The housing shortage is larger than you think
kevinerdmann.substack.com
kevinerdmann.substack.com
It is not short-term rentals, it is not individuals owning too many houses, it is not rich people moving in to a neighborhood, it is not Chinese money fleeing the PRC, and it is not private equity "commodifying" housing.
It is that we suppress the construction of housing through to byzantine permitting, incredibly harsh zoning, vetocracy, and overburdening regulation.
This shortage is at the core of so many of our woes, homelessness being the most visible, but it really underscores _the entire economy_.
I created some slides over a year ago to present to friends and colleagues how I view the problem, you can peruse at your leisure: https://docs.google.com/presentation/d/1O1_oW0Ci2SJEIIhXzuzV...
This isn't the cause everywhere. There are absolutely places that don't have such overbearing regulations but still have a serious housing shortage.
This was for a deck that was going to be used by 1-2 people at a time, that could be built for $1000 worth of materials.
Same thing doubly applies for housing, except the numbers are 10-50x higher, because Karen in Bumfuck Permitting Services can't fathom that it's not necessary to build a single family dwelling up to Fort Knox standards, especially when it's made out of sticks and drywall anyway. It's almost like the code is designed to be especially convoluted to be a make-work program for local contractors.
But it was just an example of a thing that can contribute to rising construction/housing costs. I don't think it's particularly helpful to tell a young person "whoopsie, we could have built housing for you, but thanks to the last 10 recent code updates, the house is now 2x as expensive and you can't afford it".
About three or four builders, but not many more.
I strongly believe, that we should help people buy their first home and increasingly tax the second, third etc. In several developed countries, it's very lucrative for rich / upper middle class people to use their credit capability to just buy another house and rent it out - with tax incentives and deduction, it basically pays for itself over time. While the young renter who is living in it, do not have this possibility.
Hence why most Western countries have jacked up interest rates, and will have to keep them quite high for the next several years.
1. THERE IS A LABOR SHORTAGE IN CONSTRUCTION
2. ZONING WILL NEVER BE REFORMED AT THE LOCAL LEVEL
3. EVERYONE ASSUMES THE PRICE OF HOUSING WILL CONTINUE TO GROW MORE THAN INFLATION
All 3 highlight a broken market due to inflated costs. The only solution is to slow the market down and play chicken with owners.
> pulling the ladder up and further securing the position of those who got there first
Such is life. You can't drastically change a market overnight. You'll get voted out of office.
Welcome to the late 70s. This is how it was then too. Be happy we don't have a Volcker
We've done it once before (World War 2 - in that case it was even retroactive, so you couldn't hike rents in anticipation), and it increased homeownership rate by the highest rate in the 20th century (something like 5% jump in a few years) by making leasing less profitable than selling.
Would also have to be combined with more building, but it does work. If you make investing in real estate less appealing (via rent control), people will sell - unless they're just hiding money (i.e. overseas investors).
You would probably have to go on a crusade in order to promote it, and it would require a massive anti-landowner propaganda push (of the sort that existed during WWII), but it's theoretically doable.
> it's theoretically doable
So is a constitutional amendment banning sloppy blowjobs but that is completely unrealistic.
Jesus HN has gotten dumb.
[0] - https://openscholarship.wustl.edu/cgi/viewcontent.cgi?articl...
I mean that’s the theory, right? It’s never been truly tried?
I would even tie some portion of primary home property tax to the density of people living on a lot.
One avenue is stronger property rights. Don't let local governments and randos have an opportunity to make demands or issue denials.
It took me nearly four years to get approvals and permits to repair an existing home in California. Building a new one seems impossible.
"New York University economics Professor Edward Wolff, a specialist in real estate statistics, said 4.48 percent of American households owned three or more residential properties in 1998, compared with fewer than 1 percent in the early '90s."
I wonder what that number is today...
Anyway, short-term rentals are basically a symptom of making it hard to build hotels. Most of the time staying at a hotel is much more comfortable than staying at an airbnb.
Sometimes! If I'm staying in a place for more than just a few days, I want a full kitchen. That's pretty rare to find in a hotel. Even small efficiency kitchens are pretty rare. And in most markets I can rent an Airbnb with a full kitchen for much cheaper than a hotel room with any kind of kitchen.
