Dealing with this in my community...people fighting adding housing around a subway station. Exactly where housing should go. So much of, not in my back yard.
Try building anything in East Boston. You get a few _loud_ people against. Everyone on the approval board is an activist. Meeting all the city requirements is never enough and new 'rules' emerge meeting to meeting. Board members regularly don't show up to ensure there is no quorum.
14:27 For me and most people who earn under 100k homeownership is an essential part of our retirement plan. I can afford to retire if my house is paid off, and my only cost is taxes and insurance. I couldn't imagine retiring not know how much my housing will cost. Especially since rent can have will swings in price increases.
Completely agree. I live in Canada and I did mathematical analysis of rent+investment vs buying a home, all the way to 80 years old, and retiring at 67 years old. The average investment return would need to be 9-10% to ensure it makes economic sense. This was based on average rental cost increase of 3.8% per year, which is obviously variable, but my rent would be around $8.2k per month at retirement, climbing to over $11k at 80 years old.
@pjell wow 11k sounds scary, but it's not far fetched. My grandma is turning 100 and she talks about how she bought her house for 15-20k. She sold it 2 years ago for around 400k
Definitely one of many factors that affected supply. The other one was Boomers aging in place more than any other generation and then Covid causing a sudden, violent eruption of dormant coastal equity...an explosion that allowed coastal people to buy multiple homes in other places, tearing through the existing supply in a heartbeat. Thankfully, the builders are rapidly solving that one problem. Ultimately, the root of the housing problem is deficit spending from Washington though, plus terrible monetary/interest rate policy and some lack of corporate regulation.
When I vacation I don’t want to be stuffed into a tiny pod. Hotels don’t like competition so they’ve pushed this narrative. On a large scale it is negligible. But it is a factor in some cities I will give you that
@@jasonforward6639it’s not a “narrative” Airbnb has negatively impacted communities by reducing inventory and inflating housing cost. Just because you like to utilize Airbnb on vacation, that doesn’t make the downsides any less true.
@@tedtalksrock Yeah and making it illegal doesn’t work. I’ve stayed in Airbnb’s in SF, LA, NYC, Honolulu, etc. It’s actually super easy to get around those laws. Airbnb is here to stay whether you like or not. The solution is provide more supply, but Karens love to complain about high affordable density housing.
Just imagine if we didn’t treat housing as a commodity and the only people who could buy homes were people planning to live in them. This is one reason young people are angry at older people. If you’re a young person who’s renting and wants to buy a home but needs to borrow, how do you compete with older people who can buy homes with cash and turn them into rentals?
So renting right now is 55% cheaper than buying. So buying a house to rent out right now doesn't make sense. One of the problems is laws are giving renters more power to make it difficult for housing providers to manage their rentals the way they need to when they get bad renters. This in turn raises prices of rentals in two ways. The liability potential increases for housing providers which increases prices and also reduces rental supply because people like me are considering getting out of rentals because of these laws. As soon as you need to hire a lawyer to get rid of a bad tenant is when this doesn't work anymore. Way too expensive and stressful to be worth it. What people don't get is that it is a two way street and folks need to quit demonizing housing providers. Only a very small percent of housing providers are bad and they end up paying the price for that. Most housing providers work to keep renters happy to keep turnover lower which ends up being better for the housing providers and tenants.
We would basically need to get rid of capitalism at all levels to justify your approach here. As bad of a wrap as capitalism gets, if you look at history all over the world and look at all the other ways people have tried, it is the best in terms of freedom. Socialism or communism could be good but people always end up corrupting those systems for personal gains. Capitalism does have a mechanism that helps keep corruption at bay, competition and freedom of enterprise.
@ nice try. You take my position on housing to argue that I’m advocating we end all capitalism, which I’m not. Then you use that strawman to attack socialism, which I never even brought up. It’s hilarious to hear you say socialism can be corrupted, as if capitalism can’t. What color is sky in your world and what country have you been living in? Capitalism is easy to corrupt. The US is proof of that.
There are many places in rural America, from upstate New York to the Midwest where factories have left and populations have started to decline where there are plenty of homes for sale for very , very modest prices. It would be great if people to find work in these abandoned places before these homes collapse in disrepair which also happens. Perhaps the expansion of high speed internet and remote work will help. Crazy how these two problems can’t be fixed at the same time.
