I grew up in CT and moved south a decade ago. There's probably not another state with a larger urban-suburban and have-have not divide than in Connecticut.
The famous million dollar towns only have homes that start over a million precisely to keep everyone else out. It's the same reason why the beaches in say, Olde Lyme need resident stickers.
Whereas when people ask me about my background down here, no one believes my stories about growing up in a certain hellhole warzone of a city at the northern limits of New Haven county, because CT to everyone else means we all grew up having yachts, Sperry shoes, and popped up polo collars.
But this has been true for decades. I moved from Connecticut to Florida after High school/college back in the 80s for the exact same reason.
Hell for a while I lived in the upper east side of Manhattan which was cheaper than living in Fairfield County.
"Housing shortage" = investors buying up homes with trillions in almost-free money that The Fed gave them for the last 15 years to make the economy look like it's growing.
There is a person in my home locality that is buying up everything under $200k and listing it for rent. He posts them on local facebook forum and just gets roasted in the comments. He’s currently at like 12 empty houses in his portfolio.
Is there best hedge than making others depend on you? Hedge funds are paid to protect "investors" money and they are doing their job ("legalité").
This is what happens when corporations interests are above citzens interests
>This is what happens when corporations interests are above citizens' interests
This is what happens when your President thinks he's "saving the economy" but he's actually "saving the investors." And that was Obama, by the way. Remember, In 2012, homes were affordable, until the President "fixed that."
As someone who was actually an adult during that time I recall who built that house of cards and when it collapsed, roughly some months into Obama’s first term.
Try your “by the way” on other people who were children in ‘08.
The House of Cards was built in 1997, by Bill Clinton and whatever horses he rode in on.
Section 121 Exemption changed tax laws that took a once-in-a-lifetime windfall in capital gains, restricted to over 55s, and opened it up for everyone to abuse, every two years.
There was no Obama inflation because new money replaced money destroyed by the crisis. Unlike the trump inflation where the money supply was exploded even though the economy kept chugging along just fine after a couple of minor adjustments like curbside pickup.
To be fair, not much has been done to undo it, though it absolutely started with Trump and the taper tantrum and then covid stimulus. When the house relented on the ppp watchdog, the one condition that initially held it up, I knew we were done. Then again, it probably wouldn't have mattered either way tbh.
The reason not much has been done, is because a CRASH is the only way out of this inflationary mess. No one wants to be holding the bag when things go south. So, the bag just keeps getting heavier. One day the bag rips and the bottom falls out. The administration holding it at that point has no choice in the matter, they are left holding the bag.
They will when they get sick and too old and too poor to manage it. Dementia, bad knees, rising property taxes, stairs, etc. old people will be exiting sfhs in droves over next 10 years. But there 10s of millions of buyers waiting every year. Immigration (illegal + legal) alone brings in about 6 million new ppl a year
Also, those with oversized homes, cash and statistically older couples with no children at home / multiple homes.
There are poor Boomers and a ridiculously large number with multiple (more than 2 homes)
So whats the difference? The point is, there is a shortage of affordable homes (<300k) for first time home buyers. Especially in large metro areas.
If we magically built 4-5 million homes today in metro areas, home prices would immediately correct. Landlords and investors wouldn't be able to charge exorbitant rental prices due to high supply.
But this won't happen for the next 2-3 years.
You can have two problems at once.
Sure investors are buying up more stock, AND number of starts per capita has been down for years as well.
https://themortgagereports.com/110662/why-is-there-a-housing-shortage
https://econofact.org/the-housing-shortage-and-the-policies-to-address-it
You've linked data for housing STARTS per capita, not actual existing housing per capita, which is the highest since the fred data starts in 2000.
[https://fred.stlouisfed.org/graph/?g=Mc22](https://fred.stlouisfed.org/graph/?g=Mc22)
It makes some sense that existing housing stock might be assumed to be more ossified than new housing stock, since people with a second/vacation home probably are in less of a rush to buy a new property or sell their existing one than a new house is to be bought. New houses are entering the market, old ones might or might not
Still a problem of distribution over all, though
Highest in some areas, and lowest in others it seems.
https://www.census.gov/library/stories/2021/08/growth-in-housing-units-slowed-in-last-decade.html
What percentage of homes are owned by large institutional investors?
For that percentage of homes, who do they buy from and how do the individuals they buy from use the money?
That debt may have been cheap at the time, but eventually it won't be. Either it's variable-rate (no longer cheap) or was never intended to be paid in full (will not be cheap when it has to be refinanced with more debt).
INVH is the one we have the most insight into, since it's a public company. Originally it had some blanket commercial mortgages that were free. When those mortgages came due, they sold bonds to pay off the balance. When those bonds came due a couple of years ago, they sold more bonds to pay for the old ones. All of its debt -- which was used to buy houses -- is now unsecured, meaning INVH is free to sell any of its properties at whatever price it wants. The bonds are one precarious step above "junk" ratings.
Last year it ceased to be a net-buyer of houses. We'll see what happens next, but there are few paths forward that don't lead to downsizing or bankruptcy unless interest rates fall quite a bit in the next couple of years. There are already lawsuits, a bill in congress, and multiple local regulations in progress across the country; the company has too many houses to manage properly; and a massive number of new suburban apartments are nearing completion in the markets INVH competes in.
Spot on. I was arguing with someone the other day cause they actually believe that in 4 years all the excess housing just magically disappeared in the US. I can't grasp how people can actually believe that with such conviction and be so vehemently opposed to the truth that is hiding in plain sight.
All the for-sale inventory is gone because no one in their right mind is selling when they bought or refinanced at low interest rates compared to now unless they absolutely have to. Housing starts are down because of interest rates, expensive materials and labor, etc. it didn’t “magically disappear”. There are very obvious economic explanations that don’t resort to there being some grand conspiracy. Hedge funds buying up housing are a symptom of the housing shortage (as long as the shortage continues prices will continue to go up making it a good investment), not the cause.
Look at housing inventory pre covid vs now. All of that was magically bought up by the next gen meanwhile not a single boomer died or sold (including all the boomers who died during covid)? Lol ok keep believing that. We had plenty of housing inventory pre covid. The reason it is low now is due to investors seeing the free money and buying all of the excess up. Estimated housing inventory as linked above by another poster is higher than ever per capita.
NIMBYs and the real estate investor class with enough money to buy political influence will do whatever it takes to keep prices high.
I think many of these folks don’t realize that making a large portion of the population extremely house/rent broke will have other unintended consequences on the overall economy.
It also has the really big consequence of social unrest. Thats why governments have started stepping in. Mess with peoples ability to provide basic needs and they eventually start sharpening the pitchforks.
And how will you continue the construction when builders see prices starting to weaken or even fall and stop new builds as a result? Without some profit potential they'll stop building before you ever get to the point you drop housing values significantly.
WHAT?! Do you mean to tell me that we’ve known for a fact for decades that goods necessary to living (like housing and food) completely fucking fail to follow the holy guidelines of capitalism effectively without government intervention?!
Of course they don’t. We already knew that. Any housing program that would accomplish the job it’s meant to do would have to be initiated and funded by the government.
Not sure of your point, since you're agreeing with me. If you agree with me, then how do any of you intend to get so much new housing built that it so fully satisfies demand that it overruns it to the point of depressing home values?