Beyond that, I generally prefer the Airbnb experience over that of a hotel. I know I don't speak for everyone there, but I think there are quite a few people with my preferences.
Is that possibly because it is so hard to build hotels, though?
It's trivially easy to see that this isn't true: you probably don't live in a hotel (or a structure resembling one), for example. Why not? The answers to that question generalize to travel.
If someone can't find a house because there are short-term rental properties, the solution isn't to force someone to give up their STR, it's to build another house.
I absolutely recognize that short-term rentals have other undesirable effects on a neighborhood or building: noise, constant random strangers in the building/area, etc. I think those are reasonable reasons for banning or restricting STRs, but "housing shortage" is not among them. If you have a housing shortage, the solution is to build more housing, full stop.
We would need 'China style' decisions - which ended up with building so many apartments, that they end up with a significant percentage of them being empty, and the ripples of those decision will crush their economy for the years to come.
The music has stopped. It will take some time, but the outcome is almost inevitable.
Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.
Cars are a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to chip shortages in the pandemic), but outside those no one really complains about a “car crisis”. There are new and used cars available at very many price points, old vehicles get retired and new ones are manufactured, etc.
In housing, one major reason we don’t “just build more” is precisely because of regulation that either prevents housing construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct vacant apartments — we have plenty of companies and individuals willing to build, we just need to let them.
Your example perfectly supports that!
Central planning is kind of where we are now already — transportation options are severely restricted, transit costs are subsidized in some areas for some people but not others, etc.
Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.
Housing is a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to mortgage bubbles or material shortages in the pandemic), but outside those no one really complains about a “housing crisis”. There are new and used houses available at very many price points, old buildings get retired and new ones are manufactured, etc.
In transportation, one major reason we don’t “just build more” is precisely because of regulation that either prevents rail construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct unused trains — we have plenty of companies and individuals willing to build, we just need to let them.
In Spain, there was high demand for property prior to 2008. In areas in the UK, there was high demand for property across most of the country. Then credit became harder to get after the GFC, and suddenly the demand just wasn't there. In Spain, property prices in many area more than halved within a year. What happened? Suddenly everyone moved out? No, the demand was just demand from a different source.
Actual house price increases outstripped rent increases by multiples, but suddenly all of that demand to own just disappeared when the credit driven boom went bust (not everywhere).
There is often more to it that just build more.
The base demand for housing compared to supply in the UK is that much worse.
We have a housing crisis because restrictive zoning codes prevent housing density from rising to meet demand. The market is not being allowed to work properly, and has not been for decades now in many places, so we have accumulated a huge backlog of unmet demand.
It's a very good business. In many developed countries, there are very strong incentives for owning several properties. Once you've reached a certain level of wealth, it's basically free for your - since you're buying it with a mortgage. And quite often you can deduce the interest paid, from your taxes. We are effectively subsidizing this behavior, instead of taxing it.
Simplifying a bit - you want to put 100k$ to work, and you are wealthy enough so that the bank will lend you whatever you want. A great business is to buy another home, for say 500k$ - the rent and tax deductions will cover your mortgage, so you effectively turn 100k$ to 500k$ over the span of the loan. It's basically using your leverage, which first time buyers simply cannot most of the time. It's an unfair game.
In short - the system should be set up in a way that owning a second home should not be a good financial decisions - it should be an expensive decision. If you're rich enough and want to own a second holiday home - no problem. But in the current state of affairs, it's not expensive - it's actually profitable to do that.
2. A private company in San Francisco was going to buy a downtown office building and converted into housing, hoping that even though that is incredibly expensive there would be enough demand. But then they realized that San Francisco had mandated a large percentage of new multifamily housing units must support low rent tenants and it made the whole project completely infeasible.
Zoning, on the other hand, that keeps corner stores, apartments and condos out of some neighborhoods... that is a huge problem and doesn't really exist for safety reasons.
It's all those things. Stop looking for a single explanation. That's not how the world works.
> overburdening regulation.
Last two times my country tried to cut out the red tape it ended up costing trillions in fixes, and meant fewer builds in the end. Building regulations are good, there is a reason they exist.
Yes, it is all those things. They all contribute some non-zero amount.
But if you just build more housing, those other things end up not mattering.
Consider:
There are too many short-term rentals, and people can't find houses to buy -> Build more housing, problem solved.
Too many people own second homes, and people can't find houses to buy -> Build more housing, problem solved.
