Worse yet, these nonsense housing and zoning policies have no end in sight, as homeowners are disproportionately those richer, older, and more established, and so will continue to vote in greater numbers for these policies.
When I was in LA, I met up with a friend who brought another friend as a tagalong. He had a job at a software company nearby which we got a tour of, but he lived with his parents 40 minutes away. That night I stayed at an airbnb a three minute drive from the office that would have been perfect for the guy to own and live in. The airbnb was a 2br/2bath with electric locks on the outside and inside doors so they could double-rent it for the night.
Landlords, empty houses, and airbnb are destroying the lives of young people.
"The" implies one driving issue but like most big problems, the current housing crisis has a number of drivers.
Think of a grease fire where the people throwing water on it are making it worse. So are the people pouring gas on it. So are the idiots with the big fans trying to blow it away from their own stuff.
Another search states that there are 329,283 airbnbs in California in 2021. These should go to families first.
New York has 955,437 empty houses according to a quick search, and it's 4th behind Florida, California, and Texas. Take away renting out houses, short-term or otherwise, and sell those houses to people who don't have a first house, the crisis would away. It's simply greed.
No - that's really an issue all over. Especially when viewed thru the broader lens of counterproductive zoning.
But not this particular greed - only. Maybe not even mostly. Whatever (temp) relief would be found by (permanently) forcing owners of empty dwellings to divest - that relief would be quickly overrun by the issues of an overly-constrained housing supply.
> Take away renting out houses,
I'd be homeless.
The problem is compounded by the fact that new entry-level housing isn't built and that the old stock is deterioriating. Please, no fairytales about hand-me-downs here, you cannot subdivide an exurban 3600 sqft cardboard palace into 3 1200 sqft condominia. Zoning regulations are against it, and the infrastructure (water, electric, roads, schools) would require a massive upgrade.
This will see some natural reversion as families become forced together.
That's going to be especially rough ride after 80 years of erasing the housing that could accommodate those families.
Those things certainly aren't helping, but they represent only a small number of total housing units. The main cause is lack of new units. We fall further behind every year.
[1] https://www.census.gov/library/stories/2022/05/housing-vacan...
The problem is the for-profit housing industry.
Skyrocketing Rents & Skyrocketing Homelessness: Why Are US Homes for Profit Not for Living In?
https://podcasts.apple.com/us/podcast/skyrocketing-rents-sky...
This is true. I live with my 5 adult sons because the alternative is homelessness for all of us.
> Building more houses is not simply the answer
Not the answer because there is no the answer. It is one critical part of the way out tho.
> since they are unaffordable to the people who need them.
Also true. While unaffordable housing dominates new builds, we are extending the growing homelessness crisis out another generation or so.
It is a major problem, yes.
> I believe the problem is airbnb
What? No? Short term rentals are under 1% of housing stock. Population growth in the US is somewhere between 0.5-1% per year, so even if you got rid of all short term rentals that solves your housing issues from just population growth for two years at most.
> mega-corporations/banks buying up and renting out homes,
This I don't know about. I think at least 25% of housing rental stock total, something like 10-15 million units, is just individual owners.
I don't know to what extent that forces market prices.
> homes that sit empty trying to get exorbitant rental rates,
The vacancy rate is what like 5% for rentals? 5% rental vacancy for rentals is a little high, but e.g. a 2% vacancy rate would exist if people move on average once every four years and it takes only a month to turnaround to a new tenant. 5% isn't all that high.
> vacation homes and non-homestead homes that sit empty...
Vacancy rate for housing that isn't rentals is under 1%.
The reason people don't want new construction is because it's ideologically comforting. For increasingly large swathes of the population (largely young, urban, leftist), it's far more important to denounce BlackRock, TechBros and Gentrification than to save $1000/month in housing costs. It's pretty incredible.
I am just not onboard that new housing is the crux of the problem when there are perfectly good existing houses that are being misused. We should fix the exploitation and also build new housing, but focusing only on new housing as a solution misses the problems of renting and airbnb and excessive hoarding by the well-off.
Imagine what would happen to the housing market if people were forced to sell off their excess rental houses and only keep one house. The people who can afford to own these excesses can afford to deal with the consequences of having to downsize.
For past decades we should have been tearing down single family houses near core and replacing them with better density. And building new denser suburbs with good connectivity to core while also offering necessary services for regular living.
The number of owner-occupied housing units in the USA has gone from 70m in 2001 to 86m today [1]. The number of total housing units has gone from 118m to 145m over the same period [2]. 70/118 is 59.3%. 86/145 is ... also 59.3%!
