let’s be
honest, even though the problem is not as big as some
media portrayals, Sweden has a clear problem with
criminality. But we’ll talk about this in a future video. In the
meantime, by the way, if you’re new to this channel and
you’re enjoying this video so far, remember that we publish
brand new videos every week. So subscribe to VisualPolitik
and hit that bell button so you receive a notification on your
phone anytime we post. But let’s get back to our story. Of course, this Stockholm
crisis could be solved by building more houses. But, even if
you built 80,000 new dwellings a year as many have
suggested, you’d also badly need to change those renting
laws. But now you might wonder… OK, Simon… give us a
solution! Is there any example of a city that solved
this renting problem? And the answer is yes. Let’s check it out,
shall we? VIENNA AND RENTS-FOR-ALL SYSTEM
Austria is one of Europe’s wealthiest countries. The
average salary here is over 2,700 euros a month. And, if
you live in Vienna, it’s not hard to find jobs paying more
than 3500 euros a month. Nevertheless, rent costs are the
same as a way poorer city like Madrid, Spain. For 1500
euros, you can find an amazing 860 square foot flat in the
center of the city. And I know what you’re thinking… Now the guys at
VisualPolitik are going to tell me another story about how a
city embraced the free market with no remorse and lived
happily ever after, right? Well… nope. The opposite is true. Basically, the Vienna council is something
like a developer and a rental agency at the same time. They are the city’s
biggest landlord. You see, after World War II, half of Vienna
ended up completely devastated by the bombings. So the
city hall paid for all of the reconstruction. That’s when they
said ‘Wait a minute! Since we paid for all of this… aren’t
we entitled to rent it out under our own conditions?’ This is how
the World’s most ambitious public program started. Here’s how it works: 80% of Viennese people
live in rental flats. 60% of those are public housing. Some of the
buildings are from cooperatives and others belong to the
city hall. But wait a minute because we are not talking
about normal rental agreements! In fact, we could call them something
just short of limited property. Basically, rent contracts in
Vienna last forever… even after you’re dead! Yes, rental
contracts can be inherited as well. So, as long as you don’t
move, you can say the flat is yours. And oh boy! You gotta
see those houses. In America and the UK, we have this
notion that public housing is for the poor and it’s in bad
neighbourhoods. But here, you can find public houses even
in the best neighbourhoods and they are amazing: swimming pools, gyms, even saunas. In some cases, you
can even find pretty absurd situations. While we were doing the research for this
video, we spoke to Vienna’s city hall and they gave us lots
of cases. For
example, there’s a young woman who lives in an 860
square foot apartment in the center of the city. How much
do you think she pays? 400 euros! That’s less than 500
dollars! But her neighbour, living in a similar flat,
pays 2000 euros. Why? He lives in one of the apartments that aren’t
public! So just like in Stockholm, Vienna also has
two types of renting: controlled prices and free prices. And you might
be wondering… How come they don’t have waiting lists
here? Well, here’s your answer! Annually, Vienna spends about 600 million
euros ($682 million) on social housing. In comparison, Germany — with
a population over 45 times Vienna’s — spends about 400
million euros nationwide. And now you might wonder… how does this
system work? Let’s say that you move to Vienna. In the first few years,
you can’t apply for public housing. But no problem! There
are more than 290,000 flats on the free market. So it’s not
hard to find a place and the prices aren’t crazy because
there’s a large supply. Then, after only 2 or 3 years, you
can apply for a public house. Depending on your family
status, your income and your pickiness, it might be easier or
harder for you to find a home. But, usually, we’re talking about waiting
times of no more than 2 years. Of course, as we always say on VisualPolitik,
not everything is sunshine and rainbows. The first issue
with this system is that you don’t wanna move out of your
flat once you find it. This model pretty much reduces your
freedom to choose. Basically, it’s not you who gets to
choose but the city hall. And remember that your house
determines many things about your lifestyle. But there is another issue here: the sustainability. This
system relies heavily on just one actor: the municipal
corporation. This means that, as long as the local
government has the money, there’s no problem. But they
just need one crisis and there will be no more houses. And,
since there aren’t many private developers because there
are no incentives, they could easily end up with a housing
shortage situation. And this would lead to a lot of problems. But we have to admit that, so far, this model
seems to be working. So the question now is… Would it be possible to combine
this Viennese model with a more free market solution? Do
you think this system could be applied in other cities? Would you mind renting the same flat for your
entire life if the conditions were good enough? Please, leave your answer in the comment section
below. Before finishing, let me give a special thanks
to MARC SOLO and JAIME CHAPINAL for helping us with
the facts on Stockholm. Also, let me thank Vienna’s City hall for
answering all of our questions. They were extremely nice. Don’t forget to visit our friends from RECONSIDER
MEDIA.COM, the podcast that provided the vocals in this
episode that were not mine. And, of course, remember that we publish brand
new videos every week so subscribe to VisualPolitik
and hit that bell button so you won’t miss any posts. If you liked this
video, give us a thumbs up and, as always, I’ll see you next
time.

