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Originally Posted by 4691mls
It depends on the cost of living. If someone lives in an area with a high cost of living and expensive housing (New York City, San Francisco, etc.) that money might not go very far.
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I live in NYC. Housing costs vary by location. I'm in the borough of Manhattan, where housing costs are astronomical. Manhattan is an island where the scarce resource is land, and things grew up rather than out. I can afford to live here because of historical quirks. NYC has Rent Control and Rent Stabilization which are outgrowths of policies originating in WWII to try to keep housing affordable. My place is rent stabilized, and my rent has gone up a total of 6% over several
decades. (I think I am paying about 1/4 market value or less for the space I occupy.) A new luxury condo opened across the street from me a few years back, and the listed price on the demonstrator unit was $2.5 million. I think some units were rather more expensive.
I've heard stories of places under Rent Control whose rent remains what it was in the 40's, and have been continuously occupied by families through several generations because as long as they are continuously occupied by the family the rent doesn't change.
And there were horror stories back when about landlords of rent stabilized buildings hiring goon squads to force tenants to leave buildings because the only time they could
raise the rent was when there was a change in occupancy. No surprise, really. The City of New York owns an assortment of housing, and the City released figures a while back indicating it cost more to provide upkeep and maintenance on their buildings they owned than they were legally allowed to charge for rent on the properties. The landlords resorting to terror tactics had properties that were losing money and that they couldn't sell because no one would buy them when they would still be under Rent Stabilization. I think some properties were simply abandoned by the owners.
And there were grimly amusing bits, like the New York Times and the Village Voice having to put guards on their press rooms because people were breaking in to get advance looks at new apartment listings. New construction wasn't occurring due to the distortion in the market (what incentive did anyone have to build it when they might not be able to charge market rates?) and you found out about a place because you knew someone (and did things like get tight with building doormen to get tipped off about when someone was leaving and their place would come on the market.)
Politically motivated attempts to make things more equitable by interfering in the markets tend to end badly, but that doesn't stop the politicians. They get votes now. What happens later is someone else's problem...
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Dennis