what would happen if we pegged rent? (2 Viewers)

guidomerkinsrules

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so rule of thumb seems to be that rent should be 25% of gross salary

what would happen if we pegged that? made it so that rent was "controlled" at 25%? (the % isn't important, but more the idea of 'fixing' it)

i think i can anticipate some of the "why nots" but I'm interested to hear the arguments pro/con
 

BHM

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we live in the units that used to be in the old St Bernard - we pay market price, but many pay different sliding scale prices
the places stay nice for 2 reasons:
- maintenance is ALL OVER the buildings and appearance is clearly concern 1 (it will take a few days to fix a fritzy water heater, but new paint will go up next day)
- all adults work (it's part of the lease). by 9am the parking lot is empty and usually doesn't fill back up until 8pm - so there is no hanging and and the petty stuff that happens through boredom that escalates
all income brackets carry their weight (it's really not much different than most gated communities i've been in)

HOWEVER, it seems pretty clear that this place was part of a long term bait-n-switch. The company needed to take in anyone that had been in the old pjs
after that they needed to keep a % of "affordable" units
but that was for 5 years
it seems pretty clear now that they trying to have all units at market rate

What is old pj's?

What do you mean by all income brackets carry their weight?
 

Krodwhodat

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What is old pj's?



What do you mean by all income brackets carry their weight?


I think he meant projects and he meant that they each pay a similar percentage of there income. But I'm probably way wrong!


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guidomerkinsrules

guidomerkinsrules

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I think he meant projects and he meant that they each pay a similar percentage of there income. But I'm probably way wrong!
right on the 1st part - pjs = (housing) projects

the 2nd part was threading several of the previous comments suggesting that the pjs were the way they were b/c poor people don't take care of their ****
i was saying there's no indication in this complex of any correlation between income level and treating the surroundings respectively
 

The Mongoose

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"unnatural"?
what about rent/housing is natural?
(i'm asking seriously)
It's natural for supply and demand to determine pricing, and for new inventory to be created (or not) based on a profit motive.

If we continue on this path, this discussion will get much wider and people will get riled up.
 
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guidomerkinsrules

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It's natural for supply and demand to determine pricing, and for new inventory to be created (or not) based on a profit motive.

If we continue on this path, this discussion will get much wider and people will get riled up.
cool - semantically i don't agree - but let's go with this

so i asked what would happen if we did this (fixed rent)
you're saying it would create an unnatural financial environment
but what do you think would actually happen?
i assume you think it would be bad
why bad?
 

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cool - semantically i don't agree - but let's go with this

so i asked what would happen if we did this (fixed rent)
you're saying it would create an unnatural financial environment
but what do you think would actually happen?
i assume you think it would be bad
why bad?
It wouldn't be economical to rent many properties if all incomes were free to rent at 25% salary. If there was a low allowable base rent then I'd expect a shift to small apartments and older low value homes. If there was no base then rental properties make little financial sense. There would probably be a decrease in rentable properties and increase in home ownership.
 

BHM

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right on the 1st part - pjs = (housing) projects

the 2nd part was threading several of the previous comments suggesting that the pjs were the way they were b/c poor people don't take care of their ****
i was saying there's no indication in this complex of any correlation between income level and treating the surroundings respectively
Don't take this the wrong way but you said there is ample maintenance staff that take care of things like painting and fixing broken water heaters. Did the previous pj's have the same maintenance staff?

Again, don't take me wrong. I have been through many section 8 housing complexes to know and see that there is a lack of community effort to spruce the place up. Not that poor people lack the ability or desire to do things. They probably lack motivation.

You also mentioned the new pj's which I gather is the Columbia Parc, is a mixed use neighborhood. Curious if you know how many of the original pjs' residents now live in the new facilities.

I ask because the St. Bernard projects was notorious for drugs and violence from what I have read. If true, how did Columbia Parc exclude those people involved in the drugs and violence and where is this group of people now?

If a large portion of the "bad" group has been excluded surely one would expect a nicer... Outcome.

We spent 140 million on phase one for 465 units. We provide top notch maintenance. One would expect to see nice facilities no matter if it were filled with poor people that do not take care of the property. From what I could find most of the original pjs residents have never returned to Nola,
 

BHM

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cool - semantically i don't agree - but let's go with this

so i asked what would happen if we did this (fixed rent)
you're saying it would create an unnatural financial environment
but what do you think would actually happen?
i assume you think it would be bad
why bad?
I can not predict what good or bad would happen. My personal opinion is all I could offer.