I agree that it feels counterintuitive. I share the sense that there are more entities playing landlord than there used to be, but it doesn't seem to be borne out in data. A possible contributing factor is that AirBNBs are more prevalent in the cities that attract visitors, for free market reasons.
IMO an underrated part of the US housing crisis (in addition to construction's failure to keep up with population growth, which I think is most of the story) is the fact that the fraction of households consisting of only one person more than doubled from 1960 to 2020, from 13% to 27% [3]. That same article notes that 25% of LA households consist of one person.
[1] https://fred.stlouisfed.org/series/EOWNOCCUSQ176N
[2] https://fred.stlouisfed.org/series/ETOTALUSQ176N
[3] https://www.census.gov/library/stories/2023/06/more-than-a-q...
I had a tenant move out this summer and for the first time in years (barring 2020 when Covid was in full swing), the place usually rents out within days of it being listed. This year, however, it not only didn't rent out right away, but required decreasing the rental rate to finally find a tenant. And this when all the industry stats stated that comparable apartment rental rates, as of June, were up 8% yoy. Now there are of course myriad reasons this particular apartment could be facing headwinds, but I am more or less convinced that the magnitude of the shift from short-term to long(er) term rentals that has been happening in anticipation of the Airbnb ban is the reason for this drop in rental rates. And just to quantify this n=1 data point, the price drop from last year's rental rate was 5%. If you believe the industry stats saying that prices were up 8% yoy in June, which likely were based on Q2 stats, well before short-term landlords would've been faced with the Airbnb ban, this may actually mean that the rental rate drop was ~12%.
Nothing about what I wrote above is scientific, but if these numbers (https://www.wired.com/story/airbnb-ban-new-york-numbers/) are to be believed, it seems likely that the drop in rental rate is largely attributable to the Airbnb ban. The yoy Q4 '23 numbers, when the ban will have been in place for the entire quarter, will confirm or deny all of this. If confirmed, though, will be interesting to see if other cities start to aggressively cut back on Airbnb in an effort to reduce rental rates. Again, not saying this is hard data, but if regulating Airbnb more or less out of existence resulted in a 12% drop in rental rates across major markets nationwide, that would be an amazing lever to almost-immediately decrease rental rates, even though the knock-on effects of declining real estate valuations would potentially cause significant problems. And I say that as a happy Airbnb user, a landlord and a homeowner. Things have just gotten too out of whack with the housing market so you have to somewhat cheer the possibility that there's actually a (low-caliber) silver bullet to reduce rents more or less overnight.
But I'd still prefer it to be the way it was 20-30 years ago, than how it is now. So much more affordable in the past...
Interest rates were quite high (and surprisingly variable, as a modern observer) in the early 1980s, peaking at almost 20% and spending a lot of time in the teens [1]. However, the median house price [2] was still low relative to median household income -- at the interest rate peak of 18.9% at the end of 1980, the median house sale price was 66k, and the median household income was 21k [3], for a ratio of about 3.1. In 2022 the median house sale price was about 450k, and the median household income was $71k [4], for a ratio of about 6.3!
I think the mortgage rate difference does mean the 80s were still worse if you took out a long mortgage at the given rates. However, 1) you could also save for much less time and buy a house with a smaller mortgage, and 2) there seem to have been a lot of since-closed loopholes [5] like assumable mortgages (from my limited understanding: you essentially take over the current owner's mortgage, along with its lower rates from when they bought house) that meant a lot of people were technically buying houses with much lower effective rates.
So ... I question the claim that the early 80s were easily as unaffordable as now.
[1] https://fred.stlouisfed.org/series/FEDFUNDS
[2] https://fred.stlouisfed.org/series/MSPUS
[3] https://www.census.gov/library/publications/1982/demo/p60-13...
[4] https://www.census.gov/library/visualizations/2022/comm/medi...
[5] https://www.marketwatch.com/story/how-people-bought-homes-in...
In the 40's - 60's, the US was the manufacturing powerhouse while Europe and Asia were rebuilding. The US had the baby boom and the enormous natural resources to lean into that growth.
After some decades, we grew to a point that labor became increasingly expensive. Workers wanted more, consumers wanted more for less. So we outsourced the lower-end manufacturing jobs to lower cost of living areas, and ultimately shipped them overseas to developing economies.
The US now does mostly high-cost, value-add. We're sitting at the top of the production food chain and labor costs a tremendous amount. Fewer people, as a percentage of the population, are able to fill these jobs due to the high skill required.
