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the myth of supply based economics, and other fairytales.
Realistically there is no reason for produce or rent to be increasing in price, there is not any actual reason for the hikes in COL other than "record profits"
There absolutely is. You think farmers don't have expenses? At the very least they need to pay employees wage increases to match inflation.
Rent is a different thing entirely and it's based on what people are willing to pay to live in that area. You can't charge a California rent in Ohio (unless you're selling a penthouse apartment) because nobody will pay it.
More quitter talk and apathy just like the other comment of yours I bumped into.
Fact of the matter is, if every 25% of people that normally bought X product stopped and got something else, that brand would drop prices. You can't make record profits off a 10% price hike if 25% of your sales just vanished.
There are so many people here ignorant to the basic principals of supply and demand. It’s starting to scare me how willful the ignorance is.
supply and demand is econ 101, and in econ 102 you learn that econ 101 is about as predictive as Nostradamus
yet the cost to produce hasn't gone up in any meaningful metric, and is nowhere even close to the price increase we saw in grocery goods.
rent isn't much different, there is no shortage of rent, and the (evil leftist word that means you need a house and food to live) Material conditions are the main reason why companies jack p these prices, you can't just not have a house and not have food
and pointing out that supply side economics in practice has just lead to an oligopoly increased cost of living, an increasing wealth gap, and a new class of super rich that make the fucking Rockefeller look poor. And the theoretical side is literally fairy tale beliefs that make revolutionary communists seem grounded with reality
Rent is increasing because there are millions more people but we haven't built enough housing since the 60s. The US is now 5million houses short, and this shortage is entirely caused by cities preventing construction of everything but single family homes.
"No reason for rent to be increasing"
What a bullshit statement.
I feel like I also hear that we have a ton of homelessness despite lots of vacant homes, where can I learn more about the nuance of this?
This is specifically about Australia, but essentially all 3 parts of this piece (and related linked essays) sum up how to solve the housing crisis worldwide.
https://theemergentcity.substack.com/p/how-to-solve-housing-unaffordability
Boils down to:
1: change zoning laws to allow more multifamily construction
2: remove incentives for homeownership and generally disincentivize single family homes
3: build for density in ways that reinforce and support density
If you want more info, basically every mainstream economist in the world agrees this is the solution, and that this is a manufactured problem. It's a result of regulatory capture by homeowners, essentially. There are many, many papers about it.
Here's an easily-digestible article
https://www.businessinsider.com/economist-how-to-fix-america-housing-crisis-rural-cities-2022-10
And a well-cited study in an economic journal:
https://sites.lsa.umich.edu/mje/2022/12/30/the-economics-of-the-housing-shortage/
All these sources agree, because this is the solution. Realistically, the only bad solutions are subsidizing more demand via things like rent control - these will only make our problems worse, kind of like how adding more lanes to a highway doesn't fix traffic.
Our city did this and it hasn't helped at all, because banks won't finance it. No minimum parking, no height limit, no maximum FAR, no maximum unit count.
yeah get rid of these next and you're set.
It's gonna take a lot of work, man. The regulatory capture here is extreme.
Everyone wants to point to capitalism for this, but this is what happens when you kneecap any economic system. That's why it's all over the world.
That's what I'm saying though, we got rid of those regulations, and it still doesn't matter. Banks want parking. Banks limit height. Banks limit unit counts. Developers routinely propose some pretty decent housing products, where they've run the numbers and they work, then go to get it financed and it very rapidly gets cut in half and turned to shit.
The only solution is for the city to finance and build themselves.
Cool. I'm down with that.
It'll never happen, even if there was the will to do it the city doesn't have the money (or the tax base to bring in that kind of money).
What city is that?
SUPER high level, and slightly biased explanation: corporate home buying.
Large investment firms like buying up property increasing the demand and raising prices. This prices normal people out of being able to afford a house. It also raises other housing related costs like rent, because these firms want to make a profit. This in turn prices people out of being able to afford ANY housing.
When we're just numbers on a spreadsheet, there is a certain level of vacancy and homelessness, that maximizes profits.
So I work in a field closely related to this, and the issue is less cities and more banks. The regulations in my city are basically: "if it's housing, no regulations". No minimum parking, no maximum density, no height limit, etc etc. But the banks? Won't finance over ~22 stories. Or over ~200 units. Or parked less than 2:1. So we end up with only these short towers that are 50% parking podiums, where units are expensive AF because they have to pay for $100,000+ of parking per unit, not to mention the astronomical land prices being less diluted.
The only solution is for the city itself to start financing construction (and realistically doing the development themselves too), but that's never going to happen.
Cities should def be funding more public housing.