Let's say my wife and I struggled to put ourselves through school, put off having a family until our careers were set, work several jobs to get a place to live in a good school district and that costs us $1,600/month.

Then guy next door dropped out of high school and knocked a girl and now have three kids. When I get home at night he is sitting on his porch drinking beer. Best job he can find is low wages yet he gets to live in the identical house next door but only pays $300/month.

I might be wrong but that I do not think is fair. I think I would have a hard tiime understanding that we are both paying our fair share. I am financially penalized for making good life choices and sacrifices while he is rewarded for poor choices and few sacrifices. Sounds like a system doomed to fail.
 
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guidomerkinsrules

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I can not predict what good or bad would happen. My personal opinion is all I could offer.

Let's say my wife and I struggled to put ourselves through school, put off having a family until our careers were set, work several jobs to get a place to live in a good school district and that costs us $1,600/month.

Then guy next door dropped out of high school and knocked a girl and now have three kids. When I get home at night he is sitting on his porch drinking beer. Best job he can find is low wages yet he gets to live in the identical house next door but only pays $300/month.

I might be wrong but that I do not think is fair. I think I would have a hard tiime understanding that we are both paying our fair share. I am financially penalized for making good life choices and sacrifices while he is rewarded for poor choices and few sacrifices. Sounds like a system doomed to fail.
just for argument's sake, i'll flip it with real life anecdote
my wife and i worked at the same (at will employment) school - both with tons of credentials far and above what is required and with yearly superior evaluations
she was fired on the last day of school and could only find a part time job at 1/4 salary
i was fired the next year, it took me 6 months (and depleted savings) to find a comparable salary
the person who did the firing - uncredentialed for the position - pulls down 400k and can live wherever
Also sounds like a system doomed to fail
 
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guidomerkinsrules

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Don't take this the wrong way but you said there is ample maintenance staff that take care of things like painting and fixing broken water heaters. Did the previous pj's have the same maintenance staff?

Again, don't take me wrong. I have been through many section 8 housing complexes to know and see that there is a lack of community effort to spruce the place up. Not that poor people lack the ability or desire to do things. They probably lack motivation.

You also mentioned the new pj's which I gather is the Columbia Parc, is a mixed use neighborhood. Curious if you know how many of the original pjs' residents now live in the new facilities.

I ask because the St. Bernard projects was notorious for drugs and violence from what I have read. If true, how did Columbia Parc exclude those people involved in the drugs and violence and where is this group of people now?

If a large portion of the "bad" group has been excluded surely one would expect a nicer... Outcome.

We spent 140 million on phase one for 465 units. We provide top notch maintenance. One would expect to see nice facilities no matter if it were filled with poor people that do not take care of the property. From what I could find most of the original pjs residents have never returned to Nola,
not trying to dodge the questions - i have heard police describe one of the main reasons crime has morphed in NO is the pjs changing has caused gangs who had long settled turf battles to battle for new territory
it doesn't happen so much in the old St Bernard area b/c the neighborhood damage was extensive - but in 8th ward and central city areas that didn't get the damage, the housing squeeze is a significant contributor to the violence

BUT
at the end of the day - i think programs that strongly encourage diverse (in all its forms) neighborhoods is better in the long run than homogeneous neighborhoods
 

Rickboy

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I can see two mechanisms for how this would be implemented. One would be to subsidize all renters based on income so that rent is always 25% of their earnings. The 2nd would be to outlaw rents that are higher than 25% of the renters income.

If the 2nd method were adopted, I think the results would be disastrous. That kind of price fixing will lead to multiple issues. One is that you'll cause all rental property to deflate in value almost immediately. Landlords don't all own their rental properties outright. They are usually mortgaged. If the revenue for rent goes down, then they may not be able to make their mortgage payments and the bank will seize the property. If this happens en masse, then you'll see property values everywhere go down. Deflation is the killer of any economic system. If you don't have at least a small amount of inflation for your business, then you'll end up losing money as the price of maintaining the properties goes up.

There are a lot more ramifications here but suffice to say, deflation is a very bad thing for an economy.

