Our world has changed significantly. It is not like it was even sixty years ago. Especially when it comes to economy. People are used to think that the United States have quite a high level of living standards, especially comparing to Central and Easters European countries. Recent crises, collapses and ongoing conflicts have great impact on the economy, which is thought to be one of the strongest in the world and the modern generation, which is referred to as millennials is to face the changes. They, actually, already face them in their everyday life.
The problem is as follows – in last decades the level of well-being has dramatically decreased. Prices get higher up, while salaries tend to become lower. So it leads to housing costs. The housing costs are highest where the job market is the strongest and it is nearly universal with few exceptions like Houston. Sounds like a vicious circle. The point is that millennials tend to move from towns to cities. It causes the influx of workforce but it does not solve all other issues. The main problem for them is the lack of well-payed jobs and adequate salaries. According to a recent analysis millennials pay from 33 per cent up to 54 per cent of their income on rent. Of course the numbers co-relate with the state they live in, but in general they pay more than an average renter does. The solution is clear and simple – share the rent with someone to save money. By now it has become a trend to have a roomie. Such a decision has positive impact on income as, in average, it allows to save some thirteen per cent. In Miami the number is even higher – having a roommate lets you save up to nineteen per cent. All in all, it gives an opportunity to pay less than thirty per cent of income on rent, what is considered to be pretty adequate expense nowadays. Some time before thirty per cent was the maximum people were supposed to pay, while now the average is up to forty per cent, in some places like San Francisco it can even reach unbelievable numbers like seventy per cent.
One may actually ask: “why is accommodation so expensive?”. The answer is pretty clear – there is not enough free property to buy or at least to rent. It fosters competition on the market which, as the result, leads to higher prices. And the fact is that the situation is not going to change any time soon nor in the near future. Some people though consider such a situation to be positive as it helps to establish strong social bonds and close friendships. For other it is positive from the perspective of flexibility – when you rent a flat or an apartment you are not bound to one place and if there is a need you can easily pick up the stuff and move where-ever you want. At the same time conservative people seek opportunities to buy property rather than spend money on rent.
References:
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- Colburn, G. and R. Allen. “Rent Burden And The Great Recession In The USA”. Urban Studies (2016): n. pag. Web.
- Cornette, Fanny. “Contemporary Housing Issues In A Globalized World”. Housing Studies30.6 (2015): 988-990. Web.
- Kim, Yong. “Accounting For Housing Rent-Price Ratios, 1975-2004”. SSRN Electronic Journaln. pag. Web.
- McFarlane, Alastair. “Rent Stabilization And The Long-Run Supply Of Housing”. SSRN Electronic Journal n. pag. Web.
- Priemus, Hugo. “Rent Tax And Filtering Charge”. Housing Studies 7.2 (1992): 112-118. Web.
- Ptacek, Frank. “Updating The Rent Sample For The CPI Housing Survey”. Monthly Labor Review (2013): n. pag. Web.