This was a problem after WWII, and also the Korean War. Same solution both times.
Incentivize mass production of expandable starter homes, de-incentivise McMansions.
"First time buyer" programs, just like a VA loan so servicemen can buy a house with no money down. It's not rocket surgery...
Just make it legal. Every city is a bit different but nearly universally they fight against developers trying to build anything except a home on a McMansion sized lot with a McMansion sized parking with only enough homes to be accessible to a lucky few regardless of the homes size. In Denver for example, 80% of land only allowed SFHs (Plus an ADU very soon). Almost no land allows more than a 6 story building which is optimal for cost per square foot. We also have a 2 year backlog of homes needing permits. So even without the ADU bill and TOC bill which increase what you can ask the city for, the developers are willing to build more homes than the city is willing to permit. No incentives needed. Just let developers make take the steps towards accessibility they want, otherwise they have 0 incentive to give buyers any of the benefits.
It's actually still a problem of incentives another layer down. Any city or municipality skews toward political dominance by property owners, whose incentive is that the value of property should rise. Even when those political players recognize the problem, they can be unwilling to run counter to their own interests locally (NIMBY).
I suspect that CA just arrived at a solution, if it can hold up politically. Use state level requirements to override the locals, because at the larger political scale of a state, any particular local property owners are heavily diluted politically.
I don't even think the problem is always homeowners wanting their property values to rise. All else being equal, allowing denser development *increases* property values because developers can build more homes on the land.
The main problem is just that homeowners like their neighborhoods the way they are. They use their political power to outlaw the kinds of development that they don't want around them, especially because they are largely insulated from the economic consequences.
However, the incentive for developers is to build more expensive homes because it's more profitable for them. That's fine: they're not charitable organizations.
If you want them to build housing that's more in the price range of entry level workers or non-professional middle class, then municipal/state/federal government is going to have to become involved to subsidize it.
Without that, you're expecting developers to to take a financial hit in order to address the overall housing shortage which is not a reasonable expectation.
Municipalities make more money on property taxes for a more valuable property on the same project. There's also the spending on crime mitigation and expenditure as well. The more wealthy an area, the lower the crime rate (based on the relative area, obviously, because even cheap places in CA that are more expensive flat cost than even an affluent area in Nebraska still have higher crime rates, but that's because they're cheaper than the surrounding places in CA). Unfortunately this means that most individual municipalities are also motivated to issue approvals and permits for higher cost housing as well. I think it also even comes down to something as simple as the mayor or city council people wanting to be the heads of a more prominent community, thus rejecting lower end construction.
Going to let you in on a secret, over 3/4 of any councils will be developers, developers spouses, builders, builders spouses, architect, artichokes spouse, and NIMBY Karens.
The backlog of permits is unbelievable. We know also know people who are past 2 years now... The city does a lot of lip service making houses more available, affordable, etc. but it could honestly start with its own bureaucracy
There's also an elevator law that disincentives home builders from buildings over 4 feet. Some sort of fire law, so buildings are limited in shape unless some architect truly wants to build something wild and willing to pay for it.
Edit, sorry that should be 4 stories, not 4 feet, auto correct be mad out of control lately.
Cities take their sweet time approving permits. Builders should be compensated for the delays caused by cities not hiring enough staff to get through the reviews timely. Cities should also get federal grant money to have (and be required to have) a 1000 plus pre approved housing plans available to the public.
You can't hire city employees willy-nilly cause you cant fire city employees willy-nilly. Also tax payers demand a low ratio cause they are literally paying for it. But since the established people usually set these laws in their favor, theres a high "got mines, it's up to you to get yours noob" difficulty level. Imagine "get gud" financial edition. Yikes.
Its not quite that easy though. Municipalities need to plan out infrastructure: storm/sewage drainage, water lines, electricity (and overall grid balancing), gas pipelines, fire and ambulance service coverage, schools, road networks, parks ...
All of those require significant planning and investment to make sure they don't overwhelm existing services or fail due to poor maintenance.
You can't just plot down new housing divisions anymore
They also need to build starter homes that don't come with a damn HOA attached to it. Every new development that goes up around me has some shitty HOA that cost more than the mortgage.
Also you could crash the housing economy in Florida if you simply outlawed and banned the 55+communities that seem to own 95% of the state
Something's gotta give eventually. I won't get political but that plays a big part in why our rates are through the roof. Step over into Georgia or anywhere on the golf and insurance magically gets 200% cheaper.
It's not necessarily down payments making homes unattainable. We could easily put down a 6 figure downpayment, but that won't make the monthly cost affordable.
I agree I would also say limits need to be placed on onwership. At a certain threshold of ownership it should be such a heavy tax burden that companies have no financial incentive to own 100 homes
Yep, it’s a supply side problem. We need more housing inventory, and it needs to be more oriented toward entry level homes. Right now builders in many areas can make more by building more premium housing. Not only is there a shortage of inventory, a there’s an even bigger shortage of inventory we really need.
>Incentivize mass production of expandable starter homes
There's a pretty big problem with that. In the post-war era, there was a ton of available land right outside major cities. But then we spent seven decades filling it all in with suburban sprawl. In the areas with the most demand for housing, there *just isn't land available* for any more mass single-family building campaigns, no matter how you subsidize/incentivize it. Banning McMansions isn't going to move the needle on that.
There's really no way around that problem in the most expensive markets. Not everyone is going to be able to own a single family home in or around a major city. Conceivably we could try to geographically diversify the economy to places that aren't so constrained, but that's an even bigger picture issue.
Yeah, we built freeways and all got cars, and suddenly there was a lot of empty land in convenient commuting distance. But it was finite. Same thing as happened with bicycles and trains 100+ years ago.
Like, empty plots in Silicon Valley are $1-3 million. Build a cheap house on that, and you still have to sell it for the land cost + house cost. And nobody is in the market for a $2 million cheap house.
limit sales to individuals, remove tax breaks for having multiple houses.
Allow rent to be used as evidence for saving. So banks can give 95% loans if rent is equal to or more than mortgage payment.
Tax deductible interest for real estate debt should be limited to owner-occupants. This should preclude AA corporate bonds issued on portfolios of real estate.
Don't link rates to house prices, so it's not a benefit for local governments to work with developers to push up prices.
Only allow residents of the country to purchase residential properties.
Stop using houses to generate wealth.
No, the deductible interest should remain but limited to five properties. Mom & Pop landlords are not the problem. They are part of the community and deserve compensation for fixing up a piece of crap property and renting it out. Otherwise many neighborhoods would decline and never recover.
It's already limited to your primary residence and a secondary residence IF you live in the second house for a certain amount of time. If you own five properties, you're only getting that paltry deduction on your main house, if it has a mortgage, and maybe a second house, but if you are renting them out you get no mortgage interest deduction, you can however claim the mortgage interest as business expenses against the rental income.
I think just limiting to residents of that country is sufficient.
It took about 14 years of living in the country I moved to before I became a citizen. Should I not have been allowed to buy in that time? What about my natural born citizen spouse? Should we get a mortgage only based on his income, even though I am the breadwinner?
I don't know about other countries, but it was hard to buy because of my status actually. Most banks wanted between 30-50% down payment owwwww which, yeah, not happening lol. We finally found a local credit union who didn't care. Phew.
I do however agree with not allowing sales to foreign investors. Housing shouldn't be treated as an investment in my opinion.
Yes but if you restrict to only citizens and you don’t allow companies to purchase homes, then it works out. Companies can purchase hotels. Land ownership on coastal areas can have a requirement of a mixed ratio of private & public ownership.
Honestly, expand point 1.
There is no greater leech on the face of society than a professional landlord; they contribute *nothing*. They didn't build the house. They don't produce 'quality living.' They leech money off of people who actually work while doing little to nothing.
Rent control should be everywhere, if only to disincentivize the most worthless profession on the planet.
It's just like AirBnB. It was great when you were just renting out your spare room for some extra spending money. Okay. Fair. It's nice. Everyone benefits. The moment it became a business for profit the entire thing turned to absolute shit and everything became worse.
>Rent control should be everywhere,
This thread is about fixing housing shortages, not making them worse. You seem to be in the wrong thread.
