Unintended consequences bite many of us in the behind.
Forgive me. I’m going to risk a political observation. This isn’t about right or wrong, better or worse. It’s an observation.
Most coastal states and many of the major cities in those coastal states have Democratic governors and mayors. Democrats tend to try to soften the inconveniences for the poor. They suggest that the more affluent should “pay their fair share”. Affluent taxpayers usually define “their fair share” as a lower figure. Hopefully, I’m not in trouble yet.
The coastal states also tend to have a disproportionate number of not in my backyard “NIMBY” policies. One effect of those policies turns out to be a shortage of rental housing.
Would you guess that most renters are Democrats or Republicans? I’m guessing Democrats.
Would you guess that most rental owners are Democrats or Republicans? I’m guessing Republicans.
My perception is Democratic governors and mayors oversee policies which indirectly cause rents to increase faster in coastal states. That happens because of restricted supply and greater demand. So, Democratic polices are enriching Republican rental owners, while Democratic tenants are paying relatively higher rents.
Consider “the flyover states,” like where I spent my youth. In about 35 states, there are relatively fewer restrictions and costs associated with building apartments. The heartland builds enough rentals for lower income working families.
The state of California has four times the population of the city of Houston. Yet Houston has built more apartments and condos in the last decade than the entire state of California. Rents in California are relatively high. California apartments are expensive. Rents and apartment values in Houston are relatively cheap.
It seems as if NIMBY policies have enriched Republican rental owners while Democratic tenants are paying more in coastal Democratic states. Meanwhile, in the heartland, rental ownership is not a quick way to wealth and Democratic tenants pay relatively lower share of their income for housing.
This is not a call to action. It is a reflection on what I think is true. It’s also not a political position. It’s a reflection on unintended consequences.
Many of our choices have unintended consequences. Our governors and mayors didn’t plan to have these effects on rents. Choosing well is difficult. May your choices make this year your best so far.
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.”