| HN Mirror

The cure for high prices is high prices.

People are willing to pay increasingly high amounts of rent because they see value in occupying that space. Perhaps because the area provides high paying jobs that, even after having to pay those costs, more than justifies the expense. Whatever their reason, they have evaluated all their options and have determined that this place is to their greatest benefit. When people stop seeing value, they will stop spending.

At the same time, as rents go higher and higher, the incentive to provide more rental properties increases. Maybe not yet, but at some point it becomes too much to ignore. Hypothetically, if the going rate for were $1M/month, I'm sure there would be many people would would be quite happy to vacate their houses to let you fill them that would not be so happy at the current rate. As the saying goes, everyone has a price. Maybe government would also improve zoning after a certain threshold, allowing new dwellings to come onto the market. A declining population would be something for government to stand up and take notice of. There's no indication that anything needs to be done when growth keeps on climbing.

People need a place to live, but I'm not convinced shelter is universally out of reach. Look out into small towns and rural areas and it is a whole different world of pricing. Yeah, maybe you will have to take a $20k/year job instead of a $150k/year job, but if you are hypothetically spending $130k/year more on rent to have that $150k/year job, your income is going to be the same in either place (ignoring the differences in other costs, including taxes, for ease of discussion). If you are paying less than $130k/year in rent in our hypothetical situation, it is easy to see where the money is coming from. Why shouldn't they pour it into housing?