20-30 years ago the end of the post-war tailwinds. We've been experiencing the US operate in a global economy where our lower class doesn't have access to what were once well-paying jobs. We moved those over to cheap overseas labor, and we benefitted greatly from the lower cost of goods.
Our highly compensated knowledge workers are pushing prices up at the high end, and there's less middle ground.
The middle and upper classes will be fine. It's those at the bottom that are suffering. Instead of providing means to lift our poor up and into the middle class, we're lifting laborers in India, Vietnam, and Mexico out of poverty and into their own growing middle classes. (Which I think is absolutely great for them. I just wish we could also help our own lower class.)
- https://www.numbeo.com/property-investment/rankings_by_count...
- https://knoema.com/infographics/hyjmcxd/housing-affordabilit...
- https://www.nationmaster.com/nmx/ranking/house-price-to-inco...
- https://www.statista.com/statistics/237529/price-to-income-r...
This hints at a fairly incomplete puzzle.
For example :A low-end US residence requires 4+ typical income earners to meet minimal bills needed to stay housed.
That would imply that in most of the world, a typical household has a much higher number of income earners living in the residence - they have many earning-adults under one roof.
I'm skeptical that most of the world is dominated by 5-10 adults living in US sized houses. So what's the rest of the picture look like?
You want a cheap house? Sub 300k? Come to the Midwest, you’ll get one easy. Oh what’s that? You’d rather live right in downtown San Francisco or Manhattan? Well…
Sometimes I think about just selling my expensive city apartment and moving out to a small rural mountain town and finding a wife there.
A remote tech worker can buy quite a lot of house in the midwest if they keep all or most of the salary they were getting while living in a coastal city.
Especially if you didn't grow up there, the weather is killer.
And there is still plenty of space in the popular places, if people were allowed to build there.
But the people who are already there do everything in their power to prevent it.
There is also an abundant supply of weather.
That's the problem though. Unless you grew up with it, most people do not like the extreme weather in the midwest. Both too hot and too cold.
The only thing cities dislike more than an increasing population is a decreasing one. Given homeostasis is essentially traffic, suburban sprawl, etc we should let areas organically grow and shrink as people make choices. And areas that are appealing now will become unappealing either by cost or changing economies.
There's already been a significant migration from NY+CA to FL+TX: https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...
Put another way, those houses are cheap because employment opportunities are limited.
I do have a lot of respect for the people who are able to make a sustainable living in a less dense area, but it’s not a reliable path for everybody.
Certainly nothing in the comment itself even hints at me considering entire communities of people as worthless.
Uhhh... Maybe consider giving away your laptop, and go live innawoods in a loincloth.
If you use "capitalist" dispargingly, while benefitting from it, I'd describe you as a hypocrite, naive, and immature.
If you're not a capitalist, stop accepting benefits created by capitalism.
Go find a deer, harvest its skin to clothe yourself, and drink from the local creek. ...or, continue being a comfy capitalist.
From what I discern, you've chosen the latter.
in 95% of the country you can buy a house for under $400k.
What? Have you seen real estate prices in Hong Kong and Singapore? The US is pretty cheap compared to the rest of the world.
The postwar years saw a huge boom in housing construction which created a few decades of housing availability that may just never exist again nor should it. Housing as a vehicle for building wealth and housing becoming unaffordable for the younger generation are two sides of the same coin.
There's plenty of demand for housing. There's no reason we can't build more to meet that need, other than regulation.
In theory remote work could help with this problem, but honestly it's really only available to workers who work in offices. People with physical jobs like Amazon warehouse workers and restaurant staff and construction workers...all have to live somewhere near where they work.
And I daresay that even most of the professional class who could live anywhere in the country they wanted to probably don't want to live in or near some small midwestern city or many of the other places where housing is relatively cheap. (Some of that is preserving future employment options but even if you take that off the table, there's still almost certainly a common preference for at least the general vicinity of large mostly coastal cities--and tons of excuses why this location or that location is a non-starter.)
More importantly, the proliferation of the personal automobile made suburbs possible and unlocked a one-time dividend of cheap housing that was "close" to the city (in terms of travel time, not distance). That suppressed prices for a while, but now we're returning back to historical trends.
To be sure, there's a distinct difference between housing as a vehicle for preserving wealth vice building it, where the underlying grift of the real estate industry is in having normalized the country to the perverse idea that the latter is both healthy and sustainable.