Capitalism, alllowed to run amok, will ultimately result in monopolies. This is the natural order of things. A fish will eat itself to death, the discovery of oil or natural gas will bring direct foreign investment, and inflation as a result. Is gentrification the end result of a housing market?
Houses fill two main roles
- They give us a place to live, to take shelter from the rain and wind, to sleep, eat, store our things, and find privacy.
- They have financial value, like a car or any other significant investment.
This puts the owners of any urban dwelling in a conflict of interest situation. Housing is a businesss, not a fundamental human right. Homeless are like carless or Play Station 3 less. It’s the old fasioned way, if you can’t afford a thing, you do without. Except that homeless depress an entire neighborhood and usually means crime. But the division isn’t just between those who live indoors and those who don’t.
Like cars, buildings need maintenance. Roofs wear out from defending against storms and water. Electrical and plumbing standards change over time. Things wear out and need replacement. These reinvestments are passed on to the consumer (tennents in this case), when possible. When dealing with low rent populations, it is frequently impossible to get more in terms of rent, and in such sections of a city, anyone who can afford the increased rent won’t live. A neighborhood is in decline when houses go without these necessary improvements.
When the owner of a property lives in it, this tends not to happen. A person wanting to enjoy their home life has a strong incentive to follow the necessary upkeep. But “real estate” as a speculative investment means capitol flight – moving wealth from some areas to others. While places like Flynt, Michigan slowly die on the vine, niche areas in a city become trendy (like Valencia in San Francisco), people who can afford to (yuppies) move in, and rents rise as the market will bare more.
Some are reminded of the forced migration of Native American “Indians” across the land they once sparsely filled. The bottom rungs of the economy are often pushed from one area to another when they live in metropolises, as most Americans do. (USA Today disagrees.)