100 thoughts on “From LOS ANGELES to STOCKHOLM: a HOUSING crisis? – VisualPolitik EN

  • I live in Vienna and the cheap flats are a myth.
    Only if you want to live with lower class people in the same house you can consider to rent one of those "cheap" flats.
    Only if you are extremely (i.e. improbably) lucky, you will get one of these flats in a decent neighbourhood.

  • Simple put' most economic activity has been concentrated in small geographical areas.Therefore the majority of the demand for labour is in these areas.However the supply of housing to house the labour can't keep up with the demand of housing this creating price increases.Its not physically possible to build the housing in time to keep pace with demand for housing.
    Also the housing market can suffer from a runaway effect where people moving into a area creates its own demand as their family and friends follow them as they establish themselves in a area.

  • I had to leave Melbourne (Australia) as even though I was working full time I couldn't get into a rental
    Edit : to buy my own need half a million dollars to own a unit

  • You're missing the whole point. The only thing needing to change is for central banks around the world to raise rates above negative yields. We're all turning into Japan. Lost generations because nobody wants a recession on their watch.

  • In Canada most provinces have rent control but some like Alberta do not. The provinces without rent control have better rental markets than the ones that do with more availability and supply coming on line to match demand.

  • In Detroit you can stay in nice neighborhood in a 4 bedroom home for a 1,000 dollars rent. But you’ll need a car because all the good jobs are downtown or in other cities.

  • actually its not global…try adelaide australia ..we have some of the lowest prices..my rent is only 105.00 per week and my income is 500 a week so i do well

  • Yup, housing crisis in my city too. There is insufficient public housing, and though there are plenty of new construction projects going on, most of these are only for the wealthy.

  • IMHO if you want one simple reason, it's this:
    people think housing = investment/retirement fund
    get rid or change this mentality in people, and prices drop

  • City population growth is greater than national growth for everyone. Where once upon a time only 20% of the population was urban, now it is 80%+. Add to it, that as fuel efficiency increases, you need fewer and fewer waystation towns, and all of a sudden all the semi-urban populations get merged into future Mega-Cities like Los Angeles, Dallas, etc.. The small towns between Los Angeles and Dallas on the other hand are dying faster than you can sneeze. You no longer need a town every 8 miles, or even one every 40 miles, now you need one every 160 miles, that means the 3 out of 4 towns that were built every 40 miles at the beginning of the vehicle age, are now redundant and will be phased out. These people now have to move to one of the Mega Cities since their small town died.

  • Zoning is what saved many European cities from becoming spread out American ones. It also helps improving safety and keeping the cityscape coherent. In some French cities, zoning laws even tell you what colours you can paint your house in, it seems futile but the result speaks for itself. In the US, on the other hand, it's the lack of zoning laws in some parts of California that ended up producing entire neighbourhoods who are not linked to the public water system and rely on private wells that are now running low.

  • On the question if I would be in favour of more cities adopting Vienna's model … generally speaking a resounding "maybe!". For me personally, it would not work out so well. I'm in my 30s and moved ~10 times in my life. Lived in my current place for about 5 years, and am looking at moving again within a year or so. Admittedly, those 10 moves included some student housing, so ymmv on how representative this is — but ultimately, it appears I won't be living in the same place (or even city or country) for long enough to make this kind of "eternal commitment" something that will work well for me. I'd be stuck in the 2000 eur "free market" flats. 😉

  • Housing tax breaks for different incomes to level the playing field and algorithmic caps on rents generated by weighted metrics (house size, location, age, quality, facilities etc).

  • SF does something similar with BMRs you can buy houses at a discount but the gov owns a large share. New developments require a % of new units. It unfortunately increases the prices in general.

  • So whats going to happen to property prices and rents mid century or earlier when we have a population crash due to aging demographics, low birth rates AND the effects of global warming on FOOD PRODUCTION!

  • For all the praise and advocacy for free market system Simon preaches around
    One read through 'the divide' Jason hickel throws a lot of the assumptions regarding economics out of the window
    So how about a walkthrough of the videos in the light of 'the divide' would Simon be more pro China?
    Should I support through patreon for a revision?

  • I believe this is inflation and that CBs are creating much more money than they claim. The Fed isn't subject to audit so why not? After property owners figure out the same money isn't getting what they're used to, they pass the cost down the line.