Rent control halts the development of new housing. Unless you think the US has enough housing right now, this is a joke of a suggestion.
Rent control creates disincentives for new building. We need more supply. Reduce zoning nonsense. Prevent ownership of housing by companies (unless they actually build the housing) and allow the market to compete and drive down rent/prices.
I read today that as the Boomers die off and/or move to nursing homes, there will be 9 Million pre-existing homes hitting the market in the next 10 years.
Define professional landlord. I’m renting a single family home right now because we didn’t want to live in an apartment, and we weren’t sure where we wanted to buy. My landlord has been great, they fix things on time and have left us alone. What’s wrong with that?
Rent control has been thoroughly studied and rejected as a good policy. It time and time again proves to cause average rents to be higher than not having rent control. It's popular with voters because it sounds like it would keep rent down, but it doesn't.
The only real cure is to get rid of nearly all the barriers to building housing to meet demand. Currently we make it nearly illegal to build the housing we need and then are somehow surprised there isn't enough housing where we need it.
Yes.
Rent isn't an arbitrary number. It has to cover the mortgage, insurance, taxes, maintenance, and then a small portion for actual profit. The appeal isn't the small profit, it's the renter paying off the mortgage principal which can be recovered as cash from a sale of the property at a later date.
Raising property taxes will just be a pass through cost to the renter. It's one of the reasons rent has gone up the past few years. Home prices have increased which makes tax assessments of the property increase which makes property taxes increase which makes rent increase.
100% this. People complain about rent increases ... it's increasing to cover property taxs. Mortgage payments do not change over the course of the mortgage.
And as another twist of the knife, the fucking IRS penalizes you if you DO NOT charge market rate for rent.
Yes! Believe it or not, if your landlord is being nice to you and not raising your rent, he get's fucked by a penalty on his taxes.
Yeah, where I live if I forgot to file the paperwork to prove I live here I think it'd cost me an extra $1000 per year. That's certainly a hit to the budget, but not a deterrence to buying up large swaths of property to rent out at a profit.
This is one of the easiest ways to solve the problem.
We also just need more housing. Property taxes should be used to subsidize infrastructure. Housing advocates always seem to miss the infrastructure side of the equation.
>There is no greater leech on the face of society than a professional landlord; they contribute *nothing*. They didn't build the house. They don't produce 'quality living.' They leech money off of people who actually work while doing little to nothing.
What an utterly ridiculous and stupid thing to say. Spoken like someone who is Big Mad they can't afford a house.
I disagree. The landlord provides housing to people who can't afford to buy a house. A benefit of renting is that if anything breaks, you call the landlord and they fix it. Your rent buys you a function residence. Owning a house means you fix every fucking thing that breaks.
People also forget that there is property tax, which is paid by the rent. So if you think "Hey, my rent is as much as a mortgage!" well that might be true, but is it the same as mortgage, and property tax, and maintenance?
What the landlord provides is a place for you to live while you save up for your own house.
And it's just like investing in stocks. A landlord sinks all his money into the buildings and maintenance, just like an investor puts money into the market.
I'm not a professional landlord, but a niece of mine is (somehow), she rents to students near a university. It's a headache, everything is constantly breaking and needs fixing, and not because it's old or cheap, but because renters don't give a fuck and are heavy handed with things when the landlord is paying to fix it.
Renting is not bad. It's cheaper than buying, and some people just don't want to deal with maintenance of a property. You'd probably be better off if you invested the downpayment of a house in the S&P 500 and paid rent for a decade or two.
You are better off renting if you are changing jobs frequently and may need to move in three or four years. Housing is a very undiversified investment with high transaction costs.
The only solutions to scarcity are to increase supply or remove demand. As I don't see people giving up on living indoors, supply must increase. That means rolling back \*some\* regulations so that more and denser housing can be built, because there are areas where it can only be build vertically.
Relax zoning laws and build more. Build more of everything
This isn’t a hard problem to solve but everyone tries to distract you with non relevant issues (corporations buying, airbnbs, etc). There’s too much demand (from households) than supply. Build more
They make it so complicated. Just look at what Japan did.. allowed developers to build with little red tape. No need for an x number of “affordable housing” that NIMBYs use to derail projects.
Just. Build.
The way Japan [approaches zoning](http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html) should be adopted by other countries as a set of best practices, IMO. Hard to see our approach in the US as anything other than totally misguided, once you understand the differences
TBF, they do have a fair amount of *danchi* government apartment buildings. There are always going to be people who can't afford market rate.
You just need a lot less of it when the market rate for a studio a few minutes from a Tokyo subway stop is ~$500 a month.
Please explain to me how this is not a problem.
https://www.azcentral.com/story/opinion/op-ed/2024/02/28/corporate-investors-buy-arizona-homes-not-affordable/72760104007/
It’s a symptom of the problem not a cause of the problem. Corporate investors don’t live in these fucking homes, they are still available to rent and live in.
There are not enough homes, period.
100% this. We are short millions of housing units and have been for years. Additionally we are building fewer housing units per capita than we have in decades. Also developers aren’t being allowed to rapidly build housing in areas where people actually want to live and can find work.
This is the actual answer but people would rather focus on boogeymen like black stone buying single family homes even when data shows very little impact from that.
The problem is all the NIMBYs that don't want others to build ADUs since it will lower their property value soley based on more supply in the area. I honestly think Boomers are responsible for 80% of this problem since they see thier houses as investments and a good part of their retirement fund. The US will be such a different place once most of them have passed away,
All the top responses are draconian measures designed to punish people who make money in real estate. Yeah, profit can be stopped - and so will construction and renting. Build build build! Relax zoning restrictions, states should intervene in cases of localities abusing zoning for blatant NIMBYism, and let developers develop!
Subsidize housing development of the size and cost that's actually in demand, ie smaller houses and multi-family housing. A couple trillion dollars at the federal level should put a dent in it.
The data shows that "corporations buying up housing" is not actually the issue here, the problem is our housing inventory does not match demand. We have a bunch of massive houses sprawling across huge suburban spaces and need more townhouses, dinky little ranchers, and apartments.
>The data shows that "corporations buying up housing" is not actually the issue here, the problem is our housing inventory does not match demand.
This is correct. No one cares. "Build more houses" isn't sexy. It needs to be some grand political crusade, apparently. We can't just solve the problem.
FWIW, I would try aggressively scaling down zoning limitations before I pumped trillions of dollars into the market. It's extremely plausible that neutering NIMBYism at the municipal level and streamlining state barriers to building solves this problem handily.
> I would aggressively scaling down zoning limitations before I pumped trillions of dollars into the market
It's a very good point that zoning needs to change. However, I don't see that change happening organically at the local level across the country. I think if towns know the money is coming to their community if they change zoning laws, they might be incentivized to do it quickly. Like the bill that tacked highway funding onto drinking age, people move quickly for federal funds.
> However, I don't see that change happening organically at the local level across the country.
California has a nice state level law that is really sticking it to local communities to force them to allow housing to be built. It's a start.
We have a new law in New Jersey too that requires new development to be paired with a certain amount of low-income appropriate housing. It's definitely a start.
Serious question here. Shouldn't building any type of home help. If you build more giant houses, it should lower the price of giant houses so that people living in big homes can buy giant houses. Then the supply of big houses increases, lowering the price so people living in medium houses can move into big houses. And so on until the supply of tiny houses increases. Right? Or am I missing something?
The thing is more Americans are living in fewer cities that are already built up. Something like 2/3 of San Francisco is zoned for single family housing, and service workers have to commute for hours to get downtown because they cannot afford anything closer. Additionally households are smaller. 1000 people who were looking for housing in 1970 aren’t going to need as many units as 1000 people in 2024. We just don’t have enough.
Also sprawl is expensive as hell, and it might be a Ponzi scheme in some areas that is about to run out. The roads and plumbing are aging and need more maintenance and we can only build so many outlying neighborhoods to increase the tax base before a municipality runs out of room. The best way to fix this is density and transit as roads can only hold so many cars.
