What's the Solution for Rising Rent Prices?

It shouldn’t be a surprise to learn that rent prices are still rising consistently, across many areas of the country. As of March, the cost of rent was, on average, 3.7 percent higher than it was last year (according to the Labor Department, as reported by Realtor.com). Average wages grew about 3.2 percent during the same period, meaning rent is growing faster than wages can keep up with it.

It’s estimated that there is currently a shortfall of 2.6 million housing units for Americans with low to moderate levels of income. Fast-growing urban areas are hit especially hard, with exceptionally high demand and faster-growing rent prices than wages.

So what’s the solution? If you’re left-leaning, you might suggest the development of rent control, regulating the amount of rent a landlord can charge or restricting how much rent can increase from year to year. However, there may be some inherent problems with this approach, and if we’re going to cultivate an economy where everyone can thrive, we need a more comprehensive solution.

Buying vs. Renting

First, let’s consider the fact that many people currently renting could feasibly afford to buy a house -- and in many cases, end up paying far less in a monthly mortgage payment than they’re currently paying for rent. The two inhibitory factors preventing more people from buying houses are an inability to be approved for a loan (due to a low credit score or bad credit history), and not being able to save enough for a down payment. The former issue is difficult to navigate, since banks do need some reassurance that their loans will be repaid. The latter issue is directly tied to rental prices;

Stop states and cities where sanctuary is a policy from allowing local property and other tax forms from getting diverted supporting intended services and civic projects maintenance and redirected toward supporting socialist handouts at the expense of its taxpayers.

I can think of the following contributing factors:

1) High Property taxes

2) Zoning Regulations and restrictions

3) Rent Control

4) Illegals concentrating on specific areas ( too many people chasing too few places to rent )

Wow, so different from you. My husband and I live on 165 acres, timber property and own 19 rentals, way too much work beginning to feel it now in our mid sixties.

The freedom of being independent, our own home that we can paint anyway we want, we can plant anything we want, and no one can evict us on a whim. We felt the same way with buying our own income producing property 19 years ago, we can be self sufficient not rely solely on SS checks that may not be available all our retirement lives.

Now the Oregon legislature and our Governor have taken control, they have now passed a law limiting what we can charge our tenants, how we can remove our tenants and how we screen our tenants. Becasue of that, the value has decreased, how much we do not know, I do know we won't be paying taxes in Oregon much longer!

“For sure if you are paying rent you aren’t building
up any equity nor getting any tax write offs.”

Just to add...

The deduction is nice, if you’ve already signed a mortgage, but getting $0.25 back for every dollar you pay in interest isn’t any great windfall.

Second, i believe most people have never added up the cost of annual property taxes, insurance, and maintenance - and compared investing that amount annually to any potential equity buildup. Often, there is no significant difference. Usually, it is more expensive to pay all that (and for most, a mortgage) than to rent.

Finally, a home is a use asset and not an investment.

All that said, we own our home, know the annual cost to keep it, don’t expect to make money by owning our home, and I know it would be better financially and less hassle to rent.

Our decision is not based on finances only, or we’d rent.

To each their own.

(1) millennials got screwed out of jobs in the great depression. The ones that got knocked off track had a permanent hit to their careers.

Hogwash. There are more jobs available today than at any time since 1969. Nobody got "screwed out" of anything.

(2) The jobs that do exist are in high COL metropolitan areas. In those areas, boomer NIMBYs have restricted zoning and therefore supply, raising rents and home prices.

There's some truth to that. But if house costs are high, so are rents. It makes more sense to spend the money to actually buy something than to buy it for someone else.

(3) Those same boomers voted to stop subsidizing education after going to college for free on the public’s tax dollars.

I don't know what boomers you're talking about. I had to take out student loans, and I paid back every cent. And when I went for a second degree, I paid for it all out of pocket. Unlike the millennials who waste thousands on useless degrees and bong parties, then insist the government forgive their debt.

The Headline poses a false premise.

Who says rising rent prices are a problem in need of a solution?

... says happy Landlord.

Kind of the same with me. I live in an inexpensive apartment. One of my two brothers recently divorced and sold his house which he planned on dying in and made huge renovations to. After his (now) Ex took half he had enough to pay his debt off. Now hes living in a 35’ camper-trailer. MY other brother has a good job but never has anything extra to spend because of his house and family expenses and he never seems to get caught up on yard work.

Me, I live in an inexpensive apartment, I’m single and life is nice and peaceful. I’m fine right where I’m at.

The solution is to increase the number of apartments. Simple supply and demand.

Put up more civilian barracks where many are turned into ghetto crime zones? Look at LA. One mans floor is another mans ceiling? They're a scourge on America.

Right.

Simply put, rising rents are the first signal of an upswing in the real estate cycle. Next comes that part of a boom wherein new units are built, existing units are updated/upgraded, unused office buildings/warehouses/factories are converted residential lofts, single family homes are converted to multi family, etc., etc., etc.

Good times ahead for RE.

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