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this post was submitted on 29 Jan 2024
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Popular opinion is that if you give people free money they will use it on what enriches their lives.
Economists would probably just point out the fact that whenever you subsidize something the thing you're trying to make easier is suddenly even more expensive to the point where there's hardly a discount if one even exists.
Look at the cash for clunkers program. At the end of that car dealerships were raking in huge profits.
In this case if you give someone a thousand bucks a month, odds are landlords will pocket the majority of that, because housing is the biggest cost for everybody who is not already an owner. If everyone has 1000/mo more, they can suddenly afford 1000/more on housing. This may make minimal impact in areas with extremely high COL, but all the associated suburbs, rough parts of town, college areas... yeah those rents are gonna go way up.
example: 4BR apartment? Oh... I guess that's another +$3500/mo... after all all four of you are getting that money for free. New price: $7000/mo. It's only 1750/mo, or 750 per person per month because the government (our tax dollars) is paying that poor, poor landlord. How ever would they survive elsewise?
That was an intended effect, as they were all facing enormous deficits in the wake of the '08 housing/car-note crash. Cash-for-Clunkers was supposed to be a back door bailout of dealerships in exchange for moving high emissions vehicles off the market.
In theory, we live in a large and competitive housing market, such that people with excess cash can change landlords in pursuit of lower prices.
In practice, what we end up with is a handful of cartelized renters all setting a clearing price for the last vacant unit at slightly above what the median renter can pay. This traps people in existing leases, because they can't find a better deal anywhere else in the city.
This has nothing to do with the cash distribution program and everything to do with the functional monopoly on housing owned by a handful of mega-landlords.
Hot take: the dealership system is just a useless middleman system that should have been dismantled long ago as the "only way" to buy a car.
Boston will never have enough supply to meet demand. This is the one example I know very well, there are countless others. A thousand bucks a month in podunk land is enough to rent something entirely and that will 100% be exploited by landlords, after all it's free money for doing nothing.
Nonsense. Dealers make up a critical localized component of the US automotive feudal system. They are the local barons who form the political foundation of the automotive industry. They vet (and occasionally are) candidate for local and state office, based on support for the industry. They gobble up enormous amounts of real prime real estate all along the interstate system, raising property values for everyone else. They spend a fortune on advertising, which is central to the function of professional sports and news media. They bankroll mega-churches and private schools and strip clubs. They employee a host of middle-managers and salespeople who comprise the substrata of the moneyed class.
And, of course, they provide the singular status symbol for the American consumer outside of one's home. That affords them enormous clout, simply as the folks who will always have the nicest vehicles in town. It also makes them power brokers of a sort, as they get to decide who takes home the nicest ride and at what price.
They are an irreplaceable symbol of prestige and influence. If car dealership owners did not exist, we would have to invent them.
If China can meet the demand for housing, I'm confident Boston can find a way through.
But that would require... idk, civil engineering and city planning and a political class with a vested long term stake in the city. Yes, we could have dense multi-family homes connected by mass transit corridors to city centers and schools and shopping districts and industrial sites.
But why do that when we could just let it be someone else's problem?
China is... huge... There will still be places with housing shortages alongside places where tons of buildings will sit empty. Still a very different scope and problem there vs here.
Either way though in the US there doesn't seem to be any sign of an oversupply problem coming in my lifetime (another 40 years if i'm lucky.)
The Chinese solution to housing shortages is to restrict (legal/official) migration between districts when housing isn't available. This has its own basket of problems. But in the end, China has (on paper, at least) solved homelessness through guaranteed residency and even home ownership. Folks who are homeless in China are most commonly rural vagrants who technically have homes back in their native districts and simply do not want to live there anymore. They are not people who have nowhere to live, because the Chinese economy has been enormously efficient at constructing dense housing stock nationwide.
By contrast, the US housing system has a surplus of housing that is entirely bound up in the speculative asset market. We have over half a million people with no legal home to reside and millions more who are living in RVs or shelters or other functionally temporary housing. Tens of millions more are renters, entirely exposed to the whims of the short-term tenant's markets, and potentially homeless in the next big wave of rental increases.