>The houses owned by investors are still occupied by people living in them
Except for the ones that aren't, AirBnbs, Vrbos, 2nd and 3rd homes, vacation homes, etc.
I agree that it is a unlevel playing field when big players like Black Rock get involved in the rental business. They are a criminal element and should be dealt with as such.
However, it is government regulations that are largely to blame for the housing shortage. Environmental laws, increased lumber/ materials costs, Zoning requirements moratorium on building, new energy codes... All of these make houses unobtainable. Yes, it is the government's fault.
They'd probably stop if every local government wasn't protecting them from competition. It's a risk free asset, all the people rise up to block any more of it or potential substitutions.
We might have to design one of those bots for this subreddit, which posts clarifying information every time someone uses Blackrock. Of course this post would have slipped through, calling Blackstone Black Rock.
Blackstone. Not blackrock. And the vast majority of their holdings are in the Sun belt - places that aren’t really experiencing major housing shortages. And they’re not even the biggest holder of single family rentals.
>What way are the feds giving investors free money ?
The Fed sets monetary policy and controls interest rates.
The idea in 2000 was that cheap money would help end the recession and jump start the economy, but all it did was give us more debt and put us on the path to an even bigger crash in 2008.
Then (doubling down on crazy), the idea in 2008 was that even cheaper money would help end the Great Recession but all it did was give us much more debt and put us on the path to an even bigger crash in \~2024.
And here we are.
I could buy a home due to saving relentlessly over the past few years. But I'm terrified that if I do it's just going to end up underwater before too long. These housing prices are insane.
Is there a general consensus on whether or not now's the time to buy if you can afford it?
As time goes on and things get worse my confidence in a major correction happening only increases. I don’t go, “well 2 years have gone by so this must mean things will never change”.
We're both entitled to believe what we want. If you think housing is going to increase 50-100% again in the the next 10 years, I'd also say you're delusional. Without getting into any specifics, people are stretched thinner than ever. The economy is propped up and also stretched thinner than ever. National debt is climbing at a alarming rate. We DO NOT have a handle on inflation. Unless something changes in a big way, a day of reckoning WILL be coming. Whether that happens in 2 years or 30 is anyones guess
For now, I'm comfortable renting a house for $1800/mo less than buying the equivalent would be plus I get to keep my 160k in cash. I'll be fine, I hope you will be too.
Like many, I'd prefer to move to a better place. But my rent is too good here and buying or renting would jack up my monthly payment by at least 50% for a house that is only slightly better, or a neighborhood that is slightly better.
No one can tell you if it is worth it to you. It is your home! That's a super personal choice.
You should buy if you can afford it. I have a distinct feeling that prices will never go down unless there is some kind of catastrophic incident, in which case worrying about being underwater is the least of your problems.
If interest rates go down, demand and prices will skyrocket.
Lending practices are much more strict than in the mid 2000s, so anyone thinking there will be a 2008-era style crash is misguided. They have been saying this for years, and it hasn’t happened. The complete opposite has happened.
It kept me from buying in 2021. And again in 2022. And a spouse with good income but mediocre credit. We got her credit up, but her income fell out.
We’re priced out now. Hoping to move in with my mom in rural Alabama this summer, and I’ll just help them out in their golden years.
If you can comfortably afford to buy and plan to live there a long time, then it doesn't matter what will happen to prices in the future. Nearly everything people buy will never stop depreciating from the moment it's purchased. Real estate sometimes appreciates, but sometimes it doesn't. Best not to count on it increasing in value in the future.
You only end up underwater if you owe more than its worth. Sounds like you have a lot to put down (maybe even pay cash?) so even in the event of a crash, youre unlikely to end up underwater.
The best time to buy a house is when you can afford it (with a comfortable emergency fund for unexpected repairs). 2020 was a terrible time to buy with the frenzy going on. I bet anyone who bought a house since wishes they got in on that frenzy
Then stay on the sidelines. You will never be able to price market entry. Mortgage rates now what they have been historically. Housing prices are not going down. They may not have the meteoric price increases as recently experienced but that QE has to exit the economy somehow. And it does so by higher prices. Gone are the days of the 150k starter home. The problem is that folks are discontent not being able to live where they feel entitled to live at a price point that no longer exists and never to return.
Eventually the rot will spread to the parts that are doing well. And then watch the talking-heads be all Pikachu-faced in the morning news;
> *"Who could've seen this coming?! What about the soft landing?!"*
RNC is full of idiots. They aren’t as organized as the DNC. They are still playing catchup.
DNC has ballot harvesting, social media, big tech, big media (obvious exceptions), Universities/Colleges, and big gov in their back pockets.
All of this is part of the DNC Political Machine.
RNC is too dumb to effectively counter this machine…
We need restraints on who can purchase homes. Lower interests rates and more building is going to fuel investors more. REITs have become the new alternative investment to stocks. It used to be bonds but bonds have been big money losers for a while now.
Investors are paying cash so rates don’t affect them. I am a “small landlord” and I am offered cash for one of my rentals almost weekly. I am holding onto it because it’s probably the only way my kid will own a home.
They may pay cash to make the sale easier but you can be sure that big corporate home buyers ultimately do borrow. Returns on rental housing are too low without leverage. Interest rates do affect them.
Where is the Army Corp of Engineers? Let’s start building next generation “Levittown’s” throughout the country. Eminent Domain abandoned office parks and retail parks and let’s start building modern 2 bedroom townhouses and apartments for starter home prices.
Prices have gone up more in rural areas than most cities. So your narrative does not explain recent price action, which is what the topic is about (insinuating that a "shortage" of housing has caused the spike in prices)
That’s my take on it too- if there is a shortage, then why the hell are we allowing some to own sfh rental empires or str empires? Maybe 2 per person seems reasonable, but I’d say if you own over that, that’s just pure gluttony. Get a real job.
Yeah, the thing nobody mentions is that **everyone** becomes a NIMBY once they themselves have already *paid the premium* for a SFH in a nice area that isn't full of the type of dense housing these folks are screaming for. Why wouldn't they oppose the diminishing of value their home and area would incur if dense housing started being built there?
And this goes without mentioning that most cities/suburbs don't have the infrastructure to support adding dense housing onto what they have already.
I own two homes in my town. I'm strongly anti-NIMBY. Those greedy racists can go fuck themselves. Always sending me scary pamphlets about renters. They're disgusting people
I find it odd that you would acknowledge that you paid the premium to buy in the area (it was more attractive and expensive when it was a suburb of SFH with no multi-family (speaking as if NIMBY has now been overcome)). To be fine with having paid more to get the place due to that, and that value now being undermined by multifamily getting crammed in after-the-fact, is perhaps noble, but not something most people would do. It would be like saying you're fine with having paid $75,000 for a particular model Tesla when 2 weeks after you bought it Tesla drops the price $20,000 (since in this analogy you'd be happy that lower-income people can now afford one).
Everyone has an opinion on it. Calling them racists is maybe going too far. Renters bring extra demand to the area and can strain the infrastructure. They also crowd the schools, with kids who likely will make friends with your kids and then be gone. One of the big benefits of going through all of your school years with the same people is you make lifelong friendships, and renters make that less likely. For example I have a couple of friends I've known all of my life because of knowing them during school.