Rich people / foreigners / private equity are buying up housing, and people can't find houses to buy -> Build more housing, problem solved. (This one also solves the cause as well; if there's enough housing -- because you keep building -- this housing becomes less attractive to rich people / foreigners / private equity, because they don't envision a return on their investment that's worth it.)
> Last two times my country tried to cut out the red tape it ended up costing trillions in fixes, and meant fewer builds in the end. Building regulations are good, there is a reason they exist.
Those aren't the kind's of things the GP is talking about. Safety standards are of course something we should not relax. What we're talking about:
* Restrictive zoning (e.g. "only single family homes", "no street level retail", "max height two stories", "must have parking for N cars per household", etc.).
* Allowing people who live nearby to object to construction on any grounds, which kicks off months (or years) of hearings and legal fights, that often results in projects being greatly scaled down or cancelled. (Ultimately, the homeowners just don't want more housing because they fear it will affect their own property values. Pretty much everything else is just an excuse to attempt to avoid sounding greedy or classist.)
* Laws like the CEQA (California Environmental Quality Act) -- a reasonable law with good intentions -- that is abused by other homeowners to tie up development projects in court.
* Capricious city planning departments that can hold up or deny approval for arbitrary reasons having nothing to do with building codes.
* Long permitting processes that are necessary, but the bureaucracy spends more time than necessary.
All of this ends up killing projects, or making projects prohibitively expensive. If you're a developer looking to build a condominium building, even though the actual build might only take 6 months, you will have to factor in legal costs, and just the cost of sitting around doing nothing for possibly a year or more (while the loan you took out to buy the land still needs its interest payments) before you can start building. And that's if you're lucky; maybe your project gets cancelled, or maybe it gets scaled down to the point where it's not financially feasible at all. And if you do finally get approval and finish your build, you now have to sell the units at what many would consider "luxury" prices, because your costs to build ended up being far higher than they needed to be.
If they actually cared, then they'd be complaining about the particular onerous regulations and why they shouldn't exist. Rather than just complaining about "regulations" in general, ignoring why such things are necessary.
The "character" they want to preserve is not that of an urban center with multi-family housing.
We already rely on market forces to ensure that everyone doesn’t just move to one of a few popular cities. We don’t just need more housing, we need them specifically in Seattle, SF, LA, Denver, Manhattan places where people want to live. I still don’t see how SF achieving Manhattan density would cause its prices not to be Manhattan comparable. Something else is going on with increased supply having the ability to induce even more demand.
Overbuilding is also a danger. Berlin had excess capacity of housing and work space for a couple of decades before demand could fill it. Just because there is demand today doesn’t mean there will be demand when your project is finished, eg interest rate increases can put a damper on speculative demand. A Japanese style mega property crash is something no one wants to deal with.
Also, the Chinese have been simulating the housing sector to encourage domestic growth. The Chinese housing sector did not grow out of control just due to lack of regulation. It was also financial stimulus and incentives to encourage building.
So, you just pounced on that other commenter, accused them of something they didn't say, and despite believing that you understand the Chinese housing market you actually have no clue. You are literally the Dunning Kruger effect manifest info a hacker news commenter.
I said the problem in China is speculation, they don’t have a housing shortage. You can’t just build your way out of a housing problem if the demand signals are messed up.
My armchair economist opinion is that we are still dealing with the effects of the 2008 housing crash.
Why not add more meat around the bone while criticizing others for not doing so?
Option B: Housing shortages are caused by a combination of factors that include public policy, and solving the problem requires understanding and considering all of them.
Make it cheap to build housing and it will be done.
90% of the million dollar+ mansions empty, waiting for their snowbird owners to return.
Look at the Miami skyline at 7-9pm, when people should be getting home. Half the condos with no lights on.
We have a wealth inequality problem, symptoms include housing shortages.
People buying vacation homes on prime beachfront property has nothing to do with housing shortages in cities where young people are trying to live and work.
I specifically quoted the part talking about "million dollar+ mansions" in "intercoastal areas".
The comment about condos in Miami not having lights on at 7-9PM was a separate point, but I don't think it's really true that "half" the condos in Miami are empty for no good reason. People work late, people go on vacation, people go out on the town.
To sit in the dark for 6 hours while paying a whopping $1/kWh would save me 15 cents.
