More Americans Are Ending Up Homeless–At a Record Rate
wsj.com
wsj.com
However, my brother, who is just starting his career works in IT and has a $50,000~ a year salary. He lives in a Tier 3 city in Florida and the median rent for a studio there is $1,500, up from $600 five or so years ago. After taxes, car insurance, car payment, food, and a night out here and there, he barely can save anything after his student loan payments.
This is ridiculous. I can't imagine what others are facing when it comes to the cost of living crisis that is ongoing here. (And for other folks across the pond in England, it's even worse from what I hear.)
Throughout my travels of America, anecdotally, I am seeing more families making long term accommodations out of motels and we seem unwilling from our governments to even address this. I think it's going to get much worse until it gets better unfortunately...
Professional landlords have built empires on low interest rates -> interest rates go up -> landlords pass the cost onto renters (or for smaller landlords, exit the market, potentially reducing supply further)
It's insanely city-centric, because the state is literally a swamp or sun-scorched grassland.
On top of that, add a lot of foreign buyers, for various cultural, geographical, and political/economic-stability reasons (e.g. if you're a wealthy Haitian).
On top of that, add a constant stream of snowbirds [0] and retirees.
On top of that, add a huge tourist economy.
At the end, you get a housing market that's really unstable (up and down).
Building more homes... purchasable only by people (corporations) with money... to be rented out.
Yes that is definitely something that hasn't been happening over the past several decades.
I think people are starting to learn again that the point to the game of Monopoly was that once someone has cornered the housing market, everybody else goes bankrupt. Now you're just watching it in real life. It's a human tragedy, but the market doesn't care.
Individual people? Let's talk about investment companies as vehicles then.
A LOT of it is this one.
During the peak of the home-buying frenzy, in Q1 last year (2022), ONE THIRD of homes in Atlanta were purchased by investors.
https://www.bizjournals.com/atlanta/news/2022/06/29/atlanta-...
There are details, of course, but just like every "housing crisis" in the past, the parameters that need adjusting are fundamentally the same.
Which way to adjust always changes. And, in part thus, always becomes the basis for the next crisis.
For example, zoning requirements were mostly positive and useful at a time when some jerk might open up a steel mill right next to my house just because I happened to live on some useful waterway and near some rail that had been built...* and, this fostered development of land that was arguably underutilized in the economic landscape of the time (... "suburbia").
Of course, as happens with markets in general (and, especially, when you produce "professional businesspeople" and have laws regarding "fiduciary responsibility"), once primary development of new markets / "opportunities" is largely exhausted, then, the less net-positive behavior starts. I.e., when you hit a degree of "market saturation". The resistance of market participants to change in what they have "staked out". So, all the NIMBY crap. Some, for reasons most might empathize with. Some, by the greediest and most psychopathic (including in "big corporate" contexts), to stop any further development simply to maximize prices of assets they "own".**
Right now, I'd say we're in a period of unusual disruption, even as disruptions go. Maybe more of a 1:50 year or even 1:100 year disruption. Changes related to the sudden significant increase in population that can potentially work from just about anywhere ... etc. Quite an upending of a relative status quo of, really, centuries ... and, of course, not having nearly as positive an impact on certain communities that formerly suffered more from people leaving than from people clamoring to move in ...
In any case, as pressure increases, changes will be made - more and more rapid and large-scale. Unfortunately, it always takes years (and will basically guaranteed set up the next "trouble(s)"). But, fundamentally - more houses, change in permitting requirements towards "lower", rebalancing (decreasing) "institutional ownership", etc.
* https://youtu.be/9mLu5jOUmws
** Own in quotes because that's a whole other area of sort of human absurdity that I'm not even going to get into - but, just interpret in whatever way you usually do
So cheaper to buy would be a step up.
- Real estate speculation driving up prices
- Lack of new housing being built
- Wage stagnation
Each of those also having multiple underlying causes. And that’s without even getting into things like drug addiction.
Every time I look at houses, I hear the same story: There's a lot of people who have been waiting to buy houses from the previous year, so there's a lot of competition now. The problem is this will always be true if there's more people looking for houses than houses.
This is not a left-right problem. The right and left will equally say we should not build housing. NIMBYism is common across the political spectrum. The most left places like New York have let the housing situation get so bad that now anyone that arrives there is instantly homeless because there is simply nowhere to live[0]. This is New York, the place everyone thinks of when you say "the land of opportunity" and the location of the statue that everyone cites whenever Trump says something about migrants.
A lot of stories I read these days I think about The Housing Theory of Everything. Why is everything so expensive? Why are employees so expensive? Why are these expensive employees not able to pay their bills? It seems like a large part of this is that we have structured our economy to pour all of our money into land. Not landowners, land. When you're working for a faang but paying a 5-10k mortgage for a condo, how rich do you really feel? How would it feel to be the ones that didn't get a place to live? How can there ever be a middle class when those that don't make above a certain amount just end up homeless?
When there is more housing than people, then people have freedom to ask for better or cheaper housing. Until then, we will be like crabs in a barrel, pulling other people down for a place to live.
[0]: https://www.nytimes.com/2023/08/10/nyregion/migrants-homeles...
One would think there isn't enough land in America for people to build houses (of any type?). Or, are you going to tell me that laws made by men (and women, but mostly men) make it illegal to be housed and poor at the same time, no matter the amount of land? And, that changing the laws it's an uphill battle? I understand the concept, America is not the only country like that. But if memory serves me right, America is the result of people from Europe (and Asia, and Africa, and South America) escaping from exactly the same problem?
So, here is my proposal: build new nations people can escape to. There is Greenland[^1], Svalbard[^2], Antarctica, the Sahara[^3], the oceans, the Moon, the space habitats and Mars[^4]. We have the technology to build livable spaces[^5].