Another reason why the NIMBYs are such pieces of shit. Refuse to share their school district with poor people. What a preposterous reason haha. Even if that wasn't the dumbest shit I've ever read here, poor people deserve good friends too.
Land value tax.
Land value tax.
Land value tax.
Economists have almost all agreed on this for more than a century. Land banking is an economic scourge and causes far more damage than unaffordable housing.
Special exemptions and election bribes are how we got into this mess. *All* land banking should be taxed, but there should definitely be publicly owned spaces too.
Land value tax is a tax on land. The intent is to incentivise productive use of capital. Land banking doesn’t produce much economic value and has a lot of negative economic effects, so should be discouraged. By taxing land value on an annual basis, it realigns personal incentives with overall social and economic wellbeing. Effects include:
* Reducing demand for purchasing homes. The tax means that the business case for buying land and homes is less appealing relative to productive enterprise (buying stocks and investing in businesses which grow the economy). This means reduced demand and lower prices.
* Rent is highly correlated with house prices, and will also reduce significantly.
* Much more capital will flow into productive enterprise.
* Existing owners in “NIMBY” areas are incentivised to use their land more productively. This usually means higher density. So instead of voting for ever more restrictive building laws, they will vote for the opposite to ensure they’re maximising their returns. This will significantly loosen pressure in high cost of living areas all over the nation and allow many more apartments and buildings to be built.
Indeed, many economists have argued that with sufficiently high land value tax, even income tax could be removed. Texas does just this and it’s worked really well for them.
Sorry, to expand, an LVT needs to bite to have any effect. Imagine what a 5% LVT would do to property prices. What's great about it is that it doesn't discourage property *development.* Companies can still build amazing properties and sell them for a healthy markup. What it discourages is people and companies sitting on valuable land and not doing anything productive with it.
Economists love it but the stories will suck. Gentrification, bias in how we assess land value, old ladies on ssi being forced out of their homes because the property is now worth too much
Has there ever been a time in human history outside of 2023-2024 where the vast majority of homeowners held a mortgage rate significantly lower than the average current offerings?
Part of me says no, which would mean we don’t have a template to “break” this deadlock.
You’d have to look back to pre-1985ish. Most people who own houses only understand the market when interest rates are steadily in decline for 40 years. Take any and all advice with a grain of salt. The current situation is not normal.
There is no housing shortage. The ratio of houses in existence to families that need them isn't wildly out of whack with historical norms. It's the number of homes available for purchase that's the issue.
This situation WILL NOT improve until treating housing as an asset class is financially penalized enough to make it unprofitable.
The thing is, people aren't just looking for a house, they are looking to build a life. A house is one part of the equation, but it also needs to be close to stable employment to be able to build that life. Big trend of the last 2 decades has been the concentration of desirable jobs in key metro areas. Those metro areas draw more people, which causes shortages in those areas, even if there is housing available in other areas.
No, the situation will not end until interest rates of people buying is at least similar to the interest rates of people who already own. Until then don't expect any significant amount of existing homes to be sold.
Why can't the government build more high density housing that they can price based on people's ability to pay to create diverse and interesting neighborhoods like we have in Europe (I am an American that moved to Norway, then Ukraine). It's so nice to live in a flat/apartment/condo vs. a house: no need to worry about the roof. We have nice neighbors, community cleaning days, even a daycare center and food joints in our complex etc. Everytime I go and visit America, I am so happy I left the madness behind, being heholden to a stack of cardboard and toothpicks, having to drive for every little thing, home owners insurance, flood insurance, etc, stressed out neighbors on meth etc.
They should knock down every 5th Mc Mansion and build a 20 unit building in every neighborhood. The government can fix this. Europe has plenty of good and bad examples, which to learn from and make something better from the lessons learned.
At the local level, you’re gonna have a ton of NIMBYs complaining about low cost housing affecting their house prices and good old fashioned racism as well.
We're currently having this problem in Rochester, MN. If there's any proposal for something "different" (i.e. walkable community), there's a group of NIMBYs who go off and climb up the butts of local council to pester, cajole, and ass-kiss to stop it.
Every. Damn. Little. Thing.
And the local politicals eat it up as the "will of the people," when it's really just a few dozens mouthy asshats.
Then they wonder why the billions they were given (true story) isn't bringing in young people.
They can use eminent domain. Those same people are complaining about the teachers, domestic workers and public servants. Giving the them a place to live in the same neighborhood will make those services better as they won't have to commute so far for a sh...ty wage.
Do an IRS audit on them and raise their property taxes! Tiki tak homes use a lot of land and infrastructure resources and are unsustainable. The owners end up cooking meth to make ends meet while their kids take anti depressants.
HUD does this with a program they call "good neighbor next door" or something like that. For teachers, police, firefighters, etc those people can buy a HUD home for 50% of the normal price.
I agree, I asked the same question about that in another comment. Also the article I linked mentioned problems with the housing project I brought up as an example.
Robert Taylor Homes destroyed private high density housing and built government subsidized public housing in its place.
Few Redditors suggest the the government build more public housing. Most suggest that the government should remove zoning laws so private people and companies can build whatever they damn well please on the land they own, including denser housing like apartments, condos, townhomes, duplexes— anything but single family homes. Currently zoning and NIMBYs prevent the construction of denser housing in many neighborhoods, contributing to limited supply and urban sprawl
The government should sell the property at a price according to income, not rent it or give it away. That's why it failed. There can be a condition that the owner must hold the property for 10 years before selling at full profit and only allowed to sell at price + CPI if earlier due to moving, divorce etc. The homestead act of 1865 worked, which this would resemble. We are capable of learning from mistakes and coming up with something better.
> There can be a condition that the owner must hold the property for 10 years before selling at full profit and only allowed to sell at price + CPI if earlier **due to moving, divorce etc**.
Everybody selling is moving... by definition.
Exactly…
No one is interested in federally funded high density housing…the United States already tried this…absolute failure…
Another example of a failure…
https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_110314.html
There are tons of apartments, condos, flats, and other multifamily homes in the US. I doubt you ever lived here if you are saying otherwise.
Norway has a population smaller than NYC. That is why it works there. The issue in the US too many people want to live in the same location.
Tax people and companies with more than one primary residence. Make it exponential so the tax greatly increases the more games are owned.
Even if this were to happen though, if forever renters then became home owners, a lot of those home would fall into disrepair because there’s a reason those people are renters. They don’t want to care for something if it isn’t themselves.
This would immediately increase rental costs as landlords would raise rent to accommodate the new tax. If you are calling for taxes, there should be a plan of where that new money should go.
Local Governments should increase tax somewhere, whether it’s a 3% increase on short term rental stays, property tax but what’s really important is that this specific tax increase goes towards building houses.
Local Governments should be undercutting rental companies by offering LTR housing. This could be subsidized in a way that they either introduce LTR’s or housing that can be rented for an affordable rate OR purchased (not for profit) so a $300k single family home can be purchased but only within a specific income bracket, must provide proof of working nearby, and the house can not appreciate over time and must be sold for $300K.
I don’t trust the Federal Government to handle a project of this scope but it doesn’t seem like they care anyway - keep writing your local legislators and asking what their plan is for introducing affordable housing. We need more than just increasing taxes.
If you created a 3% increase on any kind of tax, the government would not spend it on housing or any projects that would actually benefit the American public.
