In some regions there are people paying 50% or more of their income on rent and that arguably isn't sustainable in the long-run. Sooner or later they are going to have to face some serious decisions about what they want their life to be like and unfortunately not everyone can so easily pick up and move away long distance to another area.
Mind you, there are many cities around the world today which are facing the same cost of living crisis too. Where are they going to "escape" to?
One report has suggested that as many as 50% of renters in the United States are paying over 30% of their income on rent. Aside from rent people still need to pay for:
- car insurance/gas/car maintenance or public transportation costs
- a phone/internet
- food
- medical
- childcare
- unexpected expenses that might come up from time to time as well
Is there a limit to the rent prices that we are going to see in popular areas?
Is there an endless supply of wealthy renters who can afford insane prices no matter how high they go? Is it so absurd that it will eventually bring prices around $10,000 for a small studio bedroom in large cities for example, as the purchasing power continues to deteriorate? There are already many who are priced out of living alone and have to resort to living with family or with others because of those high prices. Many young adults have given up on the idea of ever owning a home and many young couples around the world aren't having children as a direct result of the high cost of living.
who will do the jobs?
For those who are working jobs that cannot afford to pay for average rent in the city they work in they could reach a point where they have to move far away and there won't be enough people in the immediate area who can do the low paying jobs. What then? Will more businesses be forced to close down who cannot turn to AI and robots to make up the staffing shortages?
failure of the market
The market should be able to bring about a wide variety of housing options to suit all needs, not everyone wants a mcmansion for millions of dollars. Why aren't we seeing more variety though? Could it be because there are countless rules and regulations surrounding the exchange and dictating what size homes can be or where they can be built/how they can be built/when they can be built etc, the extreme infringement in the market plays a direct role on supply and therefore on the prices we are eventually going to see show up in the market, how could it not? Given the state of things these days you could argue that they are doing a very poor job at delivering what is needed.
It also doesn't seem to be getting any better anytime soon. Will this mean more people turn to living in cars or camping in parks?
Safe clean housing shouldn't only be a luxury that is afforded to the rich. If we had more of a free market in this area perhaps we would see much better results instead of the expensive nonsensical mess that we see today.