The US oversupply is largely bound up in areas of the country where industry has collapsed or social services have failed. You can find plenty of cheap housing in Flint, MI for instance. You just won't have public schools or drive-able roads or tap water you feel safe drinking.
Greetings from the average American family 20 minutes in your future:
Rents have gotten so expensive now that national bidding companies have arisen to address the crisis. Now renters can decide their own prices by bid-scoring on property and rental housing. Average monetary bid on housing in Austin is $5000 for a bachelor's pad but the money is only part of the bid-score. It also includes the usual credit rating and income reporting, but also your social media connections, the stability of your job (calculated by opaque market analysis firms), letters of recommendation from your employer, friends and family, and your overall "social credit" score (how many people give you 5-stars on every day interactions?).
This actually turned out to be an incredible democratization of housing! Landlords no longer control rents! We now have 1.2 million homeless in America but hey that's their faults for being poor, working jobs vulnerable to automation and offshoring, and especially the shut-ins, glad to see we're flushing them out and forcing them to socialize and be popular, or get thrown into the streets!
I love this country!
Chapter 1 from "Not Your Parents' Dystopia", coming to your reality soon!
If you could put up $5k for a permanent address in an apartment complex and all you had to do was stay the fuck off social media so as not to embarrass yourself, do you really think that would be... dystopian? All the rest of that stuff already factors into getting an apartment spot. I needed a referral for my first apartment and proof of a steady job and a good "credit score" accrued through regular credit card payments. I consider an enormous monetary incentive to steer clear of flame wars on Facebook more of a fringe benefit than a nightmare.
The dystopian horror I see coming is is if you have no social media, you have no online reputation to boost your standing / social credit score. The landlord sees you as anti-social and will dock your rental bid score bigly for that. After all you might be anti-social and that Karen/Daren landlord doesn't want that! (Yes, asshole dirtbag logic in general is endemic to Capitalism.)
The 2nd dial-to-11 factor of my prediction is not that you need a steady job - it's that if (for instance) you work as a screenwriter with 10 years of rock solid employment, you just took a huge hit to your "rental bid score" because in this dystopian scenario the landlord's arbitrary algorithm has decided that automation/AI is threatening to make your job redundant in the near future (whether or not this is true). Plus said algorithm is opaque and unknowable so you will have no idea why it rejected you.... kinda like job applicants of today.
Also today you need one or two referrals from your landlords and maybe also a family member. In the dystopian future I see coming, the more friends and bosses and such that you have to vouch for you, the higher your rental bid score will be. References from two landlords and a family member are trumped by refs from 3 landlords, your coworkers, your boss, and your family.
Overall? What I see coming is landlords will use unaccountable algorithms which want to know every tiny thing about you and they will tweak that algorithm in unknowable ways to judge your fitness as a renter using 29 (or more) additional dimensions than they do now. Most of the time they'll use it to sell your personal information and have no intent of renting the place out at all. We're sliding in that general direction now with rental scams driven by the actual landlords. Plus on top of that there absolutely will be a brutally insidious "set your own rental price" encouraging rental applicants to bid to the moon.
I expect most who read this to say this is out of this world sci-fi overexaggeration. Our grandkids will call it reality. Rental bidding is already here on a small scale. The thin end of the wedge is already in the door.
Given the state of modern social media and the slap dash approach that most landlords take in accrediting future tenants, I don't see how this is meaningfully different from a back office that runs your regular old credit score and rejects your application because you don't have enough debt to your name.
Like, that's the real modern-day standing. Do you use your credit card? Do you have student loans? Do you have a car note? Can you pay them on time? Everything outside of that (possibly with the exception of "Does your race/religion/sexuality/appearance upset my high rollers?") is unimportant.
I think this is presuming a heavily overengineered model that fixates on things other than "How high can I raise your rent right now?" So long as eviction laws are loose enough, there are plenty of landlords who will find ways to make money by simply withholding your deposits and evicting you on short notice. What's more, there's been a growing trend of predator application processes, wherein landlords charge a vig to even consider you for their residence and make money keeping spots open indefinitely as bait.
In that sense, it doesn't matter who you are or what your future prospects are. All the landlord cares about is how much you can be milked for right now.