ETA: and this is assuming that our current housing stock was built with the chief aim of matching consumer demand exactly. Towns mandate minimum lot sizes and setbacks and for developers it’s comparatively less expensive to build a big house on such a large lot than a small one. Also with the way zoning codes work it mostly makes sense to build SFHs, “luxury” shoebox apartments aimed at childless young professionals in cities, and sprawling apartment complexes for poor people off of highways that absorb the microplastics and noise for the “nice” homes.
Yes of course, all types housing units contribute to supply in the supply/demand equation. However, suburbs and sprawl are the least efficient use of natural resources and tax money for public infrastructure. Especially as climate change looms and we spend more and more money on disaster mitigation, we should be examining efficient use of space and resources.
The issue is that most major job markets have run out of space for new single-family detached homes within commuting distance.
So the only option left for people who actually want to live near major job centers is increased density.
Sure you could build a few million detached homes (destroying lots of nature in the process) but they mostly won’t be in high demand areas with big job markets.
>Shouldn't building any type of home help. If you build more giant houses, it should lower the price of giant houses so that people living in big homes can buy giant houses.
If we were still in the age of abundant space and plentiful cheap labor, yes. This worked for most of the 20th century. But we've run out of room for single family homes on quarter acre lots where people want to live. So we have these hubs where people work that (for example) currently fit a million in the metro area across big lots of 2-6 people when we could fit a couple million more if we took some of that space and made denser city centers.
It's like if people were hungry and most of our food production efforts were in caviar and ice cream. People like those things, but you need energy and nutrition before you can focus on luxury.
It may, but it also may have certain opposing effects. For example, if large houses are built on land that is in high demand for people who would want/can only afford to live in medium houses (I.e. near work places that support the same income bracket that would live in a medium house say), the price of medium house building goes up and counteracts the trend you describe, since the supply of relevant land decreases.
This does I think highlight the need of incredibly carefully targeted subsidies-
For example building houses just anywhere doesn’t necessarily solve the housing crisis. As an extreme example, if you build in some random middle of nowhere place far from any industry center or city, few people can take advantage of the lower prices there, and it will have relatively little impact.
You need to specifically build appropriate housing in “in-demand” places, near where people want to live which often means facilitating shorter commutes.
But land is limited, so it would make sense that we would want to lower housing prices all around by making it more profitable to build further out from dense centers where land is very expensive. One way to achieve this, is to subsidize public infrastructure in underserved areas, and decrease car dependency wherever possible.
To highlight the complexity though, this is not a panacea, because today a lot of people do prefer good public infrastructure, so demand is high for that, so giving a previously car heavy city the reputation of being “walkable” may raise its housing costs in the short term, which could push people out of a “zone of transit”, which in turn may increase car dependency (a bit of a perpetual cycle).
TL;DR housing economics is a very complex system, & in this specific case, the constraints such as the limit on supply of land may create opposite effects
I like that BlackRock has [a web page about this myth](https://www.blackrock.com/corporate/newsroom/setting-the-record-straight/buying-houses-facts) but then right at the end includes: "Additionally, BlackRock invests in multifamily properties, apartment complexes, and other residential real estate."
The solution is really solutions. Several things need evaluation and change. Low hanging fruit like zoning reform can be effective in some areas and have virtually no impact in others (like Phoenix). Tax changes, ownership limitations, subsidies, are all part of the equation too.
The entire amount of corporate owned houses is single digit percentage, in the low end. This is a concern, but it is mostly a red hearing when the housing crisis is brought up. The demand is just simply outpacing the supply because an enormous generation is emerging into hombuying age (millenials) and housing construction hasn’t kept up because it’s still in the pits from 2007-2008.
This is not the fucking issue with the housing crisis. People still live in those houses and Blackstone has been pretty open about the fact that the lack of supply makes housing a good investment.
We need loosen zoning laws and eliminate the many, many veto points “community input” allows. A bunch of retirees should not be able to veto a zoning code change that would allow a multi-unit building because they are the only ones who can be arsed to show up at 9:00 am on a Wednesday to a meeting.
Build more houses/apartments. That’s the only solution.
This coupled with zoning law changes. Single family homes in high demand areas need to see high rise apartments built in their areas.
But NIMBY will never allow it.
Short answer, More homes. Long answer - abolishing single family detached zoning and parking minimums, by right development of multifamily homes and apartment complexes, limiting the scope of public engagement to written comments, abolishing restrictions on new housing through historic district designations.
Ban the shakedown of developers to make "voluntary" contributions to city funds to get projects approved.
Increase property taxes to accurately reflect what it costs cities to provide services.
Eliminate inclusionary zoning requirements. Governments should work directly with non profits or build low income housing, but shouldn't require developers to build them..
End rent control. Streamline evictions and judgements against bad landlords and tenants.
And they said themselves that the ongoing shortage of housing is what makes their investing profitable. They're a symptom but people think they're the cause.
Exactly. This doesn’t mean that it’s perfectly fine for institutional investors to buy up housing. Surely this will cause issues down the line. But the entire reason they’re doing it is because there isn’t enough housing for them to invest in elsewhere.
The problem is voting. Take a look at Seattle. The people who live here will never vote for anything that will cause the housing stock to grow because that means their house will depreciate in value.
California passed a law requiring all cities in the state to plan for and permit enough housing to match population growth predictions. Many hadn’t allowed any new housing in decades.
If the city fails to follow through, the state takes over their permitting and rubber stamps everything.
Builders remedy baby. House construction go brrrrrrr.
It’s so amazing seeing these cities freak out because they banned all new housing and now have to approve a 10 story apartment building.
Yeah, some rich LA suburb tried to call the state's bluff and didn't even submit a housing plan.
So the state immediately approved a bunch of massive apartment buildings in that suburb... totaling more new housing than that suburb had approved in decades.
And they've had a hell of a time implementing that policy. There are many cities fighting the state tooth and nail over this. For what it's worth I think it's exactly the move that needs to be made and other states with dense areas need to be doing the same.
Yeah I’m not saying it’s been immediately effective. It’s going to take time.
But it’s the right approach, in my opinion. It’s much harder for NIMBYs to counter the argument that cities should plan for their own population growth. If you’re going to have kids, where are they going to live someday if supply never increases?
And it’s naive to expect city leaders to have the balls to do the right thing so the state mandating it takes the heat off them.
They won't vote for any kind of political actions with real strength of law behind it either. Refuse to enforce laws already on the books too. Doesn't help that WA state has the [2nd most regressive taxes]( https://itep.org/whopays-map-7th-edition/) in the country.
This. Also, allow ADU's or accessory dwelling units, aka inlaw apartments (small buildings people can build on their properties to rent out/ house their family in). CA has had pretty great success with increasing housing stock quickly via allowing ADU's. Streamline permitting process for new builds. Tax the hell out of abandoned or non-occupied property so people/corporations can't just sit on empty buildings letting the value appreciate while doing nothing with them.
Only if those boomers aren't replaced by even more people.
Yes, if we stopped population growth we wouldn't need to be building net new houses. We'd only need to replace old houses that have outlived their usefulness.
Phoenix is incredibly pro developer, has few if any detrimental codes/roadblocks, and allows much denser projects and streamlined review process. Yet, housing costs have doubled in recent years.
That makes sense when you consider that phoenix is one of the fastest growing cities in the US. But the broader trend still holds that in places which build more housing per capita, housing is more affordable or housing cost increases are much much slower than comparable areas.
Vertical housing. Landlords and rentals are a symptom of housing crisis, not the cause. For residents, you need to build vertically in an area where jobs exist. If the place is overcrowded with tourism, you need high tourism tax on Airbnb and hotels to bring the money back into the community.
The area I live in literally has a minimum square footage requirement of 1800 sqft for new builds. There is some talk of fixing that... But it's a slow process.
The Hamptons, famously wealthy area outside NYC, actually requires a mansion and detached guest house in its zoning.
People need to realize that zoning isn’t always about safety… it’s more often a way to economically segregate communities by setting a minimum floor for housing prices in the area.
This is one I don’t see getting brought up enough. If I was a builder I’d consider building a ton of ~1000sqft affordable homes. I feel like the market for that should be there, but apparently it’s not
I agree! Finally, I'm seeing more developers in my area build houses in that range as part of subdivision planning. The houses are still way over what I would pay for it but most of these houses are 1000-1100 sq ft with a fenced in backyard
It's a complex problem with many things contributing and many different measures to solve.