No, it's not. That could potentially be the cost of electricity in somewhere like the South Pole.
"The average electric rates in Sunnyvale, CA cost 31 ¢/kilowatt-hour (kWh)"
https://www.energysage.com/local-data/electricity-cost/ca/sa...
You'd have to provide some shockingly well sourced data to explain why electricity cost in one location is 100 times that of the rest of California, or how the average resident spends over $150,000 a year on electricity (the average per capita use in Santa Clara county is 6.2MW)
It's just really, really high compared to the rest of the country. Or even the next city over, which is what makes it really hurt.
As long as we're talking hypotheticals with no basis in reality, how about:
"If more houses were built then none of this would be a problem"
Discussions about hypothetical forceful redistribution of wealth to prevent people from owning mansions isn't really interesting, IMO.
If money were in the hands of people who want houses built in cities instead of on beaches, there'd be more houses in cities and fewer on beaches.
A land value tax would do a lot to put these underutilized spaces to work.
This has taken many hundreds of units of housing off the market for working families. To the point that many restaurants and such house their workers seasonally. And our electrician, plumber et al drive from over an hour inland where they can afford to live (and these people are not hurting). The house across the street from mine - a teardown - is under contract for $1.7MM.
There is of course the egregious, low-density nature of such a mansion in the first place, something it seems that is especially unfit for the current culture.
Having houses in the country 3 hours from a major city is less useful than having residences in the cities.
That half the units are dark from 7-9PM doesn't mean they're not someone's primary residence.
You could argue that these empty mansions are a sign of misallocated resources, but the reason there are no homes available in the places people want/need to live isn't that there's no money to build them, it's because it's de facto illegal to build new homes anywhere they would be useful, at any price. It's not a wealth problem, it's a NIMBY problem, a symptom of our political gerontocracy.
This is simply false when stated as an absolute. It may be true in some areas, but not in most of the ones I'm familiar with.
Land value tax would fix this.
Nope. The problem having a investment growth picture so bad that real estate starts to look good as a haven.
https://blog.vanhornlawgroup.com/can-you-file-bankruptcy-and...
https://finance.yahoo.com/news/two-thirds-wealthy-americans-...
It’s not that we don’t have enough housing, the issue is that we have people that want too many houses for themselves. It’s just greed. I can’t even count on my hands How many people I know that own more than one house and I am homeless. So I’m sure wealthy people pretty much don’t know anyone that doesn’t own a single house.
The problem is that it's not legal in most parts of most cities.
Just stating that Americans love their yards/privacy and it's not so simple to fix.
Well, ok then - we want affordable housing, let's build affordable housing. Nothing's perfect. Some people prefer denser housing in a more desirable place, and some prefer more space in Cyanide Springs, Oklahoma. Both should be a choice, but currently, we limit the denser housing options way too much.
And now the Fed can’t even get the guts to lower inflation by raising interest rates because of what it’s done to the housing market.
This kind of thing happens over and over and over again, all across the US and it adds up.
Houses are built by developers whom by definition only build a project when it's a sound investment. They immediately stop building when this isn't the case.
What people who buy homes are told, though, is to essentially 'buy and hold' because it's a "good investment" that will gain value over time, even if they are not building anything or adding any value to the dwelling they inhabit.
Where I live, during the recent runup in prices, the median home gained something like $100,000 of value in a year, which is significantly more than the median household income.
https://oregoneconomicanalysis.com/2021/03/16/who-benefits-f...
Ideally, I think, home prices would be fairly stable - neither appreciating a lot, nor dropping in value. Boring. That would also make them a 'bad' investment for corporations looking to make a buck by buying and holding.
Do you expect people to buy and sell their home? It’s their home, why would selling (in the short term measured in decades) be the goal?
People primarily buy homes to live in. Any benefits of price appreciation, and/or political interests of those nearing their end of life and want to downsize/die are secondary.
Think about this in the context of any other good. No one worries that if we build more cars, they'll all be purchased by rich car collectors. Yes, when more cars are built, a few very rich people with many cars will buy more. But the increased supply also make it more economical for everyone to buy more cars.
As I said, at other times in this thread, the only incentive we have as an and an economy in the United States, is agreed.
As I said, at other times in this thread, the only incentive we have in this economy and in the United States, is greed.
Secondly if a person owns a home and rents it to a second person, I'm fine with it.
