High-Life Rental Market
Wonkblog's Emily Badger takes a close look at an intriguing question: Over nearly the past decade, there has been a boom in the construction of multifamily buildings, so why does it seem to be harder and harder to find an affordable apartment, especially in some of the biggest U.S. cities where most of that construction has been taking place? Despite the number of new units built, the average price of rent in these new buildings has skyrocketed. "Last year in America," Badger writes, "the median asking rent for a newly built apartment was an astonishing $1,372 a month. That's about 50 percent more than the typical rent nationwide. It marked a dramatic rise from what brand-new apartments were renting for just a few years ago." So, why? Freshmen studying basic Adam Smith should be able to tell you that more supply should lead to lower prices. Is demand really up enough to counteract that economic push? In part, yes. The number of people renting has increased since the 2008 economic crash and stayed elevated. But more specifically, the number of people in the Top 10th of the income scale who are choosing to rent has gone up an astronomic 61 percent over the past decade. So there are lots of new buildings being built without public assistance that need to ask more in rent once completed to cover costs and turn a profit, and couple that with this vastly larger number of renters with means willing to fork over higher rents for shiny new digs, and Badger unravels the mystery. She has lots of other data and charts to support her assertions, so check out the full story.
Read the full story at The Washington Post.
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