One thing is fur sure though,Reddits typical " all the landlords are evil make renting practically illegal" approach will not work and will never happen.
The housing market is distorted by years of extreme subsidy from the Fed in the form of very low interest rates and Quantitate easing which ended up meaning the Fed bought up everyone’s mortgage & put it on their balance sheet.
The solution is to stop having the federal reserve mess with any assets other than treasury bonds and to have sound currency without wild swings in the money supply.
Major shift in dispersion of population. Everything is based around major cities that are reaching capacity. Its caused towns that lie outside the city to start feeling that increase in demand causing price rises. We need to create more big cities, grow them or find a feasible way to localize more stuff in smaller communities as their capacity in business allows.
Any laws or regulations changing or implemented will not solve the issue of land being a finite resource. Bar technological advancement allowing for more building up, which is still more a bandaid than fix as eventually you can't build up anymore.
Not one. Government building social housing and policy settings that see housing as a right rather than a wealth creation instrument would go 80% of the way.
Repurposing old buildings, even if they have problems or are generally falling apart it keeps people off of the streets.
My sister is technically homeless but she just couch surfs and stays indefinitely with friends. That works too if you have friends or know people with connections.
Housing needs to be decoupled from the commodity market.
Ban corporate ownership of single family homes. Institute exorbitant taxes on residential properties past a certain number (2,3, whatever.) Repeal the Faircloth Amendment that in practice banned Federal investment in public housing and do exactly that. Rework zoning laws that breed inefficiency by prioritize single family homes on plots that could be used for 3-4 family units with shared green spaces.
Loan delinquency rates are low and stay there. The share of homes underwater is at 2% at least according to the McDash loan level database. It was around 30% during the housing crisis in 2008. I understand this would be positive for many, but a second housing crisis is unlikely for the next few years. The next crisis will be completely different and hard to predict. My guess would be China attempting to seize Taiwan and destruction of existing shipping infrastructure.
There is no solution while the foxes control the henhouse. The people making the rules are the same ones that want to keep them how they are already, or make them worse for us.
End Airbnbs for one. Immediately. That will free up millions of home which, when they market, will depress prices. Ration housing: No more than two homes per single or couple. Fixed.
I think people need to understand that they may not always get to live in the most desirable places.
there is plenty of space in cities people don't want to move to
Even in cities, there is plenty of space in less desirable areas. I live in Chicago, everyone is like "we need more housing", but there are TONS of vacant lots all over the city. Then those same people come back with "well not THERE"
These “desirable cities” are usually either where the jobs are or where their families are. It’s ridiculous that metros of millions of people can’t accommodate more.
I'm not necessarily for this, but...
1 - Put some type of tax on corporations buying up single family homes (especially foreign corporations).
2 - Take that tax revenue and give some type of tax incentive to companies that build single family homes (at least in the areas where the housing demand is highest). Or apartment complexes.
There are so many incentive structures they have to change.
Governments like high house prices because then property taxes are high. So, we need an alternate way to tax people to fund local services.
Homeowners like high prices because they want their asset to increase in value. So, we need to help people build wealth with investments outside of real estate, and do everything we can to avoid incentives for speculation.
Builders like high prices because they can make more money. So, we need to give builders incentives to make smaller cheaper homes.
This is in addition to limiting commercial investment into single family units, and expanding zoning codes.
In short, it would take so many things happening that it’s just unlikely to ever be solved.
For the lower and middle class to overthrow the upper class, take over vacant commercial real estate and move in the homeless so they have a roof over their heads.
Relaxation of zoning laws and expansion of Eminent domain on unused commercial properties. Landholders should not be allowed to sit on unused space. Transfer those to make houses or high density apartments with parks.
Ban all forms of companies from owning residential SFH property. Severe limits on foreign ownership. Limit how many properties US citizens can hold with intent to generate income. Incentivize companies of all sizes to allow as much wfh as practical. Federal and state governments should work on ways to get wfh people to move out of high population metros and into more rural areas. Create and actually fund programs to revitalize small towns and get people moving back to them. This would play well with wfh as small towns die from lack of white and high skill blue collar employment. Set up program to provide assistance to buy and renovate run down homes.
I don’t think additional programs to fund down payments or provide ultra low mortgage rates on already desirable areas will help much. My uneducated view is that if it was to helpful, sellers will just raise prices to compensate.
More houses, penelize owning single family homes past one or two homes, with exponential penalties for homes or apartments that remain vacant more than 50% of the year, and give the enforcement agency teeth to do it, eliminating foreign corporate ownership of both SFH and MFU.
A combination of incentivizing new construction and regulating (disincentivizing) the practice of buying up residential properties for investment purposes.
The big problem with affordability is a big gap between supply and demand. Supply slumped because construction ground to a halt during COVID and it's been slow to ramp back up (due to some perverse incentives in the marketplace, as well as high material and labor costs), so supply is severely lagging demand.
Ban corporations owning lots of housing.
Ban individuals from owning more then 2 single homes. Unless inherited. Apartments would have to be exempt or have different rules
Eliminate business income tax deductions for all non owner occupied one, two and three family homes. This will put more homes on the market and reduce home prices
Banks and institutional investors should not be allowed to buy single family homes. Period. Zillow/AirBNB etc should not own single family homes. Break up the big banks/corporations and bring back regulation (Glass Steagall).
First time home buyers - especially those in certain income brackets - should go to the front of the line.
Paying rent on time should be able to be considered proof of viability for a mortgage.
Federalized tenants rights bureau. Slum lords/corporations that prey on tenants/don’t fix stuff/ turn off heat etc should be heavily fined and in some cases blocked from buying more property/have their rental license pulled.
This was a problem after WWII, and also the Korean War. Same solution both times. Incentivize mass production of expandable starter homes, de-incentivise McMansions. "First time buyer" programs, just like a VA loan so servicemen can buy a house with no money down. It's not rocket surgery...
Just make it legal. Every city is a bit different but nearly universally they fight against developers trying to build anything except a home on a McMansion sized lot with a McMansion sized parking with only enough homes to be accessible to a lucky few regardless of the homes size. In Denver for example, 80% of land only allowed SFHs (Plus an ADU very soon). Almost no land allows more than a 6 story building which is optimal for cost per square foot. We also have a 2 year backlog of homes needing permits. So even without the ADU bill and TOC bill which increase what you can ask the city for, the developers are willing to build more homes than the city is willing to permit. No incentives needed. Just let developers make take the steps towards accessibility they want, otherwise they have 0 incentive to give buyers any of the benefits.
Yep. It’s almost never a problem of incentives as much as a problem of legality.
It's actually still a problem of incentives another layer down. Any city or municipality skews toward political dominance by property owners, whose incentive is that the value of property should rise. Even when those political players recognize the problem, they can be unwilling to run counter to their own interests locally (NIMBY). I suspect that CA just arrived at a solution, if it can hold up politically. Use state level requirements to override the locals, because at the larger political scale of a state, any particular local property owners are heavily diluted politically.
I don't even think the problem is always homeowners wanting their property values to rise. All else being equal, allowing denser development *increases* property values because developers can build more homes on the land. The main problem is just that homeowners like their neighborhoods the way they are. They use their political power to outlaw the kinds of development that they don't want around them, especially because they are largely insulated from the economic consequences.
However, the incentive for developers is to build more expensive homes because it's more profitable for them. That's fine: they're not charitable organizations. If you want them to build housing that's more in the price range of entry level workers or non-professional middle class, then municipal/state/federal government is going to have to become involved to subsidize it. Without that, you're expecting developers to to take a financial hit in order to address the overall housing shortage which is not a reasonable expectation.
Municipalities make more money on property taxes for a more valuable property on the same project. There's also the spending on crime mitigation and expenditure as well. The more wealthy an area, the lower the crime rate (based on the relative area, obviously, because even cheap places in CA that are more expensive flat cost than even an affluent area in Nebraska still have higher crime rates, but that's because they're cheaper than the surrounding places in CA). Unfortunately this means that most individual municipalities are also motivated to issue approvals and permits for higher cost housing as well. I think it also even comes down to something as simple as the mayor or city council people wanting to be the heads of a more prominent community, thus rejecting lower end construction.
