I suspect rents rise to where it is just about tolerable for most people in any particular renting cohort, where the cohort is matched to the type & quality of housing.

When it's not tolerable, people leave the cohort and move down a grade, to lower quality and therefore cheaper housing.

Obviously it's not tolerable if you don't have enough money left for food & essential bills.

Not sure why iPhone & Netflix come into this, because they are so extraordinarily cheap compared with rent, food and bills. But of course a phone is essential, and an iPhone very useful, cheap (on contract) and arguably essential these days - for some people it's their only access to the internet. People would not find it tolerable if they couldn't afford a few nice, cheap things, such as Netflix.

When you account for rent, food, bills and a few nice things, as far as I can tell that does take up all the income for many. Have you noticed that a lot of people aren't saving anything?

Of those who are saving, mostly they are saving for a deposit on a mortgage, and/or a pension.

Because people want to buy those things badly enough that they will spend less on housing, to a point, to afford them.

Theoretically a nationwide increase in discretionary income could create new classes of goods that would be desired enough to compete with rent and phones. Or it might not and people would just spend more on rent and phones up to their new limit. Phones would probably move upmarket to capture this revenue as they are essentially globally competitive. Rent would not as much due to the nature of housing supply and the effort of moving cities.

Because you can often get iPhones for <$100 or even free if you get one a couple generations old and sign a 2-year contract. Why do people still use "iPhones" as some sort of litmus test to judge if someone is poor?

And Netflix is $9/month. C'mon now.