I think it overstates how these businesses plan ahead and underweights how much they'll try to stick a prospective tenant right up front.
If we want to get really sci-fi horror, I more see a future in which landlords find a way of sticking tenants with fees and collections long after that person has left the unit. Also, the increased slum-ification of existing housing, as big corporate landlords cut further and further back on maintenance.
"Living in the pods" is the real sci-fi nightmare. Paying thousands a month to effectively lease a bunk in a contract that affords a landlord direct access to all your incomes and assets indefinitely. That's the horror story I'm more worried about than anything.
Oh yeah there is definitely that, too.
Not sure I see a path to fees and collections after a person has left their rental, but I 150% believe that they can and will do their best to find a way.
I do absolutely agree with the right-now horror stories that you're bringing up. Those are already in our face. Particularly the 200 sq ft apartment. In Hong Kong they have workers living/renting in literal rabbit hutches.
Still, I believe the Dark Mirror-style social credit score will come into existence. They've already tried it in America, it was called "Peeple" and it failed. For now. Meanwhile, across the Pacific:
https://www.forbes.com/sites/bernardmarr/2019/01/21/chinese-social-credit-score-utopian-big-data-bliss-or-black-mirror-on-steroids/#:~:text=If%20an%20individual%20has%20a,tickets%20or%20renting%20an%20apartment.
A social credit score affecting your ability to rent an apartment. This is the nightmare I described. It's happening right now at this moment in China.
We can't ever say "that can't happen here" when it's already happening elsewhere. We have to be vigilant. What's going on in China is a Beta rollout. When it gets here it'll be smoothed out and optimized for maximum suffering.
The same way you'd assign fees and collections from a credit card or an auto loan or a mortgage you'd defaulted on.
Do you mean "Black Mirror" per the episode "Nosedive"? You can read that as the horrors of a social credit system, but I primarily see it as a critique of the class system with social credit as a layer of abstraction that allows it to persist. Keeping the "wrong kind of people" out of your neighborhood isn't something we invented in the last ten years. We've had redlining and sundown towns for centuries.
Re: Forbes
They've been running this same article for 20 years. Even setting aside that it largely neglects how these systems work in practice abroad, the real horror of the story is in enforced artificial scarcity for the purpose of inflating profits. And that's something tied up far tighter in the Western economic system than in East Asia, because Western economics is driven by financialization and artificial scarcity.
Its merely an alternative to the existing US model of financial credit. The "nightmare" is only real for people who enjoy high levels of disposable income/high credit but low levels of social status. And, given how social status is already a critical component of one's economic standing, this just isn't a large number of people.
For lay citizens, its the same gray miasma of western economic credit. A host of opaque figures and metrics that are intended to force you into a queue behind your superiors.
Past that, the far bigger issue you have is in whether your economy prioritizes housing as a place to live or housing as a place to speculatively invest. In the case of China - and the recent collapse of Evergrande is a great data point on this - the answer from the state government is that Houses Are For Living In. For all the paranoia of social credit, the real root of the problem in the Chinese economy was a multi-billion dollar real estate speculator consuming valuable property for the purpose of generating profit rather than generating new housing units.
When you transplant this into the American Economy, the real fear manifests as a speculative market bubble around housing, wherein people are justified as homeless despite ample amounts of excess housing entirely due to their social credit score rather than by their economic status. Given an already expanding US homeless population, I get how this is terrifying. But the solution in the US is to organize with your fellow tenants and resist commodification of empty homes, not to crying into the void about how people are downgrading your credit based on your Facebook profile.
Are you sure it's only real for high-income/low social status people? Even if so it won't stay that way. The main goal of dystopian politics in America is to cull the herd of demand when supply is low or when supply is artificially suppressed (like with housing). Got too many people with money and great credit pursuing homes with houses going up to a godzillion per square foot in the outback of Montana? Pinch the pipeline before or after they show good credit and money: add more barriers to entry with Facebook scanning. Let the algorithms look for things like "labor union" or "climate change is real" to weed them out, and disqualify anyone with no Facebook, and make sure no one knows this algorithm exists, just say "Sorry, you got outbid," Hell, don't even CALL it a social credit system. Let the conspiracy theorists battle each other over what's going on.
