The Landlord Paradox

So rent prices are soaring. That's both good and bad for me. Well, I guess it's good for me and bad for everyone else. Rents in my hometown have increased about 11% in the last year alone, which for a $1000/mo property, is a shiny new lease of $1,110. Great for landlords and horrible for renters.

The rental prices are getting so bad, a new report in my hometown shows that homelessness is increasing with rent prices -- people are basically getting priced out of their hometown and are having to hit the street.

One thing I don't understand about the rent markets right now is how they are working. How are housing prices going up so much that local jobs are not paying enough to live in a house in the town, yet there are people flooding the area with enough money to push others out?

I suppose, after all of my education, a hole has been revealed in my idiotic education. At a fundamental level, I don't understand how there is more money coming into a place to pay rents than is being produced in a place from wages? That is what we are facing, after all.

The rent prices in my hometown are being increased by demand, which means there is a glut of people who are willing to pay, but a shortage of places to house them. With vacancy rates so low, the housing industry should be exploding, yet the price of rent is just increasing. Where is this glut of people coming from and how are they paying these rents?

Clearly, I don't get it. I would love to have it explained. Are there people out there with enough money in the bank to throw it away on rent? Are these newcomers somehow better suited to higher paying jobs, elsewhere than the town itself (commuters)? Are they better at managing money and living slim with high rents and mediocre wages?

My current theory is that there are numerous people moving in with external help. These groups come from families with money, or from other places where wages were very high (e.g., California, Texas, or New York-like places), and living costs were low, relative to income.

Now, another theory is the trust fund. Which is an ugly and dicey subject. Nobody in their right mind would refuse the bounty of a room full of money, like Harry Potter's parents left him. These people can become the layperson's hero, because they have the time, risk-capacity, and privilege to do anything they like without risking food, housing, and health security.

Must be nice, but if the theory is correct, even in a more general form that does not include a trust fund and instead includes bottomless, limitless parental assistance, we still have a problem.

And when I say, "we" have a problem, I mean, those of use without this kind of help. For those without this kind of help, risks can't be taken, shifts in the rental market can become weaponized against our sources of security, and we can get pushed out of our lifetime home spaces.

So few people must have this kind of assistance, but I wonder what it does to rental markets; Are there enough people out there with financial assistance that rent markets could be artificially ballooned in relation to local income potentials?

Whether trust-funders, parental-supporters, or just a different kind of earner, the rental markets in my home area are so screwed up, even as a landlord, I cannot reconcile the disparities. How am I supposed to offer fair and reasonable rents when my personal income is no longer big enough to even rent my own house?

There's an interesting thought: A landlord who leases a property that the landlord can no longer afford to rent. I am that landlord. And it boggles my mind. The housing system appears to be in a state of volatility that isn't sustainable.

"Sustainable" is an interesting word to use in this context. I'm talking about a market where the median income can afford the median house. I'm talking about the median job paying a median income to buy the median house. When we're at the point where rent is higher than jobs are paying, we're talking about a market that is no longer in harmony.