Seriously, I lurk a lot of places, and everyone is up in arms about cost of living at the moment. Reading most Reddit threads that mention housing will have 5k+ comments, all saying the same thing. People are at their breaking point.
For the same rent I pay I could live in a tiny studio apartment with a non functional kitchen and a view into someone else’s non-functional studio, and I would go totally insane. But the tiny studio is all that is a large part if the new housing stock in my city (seattle) right now, with no sign of stopping.
My take is that our collective focus on individualism has somehow tricked people into thinking that living alone is an important component of success, and people seem to want it at the expense of having a functional life and functional community.
I understand we can’t all live in (multi family) single family housing arrangements, but it saddens me to see that new construction doesn't make space for more shared living. It is cheaper, more efficient, better for mental health, arguably better for children, and wildly unpopular.
Also if you think he would have to shop around and change roommates often to find ones who are easy to live with, you are invalidating the point he was trying to make.
I actually agree and know a lot of people that would choose to live in more communal settings if they were available. But mostly that kind of housing doesn’t really exist: you instead have to convert single family housing to communal, and a lot of the time that means weird compromises.
I don't really see how apartments are unfriendly to communal living though. 2BRs are very common in new developments (where I live anyway) and 3BRs aren't that hard to find either. I don't find yards to be essential to getting the benefits of communal living.
I've seen 60 yr old grannies trying to find roommates. It's sad.
saying this as a person who would also theoretically prefer 105 year old houses and digital nomad lifestyle, but.
The people who can fix it have voter skin in the game and a lot of fear around the outcome: A cohort of investors have been lied to about the perpetual money making machine of house ownership, at the cost of home ownership for ordinary (young) people.
It's not investors that's the issue, it's your average older american whose home represents a significant amount of their wealth
But they are pushing back against policy to build more housing
I'm not American but in my country a lot of boomers have been able to retire early, travel and buy expensive cars by taking out very favorable loans by using their home value increase as collateral.
Let's say they bought their home at 1 million Danish krones and the house is now worth 4 million. They can use the valuation increase to pay out any remaining debt in the house and put up collateral for loans to retire early, travel and buy expensive cars.
I'm 99% sure the same is possible in the US.
Keeps people on their toes at work though, which is good for the bottom line.
There's a lot invested in housing instability. While it would be democratically popular, any democratic movement that tries to fight it is going to be attacked on all sides.
Does insecurity really make better workers?
For work where decision making and creativity are important, you’d expect it to be counterproductive.
Absolutely no food shall be taken home at the end of the shift this includes: Messed up food, no-shows, and PAID food that you buy yourself. (Probably because of the employee discount)...
For restaurant workers who probably struggle putting food on the table, this is just a slap on the face. They can definitely afford to feed their workers dinner and even their whole family back at home nightly and not lose much. I used to run a restaurant back in 2010 and would let my staff at least take home some food a few nights per week, esp when we had a good week and good profit returns. We were on a tight budget but they were happy working there!
I worked at a large retail store before. And they also forbid taking anything home even if it’s broken. Because there are of course cases of people purposely breaking things to take home.
We had a that was damaged from being a display item, but only cosmetically. They wanted us to throw it in the trash compactor, instead of donating it to a coworker had a kid at 19, single mother, and made 7.50/h.
We snuck that crib out the back and hid it behind a dumpster while my buddy came to pick it up for her.
Possible abuse isn't a reason to have shitty policies.
And tapped the breaks, rather than opening the floodgates to speculative frenzies across the board.
They were a big reason for the 90s tech bubble and 2000s housing bubble too due to excessive rate cuts.
Pretty clear they should have considered velocity of the economy and not simply point in time employment and inflation values (which are lagging indicators)
Oh well...
The Fed is actually about to hit the brakes, people are expecting 7 rate increases this year and more next year. The current 30 year mortgage rate is around 3.5%, the median sale price for a house in the bay area is $1.5 million. With 20% down that's $3500 a month for principal and interest. If the Fed follows through and raises rates say 2%, it turns into $5500 a month.
Doesn't do much for affordability.