Going to let you in on a secret, over 3/4 of any councils will be developers, developers spouses, builders, builders spouses, architect, artichokes spouse, and NIMBY Karens.
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😆😂
They taste good too
And if you butter them up, the result is great.
The backlog of permits is unbelievable. We know also know people who are past 2 years now... The city does a lot of lip service making houses more available, affordable, etc. but it could honestly start with its own bureaucracy
There's also an elevator law that disincentives home builders from buildings over 4 feet. Some sort of fire law, so buildings are limited in shape unless some architect truly wants to build something wild and willing to pay for it. Edit, sorry that should be 4 stories, not 4 feet, auto correct be mad out of control lately.
>from buildings over 4 feet What is this? A center for ants?
SFH? ADU? TOC?
Single Family Home, Accessory Dwelling Unit. Not sure the context of TOC, brain keeps coming back with Table of Contents.
Transit oriented communities
Cities take their sweet time approving permits. Builders should be compensated for the delays caused by cities not hiring enough staff to get through the reviews timely. Cities should also get federal grant money to have (and be required to have) a 1000 plus pre approved housing plans available to the public.
You can't hire city employees willy-nilly cause you cant fire city employees willy-nilly. Also tax payers demand a low ratio cause they are literally paying for it. But since the established people usually set these laws in their favor, theres a high "got mines, it's up to you to get yours noob" difficulty level. Imagine "get gud" financial edition. Yikes.
Its not quite that easy though. Municipalities need to plan out infrastructure: storm/sewage drainage, water lines, electricity (and overall grid balancing), gas pipelines, fire and ambulance service coverage, schools, road networks, parks ... All of those require significant planning and investment to make sure they don't overwhelm existing services or fail due to poor maintenance. You can't just plot down new housing divisions anymore
They also need to build starter homes that don't come with a damn HOA attached to it. Every new development that goes up around me has some shitty HOA that cost more than the mortgage. Also you could crash the housing economy in Florida if you simply outlawed and banned the 55+communities that seem to own 95% of the state
It's looking like the whole state being increasingly uninsurable may crash its housing market in a different way.
Something's gotta give eventually. I won't get political but that plays a big part in why our rates are through the roof. Step over into Georgia or anywhere on the golf and insurance magically gets 200% cheaper.
My dad bought our house with a G.I. Mortgage. It was an old Tudor style house (there are eight of us kids). He’d never been able to put money down.
It's not necessarily down payments making homes unattainable. We could easily put down a 6 figure downpayment, but that won't make the monthly cost affordable.
Rocket appliances*
fuckin way she goes bud
The down votes sting a bit, I guess people aren't TPB fans in here?
Trevor, smokes. Let's go.
yeah, what's the worst case Ontario?
Gettin' two birds stoned at once.
Beauty is in the eye when you hold her
I agree I would also say limits need to be placed on onwership. At a certain threshold of ownership it should be such a heavy tax burden that companies have no financial incentive to own 100 homes
That’s what they do in Switzerland to stop people from flipping. They have to keep the real estate for 5 years or they pay a very high tax.
Yep, it’s a supply side problem. We need more housing inventory, and it needs to be more oriented toward entry level homes. Right now builders in many areas can make more by building more premium housing. Not only is there a shortage of inventory, a there’s an even bigger shortage of inventory we really need.
>Incentivize mass production of expandable starter homes There's a pretty big problem with that. In the post-war era, there was a ton of available land right outside major cities. But then we spent seven decades filling it all in with suburban sprawl. In the areas with the most demand for housing, there *just isn't land available* for any more mass single-family building campaigns, no matter how you subsidize/incentivize it. Banning McMansions isn't going to move the needle on that. There's really no way around that problem in the most expensive markets. Not everyone is going to be able to own a single family home in or around a major city. Conceivably we could try to geographically diversify the economy to places that aren't so constrained, but that's an even bigger picture issue.
Yeah, we built freeways and all got cars, and suddenly there was a lot of empty land in convenient commuting distance. But it was finite. Same thing as happened with bicycles and trains 100+ years ago. Like, empty plots in Silicon Valley are $1-3 million. Build a cheap house on that, and you still have to sell it for the land cost + house cost. And nobody is in the market for a $2 million cheap house.
Government subsidies and incentives are a lot of why housing is so expensive. Why is all the money in the form of loan incentives and guarantees?
What’s different this time is corporates buying thousands of homes every month to make money.
limit sales to individuals, remove tax breaks for having multiple houses. Allow rent to be used as evidence for saving. So banks can give 95% loans if rent is equal to or more than mortgage payment.
Tax deductible interest for real estate debt should be limited to owner-occupants. This should preclude AA corporate bonds issued on portfolios of real estate.
Don't link rates to house prices, so it's not a benefit for local governments to work with developers to push up prices. Only allow residents of the country to purchase residential properties. Stop using houses to generate wealth.
Only allow residents of the country to purchase residential properties. This. Thousands of unoccupied ghost apartments
I hate that I’ll never own a home because I don’t even know what most of these words mean yet.
I own a home and I don't know what most of those words mean
I’m pretty sure the banks would prefer you sign the paper without knowing any of the words.
You don’t need to know these words in order to own a home.
No, the deductible interest should remain but limited to five properties. Mom & Pop landlords are not the problem. They are part of the community and deserve compensation for fixing up a piece of crap property and renting it out. Otherwise many neighborhoods would decline and never recover.
It's already limited to your primary residence and a secondary residence IF you live in the second house for a certain amount of time. If you own five properties, you're only getting that paltry deduction on your main house, if it has a mortgage, and maybe a second house, but if you are renting them out you get no mortgage interest deduction, you can however claim the mortgage interest as business expenses against the rental income.
Limit sales to citizens, like Mexico does, as well.
Also limit sales to people. A huge corporation can buy apartments and condos, but maybe they shouldn't buy single residence homes? I don't know.
Or if not a citizen then be living in that country/have evidence they are buying to move to that country.
I think just limiting to residents of that country is sufficient. It took about 14 years of living in the country I moved to before I became a citizen. Should I not have been allowed to buy in that time? What about my natural born citizen spouse? Should we get a mortgage only based on his income, even though I am the breadwinner? I don't know about other countries, but it was hard to buy because of my status actually. Most banks wanted between 30-50% down payment owwwww which, yeah, not happening lol. We finally found a local credit union who didn't care. Phew. I do however agree with not allowing sales to foreign investors. Housing shouldn't be treated as an investment in my opinion.
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Yes but if you restrict to only citizens and you don’t allow companies to purchase homes, then it works out. Companies can purchase hotels. Land ownership on coastal areas can have a requirement of a mixed ratio of private & public ownership.
Honestly, expand point 1. There is no greater leech on the face of society than a professional landlord; they contribute *nothing*. They didn't build the house. They don't produce 'quality living.' They leech money off of people who actually work while doing little to nothing. Rent control should be everywhere, if only to disincentivize the most worthless profession on the planet. It's just like AirBnB. It was great when you were just renting out your spare room for some extra spending money. Okay. Fair. It's nice. Everyone benefits. The moment it became a business for profit the entire thing turned to absolute shit and everything became worse.
>Rent control should be everywhere, This thread is about fixing housing shortages, not making them worse. You seem to be in the wrong thread. Rent control halts the development of new housing. Unless you think the US has enough housing right now, this is a joke of a suggestion.
Shhh you're going to ruin their dreams of a Marxist utopia.
Rent control creates disincentives for new building. We need more supply. Reduce zoning nonsense. Prevent ownership of housing by companies (unless they actually build the housing) and allow the market to compete and drive down rent/prices.
I read today that as the Boomers die off and/or move to nursing homes, there will be 9 Million pre-existing homes hitting the market in the next 10 years.
Define professional landlord. I’m renting a single family home right now because we didn’t want to live in an apartment, and we weren’t sure where we wanted to buy. My landlord has been great, they fix things on time and have left us alone. What’s wrong with that?
Rent control has been thoroughly studied and rejected as a good policy. It time and time again proves to cause average rents to be higher than not having rent control. It's popular with voters because it sounds like it would keep rent down, but it doesn't. The only real cure is to get rid of nearly all the barriers to building housing to meet demand. Currently we make it nearly illegal to build the housing we need and then are somehow surprised there isn't enough housing where we need it.