If the capital appreciation is zero, then it's just the rental income, which is offset against the cost of maintaining the property and the opportunity cost from the capital outlay on the property. That's not a major problem though, as the rental price won't be able to get too high as people will simply rent or buy elsewhere (as you've reduced the other barriers to building more property)
Of course you can get rid of the appreciation by simply taxing the land (which is the thing that mainly appreciates -- the building itself typically depreciates), and get most of the way there.
And what affordable rental housing exists is increasingly being purchased by investment groups who then squeeze them for every dime, squeezing out the very people who need that housing in the process.
The housing crisis really looks to me like an aspect of the serious wealth inequality problem we have.
This has been dramatically demonstrated in Berkeley, where I live. We have added tons of 0- and 1-bedroom apartments recently. These are very expensive, $3000/mo+. This building boom has caused the price of rent-regulated older apartments to plunge. What had been renting for $2252/mo in November 2018 is now renting for $1688/mo in November 2023. That is a significant increase in affordability of studio and 1-bedroom apartment, effected by building newer, expensive ones.
Edited to add sources:
The discussion is too long for me to recapitulate here, but all of my data in various forms and some visualizations are available here:
https://observablehq.com/@jwb/berkeley-rent-board-data
Also in random tweets such as:
https://twitter.com/Jeffinatorator/status/172890293692602402...
I believe these are visible to non-account holders.
Edit: I think I see where a lot of our disconnect is coming from. We have no rent control here, rent very rarely decreases and is mostly pegged to comparative sq.ft. rentals in the area. Age of the property does not factor as much as location.
Do enough of it and rents will begin to fall below loan maintenance, causing even more sales and more price drops.
"We" are not a rich country, unless by "we" you mean the 10% of the population that is rich. I feel well compensated, I'm well within the middle class and consider myself lucky. I cannot afford a home, in the current market, in a location with the services and locality of my industry. I live in Florida. Vrbo, Airbnb, and properties purchased by institutional investors have directly increased my housing costs. That is objective, not subjective. Call it anecdotal all you want, the populated parts of the state have seen their housing options obliterated.
If we're going to use statistics for anything, let's look at it in the affirmative instead. How many homes are owned by the family living in them? The most recent data for Florida is for 2015-2019. Here are the owner-occupied housing for the most populated counties, starting with the one I live in.
Hillsborough County - 58.6% Miami-Dade County - 51.2% Orange County - 55.4% Broward County - 62.1% Palm Beach County - 68.9% Duval County - 56.7% Pinellas County - 67%
The National Average is 64.8%. In my county nearly half of the housing is not owner-occupied. As a nation, nearly a 3rd of available housing is not owner-occupied. I bet this is worse now, as this information is pre-pandemic and from the very beginning of the most recent housing rush.
https://www.census.gov/quickfacts/fact/note/US/HSG445222#:~:.... https://www.census.gov/quickfacts/fact/table/US/HSG445222 https://www.florida-demographics.com/counties_by_population https://www.census.gov/library/visualizations/interactive/ac...
Edit to add some relevant information: https://cdn.nar.realtor//sites/default/files/documents/2023-...
Also, to be quite honest, your allusions about shadowy Asians has the whiff of racist tendencies.
People aren't buying two homes in the same city alternate between them while keeping young homeowners out.
> AirBnBs
It's unfortunate that sometimes vacation destinations also can be places where lots of people want to live but the PP was not wrong.
Also consider that someone with 5 houses may not even have all that much of their net worth in the houses; the could largely be financed.
We are incentivized by our greed nothing else.
Which generation exactly?
Renting a home out is still productive.
Keeping it empty is not. I was pointing out that people aren't buying two homes in the same city to keep one empty.
More housing starts means more affordable homes. We've seen what zoning reform has done for cities. We don't build enough.
Investors collectively do purchase a good amount of new housing starts (like 18%?) but that's also spurred by interest rates and confidence that demand will grow. It's neither here nor there, build more and houses become more affordable.
If we make the (extremely crude) assumption that the capital expended on that 2nd home could be moved elsewhere, we could have built more housing in cities instead of building and maintaining that home.
[0]https://www.google.com/amp/s/www.statista.com/chart/amp/1963...
Supposing everyone had more money in their hands (all else remaining equal), that would just be reflected in the market. Houses would increase in cost. Now you're where you started.