And if you're thinking prices will fall when rates rise, that's not what has happened in the past. Over the last 50 years, every time there has been an environment with rising interest rates, housing prices have gone up, not down: https://awealthofcommonsense.com/2022/01/will-higher-mortgag.... So you will be paying a much higher rate on a more expensive house.
Prices will be stickier than rising rates increases affordability. But at this point it has to be done. Increasing buying power makes inflationary pressures worse, not better. Higher rates will kill the psychology/speculative aspect of rapid price increases.
And the Fed is acting far too late. The yield curve is about to invert as investors think that Fed hikes will lead to a recession. They have to do many of them and fast to get inflation under control, which will very likely lead to a bust. Every time in US history that inflation has been over 5%, a recession followed when the Fed took necessary measures to bring it down.
It could've been a smooth landing if they had started long ago and done them in slow increments with moderation. Yet they kept emergency level money printing and rates in place for two full years, far after the acute crisis had passed.
A recession would basically undo a lot of the quick recovery/good that the fiscal spending brought about. But seems too late to avoid if the Fed is serious about inflation and doesn't let it run unchecked like the 70s.
Though it's pretty apparent to me that prices will come down considerably if mortgage rates were to rise 2% in a short period of time. Which may just happen in the end... We'll see. Only ~10% of homeowners have moved at these prices levels, so there are many with much higher equity levels that would be willing to sell for less in a slow market.
What? I can't afford that!
Oh, that's sad. I guess you'll have to sell...holding real estate isn't for everybody... and thus --assets will start to be released faster and faster and prices will come down.
By having a land tax, you push people towards societally more productive outcomes. E.g. a SFH in city center would have a very high tax rate, encouraging redevelopment to multifamily.
Income taxes do the opposite somewhat, by discouraging more labor.
And I'm convinced that if these basic necessities were fulfilled, the US would see a dramatic reduction in crime and violence.
"Why is there a housing shortage in the Netherlands?" https://dutchreview.com/expat/housing/why-is-there-a-housing...
"Germany's next government aims to tackle housing crisis" https://www.dw.com/en/germanys-next-government-aims-to-tackl...
"The History of the UK's Housing Crisis" https://www.vice.com/en/article/k78mm3/the-history-of-the-uk...
I've been looking at properties in LCOL & remote areas of the US and prices shot straight up in 2020/2021 to the point where even having high salary fo an HCOL they become unaffordable. Those places haven't seen wild growths in population and the people are purely speculating as a result of the artificial inflation caused by Zillow and friends.
Looking yesterday those properties are on the market still, some for 6+ months now with little to no drop in price... the sellers are delusional
We definitely need to build more, though the producer "market" is failing a bit also
It could also be due to govt aid programs expiring, leading to less disposable income.
The complaints about housing prices predates this by well over a decade.
If housing affordability affected happiness, unhappiness should have been off the charts in the early 1980's. But it wasn't, according to the linked article. People were as happy as ever while taking out mortgages at 18% interest.
I've got no data, but I wonder if rising inequality might be warping the statistics here.
At least, if incomes were really high across all population segments affected by the housing crisis, we shouldn't see so much talk about unaffordable cost of living, student debt, healthcare costs, etc. Something doesn't add up here.
Household incomes might be extremely high for certain groups (e.g. tech workers) while too low to afford decent housing in other groups.
> If housing affordability affected happiness, unhappiness should have been off the charts in the early 1980's. But it wasn't, according to the linked article. People were as happy as ever while taking out mortgages at 18% interest
This might as well indicate that this way to calculate housing availability is wrong, not that housing availability doesn't affect happiness.
According to a google search on how much can a person afford for a home at 60k... you get this:
> The usual rule of thumb is that you can afford a mortgage two to 2.5 times your annual income. That's a $120,000 to $150,000 mortgage at $60,000.
Can you please tell me how one gets homes at these rates? Because I don't see any available, not here in Utah which isn't even a huge COL state... or anywhere else..
Edit..so to afford the AVERAGE home in America you'd need at least 163k per year annual salary.
