Just as the inequality gap is rising all over the world, so is our inability to pay rent. That is why more often than not, we (millennials) resort to living with many roommates or in our parents’ homes long after we’ve graduated and found steady jobs. Put it this way: a Pew Research Center Analysis says a record 21.6 million young adults between the ages of 18-31 were living with their parents in 2012. It’s not that we earn meager wages (though most do at first), it’s just that rent prices are just too damn high in major cities. Thus, I make a case for implementing rent caps.
People would actually be surprised at just how many apartments in cities like Miami are empty. Foreign investors from countries like Venezuela, Brazil and a few European countries buy apartments as investments or just as a summer home that they only use for a few weeks out of the entire year. They have a right to purchase whatever they wish just as anyone else living and working in these cities. But, it doesn’t seem fair that some of us have to pay high rent because of this.
Many people, not just millennials, are spending more than 30 percent of their income on rent, which is more than economists suggest. According to an analysis done by Zillow, the median rent in Miami is equal to around 43 percent of the median income. Only Los Angeles surpasses MIA, with a 46.9 percent, while San Franciscans pay 40.7 percent and New Yorkers pay 39.7 percent.
Just imagine busting yourself Monday to Friday from nine to five to make a decent living, and then tossing just about half of your salary for housing.
San Francisco: A Flee to the Suburbs
A great example of a city where residents are being forced out into the suburbs is San Francisco, thanks to the growing tech industry. There have already been loads of protests against the skyrocketing rent prices, with residents blaming Google employees for “making” them move out of the area. What’s still amazing is that before all of this started, there were already rent laws in place to protect tenants against rising costs, but regardless, the average rent for a one-bedroom apartment continues to be $2,700. It’s time to go back to the drawing board, San Fran.
This issue has already also been addressed in France, where residents have been forced out of cities like Paris or Marseilles because of high rent prices due to exceeding demand from foreign investors. Plus, landlords are being risk averse and wary of leasing to anyone but the wealthy — I guess this fear of renting out to middle-class residents can be attributed to the last housing bubbling. This has turned cities like Paris into less of a French city and more of a touristic residence.
So, French politicians proposed rent laws that would protect both tenants and landlords. Landlords would benefit from getting a cap on the tax they pay on rental earnings. Tenants and landlords would also pay into a government-run insurance fund against unpaid rent. Also, if the tenant becomes unemployed or sick, they would receive rent relief (a system that is already in place). The Atlantic reports that rent prices have been decreasing and remaining stable since.
The US should take a cue from France. If these rent issues continue to go unaddressed, residents will continue to flood the suburbs for solace from high rent prices, leaving expensive apartments — and their landlords — sans-profit.
Statistically speaking, NYC is the city where tenants spend the least on rent, but let’s not forget that most people that live there have an income adjusted to the notorious inflation. The price of rent in NYC might actually have a bigger on impact on residents than rent has on people that live in Miami or San Francisco, considering that goods are much more expensive in Manhattan.
The Miami News Times recently addressed the current and future problems residents will face, explaining that “Demand from high-end renters and buyers, usually foreigners, is so strong in Miami that developers have little incentive to build apartment buildings that would be affordable to someone making the average income in Miami.”
In the end, if better rent laws are not implemented, many of us city dwellers will suffer the consequences. While living in the suburbs might be a solution, subsequent transportation costs can also become a heavy burden on people’s pay checks. We can always just let the market crash and let it fix itself, but no one want to go through all that pain again. In the mean time, luxury apartments continue to be built and grabbed up by the wealthy, making it almost impossible for middle class residents to find an affordable place to live.