General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe 1 Percent’s Houses Are Getting Bigger and Swankier While Average Americans --
--Struggle To Make Rent
http://inthesetimes.com/article/18441/the-1s-houses-are-getting-bigger-and-swankier-while-average-americans-strug
For a view of the inefficiencies of the free market, theres no clearer view than the U.S. housing market, where there are as many as 29 empty homes for every homeless person.
Todays gigantic class cleavages bring to mind Matthew 8:20, where Jesus describes his persecution: The foxes have holes, and the birds of the air have nests, but the Son of man hath not where to lay his head. This description could increasingly also apply to the wrong end of our lopsided capitalist society, which shows itself nowhere more clearly than in housing.
The Wall Street Journal has characteristically thorough reporting on the current housing market, in which it observes a severe shortage of midtier apartments, meaning those aimed at the working class. This dearth of lower-priced apartments has driven up rents for lower- and middle-income-earners, with a market segment average of $845 a montha daunting figure for many of todays part-timers and even full-timers.
The reason for this severe shortage is pure market economics: Construction costs are generally too high to justify building new complexes for low- and middle-income tenants.
The difference in costs between installing granite countertops and stainless-steel appliances is so slight compared to buying land and installing elevators that economists say developing a luxury apartment and a midtier one comes out roughly the same. This has meant that the supply of less expensive apartments
had decreased 1.6% since 2002. Over that time, high-end apartment inventory has increased 31%. Not surprising, since rents for the higher-income occupants average $1,702. This isnt exactly a glowing review of capitalisms alleged ability to meet consumer demand, regardless of income level.
These market dynamics are especially important for todays generation of young millennials, as the business press observes they tend to rent more, younger Americans either cant afford to buy a house or dont want to. Theyre willing to accept small apartment sizes also, and for reasons that reflect the economic realities of the new generation: They have diminished expectations, less access to financing and a strong desire to stay in cities. The tendency for normal working families to be squeezed by high rents out of safe neighborhoods, or into tinier spaces, is another example of the invisible hand giving the finger.
Hortensis
(58,785 posts)Even Adam Smith didn't think markets could work efficiently without careful management. Or especially Adam Smith.
Laissez faire economics are just a means to allow sacking of whole nations, and "small government" the same.