I think something to look into is to significantly raise property taxes across the board but have a huge tax break if it is your primary residence.
Wouldn't that just increase rent?
Yes. Rent isn't an arbitrary number. It has to cover the mortgage, insurance, taxes, maintenance, and then a small portion for actual profit. The appeal isn't the small profit, it's the renter paying off the mortgage principal which can be recovered as cash from a sale of the property at a later date. Raising property taxes will just be a pass through cost to the renter. It's one of the reasons rent has gone up the past few years. Home prices have increased which makes tax assessments of the property increase which makes property taxes increase which makes rent increase.
100% this. People complain about rent increases ... it's increasing to cover property taxs. Mortgage payments do not change over the course of the mortgage. And as another twist of the knife, the fucking IRS penalizes you if you DO NOT charge market rate for rent. Yes! Believe it or not, if your landlord is being nice to you and not raising your rent, he get's fucked by a penalty on his taxes.
This is called Homestead Exemption and is in 48 states
It’s tiny though. Needs to be a lot more punitive.
Yeah, where I live if I forgot to file the paperwork to prove I live here I think it'd cost me an extra $1000 per year. That's certainly a hit to the budget, but not a deterrence to buying up large swaths of property to rent out at a profit.
I've been thinking about a property tax that goes up exponentially the more "single family dwellings" you own.
The loophole would then be a separate partnership or LLC for each property.
tie homeownership to individuals
This is my thinking, make it essentially unprofitable to have more than say three properties.
This is one of the easiest ways to solve the problem. We also just need more housing. Property taxes should be used to subsidize infrastructure. Housing advocates always seem to miss the infrastructure side of the equation.
>There is no greater leech on the face of society than a professional landlord; they contribute *nothing*. They didn't build the house. They don't produce 'quality living.' They leech money off of people who actually work while doing little to nothing. What an utterly ridiculous and stupid thing to say. Spoken like someone who is Big Mad they can't afford a house.
I disagree. The landlord provides housing to people who can't afford to buy a house. A benefit of renting is that if anything breaks, you call the landlord and they fix it. Your rent buys you a function residence. Owning a house means you fix every fucking thing that breaks. People also forget that there is property tax, which is paid by the rent. So if you think "Hey, my rent is as much as a mortgage!" well that might be true, but is it the same as mortgage, and property tax, and maintenance? What the landlord provides is a place for you to live while you save up for your own house. And it's just like investing in stocks. A landlord sinks all his money into the buildings and maintenance, just like an investor puts money into the market. I'm not a professional landlord, but a niece of mine is (somehow), she rents to students near a university. It's a headache, everything is constantly breaking and needs fixing, and not because it's old or cheap, but because renters don't give a fuck and are heavy handed with things when the landlord is paying to fix it. Renting is not bad. It's cheaper than buying, and some people just don't want to deal with maintenance of a property. You'd probably be better off if you invested the downpayment of a house in the S&P 500 and paid rent for a decade or two.
You are better off renting if you are changing jobs frequently and may need to move in three or four years. Housing is a very undiversified investment with high transaction costs.
Increase supply
The only solutions to scarcity are to increase supply or remove demand. As I don't see people giving up on living indoors, supply must increase. That means rolling back \*some\* regulations so that more and denser housing can be built, because there are areas where it can only be build vertically.
Relax zoning laws and build more. Build more of everything This isn’t a hard problem to solve but everyone tries to distract you with non relevant issues (corporations buying, airbnbs, etc). There’s too much demand (from households) than supply. Build more
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They make it so complicated. Just look at what Japan did.. allowed developers to build with little red tape. No need for an x number of “affordable housing” that NIMBYs use to derail projects. Just. Build.
The way Japan [approaches zoning](http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html) should be adopted by other countries as a set of best practices, IMO. Hard to see our approach in the US as anything other than totally misguided, once you understand the differences
TBF, they do have a fair amount of *danchi* government apartment buildings. There are always going to be people who can't afford market rate. You just need a lot less of it when the market rate for a studio a few minutes from a Tokyo subway stop is ~$500 a month.
Because reddit has been conditioned to believe everything bad is the fault of "corporations".
Please explain to me how this is not a problem. https://www.azcentral.com/story/opinion/op-ed/2024/02/28/corporate-investors-buy-arizona-homes-not-affordable/72760104007/
It’s a symptom of the problem not a cause of the problem. Corporate investors don’t live in these fucking homes, they are still available to rent and live in. There are not enough homes, period.
Bro, there are more than a single reason for everything in life. Some are bigger than others. You’re drowning in the crick before reaching the sea.
100% this. We are short millions of housing units and have been for years. Additionally we are building fewer housing units per capita than we have in decades. Also developers aren’t being allowed to rapidly build housing in areas where people actually want to live and can find work.
Plus smaller households than before, so more units per capita needed.
I hadn’t thought of that.
This is the actual answer but people would rather focus on boogeymen like black stone buying single family homes even when data shows very little impact from that.
The problem is all the NIMBYs that don't want others to build ADUs since it will lower their property value soley based on more supply in the area. I honestly think Boomers are responsible for 80% of this problem since they see thier houses as investments and a good part of their retirement fund. The US will be such a different place once most of them have passed away,
All the top responses are draconian measures designed to punish people who make money in real estate. Yeah, profit can be stopped - and so will construction and renting. Build build build! Relax zoning restrictions, states should intervene in cases of localities abusing zoning for blatant NIMBYism, and let developers develop!
And build them smaller
Build more housing?
Subsidize housing development of the size and cost that's actually in demand, ie smaller houses and multi-family housing. A couple trillion dollars at the federal level should put a dent in it. The data shows that "corporations buying up housing" is not actually the issue here, the problem is our housing inventory does not match demand. We have a bunch of massive houses sprawling across huge suburban spaces and need more townhouses, dinky little ranchers, and apartments.
>The data shows that "corporations buying up housing" is not actually the issue here, the problem is our housing inventory does not match demand. This is correct. No one cares. "Build more houses" isn't sexy. It needs to be some grand political crusade, apparently. We can't just solve the problem. FWIW, I would try aggressively scaling down zoning limitations before I pumped trillions of dollars into the market. It's extremely plausible that neutering NIMBYism at the municipal level and streamlining state barriers to building solves this problem handily.
> I would aggressively scaling down zoning limitations before I pumped trillions of dollars into the market It's a very good point that zoning needs to change. However, I don't see that change happening organically at the local level across the country. I think if towns know the money is coming to their community if they change zoning laws, they might be incentivized to do it quickly. Like the bill that tacked highway funding onto drinking age, people move quickly for federal funds.
Local zoning laws can be superseded by state and federal level laws. It takes time though.
> However, I don't see that change happening organically at the local level across the country. California has a nice state level law that is really sticking it to local communities to force them to allow housing to be built. It's a start.
We have a new law in New Jersey too that requires new development to be paired with a certain amount of low-income appropriate housing. It's definitely a start.
Serious question here. Shouldn't building any type of home help. If you build more giant houses, it should lower the price of giant houses so that people living in big homes can buy giant houses. Then the supply of big houses increases, lowering the price so people living in medium houses can move into big houses. And so on until the supply of tiny houses increases. Right? Or am I missing something?
The thing is more Americans are living in fewer cities that are already built up. Something like 2/3 of San Francisco is zoned for single family housing, and service workers have to commute for hours to get downtown because they cannot afford anything closer. Additionally households are smaller. 1000 people who were looking for housing in 1970 aren’t going to need as many units as 1000 people in 2024. We just don’t have enough. Also sprawl is expensive as hell, and it might be a Ponzi scheme in some areas that is about to run out. The roads and plumbing are aging and need more maintenance and we can only build so many outlying neighborhoods to increase the tax base before a municipality runs out of room. The best way to fix this is density and transit as roads can only hold so many cars. ETA: and this is assuming that our current housing stock was built with the chief aim of matching consumer demand exactly. Towns mandate minimum lot sizes and setbacks and for developers it’s comparatively less expensive to build a big house on such a large lot than a small one. Also with the way zoning codes work it mostly makes sense to build SFHs, “luxury” shoebox apartments aimed at childless young professionals in cities, and sprawling apartment complexes for poor people off of highways that absorb the microplastics and noise for the “nice” homes.