You're assuming they have no equity. Close to 40% of homeowners have their houses paid off. If they want to move up to a more expensive house, the 68K income needs to finance the difference in price between their current house and the new one, not the entire amount.
If you're buying your first home on 68K income, you are not going to be buying a 400K house. You're going to be buying a "starter home" with a 5% down payment. Or even 3%.
Is there some mystical oracle of house prices? Or, like all markets, are things priced according to what buyers will pay intersected with what sellers will sell for?
The price "should have been" whatever a homeowner could get for selling his house. It was his asset to do with as he pleases. It is not the asset of a whiny buyer to cry about not getting the price he wanted, especially at a cost to the seller.
Also Zillow bought a small fraction of all house sales, so paid market rates. They weren't paying 50k more for a house than a neighboring house sold to a person for. The evidence you imply isn't there. Zillow and individuals were paying the same rates, i.e., what the market would bear, i.e., the actual price.
I've been involved in 6 house transactions in the past 2 years (a good friend is a realtor, 2 of the transactions involved properties I was moving, 2 were friends, 2 were relatives.) 5 moves f the 6 went for more than asking by quite a bit, for the exact reason that the realtor, wisely, knew the market prices and put them up decently below rates. This causes a rush of buyers who then start a bidding war. All were private buyers. This is standard practice.
Did you know this is how properties are sold?
Got any more non-evidence?
(My real point in asking these questions is that housing issues in say, the Bay Area, are different from those in other parts of the country such that it's really hard to make blanket statements about housing. There are some themes, but I posit there are different answers for different locales.)
Single family housing uses more water and energy per capita, generally one will be fine. And overtime one can slowly upgrade infrastructure -- as is done around the world or what happens in American neighborhoods that are upzoned. It really is a red herring of a problem that is brought up.
> As we saw a good example of in Pittsburgh, how do we maintain the transportation and muni services to these new houses?
As long as one is building the new housing nearby jobs you'll be decreasing the average miles traveled. Also it is usually the other way around you need a minimum level of density to make transit more viable and useful.
Expand service?
>how do we maintain the transportation and muni services to these new houses?
Use the tax money they pay to pay for infrastructure maintenance.
>are different from those in other parts of the country such that it's really hard to make blanket statements about housing
But the general issues is the same isn't it: there's more demand than available supply or else prices wouldn't be going up
1 - Build more housing.
2 - Eliminate weird NIMBYisms in a lot of places.
3 - Rent controls
4 - Eliminate corporate ownership of SFH
5 - Progressive property taxing
Instead, we've done absolutely nothing, and that unfortunately didn't seem to work.
Corporate ownership of SFHs is so small to not matter. The house you live in shouldn't be an investment.
People keep saying this and quoting total ownership figures, which is probably what Blackrock and co wanted. Look at actual purchases in the last 2 years instead. Blackrock has bought nearly 50% of all SFH sales in my area in the last year.
It's no coincidence that corporate buying percentages shot up with the prices.
On the other hand if property taxes get high enough, they basically act like rent, and the purchase price drops because it's no longer a good investment.
What you are proposing is expropriation and state ownership of residential property.
How would your scheme deal with larger multi-occupancy dwellings? Would they need to be demolished, or would they be appropriated by the state?
Yes, that's exactly the goal.
Feds policies led to artificially low interest rates which juices prices. But the prices become sticky when rates rise again, which they are now.
All locales should allow for greater density, and YIMBY attitude needs to prevail over NIMBY. Plenty of people would love to live in small place in a great neighborhood. It's exclusionary and increases wealth disparity to prevent construction in desirable areas. Though denser zoning can actually be lucrative to homeowners (landowners).
Government could also easily curb investor activity in residential by limiting the amount of leverage investors can use for buy and hold rentals. E.g. investors need to put 50% down if it's a buy and hold, and not just a flip. This would clearly kill large amounts of speculation in the SFH market.
Of course this alone doesn't completely solve the problem, but at least the duplexes are cheaper than the SFH.
E.g. In the northwest hills neighborhood, lots of smaller homes that are noticeably cheaper than the SFH equivalents.