Housing supply is just too inelastic in most US cities.
Those mansions also tend to be built far away from city cores, with large lots to maintain (with paid labor), more taxes to be spent for infrastructure cost, requiring a vehicle, etc. It would still be too expensive and unhelpful for average people.
WE don't build enough. Look at what zoning reform has done for Minneapolis.
At any rate, the point is that qua "second homes", they represent a drop in the bucket compared to the overall market. Home ownership rate is around 63%, for a population of 334 million. The inelasticity of housing construction whilst demand is steadily climbing due to immigration has far more impact on average housing prices than cases of the ultra-wealthy constructing or purchasing a mansion upstate.
One resource America has is a lot of space and we had many generations of easy money and government policy that encouraged such behavior.
If you're presented with abundance, everyone is taking a similar share and there isn't counterpressure from your peers (e.g., laws that we vote for), then there is no selfishness and thus no greed. To define greed you need a feedback loop.
We're simple dumb animals. We take what's available. If you want to talk about defining arbitrary limits on consumption that are disconnected from circumstances then you're basically out here preaching religion.
When boomers bought all of these second/vacation homes cheaply in the 80s it wasn't in places with huge demand from underhoused people.
These arguments need a little more consideration of facts rather than appeals to emotion.
https://www.coalitionforthehomeless.org/wp-content/uploads/2...
Nobody was buying second apartments in NYC in the 80s. Nobody was buying apartments period. I knew people with brownstones for sale in spanish harlem that they couldn't get $10k for in the late 80s. 80% of _storefront_ space in midtown was vacant.
People buying vacation homes in Florida or Vermont aren't responsible for homelessness in major cities.
To me, it is indeed greed. Some things are more sacred than money and housing is one of those things
I suspect a great deal of people buy a second home while maintaining the first one as a rental, if they can swing it.
with all of the "free" money out there over the past few years, it was insanely easy to pull equity of your home to buy investment properties. I don't have numbers but I can't imagine this is a small amount.
The overwhelming majority of second homes are vacation homes. _Landlords_ aren't keeping people out of housing -- quite the opposite.
Home ownership is kind of an endless money pit anyway. Most people are better off renting in any of the markets we're talking about homeless populations anyway.
Ideally landlords should be able to get better pricing for maintenance.
Unfortunately our dumb FREE MONEY monetary policy has absolutely wrecked the trades and saddled generations with bad debt chasing worthless credentials.
...YOU ARE PERFECT! https://www.youtube.com/watch?v=4p8vqoIVESc
I can surely blame people for taking what’s in front of them when people who are also in front of them have nothing.
That's what you fail to understand.
/someone who has been homeless and has also bought a home.
By the way, I’m homeless because I have a serious mental illness. Not all of us are equipped to jump back in the workforce.
When young people get hold of a home, then later sell it, none of them will be giving a "social" discount on the price.
Private property is private.
I believe for instance that property is theft, as Prodhoun proclaimed.
The fact that we see housing as an investment is part, no, probably most of the problem.
But should you genuinely believe that and walk the talk, fair enough. I'm more of a pragmatist myself.
By "property", Proudhon referred to a concept regarding land property that originated in Roman law: the sovereign right of property, the right of the proprietor to do with his property as he pleases, "to use and [to] abuse," so long as in the end he submits to state-sanctioned title. Proudhon contrasts the supposed right of property with the rights (which he considered valid) of liberty, equality, and security. Proudhon was clear that his opposition to property did not extend to exclusive possession of labor-made wealth.
It's a social norm we maintain, with some limitations, because it's useful. It's not sacred.
It's not the individuals owning the houses. It's corporations.
How do you know?
> It’s just greed.
These people whom I know personally, they are not greedy. They're not even selfish. They're not the bad guys.
Why don't the rich rent their vacant homes to the poor? At least we can answer this question objectively: if you're poor, you have less to spend, you can't fix your stuff, you will have more occupants, you will pay late more frequently, you will not be able to pay rent increases, you will not be able to adapt to extraordinary events like fires and layoffs, you have higher legal risks like tenant lawsuits, you will...
The crazy thing is, in every sector, sellers are less interested in poor buyers.
What if we made it a law that no one could own a second home before everyone owned a first home?