  • when they talk about how nice public housing in vienna is, they show the Hofburg, the presidental palace. Well, also a kind of public housing, i guess…

  • 10:45 So the city hall started reconstruction, then they said they will pay for it with taxpayer money, then since city hall paid for it they deserved the rent money, the taxpayers then rented these houses, I guess its cool that it works out decades later but bloody hell people are blaze with tax, am i missing something pls let me know

  • I pay 179 Euros a month for my 100m2 three bedroom two bathroom apartment with lake and mountain views, underground parking, gardens, etc. Perks of living in suburban China.

  • I lived for a while in the center of Sofia, Bulgaria. I lived in several nice places which were very affordable with none of this rent control nonsense because the Bulgarian government is not in the business of replacing Bulgarians with immigrants. The countries population is shrinking (supposedly) so real estate naturally is just getting cheaper.

  • Actually Paul Romer think older owners poisons the property market, and that is why he suggest charter cities on empty, undeveloped lands. It is the old farts who poison the youth life.

  • Well my dad and his parents before him have been renting the same flat since 1936. And we finally bought it last year. So yes, i can definitely imagine renting an appartment for a lifetime 🙂

    Fun fact, during the renting period 5 different countries controlled the area it was in.

  • 1:30 holy shit, I've been saying this to my friends for months now. Unemployment rising makes so the only consummer not to reduce consumption are the extremely wealthy that don't need to work at all. Every company is going to change their focus public pretty soon and prices go higher on pretty much everything which make even those who are reducing their live costs now not to have any real growth in economical security

  • You say Stockholm has a crime problem, yet crime in Auckland, Melbourne, Glasgow, Nottingham etc. all have higher crime. Your analysis seems anecdotal. https://www.numbeo.com/crime/rankings_current.jsp

  • 1200 dollars in LA for an apartment, but that's an apartment big enough to fit two people, so that's 600 dollars per person which is less than a third of the sample salary of 2000 dollars.

  • The issue nobody wants to talk about is overpopulation… of course housing will become more scarce, and thus expensive, when there is an ever–growing number of people. The demand is growing far faster than the supply ever could.

    Zoning laws are an important part of maintaining a good quality of life in urban neighborhoods (although I'll concede that they can certainly be used incompetently) and there's no way you can construct enough housing units to keep up with demand in the big, popular cities like NYC. You'd need to drastically reduce the amount of safety and environmental regulations as well as divert land use from other purposes to housing. It's not realistic. The root problem is that there's just too many people, but discussing that is taboo so people would rather just attack zoning laws…

  • How does housing and building cartel's work in this scenario, as that's what we have in the UK, that keeps prices artificially high so the government sits back on the nice income from stamp duty and there's little incentive to build social housing?

  • I dont understand if money is currently very cheap and banks dont aprove housing loans or they are really expensive, for example savings intrest in my country (Croatia) is abous 0.7 percent and housing loan (the cheapest one) is 4.2 percent

  • According to the Mayor of Skid Row in Los Angeles, there are more than 40,000 new and empty housing units that are deliberately kept off the market.

  • Ah…. so to problem created by the government regulations, we just use more governments funds… YEAH THAT'S GENIUS!
    Why don't you move to north korea like a good communist you are.

  • As usual, the problem is Regulation and Government. Stupid laws by stupid bureaucrats. The free market solves the problem. The mix of Vienna and the Free Market. Is the Free Market with direct payments of cash to the poor.

  • I'm a landlord . it cost a lot to maintan property. This year I spent close to 19k A gardener$150 a month, Painting the out side of the house 4k, Had to buy new air and heating unit 8k, property tax 3k, garbage $500, sewer $700. new gutters 1k, Maintenance cost are vary high to take care of property. They keep going up every few years. I use to pay $80 a year for garbage bill not $400 now. House in USA California bay area.

  • No mention of houses staying empty due to speculation or rather having been bought due to fear of the come back of the financial crisis?
    Personally, I'd love to be able to switch my flat any time as I'm chasing after employment and since companies went from life long hire to 1 year contracts and no concern for loyalty…

  • RENT GAUGING : The New World-Wide Scam To RIP-OFF The Public ! ,,, The City Of Los Angeles Is LOSING Population As Rents SkyRocket Amid " An Affordable Housing Shortage " Set Into Motion With The Blessings Of Both Corporate Parties , Repugnican & DemoCrook !

  • the crime situation in Sweden is far WORSE than media report on. just look at the official statistics ((brå) reported rape has increased with over 1000% since 1979!!! and 5of6 rapists are borned outside Europe. 😩

  • Does he ever get around to the fact that the supply of land is fixed? Would he have us believe that homes can be produced the way i phones can be produced?

