Pricing housing as a function of income.

Rule of thumb for the RERL (Real estate and rental and leasing) sector is that rents, including mortgage payments, compute to 30 percent of a household's monthly income.

Two other businesses, one of which overlaps the RERL sector, price payments as a function of a payer's income. The first is extortion, the signature criminal enterprise of a mafia. Thugs approach a target, threaten violence, and demand a periodic payment of a percentage of the target's income to prevent it.

The second is for-profit banking, which is one step above extortion because a bank provides a loan in exchange for future payments. Note, however, that banking in the first and fourth fastest growing economies in the world by Purchasing Power Parity (PPP), namely China and Russia, is managed as a public utility, not as for-profit private enterprises. Central banks in the public banking model extend loans to finance R&D, plant and equipment, and labour to produce new technologies, manufacture value-added products, and build public infrastructure, not to inflate financial asset prices like house prices and apartment unit rents.

There is no inherent physical property of housing that requires it to be priced by a holder at 30 percent of an occupant's income rather than as a function of what it costs to build and maintain it. The 30-percent convention has its roots in the warlordism and serfdom that emerged from the Dark Ages after the fall of the Roman Empire, an event which itself resulted from a creditor class using oligarchic power to strip a civilization of its economic vitality from within.

This is precisely what is occurring across the neoliberal West as its economies devolve further into derivatives casinos fueled by a speculator class extracting the surplus of an ever-dwindling productive economy to inflate financial asset prices, not least house prices and apartment unit rents.