I first thought about sort of theorizing what would be the next revolution (in the sense like the 1789 revolution, with a brutal change of political system, and a civil war style of situation), but it could be a full essay.
The recent videos I came across regarding the recent hike in rental prices in NYC and the fact that even 30yo’s with six figures salaries can’t even afford to rent anymore made me write this article. This situation is worldwide, whenever there is a big city, or an attracting capital where jobs and people want to be, the same issue comes up.
The situation in big cities
CNBC reported that the rental market is now out of control in NYC.
The median asking rent in Manhattan has risen to a ridiculous $4000 average. While tenant are asked to make about 40 times the rent when applying to an apartment, even the wealthy Y generation can no longer afford living in the center.
40 times seems crazy, but it’s almost the same in Paris, with agencies and landlords asking you to make at least 3 times the monthly rent per month, it makes 36 times in the end. And it was the same in Berlin when I was there. It’s the same in every big cities right now.
Making at least 3 times the rent means your rent is supposed to be no more than 1/3 of your income. It sounds pretty reasonable when you think about it. I understand why this rules was made at first, but it was made in a market where apartments where quite cheap probably.
Even in more remote cities like Wroclaw, Poland, it is now hard to find an affordable price. With 4.5 million Ukrainian refugees in the country, the demand is way higher than any time before, and with the Polish central fund rates who recently sky rocketed, all tenants like me have seen their rent increase by a mighty 30% the last few months.
Unlike France or Germany, and like most apartments in NYC, rent increase is not regulated, meaning landlord can charge as much as they think they can get on the open market. The other apartments are rent stabilised and more regulated, but those units are only rarely available today. But even in France, or NYC, this year the rent increase for rent stabilised units will be a lot more than usual, since in most cases it is aligned with inflation.
This year, the energy bills have and will continue to sky rocket
With the war in Ukraine, Europeans have been suffering the natural gaz cuts from Russia following economical sanctions. As of today, the electricity is already trading at almost €1600 in prevision of next winter… in comparison, for France, the price of electricity was trading around €85 last year, almost 20 times higher.
Energy bills is not something you can chose not to pay. Even with efforts on consumption, our digitalized life rely on electricity ( gosh the bangles song is in ly head now 😅); we will all end up paying probably a lot more than before for electricity and natural gas this year and the next ones. This expense which in some countries like Germany was already quite costly, will really become a big problem for households, and moreover for governments.
Salaries won’t follow the inflation except for a few lucky ones
While we already see signs of recession on the US market with crazy high inflation numbers, the same situation is slowly building up in Europe as well. France reported that more and more promoters have trouble to find buyers for their newly built apartments. As for the the US, it is usually a good indicator of an upcoming recession. While companies are still struggling worldwide to recruit, with a post covid situation marked by workers questioning their work conditions more than ever, recession will probably correct the market at some point, and it will probably hurt.
Indeed, I don’t think a work-market where companies are the one losing big is viable on the long run. I took a look at the offers on the market in France and rapidly figured out that about none of the companies who declared being in big needs of recruiting employees have increased salaries. They seem to be waiting for a better situation, where people will want to come work for them with the salary they want to offer.
Living costs and ways to correct the situation
The cost of living seems to be the big negative points crippling our generation and the next one. When you think about it, how come in 2022, our major preoccupation is still how to afford a roof on our heads. It almost feels likes it was easier in caveman ages, you would find a cave and make it yours, period.
My big guess is that we pay the fact that our generation does not vote as much as the older generations, and this leads us not to be the main focus of the state’s policies. It would be about time to take care of our fortunes in a democratic way, instead of a revolution or any violent outcome.