> Greed is an insatiable desire for material gain (be it food, money, land, or animate/inanimate possessions) or social value, such as status, or power.
Keyword: Insatiable. Lots of the people in the Bay Area are simply looking for a secure future for their children. Why is this unreasonable?
Edit: Thanks Podgajski, I like your definition below better.
intense and selfish desire for something, especially wealth, power, or food.
It’s not the job of individuals to fix our global economic system by changing their individual (legal) behavior. This is a regulatory problem.
I try (and sometimes fail, but I try) not to judge people for what they choose to spend their money on. Wealth inequality is a thing, to be sure, and we can argue that perhaps there just should not be that many people who can afford 2 (or 3 or 4) homes. But that aside...
If people want to buy more houses, that's fine. If there are people who can't find an affordable home, that means we have a shortage, and building more will tend to alleviate that problem.
Either make units or make peace. Everything else is lipstick on a pig.
Even my friends who have been on “housing prices have to drop” camp jumped across the fence once they got their own place. Obviously, this wouldn’t be the case if we didn’t look at housing as an investment, but here we are.
I’m actually curious what will happen in like 15 years in countries where population decrease will be visible. To my understanding, even Tokyo/Osaka are still growing due to people moving in from the countryside. At some point the demand will be collapsing, and curious how the governments in Japan/SK/China will respond.
This is an actual crisis, a roof over one's head is a basic human need and with rent prices continually going up compared to income it's insane that it's not viewed as enough of a priority to spend real money on it, while other projects get funding easily.
https://www.theatlantic.com/ideas/archive/2023/01/housing-cr...
Something like -- no tax on any homes construction for the next 5 years. Wouldn't that create a construction boom?
I'm involved in housing advocacy locally, and a huge impediment to building more is zoning and NIMBYism.
People forget that most construction companies went bankrupt in the aftermath of 2008.
[0] - https://www.abc.org/News-Media/News-Releases/construction-wo...
Newer housing is quite often much nicer than older housing, truth be told. More energy efficient, for instance.
I would disagree very strongly. Stronger building codes and rising material costs have made everything look very samey. I really wish people would/could build more houses that were interesting.
https://www.theatlantic.com/ideas/archive/2022/01/stop-fetis...
I haven't seen this in the real world. Newer housing tends to be of much lower quality than older housing, even when we're talking about high-end housing.
Newer housing is indeed better in certain ways, but is worse in others. I suppose whether or not it's better overall depends on how much you value those different things.
if you want more housing, build more houses.
Changing % ownership of houses between individuals/companies via government mandates does not actually build more houses.
Here on HN we're all quick to lament the end of real ownership in the sense of media like books and music, at the mercy of an exploitative corporate practice that is not coincidentally called rent-seeking. So why should we all be happy to be literal rentiers to the landed gentry?
I found this Derek Thompson article informed my thinking on the subject:
https://www.theatlantic.com/ideas/archive/2021/06/blackrock-...
I'm simply saying that we should ban private equity firms owning residential properties, period. If it's not a problem, why should Blackrock care?
What happens to apartments? What is a "PE" fund defined as? REITs own a number of properties but are not PE. Are small landlords banned from renting? What is the delineation of a Family Office/Small Landlord and a PE fund?
You've basically done the policy equivalent of asking you to build me a website that can host FB level load with no other criteria except Facebook did it.
Low detail, high accuracy.
In the area I worked in, 30% of all home sales were bought with cash with no inspections to investment companies like Blackrock and then listed for rent. In the 3 cities around me, 2 new communities that were supposed to be starter homes starting at $300k, were all bought up by those investment companies and are now rental-only communities.
The average American can't compete with that no matter how much we delude ourselves into thinking we can.
The real question is what is a significant percentage? My understanding was that the housing stock has always been so tight that residential vacancies (rental/sales) have always been in the single digit percentages. So if a private equity starts buying just a few percent they put an outsized pressure on a tight market.
Add in things like airbnb, foreign sales and the limited capacity in time and labour for construction you have a recipe for exhausting the already extremely limited suppy
I can definitely see Airbnb or foreign buyers being a factor in some local markets. In both these cases, the operational aspect of home ownership is less of an issue since the ownership is diffuse.