(Yes, I am a Supervillain University Professor. See my course on how to laugh maniacally and be taken seriously.)
I'd further calibrate what you said to this: the solution in the US is to organize with your fellow Americans at large and vote for politicians who will stop the commodification of empty homes before the powers that be start downgrading your standing as a prospective home buyer based on your Facebook profile.
Its functionally inconsequential for normies. These kinds of laws can impact the modern day Influencers and other celebrities, media heads, and mid-tier politicians, when they try to access high end luxury accommodations. And that's why you're seeing so much consternation about Chinese Social Credit from folks at the WSJ or on some Hollywood Social Media channel. They know they have to travel to China from time to time for promotions and they don't want to be stuck at the Hotel 6 Legs or waiting in line for the Chinese-equivalent of the Greyhound, because Beijing has them flagged as "Legally A Bunch of Assholes".
But for the folks who are already in the proletariat class, this doesn't matter because they're not doing anything important enough to get themselves dinged. They're already shopping Target and living in the Basic Housing Unit and working the Standard Job. That's the baseline. And they aren't commanding these enormous audiences or drawing in these vast revenue streams through which they might be denied privileges of their advanced fame and wealth.
What really matters is that basic standard of living. If its high - if you're retiring at the age of 54 and living in cozy low-rent apartment blocks with your SO and your dog and your 2.3 kids - then "low social credit" is of marginal worry. But if its low - if you're barely affording a slum while working two jobs as a bachelor who never gets laid - then "low social credit" is the nightmare Westerners can't abide.
Again, all of this is already a reality for the folks who don't have a good credit score because they don't have good jobs or a pile of surplus cash. You don't need to be a conspiracy theorist to know that poverty exists.
At least in my home state of Texas, the political system is ITSELF a consequence of the credit system. You need money to campaign and run. You need "social credit" to get free media exposure and positive coverage from "neutral" venues. The folks on offer to vote for are the folks with "good social credit". They've already been vetted and have chosen to toe the line on Labor Unions and Climate Change. They're the ones who survived the weeding.
So by all means, organize. But don't expect the guys who survived their primaries to save you. Even if your guy wins, whether they're in the Tea Party or the Squad, their higher status simply exposes them to a more brutal and draconian form of social enforcement. The voting doesn't matter if you're not out on the picket lines and in the street in their defense when the political and private leadership class cracks the whips.
That's a very convenient "fact" to point out if you want to eliminate all assistance for people who are struggling.
Now explain how corn subsidies had no effect on corn prices and definitely didn't result in everything being full of corn syrup.
Next explain how basic income is a subsidy.
It's not and he's wrong. UBI will definitely cause some inflation when people spend the money, but the money will come from somewhere (probably wealthier people or corporations). So that taxation will reduce inflation at the same time.
If the money came from a tax on rental income, it would not hurt renters. It would probably just be a circle: where owners are taxed and the money goes to renters, who then spend it on rent. It may help people buy houses because they now have free money regardless of whether they spend it on rent.
I NEVER mentioned this. I in NO WAY advocate for removing assistance for people. I 100% believe we need to look at the effects of something and tweak it to avoid people taking advantage of the system. The poors aren't taking advantage of it, the ownership class IS. They ALWAYS do. and we cannot stand for that any longer.
I would rather fully rework the landlord slave-ownership system we have today and make it so all payments into housing give you a share of ownership. Same deal with work - you work for a company and you get a share of ownership. 30 years of rent and you own your apartment. Live there for 5 years? You now own 1/6th of the apartment. One year? 1/30th. Let's really FUCK the "investment property" wealth.
Make it so whoever works at a business shares ownership equally based on hours worked there. Make it so no human can get more than 80 hours of ownership shares a week, or something like that. There is obviously a lot more thought involved in having a system like this where people are no longer just "workers" but partial owners **
Economists would not say that. There's a lot of cases of subsidized products not inflating. Generally for that kind of inflation to happen you would need a monopoly or similarly non competitive market to allow such rent seeking. (In the economic sense, not the housing sense)