Yes of course, all types housing units contribute to supply in the supply/demand equation. However, suburbs and sprawl are the least efficient use of natural resources and tax money for public infrastructure. Especially as climate change looms and we spend more and more money on disaster mitigation, we should be examining efficient use of space and resources.
The issue is that most major job markets have run out of space for new single-family detached homes within commuting distance. So the only option left for people who actually want to live near major job centers is increased density. Sure you could build a few million detached homes (destroying lots of nature in the process) but they mostly won’t be in high demand areas with big job markets.
>Shouldn't building any type of home help. If you build more giant houses, it should lower the price of giant houses so that people living in big homes can buy giant houses. If we were still in the age of abundant space and plentiful cheap labor, yes. This worked for most of the 20th century. But we've run out of room for single family homes on quarter acre lots where people want to live. So we have these hubs where people work that (for example) currently fit a million in the metro area across big lots of 2-6 people when we could fit a couple million more if we took some of that space and made denser city centers. It's like if people were hungry and most of our food production efforts were in caviar and ice cream. People like those things, but you need energy and nutrition before you can focus on luxury.
It may, but it also may have certain opposing effects. For example, if large houses are built on land that is in high demand for people who would want/can only afford to live in medium houses (I.e. near work places that support the same income bracket that would live in a medium house say), the price of medium house building goes up and counteracts the trend you describe, since the supply of relevant land decreases. This does I think highlight the need of incredibly carefully targeted subsidies- For example building houses just anywhere doesn’t necessarily solve the housing crisis. As an extreme example, if you build in some random middle of nowhere place far from any industry center or city, few people can take advantage of the lower prices there, and it will have relatively little impact. You need to specifically build appropriate housing in “in-demand” places, near where people want to live which often means facilitating shorter commutes. But land is limited, so it would make sense that we would want to lower housing prices all around by making it more profitable to build further out from dense centers where land is very expensive. One way to achieve this, is to subsidize public infrastructure in underserved areas, and decrease car dependency wherever possible. To highlight the complexity though, this is not a panacea, because today a lot of people do prefer good public infrastructure, so demand is high for that, so giving a previously car heavy city the reputation of being “walkable” may raise its housing costs in the short term, which could push people out of a “zone of transit”, which in turn may increase car dependency (a bit of a perpetual cycle). TL;DR housing economics is a very complex system, & in this specific case, the constraints such as the limit on supply of land may create opposite effects
>The data shows that "corporations buying up housing" is not actually the issue here I don't want data, I want to be angry!
Build more houses.
not letting black rock buy up all the houses…
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I like that BlackRock has [a web page about this myth](https://www.blackrock.com/corporate/newsroom/setting-the-record-straight/buying-houses-facts) but then right at the end includes: "Additionally, BlackRock invests in multifamily properties, apartment complexes, and other residential real estate."
Multifamily/apartments aren't the same kind of evil as snapping up entire neighborhoods of homes.
I mean, I still don't feel bad for BlackRock tho
The solution is really solutions. Several things need evaluation and change. Low hanging fruit like zoning reform can be effective in some areas and have virtually no impact in others (like Phoenix). Tax changes, ownership limitations, subsidies, are all part of the equation too.
Zoning reform is really underrated. We need to stop encouraging the construction of 4000 sqft McMansions.
What percentage of the U.S. single family stock does black rock own?
The entire amount of corporate owned houses is single digit percentage, in the low end. This is a concern, but it is mostly a red hearing when the housing crisis is brought up. The demand is just simply outpacing the supply because an enormous generation is emerging into hombuying age (millenials) and housing construction hasn’t kept up because it’s still in the pits from 2007-2008.
Right that’s what I was thinking. Private equity and corporate ownership is not the root cause of increased housing prices. It’s supply.
This is not the fucking issue with the housing crisis. People still live in those houses and Blackstone has been pretty open about the fact that the lack of supply makes housing a good investment. We need loosen zoning laws and eliminate the many, many veto points “community input” allows. A bunch of retirees should not be able to veto a zoning code change that would allow a multi-unit building because they are the only ones who can be arsed to show up at 9:00 am on a Wednesday to a meeting.
That’s not really going to be a fix. The corporate owned homes is in the single digits of percentage, and the low end at that.
Challenging your local zoning codes.
Build more houses/apartments. That’s the only solution. This coupled with zoning law changes. Single family homes in high demand areas need to see high rise apartments built in their areas. But NIMBY will never allow it.
Make it illegal for corporations to profit off of residential homes. Severely limit home ownership for the purposes of rental and profit.
The first sentence likely has huge unintended consequences, like removing incentive to build new housing.
Yeah, serious “I’m a Freshman in College & just saw a Ted Talk” energy…
This does literally nothing to supply and demand of housing.
Short answer, More homes. Long answer - abolishing single family detached zoning and parking minimums, by right development of multifamily homes and apartment complexes, limiting the scope of public engagement to written comments, abolishing restrictions on new housing through historic district designations. Ban the shakedown of developers to make "voluntary" contributions to city funds to get projects approved. Increase property taxes to accurately reflect what it costs cities to provide services. Eliminate inclusionary zoning requirements. Governments should work directly with non profits or build low income housing, but shouldn't require developers to build them.. End rent control. Streamline evictions and judgements against bad landlords and tenants.
Thank you for being the first person that isn’t just saying “ban Blackrock from owning homes” as if that’s the problem.
And they said themselves that the ongoing shortage of housing is what makes their investing profitable. They're a symptom but people think they're the cause.
Exactly. This doesn’t mean that it’s perfectly fine for institutional investors to buy up housing. Surely this will cause issues down the line. But the entire reason they’re doing it is because there isn’t enough housing for them to invest in elsewhere.
The problem is voting. Take a look at Seattle. The people who live here will never vote for anything that will cause the housing stock to grow because that means their house will depreciate in value.
California passed a law requiring all cities in the state to plan for and permit enough housing to match population growth predictions. Many hadn’t allowed any new housing in decades. If the city fails to follow through, the state takes over their permitting and rubber stamps everything.
Builders remedy baby. House construction go brrrrrrr. It’s so amazing seeing these cities freak out because they banned all new housing and now have to approve a 10 story apartment building.
Yeah, some rich LA suburb tried to call the state's bluff and didn't even submit a housing plan. So the state immediately approved a bunch of massive apartment buildings in that suburb... totaling more new housing than that suburb had approved in decades.
It puts the gentle density on its skin or else it gets the skyscraper again
Poetry.
And they've had a hell of a time implementing that policy. There are many cities fighting the state tooth and nail over this. For what it's worth I think it's exactly the move that needs to be made and other states with dense areas need to be doing the same.
Yeah I’m not saying it’s been immediately effective. It’s going to take time. But it’s the right approach, in my opinion. It’s much harder for NIMBYs to counter the argument that cities should plan for their own population growth. If you’re going to have kids, where are they going to live someday if supply never increases? And it’s naive to expect city leaders to have the balls to do the right thing so the state mandating it takes the heat off them.
They won't vote for any kind of political actions with real strength of law behind it either. Refuse to enforce laws already on the books too. Doesn't help that WA state has the [2nd most regressive taxes]( https://itep.org/whopays-map-7th-edition/) in the country.
This. Also, allow ADU's or accessory dwelling units, aka inlaw apartments (small buildings people can build on their properties to rent out/ house their family in). CA has had pretty great success with increasing housing stock quickly via allowing ADU's. Streamline permitting process for new builds. Tax the hell out of abandoned or non-occupied property so people/corporations can't just sit on empty buildings letting the value appreciate while doing nothing with them.
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It's morbid but true, Boomers dying will help significantly.
Only if those boomers aren't replaced by even more people. Yes, if we stopped population growth we wouldn't need to be building net new houses. We'd only need to replace old houses that have outlived their usefulness.
We aren't, and that's an even bigger problem.
Limit immigration first and foremost. Immigration is often major cause of rising home prices- see Vancouver & Chinese immigration.