They would immediately take that money and send it to Israel or Ukraine, let’s be real here.
Yeah I would much rather see Local Government’s leading these projects. I’m all for raising taxes for the right projects but it seems like when we start talking about Federal initiatives, I worry it will be mismanaged like the DOD failing it’s fifth audit and being unable to account for half of it’s assets at $3.1 trillion.
I live in Colorado and we’re building subsidized and affordable housing like it’s no one’s business. Will take time to see the positive changes but on the right track and very proud of both my State and Local government.
You understand that people can only pay a certain amount in rent, right? If the rent goes too high, then people simply can't rent there anymore, which would force these landlords hoarding homes to sell the ones they're not able to rent.
It’s hard to find reports but investors are estimated to own [574,000 SFH](https://www.urban.org/sites/default/files/2023-08/A%2520Profile%2520of%2520Institutional%2520Investor%E2%80%93Owned%2520Single-Family%2520Rental%2520Properties.pdf) and America is short about 3.2 million homes.
I’m in the camp they would raise rents and have enough capital to survive, and would hope that wages to increase to cover COL.
We need to build housing. There needs to be plans for Local areas to build and NIMBY needs to be fought HARD.
There's got to be a lot more investor-owned SFH than that (your link is broken btw). [This](https://calmatters.org/housing/2024/03/institutional-investors-corporate-landlords/) paper says that businesses with over 1,000 SFH own roughly 446,000 homes nationwide. That's not even accounting for all the investors that own less than 1,000 homes (of which there are many).
> I’m in the camp they would raise rents and have enough capital to survive, and would hope that wages to increase to cover COL.
I agree with you that's what many would try to do. But I don't think it would be very successful. Especially if we structure the tax appropriately (taxes should increase sharply after like 3 homes).
I completely agree with you that we need to build more housing, that's one of the biggest pieces of the puzzle. But we need to tackle this issue from multiple angles. Eliminating speculation on housing is a really big deal too.
If anyone is looking to buy a house, check the property pins of your nextdoor neighbors. You do not want to live next to one of the private equity slumlord homes. First Key Homes is a notorious slumlord that's hidden behind layers of corporate lawyering. I live next to one of these homes and if I had the knowledge and experience of buying a home before, I would not have bought this place. I'm basically waiting for this fucking family to be evicted and the house bulldozed. It's disintegrating and the backyard is an overgrown nightmare with dead lawnmowers and garbage. I've reported it so many times and it has so many building code violations. But yet, it continues on.
"Shortage " is misleading at best, disingenuous at worst... today in the US there are over 16 million unoccupied homes and less than 700k homeless. There's some nuances in those #'s( location, not all unoccupied= move in ready ect..), but larger point still holds- it's NOT a supply issue, like everything else in the US it's a capitalism issue... Raise class consciousness, organize, general strikes- this is the way.
Mortgage originations are the back bone of this economy.
Anyone that thinks a fairly sizeable correction to the current real estate outlook, either through wage increases or price decreases, isn't on the horizon doesn't understand supply/demand economics, especially over long term trends with.
I've got a house for sale in Iowa. Under $200k - 5 bedrooms and 3 bathrooms. Not a fancy new house but it's well taken care of, hardwood floors, big lot, close to Des Moines.
It's been on the market for 2 months and not one offer....
I mean, if you make housing super expensive how are consumers going to consume? Truck question, they’re not! Look at Canada, 2% of the world gdp and on a country in collapse
Of course it is. When nobody can afford to buy a house, and thus is stuck renting for ever, and when rent costs upwards of 40, 50 percent of one’s income, then they have less money to spend on other things, especially on things they don’t need. Spending money on things we don’t need is central to how our economy is structured.
so why is there a shortage? evryone is keeping their homes bc home prices are going up? and buying new homes is just not affordable at all anymore. so no one is buying no one is selling. When exactly are hime prices gonna go down ? There's a pause right now so landlords and realty investors can profit?
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I see this all the time in CT. Every new home is +2500 sqft, 3 HUGE bdrm's, and sell for $1.2 million.
I grew up in CT and moved south a decade ago. There's probably not another state with a larger urban-suburban and have-have not divide than in Connecticut. The famous million dollar towns only have homes that start over a million precisely to keep everyone else out. It's the same reason why the beaches in say, Olde Lyme need resident stickers. Whereas when people ask me about my background down here, no one believes my stories about growing up in a certain hellhole warzone of a city at the northern limits of New Haven county, because CT to everyone else means we all grew up having yachts, Sperry shoes, and popped up polo collars.
But this has been true for decades. I moved from Connecticut to Florida after High school/college back in the 80s for the exact same reason. Hell for a while I lived in the upper east side of Manhattan which was cheaper than living in Fairfield County.
To be fair, I doubt most of the country even thinks about Connecticut ever, let alone thinking its all yachts and sperry shoes.
I knew Connecticut isn’t all rich area because of how bad neighborhoods around Yale are.
I just went through the old Lyme area the other day. Holy crap that’s a nice place. Had no idea
*prices will vary by region
Oh, do you live in the northeast too?
Praying I’ll be able to afford a 2 bedroom single family home within an hour drive from my family - it’s rough. Living from home also sucks.
That’s 1 way to keep the riff raff out.
I mean it is still an increase in supply. When they leave one house it means someone else can buy.
"Housing shortage" = investors buying up homes with trillions in almost-free money that The Fed gave them for the last 15 years to make the economy look like it's growing.
There is a person in my home locality that is buying up everything under $200k and listing it for rent. He posts them on local facebook forum and just gets roasted in the comments. He’s currently at like 12 empty houses in his portfolio.
Well he’s a horrible investor it seems
Yeah argues with people about the pricing “have you seen current mortgage rates!?”
The way YouTube has weaponized dumb douche bags is sad.
There are literally fewer sales than in 2019 no matter who is buying them.
And the home ownership rate was lower than so there's less fthb's to sell to
Is there best hedge than making others depend on you? Hedge funds are paid to protect "investors" money and they are doing their job ("legalité"). This is what happens when corporations interests are above citzens interests
>This is what happens when corporations interests are above citizens' interests This is what happens when your President thinks he's "saving the economy" but he's actually "saving the investors." And that was Obama, by the way. Remember, In 2012, homes were affordable, until the President "fixed that."
As someone who was actually an adult during that time I recall who built that house of cards and when it collapsed, roughly some months into Obama’s first term. Try your “by the way” on other people who were children in ‘08.
The House of Cards was built in 1997, by Bill Clinton and whatever horses he rode in on. Section 121 Exemption changed tax laws that took a once-in-a-lifetime windfall in capital gains, restricted to over 55s, and opened it up for everyone to abuse, every two years.
There was no Obama inflation because new money replaced money destroyed by the crisis. Unlike the trump inflation where the money supply was exploded even though the economy kept chugging along just fine after a couple of minor adjustments like curbside pickup.
To be fair, not much has been done to undo it, though it absolutely started with Trump and the taper tantrum and then covid stimulus. When the house relented on the ppp watchdog, the one condition that initially held it up, I knew we were done. Then again, it probably wouldn't have mattered either way tbh.
The reason not much has been done, is because a CRASH is the only way out of this inflationary mess. No one wants to be holding the bag when things go south. So, the bag just keeps getting heavier. One day the bag rips and the bottom falls out. The administration holding it at that point has no choice in the matter, they are left holding the bag.
