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To: BGR who wrote (38449)	6/7/2000 12:16:00 PM
From: LLCF	Read Replies (1) \| Respond to of 42523

<1) Those who lease (for whatever reason, affordability or otherwise) are unaffected by real estate price inflation but affected by lease price inflation. 2) Those who own are unaffected by lease as well as real estate price inflation as their mortgage payments (if they have one) remain unchanged.<Hence, only lease price inflation deserves a place in the CPI. Please tell me what is wrong with this picture?> But the two are somewhat linked no? I know builders watch rent's like hawks as do commercial lenders. Don't you have to assume some fungibility to get any statistics at all?? DAK

To: BGR who wrote (38449)	6/7/2000 12:55:00 PM
From: flatsville	Read Replies (1) \| Respond to of 42523

You have a very static view of consumption and can't seem to see where real estate as an asset class and the need for "shelter" as a consumable item blend from a consumer perspective. >>>1) Those who lease (for whatever reason, affordability or otherwise) are unaffected by real estate price inflation but affected by lease price inflation.<<< Not so. Real estate price inflation directly affects lease rates. Real estate prices are rising in my area, raising the assesed value of real property and increasing the real estate tax burden. In my area real estate taxes double every ten years on average. The tax rate itself is rising. Landlords are raising the price of leases to cover the increased taxes. A documentable trend. (In March 99 a Bloomberg article ranked this state second in the top 10 highest overall tax burden on individuals.) >>>2) Those who own are unaffected by lease as well as real estate price inflation as their mortgage payments (if they have one) remain unchanged.<< Think cost of ownership which includes real estate taxes rather than simply "mortgage." Even if your real estate tax rates aren't rising (as in my area) the assessed value of your real property is due to asset inflation and your tax burden is rising...Read above again.