[^1]: Which is Danish, but can be rented from them for a (high) price.
[^2]: Ident, but from Norway. Rent is going to be more expensive.
[^3]: Rents and labor are cheap.
[^4]: A bad idea, even according to my client.
[^5]: Anybody who has been in Las Vegas knows that humans are perfectly adapted to live in big dens of concrete with no vegetation nor walking spaces[^6]. Anything better than that.
[^6]: Yes, there are golf curses.
There is a reason the only homes you see being built these days are massive single family homes and luxury apartments. It just isn't economical to build low income housing. If people could move to Greenland, Svalbard, Antarctica, or the Sahara they would have. But those places just don't support human life. If we used technology to make them livable, they would cost an order of magnitude more than living in California or New York.
That's only part of the problem. Another part is the fact that rents are a thing. Make it unprofitable to rent and you'll find a lot fewer people forced to rent.
We could build more homes on golf courses, we could build affordable housing, we could build up, we could get rid of parking mandates. All of that would cost The Boomer, and so is forbidden.
We could build homes no golf courses and it still wouldn't matter because only the rich could afford to live in them anyway.
The law simply needs to be updated - though it's basically political suicide to attempt it - to only include primary residences of a certain relative value. If you have three houses and a mansion, you should be paying way more tax.
BTW many other states have Homestead Exemption that only applies to homeowners, retirees, widows, or veterans. Unlike Prop 13 they were designed to specifically help those groups while making sure the state was still able to collect tax revenue from those not in that group.
Also - consider that a good amount of wealth is locked up in real estate. Whoever falls in that bucket has political influence and no interest at all that more housing will be built, because that will diminish their wealth.
It's not envy, it's rational self-interest.
Is this bad on net? From what I've heard, the main political difference between the rich and the rest of the population is that they tend to be more pro-business. That sounds like a good counterweight to the popular antipathy toward business.
> Also - consider that a good amount of wealth is locked up in real estate. Whoever falls in that bucket has political influence and no interest at all that more housing will be built, because that will diminish their wealth.
NIMBYism is overwhelmingly driven by non-rich people, and most people who are rich have most of their wealth in stocks, which gives them an incentive to favor the construction of housing as a complementary good. Again, I'm not seeing the harm here.
Billionaires shouldn't exist. They shouldn't. We should re-implement proper progressive tax rates (like the US had in the 50s), and ensure that that type of wealth can never happen again.
People have this idea that if we could just harvest all of that money and spread it out, the problem would be solved. Fleece the billionaires. So let's run the numbers.
Currently, there are seven hundred fifty-six billionaires in the United States. I'll do 750 for ease of calculation. Let's say they have three billion each (this is wildly overshooting it, there's some power law and they probably average 1.5 billion, since for every Bezos there are likely fifty people at 1.1 billion). What we get is 2.250 trillion dollars.
We could throw that out to each person (say three hundred million people) for a one-time boon of $7,500. That's it, it's gone. Whoosh. A little more than our COVID payments. Nice to have. Or, you could do about two years of our United States budget deficit. Or you could even knock a little over seven percent off of the $30.93 trillion US debt.
My question is: now that you've harvested the billionaires, what do you do next year? What's the follow-up? Be sure to include the knock-on effects of a lot of slightly less wealthy people hustling their money out of the country.
Billionaires are a glittering distraction to the crabs in the bucket. Hauling them down to your level is satisfying in a monkey way. It isn't much of a solution, though.
1) A lack of re-investment of positive economic activity into the “common good” (infrastructure, education, social services, etc) that were almost certainly instrumental in creating the environment for that wealth to grow in the first place.
2) An undemocratic concentration of political power in a small number of individuals
The amount of money spent on those things, adjusted for inflation, has been going up over time in the US. Are we actually under-investing in those things? And how does wealth inequality indicate under-investment?
I think we are definitely under investing in infrastructure.
Amazon builds an empire on cheap-to-use interstate highways and we can’t take a train across the country in less than 3 days.
Bridges falling down, power grids starting wildfires, levees failing, towns with abysmal drinking water quality.
We spend more on healthcare with worse results than other countries, with private profits being skimmed at every step.
We have normalized needing a college degree on your resume for “entry level” jobs and graduating with tens of thousands in debt to achieve this checkmark.
I think it’s an indication because if you were paying back society as you prospered, these black-hole pockets of increasing wealth wouldn’t be so large or common.
Economic prosperity is great. But that was generated in the framework of our society and should be re-invested in it.
[1] https://slatestarcodex.com/2017/02/09/considerations-on-cost...
Do they? They tend to have cheaper housing in absolute dollar terms, but that has to be weighed against the job market - not for white-collar can-work-remote folks like us, but for folks at the lower end of the income scale in fields such as construction or retail. The OP cites results from Denver and New Orleans as well as New York and Boston. When it comes to homelessness, no state seems to be immune. I know people on the left tend to blame greedy landlords and developers, while people on the right tend to blame over-regulation and limited supply, but just blaming Biden (which satao did at the time I replied) without any supporting reason or facts seems like the kind of partisan pot-shot we shouldn't welcome here.
Most people in the US live in “blue” islands even within “red” states. People live in cities (well, metro areas).
How long till the unstoppable wealth elevator strands enough people at the bottom who are both armed and capable of building effective resistance? Course such things wont effect this group on this site, so best to stay curious, sip coffee and watch.
Perhaps people forget that things like air travel, restaurants, and going into the office were shutting down naturally in the US even before government recommendations to do so.
And there were actually very few US-wide mandates or anything resembling a government forced “shutting down the country” outside of restrictions on international air travel.