Hey man, I live in WNY, (Roc, Buff, Cuse) there is minimal housing being built here too :/, rent is about $1300 for a "good" one bedroom.... (No utility included)
@ right, I was thinking more Norwich , Sherburne, etc.. some of those big old homes for for 200k. I was there a while ago. Here in Wisconsin central and northern Wisconsin you can get a 3 bedroom 2 bath home for $150k or less, same for central and southern Illinois. No jobs for 100 miles now, factories and paper mills in Asia now, people are moving out, but homes are still there and in good shape , for now. I fear it will be Detroit soon, square miles of bull dozed homes.
I worked along side homeless people for years in Seattle. They, for the most part, were not locals who got priced out. They were people from all over the country who quickly learned that they could come to the city, sleep anywhere for free, set up a tent anywhere, go to needle exchanges for free drugs when they could not get their street drug of choice, could shoplift with no consequences, could urinate and defecate in the street at will, get free food anytime at pantry, etc etc. And for the people who say that surveys of homeless people showed that there were local... those were bent stats based on the fact that if someone had no i.d. or had been in the city for more than 3 months were then considered local. It seemed like southern accents were half as common as west coast accents. The people are the street are 99% drug addicts. There is massive support for homeless ppl in Seattle and moms and kids dont end up on the street unless they refuse service. Build it and they will come.
@@claireh.7605 it's the city, there are bathrooms everywhere open for everyone, from public restrooms to fast food places that anyone can use, to libraries and park bathrooms, to homeless facilities that offer all that. they dont take it and they dont care cuz they just want to get high on drugs and hang on the street. when you are wasted you dont care.
Also what we're not doing is urban planning in that regard which is to say we should be building light rail out to highly dense urban communities within existing Urban boundaries.
Adding capacity and diversity to the housing stock is important but also we have to stop building crappy buildings that have huge costs for maintenance and upkeep because this drives the ultimate price up as well, so while they're cheap on the front end their cost of maintenance and habitation increases over time.
@@robertnobles8189 it depends upon the type of old home. And also many of the so-called homes being built today are being made with such crappy material that in 50 years they'll need to be torn down and rebuilt what's the cost of that in a declining global resource market? Building a house of concrete stone brick hardwoods and quality roofing materials is expensive but they can last for hundreds of years. How do we know? We have the existing homes that were well built to prove it.
@robertnobles8189 have you been to Europe? Millions upon millions of homes hundreds of years old and doing just fine. If you build a home well with brick, concrete, steel, hardwoods, glass, tile, etc., it can last for 100s of years.
@ if you build like they built hundreds of years ago? We don’t build housing like that anymore and Europe hasn’t built like that for over 100 years either. We can’t go back in time. We build within the current time with the current capabilities. You can’t ignore hundreds of years of development because there are some surviving examples of old housing that are very expensive to maintain.
I took a marketing course years ago in my school’s planning department. I will never forget a guest lecturer who responded to an earnest question about affordable housing: “Just because there is a need for something doesn’t mean that there is a market for it.” Yes over regulation and gaming the system stop too many things. But is there proof that anyone would be interested in providing non-luxury units? Also, are we just externalizing long term infrastructure costs? I expect that including these would more than make up for eliminating parking minimums.
Scott, thanks for getting another thoughtful topic in the conversation. I’m in the San Francisco Bay area getting the building permit repairs much less it’s an absolute. As a contractor and builder I’ve recently started a remodel on my parents home and the permits because of the third-party outsource planning agency and cost me over $58,000..00. Caron cost on the property almost $200,000 in time for a home visit for 60 years. My property tax basis went to $8000 and $42,000 as I can claim as my principal residence. this must change.
San Francisco is part of the problem. But instead of NIMBYism, could the focus be put on HOW a city is developed, especially one as small as this one? Shoving up a 30-story tower in a low density neighborhood in the remotest part of the peninsula nowhere near existing transportation makes no sense. Replacing existing moldy old frame housing stock in the south Mission with 6-story block square multiuse structures with green space in the middle just costs more -- so developers don't want to do it. Too bad. You want to be part of developing this city? You need to follow some rules. And describing the entire severely behaviorally unable population as "homeless" isn't accurate. Michael Shellenberger has described how placing someone unable to care for themselves into their own apartment is not the answer. We need a new generation of custodial (you can't recover from addiction if your dealer visits you in the hospital) behavioral health campuses to house this population -- in some cases very long term. Behavioral illnesses take years to stabilize. Some will need various levels of supportive housing for the rest of their lives. And if we can pay prisoners to work, we can pay hospital residents to work as well when they're able to, without losing their housing, friends, and medical care. It's time to address this issue as well. Our streets have become open wards for the behaviorally ill. That is not compassion.
