How An Algorithm Is Helping Drive Up Rent
Big landlords are using “YieldStar”, which finds the highest price a market can bear — leaving rents higher, and units emptier
Recently, Annie Lowrey wrote a good piece for The Atlantic noting just how bad rental housing is for Americans right now.
As she wrote, rent is eating an increasingly large share of people’s budgets:
Nationwide, the share of renters who are considered “burdened” — spending more than 30 percent of their income on rent and utilities — has climbed to 47 percent; one in four renters — about 11 million — spend more than half their income on shelter. Renters today spend about 10 more percentage points of their earnings more on housing than they did in the 1970s.
The problem, of course, is that there simply isn’t enough housing. Many American cities haven’t built anywhere near enough in recent decades. The reasons why? Manifold: NIMBYism, local regulations that prohibit dense housing, developers who can make more money on a single giant home than several smaller starter homes, and more. By the estimates of the experts Lowrey consults, the US needs anywhere from 3.8 million to 7 million more units, yowsa.