It only works if people keep stretching themselves thin in order to buy into the manipulated real estate markets, once this becomes untenable the aforementioned regions will become less relevant. Then you might see a real attempt at change, but at that point people won't care and the jobs will be elsewhere
There's no shortage of housing just a shortage of housing at a price people would prefer to pay. Just like labor.
Zoning laws and planning procedures prevent that from happening anywhere where it would be useful.
And just like with famines the best way to resolve the issue isn't price controls on food but to increase wealth.
It's that dynamic that makes it an impossible problem to solve. Even if you temporarily add new supply, it will immediately be consumed, and new demand keeps coming in. Every small step of new supply will be ever harder to achieve, and the quality of life will get ever worse.
It's a total dead-end.
Instead, reorganize society. Instead of 3 mega cities, have 20. Have a 100, across different tiers. Reconsider where work is organized.
Some say more people living there is a good thing in an of itself but they are going to be disappointed if their real goal is lower housing prices. It's just like highways. Adding another lane will increase throughput which may be a good end by itself, but it will never cure traffic.
lol.
The same thing happens with apartments. They are vacant for a month between tenants or when finding new tenants. Landlords would never accept temporary tenants who couldn't pay.
People holding houses for investment happens, but most rent them out. The few that don't are pretty rare and not enough to affect the housing market.
Density is horrible for qol in my experience.
$1,200/month for 3bd/2.5ba, 1,200sqft with hardwood flooring and free off-street assigned parking 15 minutes from the city. Lived there 3 years and moved out in 2018, loved it. Now I pay $1,200/month to live a 600sqft studio apartment behind a Costco an hour from the city.
To this day I don't understand why this style of housing isn't more popular.
You answered your own question.
> They all looked the same so there was no stigma as to who had section 8 and who didn't
Part of the point of segregating by income is precisely to distinguish the haves from the have-nots.
If the surroundings are low quality, then yes, density sucks. If the surrounding area is high quality, density makes things better. More things closer. It's awesome.
Money talks too. The denser, walkable areas are always the most expensive. Market is underserved in much of this country.
As to why, it's really all about tradeoffs. If you live in a nice house with land, you'll be far from city amenities. If you want to be close to city amenities (concerts, theaters, stadiums, bars, restaurants, shops, activities, people, being able to walk to places, public transit, etc), then you need to live somewhere dense.
Dense areas are popular because there are so many cool things nearby you. That's just not possible if you live in the suburbs.
Sure, most people would probably prefer a single-family home also in a dense area. But that's just physically impossible. A subdivision of nice homes with yards doesn't even contain enough people to support its own infrastructure (roads, pipes, etc) let alone a vibrant local restaurant scene. So you must drive everywhere you go, which has some serious downsides.
So many people prefer being able to walk to a coffee shop or to the bar without needing to drive. There's a reason 15-minute cities are growing in popularity.
Just to start, this doesn't match reality. Dense cities get a lot of attention. Look at the SF Bay area. SF city is expensive yes, and it's dense. The median home is about 1.2 million. The rest of the bay's home prices suggest that people prefer less dense living. Atherton with a median home prices over 7million, palo alto at over 3 million, los altos is 3.5 million, menlo park over 2.8million, mill valley almost 2 million.
The most expensive places to live in the US are never its major cities.
Doesn't "like" have to be assessed in comparison to the available alternatives? I mean, I don't like having to cook (minimally), empty the dishwasher, and other daily household chores, but I prefer those things to store-bought meals, eating on paper plates with plastic utensils, and/or hiring a daily housekeeper.
Given equal opportunity, I would bet most people would choose to live in a ranch style house with land around it than an apartment.
The hard part is building on it.
They’re in shrinking rural towns and small cities. The schools are bad and there’s no economy to speak of.
… but they’re better than some imagined frontier. Yet nobody’s moving there. Which suggests a lack of places to escape to cheaply may not be the problem.
Also - I think this is a popular point as most people would agree with this Malthusian outlook. (And by the way, Malthus was always wrong in his predictions, but that didn't impact his credibility or the longevity of this idea.) Everyone, it seems, promotes this outlook - Bill Gates, David Attenborough, most politicians - I never hear the opposite idea that we should increase the population (except via immigration).
It's funny, I live in NYC, where the population has declined by over 5% since 2020 (https://news.ycombinator.com/item?id=38698353) and supposedly everyone is working from home, and yet I'm still sitting in traffic every day. The buses are still crowded. The subways are still crowded.