Great guest. Cities need to remove single family zoning and replace it with mixed use zoning having all different kinds of housing options. Public transportation will need to be improved as well
I love the talk about converting offices into housing! We have found a way to accomplish this in San Francisco, and I am working to convert office buildings into homeless shelters at Brownstone X!
1. address corporate and investment fund ownership of homes (either to flip, rent, hold to drive values up) 2. some other countries don't allow land ownership for foreign entities... 3. there is NO incentive to reduce housing prices - the ONLY person benefitting from lower prices is the buyer. agents on both sides want % of $$$. taxes feed local govt. commodification of housing is simply unsustainable in a capitalist system where salaries are not effectively rising. 2008 showed the problem but it was never fixed, just swept back under the rug - nothing to see here - move along
Corporate funds realized a long time ago, that local jurisdictions would constrain supply for a long time. Therefore the cost of housing would go up, its a market constrained by government regulation and the hedge funds profits would continually rise. If you actually allowed people to build housing, to relieve supply problems, housing would not be as attractive of an asset class to investors. That's where corporate money should be going, not into capturing a market through rent seeking behavior.
1. that has nothing to do with the housing crisis. We had unaffordable housing for years before hedge funds got involved 2. another completely tangential distraction that is meant to avoid the need to build more housing you just dont want to admit we have a housing shortage
With the billionaires in full control of our government we will see Wall Street and private equity buying of single family home go from 26% to 50%? Maybe more? We will be all renters soon. If you make 50k a year and your house is now worth 500k you cant afford the taxes and are forced to sell pay a huge percentage of your equity in Capital gains tax . Now you are a renter .
Does no good to build houses that the majority of people can't afford. Fix the income inequality and there will be incentives to build houses. Instead of allowing investors to price families out of the housing ownership market.
@robertnobles it's not just supply and demand. All assets prices are skyrocketing. All over the world. Currencies are being debased. Build all you want, won't change much.
Having grown up in the suburbs of Boston and still having most of my family in that area and then myself getting into farming and living in the Midwest and rural upstate NY I really have come to the conclusion that it's a subculture problem where left wing areas really believe they should have the right to veto anything that they do not think should be built in their town whereas where I live now and rural upstate New York where it's very conservative no one thinks they should have the right to tell other people what to do on their own land even in town and small cities. I was talking to two of my neighbors to live right across the road for me about this They said the same thing as me they're like I just don't understand why another person thinks they have the right to tell someone else what to do in their own land I don't want someone else telling me what to do I might not like what you're doing over there It might be ugly but I still don't think I should have the right to veto it. Where is when I go to my sister's who's in a rich suburb of Boston One of their neighbors put up a white picket fence every other one of the neighbors went to the HOA and the town to complain that it didn't fit in and it needed to be taken down, im pike who cares it doesnt even look bad. I think fundamentally if you do not change that subculture where you think you have the right to tell other people what to do on their own land I don't really care what you do policy-wise. Technically where I am and upstate New York still has all the same policies from environmental housing regulations and so on that they do downstate but up here no one follows them and no one turned someone in when they know their neighbor didn't follow them. Like the house I live in we built it ourselves with help from the Amish in a couple other friends We never got a building permit no environmental study ever got it inspected or got occupancy. The only pushback we got was when the appraiser came he said looks like you got a new building there I'm going to have to raise your appraisal lol.
We are self insured, money have been invested into hardening our place. Stone walkways, drainage, all stone, concrete, solar panels, batteries, irrigation… all vegetation has been cut back, no more problems with bugs, pests. Also whole property have not seen any chemicals for last 8 years.
I am fascinated by this topic because it seems to me that there was a substantial group of people against building new housing in the last 25 years due to environmental concerns. Is that suddenly not a thing? 🤔
Hempcrete and 3d house printers are the newest methods out there. Takes days not months. One clay houses printer uses local materials. Have house design competitions for passive housing designs in regular neighborhoods. Small towns are awesome.
Progressive cities have policies that attract people experiencing homelessness; these are the places that the services exist, for better or worse. The rub is and will always be there …
@@Meishach2112Not totally surprising given this conversation is about housing. You could talk for 10 hrs about all the reasons homelessness is big in those states.