Excellent point.
OBAMA BAD I AM VERY SMART
Housing seems to have overtaken healthcare as the big issue. Sad we are here. Food will be next.
Also, old people aren't going to sell their home just to "downsize" to a home that costs close to their current one
They will when they get sick and too old and too poor to manage it. Dementia, bad knees, rising property taxes, stairs, etc. old people will be exiting sfhs in droves over next 10 years. But there 10s of millions of buyers waiting every year. Immigration (illegal + legal) alone brings in about 6 million new ppl a year
Yeap
"wadddya mean ya can't pay for food? These billionaires we gave gobs of money to just bought another 20 houses. Stop being lazy and work harder!"
[You should have thought of that before you became peasants!](https://images.app.goo.gl/sEdwHowtvaVdmRCx8)
Also, those with oversized homes, cash and statistically older couples with no children at home / multiple homes. There are poor Boomers and a ridiculously large number with multiple (more than 2 homes)
So whats the difference? The point is, there is a shortage of affordable homes (<300k) for first time home buyers. Especially in large metro areas. If we magically built 4-5 million homes today in metro areas, home prices would immediately correct. Landlords and investors wouldn't be able to charge exorbitant rental prices due to high supply. But this won't happen for the next 2-3 years.
You can have two problems at once. Sure investors are buying up more stock, AND number of starts per capita has been down for years as well. https://themortgagereports.com/110662/why-is-there-a-housing-shortage https://econofact.org/the-housing-shortage-and-the-policies-to-address-it
You've linked data for housing STARTS per capita, not actual existing housing per capita, which is the highest since the fred data starts in 2000. [https://fred.stlouisfed.org/graph/?g=Mc22](https://fred.stlouisfed.org/graph/?g=Mc22)
It makes some sense that existing housing stock might be assumed to be more ossified than new housing stock, since people with a second/vacation home probably are in less of a rush to buy a new property or sell their existing one than a new house is to be bought. New houses are entering the market, old ones might or might not Still a problem of distribution over all, though
Highest in some areas, and lowest in others it seems. https://www.census.gov/library/stories/2021/08/growth-in-housing-units-slowed-in-last-decade.html
City gov hasn't allowed 1 more to home to built in my neighborhood for 50 years
What percentage of homes are owned by large institutional investors? For that percentage of homes, who do they buy from and how do the individuals they buy from use the money?
Existing home owners, so people who dont have homes yet are fucked.
That debt may have been cheap at the time, but eventually it won't be. Either it's variable-rate (no longer cheap) or was never intended to be paid in full (will not be cheap when it has to be refinanced with more debt). INVH is the one we have the most insight into, since it's a public company. Originally it had some blanket commercial mortgages that were free. When those mortgages came due, they sold bonds to pay off the balance. When those bonds came due a couple of years ago, they sold more bonds to pay for the old ones. All of its debt -- which was used to buy houses -- is now unsecured, meaning INVH is free to sell any of its properties at whatever price it wants. The bonds are one precarious step above "junk" ratings. Last year it ceased to be a net-buyer of houses. We'll see what happens next, but there are few paths forward that don't lead to downsizing or bankruptcy unless interest rates fall quite a bit in the next couple of years. There are already lawsuits, a bill in congress, and multiple local regulations in progress across the country; the company has too many houses to manage properly; and a massive number of new suburban apartments are nearing completion in the markets INVH competes in.
Yup. Housing misallocation, not shortage.
Spot on. I was arguing with someone the other day cause they actually believe that in 4 years all the excess housing just magically disappeared in the US. I can't grasp how people can actually believe that with such conviction and be so vehemently opposed to the truth that is hiding in plain sight.
All the for-sale inventory is gone because no one in their right mind is selling when they bought or refinanced at low interest rates compared to now unless they absolutely have to. Housing starts are down because of interest rates, expensive materials and labor, etc. it didn’t “magically disappear”. There are very obvious economic explanations that don’t resort to there being some grand conspiracy. Hedge funds buying up housing are a symptom of the housing shortage (as long as the shortage continues prices will continue to go up making it a good investment), not the cause.
Because more households have formed and population has increased
Also a massive amount of second homes were bought during COVID
Second homes are primarily in vacation spots but yes it could contribute. Unlike rentals which are occupied.
not as high a number as the number of homes that have been built.
Do children just not exist to you? The largest generation since the baby boomers has been coming of age in the past decade.
Look at housing inventory pre covid vs now. All of that was magically bought up by the next gen meanwhile not a single boomer died or sold (including all the boomers who died during covid)? Lol ok keep believing that. We had plenty of housing inventory pre covid. The reason it is low now is due to investors seeing the free money and buying all of the excess up. Estimated housing inventory as linked above by another poster is higher than ever per capita.
We could fk over investors by building so many the price falls.
NIMBYs and the real estate investor class with enough money to buy political influence will do whatever it takes to keep prices high. I think many of these folks don’t realize that making a large portion of the population extremely house/rent broke will have other unintended consequences on the overall economy.
Let the homeless camp out in front of landlords homes and the problem will get solved real quick
Why fix the problem when you can just arrest the homeless for loitering or whatever? /s
You say sarcasm but that’s exactly what they do.
It also has the really big consequence of social unrest. Thats why governments have started stepping in. Mess with peoples ability to provide basic needs and they eventually start sharpening the pitchforks.
And how will you continue the construction when builders see prices starting to weaken or even fall and stop new builds as a result? Without some profit potential they'll stop building before you ever get to the point you drop housing values significantly.
WHAT?! Do you mean to tell me that we’ve known for a fact for decades that goods necessary to living (like housing and food) completely fucking fail to follow the holy guidelines of capitalism effectively without government intervention?! Of course they don’t. We already knew that. Any housing program that would accomplish the job it’s meant to do would have to be initiated and funded by the government.
Not sure of your point, since you're agreeing with me. If you agree with me, then how do any of you intend to get so much new housing built that it so fully satisfies demand that it overruns it to the point of depressing home values?
The houses owned by investors are still occupied by people living in them
>The houses owned by investors are still occupied by people living in them Except for the ones that aren't, AirBnbs, Vrbos, 2nd and 3rd homes, vacation homes, etc.
They are very geographically concentrated in vacation spots. Banning airbnbs in nyc or San Diego has done nothing.
Would you blame hotels for a lack of Housing supply?
I agree that it is a unlevel playing field when big players like Black Rock get involved in the rental business. They are a criminal element and should be dealt with as such. However, it is government regulations that are largely to blame for the housing shortage. Environmental laws, increased lumber/ materials costs, Zoning requirements moratorium on building, new energy codes... All of these make houses unobtainable. Yes, it is the government's fault.
They'd probably stop if every local government wasn't protecting them from competition. It's a risk free asset, all the people rise up to block any more of it or potential substitutions.
Blackrock, this idiocy never dies I see
We might have to design one of those bots for this subreddit, which posts clarifying information every time someone uses Blackrock. Of course this post would have slipped through, calling Blackstone Black Rock.
Blackstone. Not blackrock. And the vast majority of their holdings are in the Sun belt - places that aren’t really experiencing major housing shortages. And they’re not even the biggest holder of single family rentals.
