How Can the Rent Be Too High If Someone is Willing to Pay It?

An article in the New York Times realestate section last week once again sparked the debate on "affordable housing". The article details how residents are being forced out of formerly less expensive Brooklyn neighborhoods due to rising rents. Which has led to anger from certain interest groups about the lack of "affordable housing".

The reason that I put quotations around "affordable housing" is that the term in and of itself is a misnomer. The term is meant to suggest that the housing is not affordable when it obviously is affordable because someone is renting it at that rate.

Only the absurdist logic of the world's Jimmy McMillans would say that those running a city are doing a poor job because the economy is thriving. Rent is high because people want to live there. When there is a product that is better than other similar products it becomes more expensive as demand rises. It is the same with cities. Because New York is a fantastic place to live property values increase leading to an increase in rent. New York stays a fantastic place to live because property values go up which creates a higher tax base thus allowing the city to provide better services and increased public safety. The result of lower property values and therefore lower rent is bankruptcy.

The other argument I hear is that rising rents force out the artists that provide the culture that makes a city great. This is a vestigial argument that originates more in that early 90s musical about the guy who was trying to better the neighborhood and bunch of self indulgent assholes who refused to pay their rent. Who are today's artists and musicians? More and more they are kids whose parents did well enough to send them to art school and pay for their music lessons. I know a little something about this. Rents in places like Williamsburg have gone up because trust fund kids wanted to move there because that's where all the hip culture is.

Many people think it is a good idea to set aside a certain percentage of units per building for low and middle income residents. My question is why would people who cannot afford the market rents choose to live in an area where they will face the higher consumer prices that go along with higher rents. It makes no sense from a logical perspective.

 In the 20th century the blame for urban decay was placed on those who were well fleeing from the cities to the suburbs. Now that the suburban century is over the grand children and even the children of those who fled the cities in the post World War II economic boom are returning to and improving the cities. In the end the people that were vilified in certain circles for urban decay are now being vilified in the same circle for urban renewal.

Had those who fled the cities in last century not been seduced by the suburban syren song this wouldn't even be a discussion. It is a simple fact of life that as property values increase wealth increases and people as a whole do better. I mean everyone does better. At least as long as they don't make foolish mistakes and take on responsibilities they cannot afford.