I can't help but think the situation will rapidly worsen as climate and overshoot impacts continue to accelerate. And yes, I think it will even impair the lifestyles of the 1%
Great discussion from a very astute and knowledgeable guest, unfortunately it was very superficial in terms of solutions. But awareness is a start I guess. but let's all never forget that the ever-widening wealth inequality is due at least 99% to the government simply spending more than it takes in and printing the rest to make up the difference. The borrowed money goes first to Wall street and in turn creates asset inflation which benefits the already asset-laden. Also, atrocious interest rate policy from the Fed made matters far worse than they needed to be. Let's also not forget the incessant and ongoing illegal bank/lender rescue packages that have not allowed the necessary credit cleansing cycle (that is there to wipe out excessive greed and gamblers) to happen. That being said, house prices are falling fast in many places, including California. Rents are cratering in certain places as well.
Both of you are clueless about absentee ownership. Absentee Ownership is the Destruction of Community, and Crypto Currency is a double layer cake of the Absentee Ownership abstraction. "A Pattern Language; Towns, Building, and Construction", p 211 When shops are too large, or controlled by absentee owners, they become plastic, bland, and abstract." "A Pattern Language; Towns, Building, and Construction", p212 Communities can only get this personal quality back if they prohibit all forms of franchise and chain stores, place limits on the actual size of stores in a community, and prohibit absentee owners from owning shops.)" Absentee Ownership becomes a problem within a very small radius. The owner of the B... Estate got into big trouble within our beautiful town for trying to develop a beautiful historic estate that was only one mile from his home. The town and even his daughter convinced him to stop the plans. He eventually moved outside of town.
Excellent show. In my area (southern NJ), all of the housing development is geared towards upper middle come. Even high density development is all priced too high. There needs to be more building of smaller homes, everyone does not need 4 bedrooms and 3 bathrooms, a big dining room, a den, home office and a living room, or a grand entrance. Why not build some 3 bed, 1.5 bath cape cods.... I will answer the question, builders don't make enough money on them, it is good old American greed.
Scott, I think this issue gets at a lot of what you say about artificial supply constraints. In America we have put a lot of eggs in the housing basket. It's where a lot of Americans net worth is based. Therefore we have strong financial incentives to artificially constrain the supply to increase the demand.
Even if we assume a total free market- without any ADA, planning, or building code requirements- it remains unconvincing to argue that the supply side of the market would be capable or interested in providing housing that people can afford. A grad school guest lecturer remarked to my class years ago that just because there is a need for something does not mean that there is a market for it.
Building houses and solving the issues around the building of houses is super, super, easy. The problem is INFRASTRUCTURE supporting more housing, i.e. water, sewer, power, transportation, services (police and fire, etc.). Solve those first, housing become easy.
In Madison, Wi there is no shortage of developers building. The problem is these developer’s are pricing people out. Who wants to pay on average $3500 for 1 bedroom apartments and het no equity. Plus, are developer’s just throwing buildings up without consideration to rain run off and flooding because a laxed rule to zoning.
Renting and owning are not equivalent from a lifestyle perspective, and it’s totally disingenuous to simply equate the two in financial terms as to which is a better investment. Multi-family units come with too many restrictions. Carpets that are filthy that can’t be ripped out and replaced with something clean, old appliances that landlords refuse to upgrade, shared laundry facilities that are poorly kept by the management, plumbing issues that are never really fixed. Landlords never live up to their end of the maintenance contract. Home ownership is freedom from the landlord’s restrictions on how we want to live as free people. Screw landlords from east coast to west coast.
Sure it is. Have you ever made 4 trips to Home Depot to fix one plumbing issue? Freedom my ass! There is truth in the lack of equivalence, but the rest is the result of a contest where tenants don't want to pay so landlords don't spend.
@Barnaby33YT I spent years as a home maintenance worker before becoming an engineer. Yes, I have spent a lot of time fixing plumbing, electrical, and other issues on older homes. I’d still rather have the ability to upgrade and accept the liability of repairs than to live in a minimally maintained space I have no control over.
The real reason housing is expensive is because interest rates were 2% for 2 years. Don’t understand why people don’t talk more about this. My dad’s house in NJ was on the market for 1+ year 2019 into 2020. Then sold in 2 months and had 20 offers. It all had to do with the demand.
Before we do any of what was talked about here we need legislation that limits or eliminates private equities ability to purchase single family housing.
@@degenshaw6386well of course there's a combination of a lot of different factors like cost to build due to the increase in material cost, zoning issues across the nation etc...but this is an opportunity for legislation to jump in.
Agree so much. Ownership is clearly almost always a better deal than renting and all these smart commentators are trying to convince us it’s not. Make investors build new homes and restrict existing supply to homestead buyers only. Only populist opinion I feel strong about.
Is it a regulatory problem, a housing availability problem, an affordability or a vacancy problem or some combination? I think the amount of homes that are taken off the the market by institutional investors and b and b ers is the major change along with the number of people in a household decreasing. Allowing single family homes to be converted to duplexes and limiting the number of houses institutional investors can own (max single family homes from 10 to 25) could relieve some of the market shortages in different communities.