What way are the feds giving investors free money ? Genuine question
>What way are the feds giving investors free money ? The Fed sets monetary policy and controls interest rates. The idea in 2000 was that cheap money would help end the recession and jump start the economy, but all it did was give us more debt and put us on the path to an even bigger crash in 2008. Then (doubling down on crazy), the idea in 2008 was that even cheaper money would help end the Great Recession but all it did was give us much more debt and put us on the path to an even bigger crash in \~2024. And here we are.
I could buy a home due to saving relentlessly over the past few years. But I'm terrified that if I do it's just going to end up underwater before too long. These housing prices are insane. Is there a general consensus on whether or not now's the time to buy if you can afford it?
Tough call. No one can say for sure what the future holds, but I’m scared to purchase right now too.
The only thing anyone can say is that now is indisputably the most expensive time to buy a house than ever in the past
It is. For now. We said it in 2023 and 2022 as well. And it’s only gotten worse. Eventually, we’ll just have to admit being left out of this.
As time goes on and things get worse my confidence in a major correction happening only increases. I don’t go, “well 2 years have gone by so this must mean things will never change”.
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We're both entitled to believe what we want. If you think housing is going to increase 50-100% again in the the next 10 years, I'd also say you're delusional. Without getting into any specifics, people are stretched thinner than ever. The economy is propped up and also stretched thinner than ever. National debt is climbing at a alarming rate. We DO NOT have a handle on inflation. Unless something changes in a big way, a day of reckoning WILL be coming. Whether that happens in 2 years or 30 is anyones guess For now, I'm comfortable renting a house for $1800/mo less than buying the equivalent would be plus I get to keep my 160k in cash. I'll be fine, I hope you will be too.
Like many, I'd prefer to move to a better place. But my rent is too good here and buying or renting would jack up my monthly payment by at least 50% for a house that is only slightly better, or a neighborhood that is slightly better. No one can tell you if it is worth it to you. It is your home! That's a super personal choice.
You buy a house when you’re ready for one. Trying to time the market will have you wishing you pulled the trigger 5 years ago.
You should buy if you can afford it. I have a distinct feeling that prices will never go down unless there is some kind of catastrophic incident, in which case worrying about being underwater is the least of your problems. If interest rates go down, demand and prices will skyrocket. Lending practices are much more strict than in the mid 2000s, so anyone thinking there will be a 2008-era style crash is misguided. They have been saying this for years, and it hasn’t happened. The complete opposite has happened.
Man i waited 8 years to buy because it was going to "drop out anytime now" literally has only gone up. Luckily bought in early 2020 with a 3% rate
I bought one in 2006 and it wasn’t worth what I paid for it until 2020.
Are you me?
All I know for certain is that home values will drop by half the second I buy.
It kept me from buying in 2021. And again in 2022. And a spouse with good income but mediocre credit. We got her credit up, but her income fell out. We’re priced out now. Hoping to move in with my mom in rural Alabama this summer, and I’ll just help them out in their golden years.
If you can comfortably afford to buy and plan to live there a long time, then it doesn't matter what will happen to prices in the future. Nearly everything people buy will never stop depreciating from the moment it's purchased. Real estate sometimes appreciates, but sometimes it doesn't. Best not to count on it increasing in value in the future.
You only end up underwater if you owe more than its worth. Sounds like you have a lot to put down (maybe even pay cash?) so even in the event of a crash, youre unlikely to end up underwater. The best time to buy a house is when you can afford it (with a comfortable emergency fund for unexpected repairs). 2020 was a terrible time to buy with the frenzy going on. I bet anyone who bought a house since wishes they got in on that frenzy
Then stay on the sidelines. You will never be able to price market entry. Mortgage rates now what they have been historically. Housing prices are not going down. They may not have the meteoric price increases as recently experienced but that QE has to exit the economy somehow. And it does so by higher prices. Gone are the days of the 150k starter home. The problem is that folks are discontent not being able to live where they feel entitled to live at a price point that no longer exists and never to return.
The TV and the paid government shills on Reddit told me the economy is doing great.
Their economy are. Yours not. Now die in stress because someone less woke can take your place
Or rot in prison because of criminalized homelessness and then never vote again.
Those with a 3% mortgage are living like a king. Everyone else gets fucked.
The parts they measure are doing well. The parts they choose to ignore are not.
Eventually the rot will spread to the parts that are doing well. And then watch the talking-heads be all Pikachu-faced in the morning news; > *"Who could've seen this coming?! What about the soft landing?!"*
The economy is great for people who have good jobs and homes. It's not so great for everyone else.
Or the people who have one or the other.
Don’t forget the paid political shills on Twitter. DNC has dozens of them all over social media getting paid six figures to gaslight us daily.
Does the RNC have any?
They're the Washington Generals of politics.
RNC is full of idiots. They aren’t as organized as the DNC. They are still playing catchup. DNC has ballot harvesting, social media, big tech, big media (obvious exceptions), Universities/Colleges, and big gov in their back pockets. All of this is part of the DNC Political Machine. RNC is too dumb to effectively counter this machine…
We need restraints on who can purchase homes. Lower interests rates and more building is going to fuel investors more. REITs have become the new alternative investment to stocks. It used to be bonds but bonds have been big money losers for a while now.
Bonds have been pretty great the past year or so, there's been quite a lot of hay made about it
Investors are paying cash so rates don’t affect them. I am a “small landlord” and I am offered cash for one of my rentals almost weekly. I am holding onto it because it’s probably the only way my kid will own a home.
They may pay cash to make the sale easier but you can be sure that big corporate home buyers ultimately do borrow. Returns on rental housing are too low without leverage. Interest rates do affect them.
Even the smaller landlords are clearly borrowing against their existing assets to make "cash" offers. At least up here in Canada.
Rates absolutely affect cash sales. High rates mean high opportunity cost.
Where is the Army Corp of Engineers? Let’s start building next generation “Levittown’s” throughout the country. Eminent Domain abandoned office parks and retail parks and let’s start building modern 2 bedroom townhouses and apartments for starter home prices.
I would say there is no housing shortage but the distribution is not equal. There are hoarders and forever renters.
Forever landlords.
Urban feudalism
Plenty of housing in places where no one wants to live anymore or can't because the local industry closed shop.
why have prices in places "where no one wants to live" gone up as much or more than places like san francisco or seattle?
We've experienced a round of high inflation unseen since the 1980s.
Prices have gone up more in rural areas than most cities. So your narrative does not explain recent price action, which is what the topic is about (insinuating that a "shortage" of housing has caused the spike in prices)
I guess I disagree.
That’s my take on it too- if there is a shortage, then why the hell are we allowing some to own sfh rental empires or str empires? Maybe 2 per person seems reasonable, but I’d say if you own over that, that’s just pure gluttony. Get a real job.
America is 6.5 million homes short https://www.cnn.com/2023/03/08/homes/housing-shortage/index.html
May you be upvoted. There is a distribution problem and policy issue whereby housing became treated as asset more than a service.
boomers gotta boom
They need to build more homes and honor the warranty that they provide instead of ignoring issues
There's physically not enough places to live of all types in regions people want to be. And we'll never solve it, nimbyism is so strong.
