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Comment by Spooky23 | Hacker News Reader

Fascinating, yet rents have increased faster than inflation even as rent control has waned in NYC.

The problem with citing studies from 1992 is that you’re missing the last 25 years of war inflation hidden through various schemes of quantitative easing and capitalization. We’ve made capital so easy to get everything is fungible and inflates as everyone from families to foreign rich people looking to exfiltrate cash from their country pumps dollars into real estate.

My parents recently passed and we sold their house in Queens for a ridiculous sum - representing a 8% CAGR. Most of that increase in value has been since 2000, and that’s driven by a surplus of capital looking for a return.

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The underlying cause of runaway asset price inflation is ZIRP and QE. Renters experience it as rent increases outpacing wage increases - this is socially destructive. But neither Mamdani (DSA) or Democrats or Republicans are willing to touch Federal Reserve QE.

Senator Schumer (D-NY) famously said in 2012 to Ben Bernanke (Federal Reserve Chair): 'Get To Work Mr. Chairman' - encouraging him to start Quantitative Easing 3 (QE3) - a program to digitally print $40billion and eventually $85billion per month of "money" and injecting it into the financial system.

Democrats want higher wages for workers instead of reducing the cost of living (rent, insurance, etc).

Which is a total exercise in futility.

The way you fix housing is by building new housing, and letting old housing become the affordable housing.

You can also build affordable housing directly. We powered the post war period with a huge supply of starter homes.

Other countries have also directly attacked homelessness by simply building enough public housing such that anyone who wants a roof over their head can have one regardless of their ability to pay for it.

No, it's a pretty bad idea.

We don't mandate car manufacturers to build affordable cars (although they are free to). People with lower income rely (or should rely) on the used car market. Those cars are naturally affordable.

Car manufacturers build high margin cars for people with the money, people with the money leave a trail of used cars in their wake, people without money for a new car buy those used ones.

That's a totally sensible and functional market. No mandates or compelled charity needed.

You don't have to mandate anything of landlords. Public housing is a thing.

There are very successful examples.

And on the car side, there's plenty of very cheap new options. I can literally lease a new EV for ~$100/month. Who's voluntarily building starter homes anymore? We built fleets of those in the 50s, without the song and dance that they were luxury and required time to turn into starter homes. If anything in a lot of places, the starter homes of the 50s are the relatively expensive housing of today.

We don't have "used apartments". Your metaphor falls apart here. And land is limited and government controlled. So GM can't just roll up and produce new houses out of an assembly line.

Land is limited, meanwhile we've built cars for a century and maybe the last 40 yeses worth of cars are street compliant. The only thing comoarable for cars is showing what abundance can do for a market. Less people care about a 2026 Camaro being affordable if you can buy a used '05 camaro for $3000 (which is probably still and absurd price, but hey. That's less than two months of rent in CA)

Generally speaking, legal requirements for elevated wages are another form of price fixing. The results of this price fixing are that fewer people will have jobs, the poorest people will be disenfranchised because it is not profitable to pay them a full salary, and the cost of everything in the city may very well be elevated due to more people willing/able to pay for the limited housing and other necessities. If you really want to help poor people, find a way to help them be more productive, and stop damaging the industries that get people the things they need.

You can see this in California with its mandated $20/hr fast food minimum wage. Restaurants responded by cutting workers or cutting hours.

https://www.nrn.com/quick-service/california-lost-16-000-res...

"It has been almost one year since California implemented a $20 minimum wage for quick-service restaurant workers, and industry experts have been debating the long-term effects the wage jump would have on the industry’s job market.

As it turns out, thus far, the 33.3% wage increase for fast-food workers in California has resulted in almost 16,000 job losses — a decline of 2.8% — across the limited-service food industry from September 2023 (when AB 1228 was signed into law) until September 2024, according to the latest Bureau of Labor Statistics data. Since the law went into effect in April, California’s limited-service restaurant industry has seen an employment rate decline of 2.5%."

Does that compare to other similar states over the same time? It hasn’t been a great year for restaurants anywhere afaik.

That article doesn't even attempt to analyze why those jobs were lost, and just parrots the "minimum wage is evil" talking points of a conservative think tank. Hard to take it seriously.

Yeah, clearly minimum wage increases is why every other sector is also hiring less and laying off more. I'd love to see that -2.5% statitic compared to the tech industry this year in the US (and industry where you'd scoff at the idea of working for $20/hr.

That’s not a very robust assessment. And even there, the 2.5% reduction is a nothingburger. A busy fast food has like 50 employees working 15-25 hours on average. That works out to a loss of 2-3 people. These stores have been doing that type of efficiency moves since day 1.

My cousins operate fast food stores, none in California. They are doing the same thing. Starbucks let the genie out of the bottle ~15 years ago with the app. Legacy fast food like McDonalds use apps to reduce labor with the incentives of high prices for counter sales and the perception of easier ordering.

I think that's a horrible analysis, in a time where all job sectors except healthcare is hiring less. A 2.5% decline sounds pretty good when compared to the rest of the job market. Especially in a high turnover market like fast food.

At this point we need both. If full time minimum wage can't afford an entry level studio apartments, then we're already in trouble.

For reference, that's $2100 or so of monthly take home pay for NYC's 16.50 minimum wage. Old wisdom would mean that this should make for $700 rental prices. But I'm sure few Gen Z are expecting rent to be 30% of income.

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