Quote (Black XistenZ @ Apr 26 2019 06:16pm)
Seriously: when everyone suddenly has $1k in additional income per month, what's stopping landlords in sought-after cities/districts from raising every rent by $1k at the next opportunity?
This might be a bit of a simplistic description, but the problem should be clear anyway: how do we prevent this additional income from immediately being redistributed in large parts from renters to landlords?
That's just another example for the more general point I made pages ago: increasing the purchasing power of every citizen by the equivalent of 1000 (present-day) dollars is highly nontrivial, and handing everyone $1k will absolutely definitely not be enough to achieve this goal.
You're overlooking simple supply and demand here. Nothing should stop them from doing so, but if some landlords increase rent by $1k they wouldn't get any takers. If the rental market becomes more expensive it becomes relatively cheaper for people to buy new build homes and presents a greater incentive for building merchants to increase supply. In addition, there is plenty of land to build on in the US so the barriers to entry are very low excluding the major cities, which helps to ensure competitive pricing in the market.
Rent payments make up less than 40% of disposal income expenditure and there is no evidence consumers would spend their further disposable income solely on property. I'd argue that the more likely result of increasing personal wealth is switching from expensive renting accommodation to more manageable, fixed rate mortgages.
I'd be more worried about inflationary pressure on healthcare and energy.