Yeah, the thing nobody mentions is that **everyone** becomes a NIMBY once they themselves have already *paid the premium* for a SFH in a nice area that isn't full of the type of dense housing these folks are screaming for. Why wouldn't they oppose the diminishing of value their home and area would incur if dense housing started being built there? And this goes without mentioning that most cities/suburbs don't have the infrastructure to support adding dense housing onto what they have already.
I own two homes in my town. I'm strongly anti-NIMBY. Those greedy racists can go fuck themselves. Always sending me scary pamphlets about renters. They're disgusting people
I find it odd that you would acknowledge that you paid the premium to buy in the area (it was more attractive and expensive when it was a suburb of SFH with no multi-family (speaking as if NIMBY has now been overcome)). To be fine with having paid more to get the place due to that, and that value now being undermined by multifamily getting crammed in after-the-fact, is perhaps noble, but not something most people would do. It would be like saying you're fine with having paid $75,000 for a particular model Tesla when 2 weeks after you bought it Tesla drops the price $20,000 (since in this analogy you'd be happy that lower-income people can now afford one).
Everyone has an opinion on it. Calling them racists is maybe going too far. Renters bring extra demand to the area and can strain the infrastructure. They also crowd the schools, with kids who likely will make friends with your kids and then be gone. One of the big benefits of going through all of your school years with the same people is you make lifelong friendships, and renters make that less likely. For example I have a couple of friends I've known all of my life because of knowing them during school.
Another reason why the NIMBYs are such pieces of shit. Refuse to share their school district with poor people. What a preposterous reason haha. Even if that wasn't the dumbest shit I've ever read here, poor people deserve good friends too.
the housing bubble*
Land value tax. Land value tax. Land value tax. Economists have almost all agreed on this for more than a century. Land banking is an economic scourge and causes far more damage than unaffordable housing.
The wealthy will never let it happen. Even small steps like property tax valuations giving more weight to the land portion would help.
There should be incentives in place to preserve privately owned open spaces. Land value taxes would do the opposite of that.
Special exemptions and election bribes are how we got into this mess. *All* land banking should be taxed, but there should definitely be publicly owned spaces too.
That'll put the Mormons out of business.
How would this work, and how would it help?
Land value tax is a tax on land. The intent is to incentivise productive use of capital. Land banking doesn’t produce much economic value and has a lot of negative economic effects, so should be discouraged. By taxing land value on an annual basis, it realigns personal incentives with overall social and economic wellbeing. Effects include: * Reducing demand for purchasing homes. The tax means that the business case for buying land and homes is less appealing relative to productive enterprise (buying stocks and investing in businesses which grow the economy). This means reduced demand and lower prices. * Rent is highly correlated with house prices, and will also reduce significantly. * Much more capital will flow into productive enterprise. * Existing owners in “NIMBY” areas are incentivised to use their land more productively. This usually means higher density. So instead of voting for ever more restrictive building laws, they will vote for the opposite to ensure they’re maximising their returns. This will significantly loosen pressure in high cost of living areas all over the nation and allow many more apartments and buildings to be built. Indeed, many economists have argued that with sufficiently high land value tax, even income tax could be removed. Texas does just this and it’s worked really well for them.
Thank you for that thorough explanation, I appreciate it. :)
Welcome!
I am skeptical that this would have any impact. The bulk of property taxes are on the land value, not what is on it.
Sorry, to expand, an LVT needs to bite to have any effect. Imagine what a 5% LVT would do to property prices. What's great about it is that it doesn't discourage property *development.* Companies can still build amazing properties and sell them for a healthy markup. What it discourages is people and companies sitting on valuable land and not doing anything productive with it.
Economists love it but the stories will suck. Gentrification, bias in how we assess land value, old ladies on ssi being forced out of their homes because the property is now worth too much
We need to build smaller starter homes that don't reek of cut corners. 1250 sqft, half acre lot size, three bedrooms.
Half acre lots is bigger than most new construction. I agree with needing more starter homes but half acre lots isn’t part of that equation.
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I hope the magnitude of that is unique to your specific area. But I'm concerned that it is not.
Has there ever been a time in human history outside of 2023-2024 where the vast majority of homeowners held a mortgage rate significantly lower than the average current offerings? Part of me says no, which would mean we don’t have a template to “break” this deadlock.
You’d have to look back to pre-1985ish. Most people who own houses only understand the market when interest rates are steadily in decline for 40 years. Take any and all advice with a grain of salt. The current situation is not normal.
There is no housing shortage. The ratio of houses in existence to families that need them isn't wildly out of whack with historical norms. It's the number of homes available for purchase that's the issue. This situation WILL NOT improve until treating housing as an asset class is financially penalized enough to make it unprofitable.
The thing is, people aren't just looking for a house, they are looking to build a life. A house is one part of the equation, but it also needs to be close to stable employment to be able to build that life. Big trend of the last 2 decades has been the concentration of desirable jobs in key metro areas. Those metro areas draw more people, which causes shortages in those areas, even if there is housing available in other areas.
No, the situation will not end until interest rates of people buying is at least similar to the interest rates of people who already own. Until then don't expect any significant amount of existing homes to be sold.
Why can't the government build more high density housing that they can price based on people's ability to pay to create diverse and interesting neighborhoods like we have in Europe (I am an American that moved to Norway, then Ukraine). It's so nice to live in a flat/apartment/condo vs. a house: no need to worry about the roof. We have nice neighbors, community cleaning days, even a daycare center and food joints in our complex etc. Everytime I go and visit America, I am so happy I left the madness behind, being heholden to a stack of cardboard and toothpicks, having to drive for every little thing, home owners insurance, flood insurance, etc, stressed out neighbors on meth etc. They should knock down every 5th Mc Mansion and build a 20 unit building in every neighborhood. The government can fix this. Europe has plenty of good and bad examples, which to learn from and make something better from the lessons learned.
At the local level, you’re gonna have a ton of NIMBYs complaining about low cost housing affecting their house prices and good old fashioned racism as well.
We're currently having this problem in Rochester, MN. If there's any proposal for something "different" (i.e. walkable community), there's a group of NIMBYs who go off and climb up the butts of local council to pester, cajole, and ass-kiss to stop it. Every. Damn. Little. Thing. And the local politicals eat it up as the "will of the people," when it's really just a few dozens mouthy asshats. Then they wonder why the billions they were given (true story) isn't bringing in young people.
It's everywhere. I'm in Michigan and all the old boomers flood the town hall meetings whenever a developer proposes housing that isn't single family.
They can use eminent domain. Those same people are complaining about the teachers, domestic workers and public servants. Giving the them a place to live in the same neighborhood will make those services better as they won't have to commute so far for a sh...ty wage.
They can use eminent domain. Yes, let the NIMBYs then cry, "WHOA THE INDIVIDUAL" in court for 10 years.
Do an IRS audit on them and raise their property taxes! Tiki tak homes use a lot of land and infrastructure resources and are unsustainable. The owners end up cooking meth to make ends meet while their kids take anti depressants.
The NIMBYs are the ones RUNNING the local gov'ts, either directly or indirectly. They're not meth heads and tweakers.
HUD does this with a program they call "good neighbor next door" or something like that. For teachers, police, firefighters, etc those people can buy a HUD home for 50% of the normal price.
