The incentives are hilariously broken. 60-70% of the population owns homes and want to restrict new construction, while the federal government wants to solve economic problems with 2.5% immigration.
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 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...
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%.
[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.
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.
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.
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.
"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.
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.
No - that's really an issue all over. Especially when viewed thru the broader lens of counterproductive zoning.
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.