  • Los gobiernos crean leyes y mas leyes para "y" que proteger a los que alquilan. Haciendo muy dificil sacar a la gente que alquila, por ende cada día menos gente quiere invertir en construir casas y apartamentos para alquiler. Es el estado que hace subir los alquileres, ya que al disminuir la oferta sube el precio

  • Ademas las regulaciones son horribles, los parasitos publicos, conocidos como empleados publicos, generalmente incapaces y vagos, lo peor de cada profesion inventan leyes como si estas no tuvieran efectos reales sobre el mercado y arruinan todo lo que cae bajo su responsabilidad.,

  • Basic greed, all non minimum wagers seem to be buying Airbnb, so now we have half world being landlords. You don't need stuff if you're homeless, police give fines to homeless as they use carts for their few clothes& sleeping bags. Then corporations are in tax Haven's & pay no tax. As a species humans are trashing any sense of ethics, & communities. None of us deserve this beautiful planets & things are getting ugly to greed off taking more than what we need, very sad

  • Several reasons:
    >As mentioned, a lot of increase in demand due to the growth in divorces.
    >Population growth.
    >As people have started pursuing higher education, their work equivalents (offices) have centered in larger cities, increasing demand.
    >Low-interest rates increase the prices as its cheaper to borrow (probably the most significant reason).
    >Property used as an investment vehicle in much more of an international scale as opposed to previously. Especially prevalent among newly wealthier chinese who are trying to hedge themselves against their shitty currency.
    >Zoning laws (if your country has them).
    >Maybe something about neoliberalism

    Something like that I guess

  • I guess the elite want poor and Rich society, is almost Imposible too pay Rent I’m not talking New York or los Angeles Im talking about Florida

  • nice shirt. i live 90 miles up from nyc and bought my house in 1986 3 bedroom on 2 acres. i paid 126k now worth 210k i also own a 2 bedroom house i rent out during the summer for 500.00 but i do not very often because it sucks dealing with tenets.

  • Yes, even in Manila, property prices (mortgage or rent) have increased a great deal since 2010. What's happening now in Metro Manila are the growing number of high rise condominium/apartment buildings in order to accommodate the ever increasing demand. Even "townhouses", with smaller land footprint, are skyrocketing in prices. So, newly built townhouses are getting rare in the city center, and they are being built in the peripheral cities of Metro Manila and in the provinces. Single workers are now sharing their apartments with roommates. And some single or married people choose to live with their parents even well into their 30s.

    Of course, there are those who are fortunate enough to belong with the wealthy families in the country, they can afford to buy single detached houses in exclusive subdivisions. However, such is not the case for the average filipino with an average salary. They have to make do with decreasing lot sizes and ever increasing prices.

  • I am a contracktor working for rental Companys. And the housing cryses in my contry comes from. Investment Companys comming in and buy up all the flats and raising the rent. 1/3 of all the new bildings are empty. But the make more money on high prices then full bildings.

  • You are forgetting the development of construction which in the past years almost grow nothing. The cost, engineering and technology of construction are basic the same in the past years in comparison with another areas.

  • oh is the new crash finally here? bet wall treet will get punished this time right and we will not deregulate like crazy this time right.

  • The invaders come making rent go up making the locals homeless.then in demogratic socialist control cities it becomes impossiple to build.

  • Everything but housing is getting cheaper?? How about college? In USA, tuition has increased 150-200% over the last 30 years and incomes have only increased by 16%, leaving my whole generation saddled with student loan debt that many struggle to pay off with their low income. I have a 30 yr old college friend living in my basement. He has a masters degree and two low income jobs and can't seem to dig himself out of the hole he's in. Literally and figuratively.

  • Because of China. Trillion of dollars flowing out of China from corrupted officials and rich people and buying up properties all over the world as Peggy bank

  • Immigration – supply and demand and landlords are cashing in with those who are willing to share a two bedroom apartment with five or six others.

  • Can you please do a video on Singapore’s HDBs in relation to this video. Thank you……love this channel all the way from South Africa

  • I don't get why Homer Simpson could afford, with his salary alone, one house, 2 cars, a family of 5, a cat and a dog, and he was supose to be the average blue color worker… nowadays a couple of phd's cant afford a one bedroom apartment in most capital cities

  • this video is horrible …
    if you have infinite access to capital, you have vast (near infinite) options for housing
    if you have minimal capital, your options trend to 0
    there is so much competition at the lowest end — as that mirrors the labor market, where there is so much competition at the lowest wages..

    add more people who work at the lowest wages, then the demand for cheap housing increases proportionately. however, the change in the supply of housing does not change as the incentive to "make, manufacture" more housing is directed toward higher income housing.

    add to the fact that some lower income wage earners are highly amenable to substandard living conditions, such as living "10 to a room" (so to speak) and the rental pricing gets that that worse. OBVIOUSLY, if you insource cheap labor from outside the US this exacerbates the problem exponentially.

    however, the real problem is the idiocy of the American population to not understand how unfettered immigration corrupts the pricing models — of both wages and rents

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