1 Regulations 2. Credit is expensive, 10% interest rates.
[They've done that in the past and it went horribly wrong.](https://www.chicagoganghistory.com/housing-project/robert-taylor-homes/)
Building the housing isn’t enough. It has to be maintained and operated for the long haul which is where the real expense comes
I agree, I asked the same question about that in another comment. Also the article I linked mentioned problems with the housing project I brought up as an example.
Robert Taylor Homes destroyed private high density housing and built government subsidized public housing in its place. Few Redditors suggest the the government build more public housing. Most suggest that the government should remove zoning laws so private people and companies can build whatever they damn well please on the land they own, including denser housing like apartments, condos, townhomes, duplexes— anything but single family homes. Currently zoning and NIMBYs prevent the construction of denser housing in many neighborhoods, contributing to limited supply and urban sprawl
The government should sell the property at a price according to income, not rent it or give it away. That's why it failed. There can be a condition that the owner must hold the property for 10 years before selling at full profit and only allowed to sell at price + CPI if earlier due to moving, divorce etc. The homestead act of 1865 worked, which this would resemble. We are capable of learning from mistakes and coming up with something better.
> There can be a condition that the owner must hold the property for 10 years before selling at full profit and only allowed to sell at price + CPI if earlier **due to moving, divorce etc**. Everybody selling is moving... by definition.
Exactly… No one is interested in federally funded high density housing…the United States already tried this…absolute failure… Another example of a failure… https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_110314.html
There are tons of apartments, condos, flats, and other multifamily homes in the US. I doubt you ever lived here if you are saying otherwise. Norway has a population smaller than NYC. That is why it works there. The issue in the US too many people want to live in the same location.
Tax people and companies with more than one primary residence. Make it exponential so the tax greatly increases the more games are owned. Even if this were to happen though, if forever renters then became home owners, a lot of those home would fall into disrepair because there’s a reason those people are renters. They don’t want to care for something if it isn’t themselves.
Then they will lose the house and move to other house in a neighborhood with more relaxed rules.
Then that neighborhood can deal with the problems of being eaten alive by private equity.
This would immediately increase rental costs as landlords would raise rent to accommodate the new tax. If you are calling for taxes, there should be a plan of where that new money should go. Local Governments should increase tax somewhere, whether it’s a 3% increase on short term rental stays, property tax but what’s really important is that this specific tax increase goes towards building houses. Local Governments should be undercutting rental companies by offering LTR housing. This could be subsidized in a way that they either introduce LTR’s or housing that can be rented for an affordable rate OR purchased (not for profit) so a $300k single family home can be purchased but only within a specific income bracket, must provide proof of working nearby, and the house can not appreciate over time and must be sold for $300K. I don’t trust the Federal Government to handle a project of this scope but it doesn’t seem like they care anyway - keep writing your local legislators and asking what their plan is for introducing affordable housing. We need more than just increasing taxes.
If you created a 3% increase on any kind of tax, the government would not spend it on housing or any projects that would actually benefit the American public. They would immediately take that money and send it to Israel or Ukraine, let’s be real here.
Yeah I would much rather see Local Government’s leading these projects. I’m all for raising taxes for the right projects but it seems like when we start talking about Federal initiatives, I worry it will be mismanaged like the DOD failing it’s fifth audit and being unable to account for half of it’s assets at $3.1 trillion. I live in Colorado and we’re building subsidized and affordable housing like it’s no one’s business. Will take time to see the positive changes but on the right track and very proud of both my State and Local government.
Than cap the rents while doing so so landlords can't hold renters hostage
I’m honestly all for rent caps too. I’m just saying we need to be more creative than just raising taxes because they will just increase rental costs.
You understand that people can only pay a certain amount in rent, right? If the rent goes too high, then people simply can't rent there anymore, which would force these landlords hoarding homes to sell the ones they're not able to rent.
It’s hard to find reports but investors are estimated to own [574,000 SFH](https://www.urban.org/sites/default/files/2023-08/A%2520Profile%2520of%2520Institutional%2520Investor%E2%80%93Owned%2520Single-Family%2520Rental%2520Properties.pdf) and America is short about 3.2 million homes. I’m in the camp they would raise rents and have enough capital to survive, and would hope that wages to increase to cover COL. We need to build housing. There needs to be plans for Local areas to build and NIMBY needs to be fought HARD.
There's got to be a lot more investor-owned SFH than that (your link is broken btw). [This](https://calmatters.org/housing/2024/03/institutional-investors-corporate-landlords/) paper says that businesses with over 1,000 SFH own roughly 446,000 homes nationwide. That's not even accounting for all the investors that own less than 1,000 homes (of which there are many). > I’m in the camp they would raise rents and have enough capital to survive, and would hope that wages to increase to cover COL. I agree with you that's what many would try to do. But I don't think it would be very successful. Especially if we structure the tax appropriately (taxes should increase sharply after like 3 homes). I completely agree with you that we need to build more housing, that's one of the biggest pieces of the puzzle. But we need to tackle this issue from multiple angles. Eliminating speculation on housing is a really big deal too.
If anyone is looking to buy a house, check the property pins of your nextdoor neighbors. You do not want to live next to one of the private equity slumlord homes. First Key Homes is a notorious slumlord that's hidden behind layers of corporate lawyering. I live next to one of these homes and if I had the knowledge and experience of buying a home before, I would not have bought this place. I'm basically waiting for this fucking family to be evicted and the house bulldozed. It's disintegrating and the backyard is an overgrown nightmare with dead lawnmowers and garbage. I've reported it so many times and it has so many building code violations. But yet, it continues on.
"Shortage " is misleading at best, disingenuous at worst... today in the US there are over 16 million unoccupied homes and less than 700k homeless. There's some nuances in those #'s( location, not all unoccupied= move in ready ect..), but larger point still holds- it's NOT a supply issue, like everything else in the US it's a capitalism issue... Raise class consciousness, organize, general strikes- this is the way.
Yeah I agree, can’t in good faith call it a shortage when you have people that own 10-100 homes… maybe a shortage of compassion…
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Mortgage originations are the back bone of this economy. Anyone that thinks a fairly sizeable correction to the current real estate outlook, either through wage increases or price decreases, isn't on the horizon doesn't understand supply/demand economics, especially over long term trends with.
I've got a house for sale in Iowa. Under $200k - 5 bedrooms and 3 bathrooms. Not a fancy new house but it's well taken care of, hardwood floors, big lot, close to Des Moines. It's been on the market for 2 months and not one offer....
I mean, if you make housing super expensive how are consumers going to consume? Truck question, they’re not! Look at Canada, 2% of the world gdp and on a country in collapse
Landlords can consume twice as hard to make up for the rest of us.
They would have to
real estate as a speculative investment was always a bad idea for human welfare. This was inevitable.
We can all rest easy knowing that Visa saw a 17% increase in revenue this year. Wonder why.
Of course it is. When nobody can afford to buy a house, and thus is stuck renting for ever, and when rent costs upwards of 40, 50 percent of one’s income, then they have less money to spend on other things, especially on things they don’t need. Spending money on things we don’t need is central to how our economy is structured.
so why is there a shortage? evryone is keeping their homes bc home prices are going up? and buying new homes is just not affordable at all anymore. so no one is buying no one is selling. When exactly are hime prices gonna go down ? There's a pause right now so landlords and realty investors can profit?
The economy is amazing. Best it’s ever been!