The other method would be to subsidize rents so that the final price out of the renters pocket is no more than 25% of their income. The first and most obvious problem here is that you have to get money to fund this. Where does that come from? Are you going to tax home owners more? Higher income taxes? Let's set that aside and say that you do find the funding, now you have to set a limit on the maximum subsidy. We aren't going to have everyone living in mansions. IMO you would still end up with a situation where you would put deflationary pressure on real estate. When you do that, you're going to end up with less product on the market in the long run. Eventually there won't be enough housing to go around. Why should I invest in building something if I can't make some money from it?

IMO, if you are looking at this as a means to end poverty, then your approach is all wrong. The only way to address this is with a guaranteed minimum income for every person. Let's say $1000 a month per person. Even a kid gets $1000 (handed to their parents). I can see all sorts of issues that could crop up from that, but I cannot deny that there may be a way to pull that off. In fact, with the ever increasing use of automation and the rise if artificial intelligence, I think we are going to be forced to do exactly that to maintain the social order in the long run.
 

BHM

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just for argument's sake, i'll flip it with real life anecdote
my wife and i worked at the same (at will employment) school - both with tons of credentials far and above what is required and with yearly superior evaluations
she was fired on the last day of school and could only find a part time job at 1/4 salary
i was fired the next year, it took me 6 months (and depleted savings) to find a comparable salary
the person who did the firing - uncredentialed for the position - pulls down 400k and can live wherever
Also sounds like a system doomed to fail


In a typical economy, two well qualified teachers would not both get fired in one year. I do not want to know the particulars but unless you and your wife have some issues that caused the firing, there are safety nets and proper personal actions that could protect you.

There are a laundry list of what is that you can put into the game. If you can no longer afford your current housing then you need to look at other options.

My suggestion would try to become that man earning 400k sp you could go around firing good people at random. That doomed system as you suggest has allowed a man to earn 400k. Aim to become that man rather than allow resentment to build up inside you.

You seem to have a lot of built up_____________ in you for some reason. You seem to desire a perfectly balanced eutopia in life that just simply does not exist. It would be nice if every person earned the exact same amount, lived in identical cookie cutter hones and had 2. 35 kids.
 

BHM

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not trying to dodge the questions - i have heard police describe one of the main reasons crime has morphed in NO is the pjs changing has caused gangs who had long settled turf battles to battle for new territory
it doesn't happen so much in the old St Bernard area b/c the neighborhood damage was extensive - but in 8th ward and central city areas that didn't get the damage, the housing squeeze is a significant contributor to the violence

BUT
at the end of the day - i think programs that strongly encourage diverse (in all its forms) neighborhoods is better in the long run than homogeneous neighborhoods
Encouraging diversity by subsidizing people to live like the Jones will continue to build class warfare and eventually lead to other problems. You can not tell me that you and your wife who went to college and work hard to afford your decent housing would not get red faced to come home and see my subsidized *** sitting on my porch drinking beer.

At some point people will tire of trying to get ahead in life only to find they are no better off than me and my can of beer. At some point, you and your wife will abandon the teacher rat race and go work at McDonald's for 15/hour and lived in your subsidized condo just like me.

At some point the money runs out to continue the subsidies and the nice condos turn into the old pjs.
 
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Encouraging diversity by subsidizing people to live like the Jones will continue to build class warfare and eventually lead to other problems. You can not tell me that you and your wife who went to college and work hard to afford your decent housing would not get red faced to come home and see my subsidized *** sitting on my porch drinking beer.

At some point people will tire of trying to get ahead in life only to find they are no better off than me and my can of beer. At some point, you and your wife will abandon the teacher rat race and go work at McDonald's for 15/hour and lived in your subsidized condo just like me.

At some point the money runs out to continue the subsidies and the nice condos turn into the old pjs.
but you run to the "welfare queen" extreme to make a point that i'm not sure is valid

the OP was merely about reading/hearing plenty of reports saying where rents should be - then couple that with decades of wage stagnation - i was wondering if there was any fixable on the rent side
 
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IMO, if you are looking at this as a means to end poverty, then your approach is all wrong. The only way to address this is with a guaranteed minimum income for every person. Let's say $1000 a month per person. Even a kid gets $1000 (handed to their parents). I can see all sorts of issues that could crop up from that, but I cannot deny that there may be a way to pull that off. In fact, with the ever increasing use of automation and the rise if artificial intelligence, I think we are going to be forced to do exactly that to maintain the social order in the long run.
the poverty is a red herring
rising rents are a problem that cut into savings and any number of other areas that stagnate the economy
wages aren't rising
is there a way to fix rents?
 

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