RE: Our Homeless Experience Part 4: Bureaucratic Meddling.
You're in Duluth- you tell me if that is Market Rate.
It comes out to $2.23 a sq ft. In Chicago's North Suburbs- a Nice Area- you could get a place for $1 sq ft easy. In some decent areas of the City of Chicago itself- you could get 500 sq ft apartment- clean apartment for $1.70 sq ft .... This was prices as of last year 2017. So how in the world can Duluth rents be higher than Chicago?
The bull started with the cost of $60K to build and continued with the exaggerated Rent. It seems to me if it Really were intended to actuaclly help the working homeless- the MAXIMUM RENT would have been planned & calculated BEFORE it was built- by taking into account- the local economy & what the lower end jobs pay in the area.
I'm guessing any REAL Plan- would have had the Maximum Rent planned to be a MAX of $450 month. I mean the ABSOLUTE HIGHEST MAXIMUM RENT of $450- which isn't really any favor to the homeless for such a tiny place.
If people are willing to pay such a rent, it's by definition the market rate.
Keep in mind that the indoors living area is just one point of measure, there are other factors also. If you measure the rent price as "dollars per bathrooms" or "dollars per square meters of garden", "dollars per parking place", then maybe the $750 price tag is cheap compared to Chicago standards?
Here are some ways local governments can try to tackle homelessness:
I think that you can't fool the market. Central price control (which has been tried many places in the world, to tackle the problem with "greedy property owners taking too much rent") is really the worst thing one can do - by introducing price controls, one is efficiently making a black market for renting (variants of this has been seen in Sweden, house-renters paying the agreed-on rate, but in addition promising gifts or services if they get to rent) and also one is disincentivizing people from renting out - hence reducing the amount of property for rent, and only making things only worse for the homeless.
Having the municipality to build houses and renting them out cheaper than market price is also a way to try to cheat the market. One may end up with a black market for people forwarding their rent contracts to others, and one will surely end up with two classes of homeless people - those being lucky enough to rent a discounted house, and those not getting this support from the government, simply because there are too few houses (I saw this as a student - there were student dormitories rented out to students, at a discounted price - but of course not enough of them - every year the dormitories would be allocated to students through a raffle - basically government subsidies given away through a raffle, how fair isn't that?)
I believe it's also important to incentivize people to rent out - i.e. through tax breaks, and I think the dutch squatting regulation is cool as well.