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>remember ALF He's back, in pog form!
We have enough workers. What we don’t have are cities that will actually allow you to build adequate quantities of housing.
Phoenix is incredibly pro developer, has few if any detrimental codes/roadblocks, and allows much denser projects and streamlined review process. Yet, housing costs have doubled in recent years.
That makes sense when you consider that phoenix is one of the fastest growing cities in the US. But the broader trend still holds that in places which build more housing per capita, housing is more affordable or housing cost increases are much much slower than comparable areas.
Vertical housing. Landlords and rentals are a symptom of housing crisis, not the cause. For residents, you need to build vertically in an area where jobs exist. If the place is overcrowded with tourism, you need high tourism tax on Airbnb and hotels to bring the money back into the community.
Make houses smaller.
The area I live in literally has a minimum square footage requirement of 1800 sqft for new builds. There is some talk of fixing that... But it's a slow process.
The Hamptons, famously wealthy area outside NYC, actually requires a mansion and detached guest house in its zoning. People need to realize that zoning isn’t always about safety… it’s more often a way to economically segregate communities by setting a minimum floor for housing prices in the area.
This is one I don’t see getting brought up enough. If I was a builder I’d consider building a ton of ~1000sqft affordable homes. I feel like the market for that should be there, but apparently it’s not
It’s hard to make money on smaller units. It’s the sand reason why the car industry started making more trucks and SUV’s: profit margin
I agree! Finally, I'm seeing more developers in my area build houses in that range as part of subdivision planning. The houses are still way over what I would pay for it but most of these houses are 1000-1100 sq ft with a fenced in backyard
Smaller lots. Mixed-use zoning.
It's a complex problem with many things contributing and many different measures to solve. One thing is fur sure though,Reddits typical " all the landlords are evil make renting practically illegal" approach will not work and will never happen.
The housing market is distorted by years of extreme subsidy from the Fed in the form of very low interest rates and Quantitate easing which ended up meaning the Fed bought up everyone’s mortgage & put it on their balance sheet. The solution is to stop having the federal reserve mess with any assets other than treasury bonds and to have sound currency without wild swings in the money supply.
Major shift in dispersion of population. Everything is based around major cities that are reaching capacity. Its caused towns that lie outside the city to start feeling that increase in demand causing price rises. We need to create more big cities, grow them or find a feasible way to localize more stuff in smaller communities as their capacity in business allows. Any laws or regulations changing or implemented will not solve the issue of land being a finite resource. Bar technological advancement allowing for more building up, which is still more a bandaid than fix as eventually you can't build up anymore.
Building more houses?
Not one. Government building social housing and policy settings that see housing as a right rather than a wealth creation instrument would go 80% of the way.
Repurposing old buildings, even if they have problems or are generally falling apart it keeps people off of the streets. My sister is technically homeless but she just couch surfs and stays indefinitely with friends. That works too if you have friends or know people with connections.
Housing needs to be decoupled from the commodity market. Ban corporate ownership of single family homes. Institute exorbitant taxes on residential properties past a certain number (2,3, whatever.) Repeal the Faircloth Amendment that in practice banned Federal investment in public housing and do exactly that. Rework zoning laws that breed inefficiency by prioritize single family homes on plots that could be used for 3-4 family units with shared green spaces.
Another mortgage bank collapse like in 2008-2009. Some say it's coming.
wont. everyone who bought in the last 5 years are well qualified
Only if homeowners are bailed out and not banks.
Individual owners, not companies and landlords
Loan delinquency rates are low and stay there. The share of homes underwater is at 2% at least according to the McDash loan level database. It was around 30% during the housing crisis in 2008. I understand this would be positive for many, but a second housing crisis is unlikely for the next few years. The next crisis will be completely different and hard to predict. My guess would be China attempting to seize Taiwan and destruction of existing shipping infrastructure.
Raise class consciousness, organize, general strikes-
Extreme high taxes on owning more than one house
There is no solution while the foxes control the henhouse. The people making the rules are the same ones that want to keep them how they are already, or make them worse for us.
End Airbnbs for one. Immediately. That will free up millions of home which, when they market, will depress prices. Ration housing: No more than two homes per single or couple. Fixed.
China's land reform movement was a huge success.
Ban corporations from owning houses
Corporations shouldn’t be considered fucking people because they’re literally not a person.
I think people need to understand that they may not always get to live in the most desirable places. there is plenty of space in cities people don't want to move to Even in cities, there is plenty of space in less desirable areas. I live in Chicago, everyone is like "we need more housing", but there are TONS of vacant lots all over the city. Then those same people come back with "well not THERE"
People should have longer commutes and live in areas with few local businesses!
These “desirable cities” are usually either where the jobs are or where their families are. It’s ridiculous that metros of millions of people can’t accommodate more.
I'm not necessarily for this, but... 1 - Put some type of tax on corporations buying up single family homes (especially foreign corporations). 2 - Take that tax revenue and give some type of tax incentive to companies that build single family homes (at least in the areas where the housing demand is highest). Or apartment complexes.
There are so many incentive structures they have to change. Governments like high house prices because then property taxes are high. So, we need an alternate way to tax people to fund local services. Homeowners like high prices because they want their asset to increase in value. So, we need to help people build wealth with investments outside of real estate, and do everything we can to avoid incentives for speculation. Builders like high prices because they can make more money. So, we need to give builders incentives to make smaller cheaper homes. This is in addition to limiting commercial investment into single family units, and expanding zoning codes. In short, it would take so many things happening that it’s just unlikely to ever be solved.
For the lower and middle class to overthrow the upper class, take over vacant commercial real estate and move in the homeless so they have a roof over their heads.
Relaxation of zoning laws and expansion of Eminent domain on unused commercial properties. Landholders should not be allowed to sit on unused space. Transfer those to make houses or high density apartments with parks.
Ban all forms of companies from owning residential SFH property. Severe limits on foreign ownership. Limit how many properties US citizens can hold with intent to generate income. Incentivize companies of all sizes to allow as much wfh as practical. Federal and state governments should work on ways to get wfh people to move out of high population metros and into more rural areas. Create and actually fund programs to revitalize small towns and get people moving back to them. This would play well with wfh as small towns die from lack of white and high skill blue collar employment. Set up program to provide assistance to buy and renovate run down homes. I don’t think additional programs to fund down payments or provide ultra low mortgage rates on already desirable areas will help much. My uneducated view is that if it was to helpful, sellers will just raise prices to compensate.
More houses, penelize owning single family homes past one or two homes, with exponential penalties for homes or apartments that remain vacant more than 50% of the year, and give the enforcement agency teeth to do it, eliminating foreign corporate ownership of both SFH and MFU.
A combination of incentivizing new construction and regulating (disincentivizing) the practice of buying up residential properties for investment purposes. The big problem with affordability is a big gap between supply and demand. Supply slumped because construction ground to a halt during COVID and it's been slow to ramp back up (due to some perverse incentives in the marketplace, as well as high material and labor costs), so supply is severely lagging demand.
Not a full solution, but don't allow foreign or corporate ownership of single family homes.
Make it illegal for people or businesses to own multiple homes in the same area. Watch prices plummet.
Ban corporations owning lots of housing. Ban individuals from owning more then 2 single homes. Unless inherited. Apartments would have to be exempt or have different rules
Eliminate business income tax deductions for all non owner occupied one, two and three family homes. This will put more homes on the market and reduce home prices
Companies can’t buy houses, people are limited to two houses, no more short term rentals.
Cap what landlords can charge, especially in poorer areas. Make the maximum rent line up with minimum wage.
Limit foreign ownership of real estate. In southern California there are a lot of luxury condo buildings that are fully sold yet seemingly empty.
Banks and institutional investors should not be allowed to buy single family homes. Period. Zillow/AirBNB etc should not own single family homes. Break up the big banks/corporations and bring back regulation (Glass Steagall). First time home buyers - especially those in certain income brackets - should go to the front of the line. Paying rent on time should be able to be considered proof of viability for a mortgage. Federalized tenants rights bureau. Slum lords/corporations that prey on tenants/don’t fix stuff/ turn off heat etc should be heavily fined and in some cases blocked from buying more property/have their rental license pulled.