Not mentioned here; upgrading existing utilities to accommodate higher density ie power, sewer, water, parking, schools.......who pays for that? I agree there's a supply problem and more housing is needed and higher density is inevitable, but I was in construction and a general contractor in Southern California in the 80's. Additional infrastructure has to be paid for, in the costs to the builder, the buyer, and the cities through higher taxes. Add on HOA's, homeowners, flood, or earthquake insurance and you have the insane problem California has had for 30 years. First time buyers have a high bar there, always has been.
Fixed rate mortgages don't rise. Rents do. Homes escalate in value, and even if they don't, at the end of the mortgage you build equity. More important: you don't get a $500k capital gains tax deduction/exemption on stocks....you do on your home.
There is the thing, NO ONE is addressing If most of someone's net worth is tied up in a home and I start to view my home as a retirement plan....it is hard to justify/explain that I should transfer my retirement savings to developers. I live in a area where developers will gladly build housing...but it has to be +$1M for each unit. The county wants to rezone properties in my neighborhood to allow duplexes on properties that used to have one house. The ironic thing is the house they will purchase might by worth 2M, but they will sell 4 duplexes for $1.5 - $2M each. This does not solve the affordability problem. Cities need to purchase office buildings and demolish/convert them to affordable housing. I have no issues with rezoning and putting more housing my my neighborhood....I do have issues with short term rentals, profiteering and profit at the expense of a neighborhood. Most of my net worth is not in my house....but most of my neighbors...this is probably true. There is land to build everywhere....the problem is that developers won't make 90% margins....instead it will be 20% (making a point). Also, there are a lot of "hood" properties that are close to the city and the metro that developers will not touch because it is not as profitable as they would like.
Developers don't do themselves any favours when they propose projects that are far too large to ever be approved, then backtrack, rather than starting out with a feasible plan. Seems to be a particular issue in Ontario, as other places seem to manage the process better.
Condensed housing requires upgrades to the mass transit system. The expertise of urban planners is essential in safeguarding the local quality of life & natural environment. Innovative, comprehensive community design solutions can meet new housing demands. Let’s learn from successful urban planning project models in Europe & elsewhere. Is progress about “relaxing the rules,” or more about upgrading or “modernizing” the rules to perhaps better effect - to achieving even better housing?
Take a look at lumber, the one building material we grow and sequesters carbon … the price-per-square foot to build is going up, lumber and plywood have been in a historic free fall for two years. (I’m living it.) The problem is us, all of us. We all want affordable housing somewhere else, we want less regulation somewhere else, and we want others to live in spaces we do not want to live in. We want affordable building products and we want jobs, but we banks and municipalities come first. The layers above the actual production of housing are not going away, they are too lucrative; no one with a mortgage, no one who issued a mortgage, and no municipality collecting housing fees and taxes, wants housing supply to go up and prices to go down. Griping about housing and pointing fingers is far more beneficial to those who could make a difference.
How about changing the tax code by eliminating the 1031 exchange option on single family residential properties along with depreciation on SFR homes as investments. A good portion of the problem is VRBO and AirBNB homes that are becoming profit centers and take away from the necessary supply for all.
What happens when it's time to retire and you've rented your whole life? For many people retirement isn't possible if you're paying rent or still making a house payment. Buying a home early in your 30's makes it more likely you'll be mortgage free by your 60's.
Interesting conversation. Here in Auckland, New Zealand, planning restrictions have been removed, and new houses are springing up everywhere. Developers are replacing old homes with dense, unattractive, generic units. Street parking is scarce, there's no space for trees or birds, and on our street the overwhelmed sewage system is constantly being dug up for repairs. More housing has stabilized rents, but at the cost of crowded, unattractive neighborhoods. Even so, I understand the urgency, kids can’t afford homes, and in a capitalist society, lacking capital is a problem.
There are no solutions only trade-offs...the answer I found is to move out of a city and back to the farm. Much better quality of life lower cost of living and in order of magnitude better for raising a family.
Some of these discussed solutions are quite worrying and lead to greater problems. I'm assuming a lot of these answers are based on theory and not practice.
There needs to be a ban on foreign investment firms buying real estate here. We should also keep investment firms out of real estate until we have affordable housing.
we had a flood, building getting a lot easier now and everyone wants new housing, homeless, tax base etc come on down we needed help and things are moving, not as slow as before
Even if we build a new community it’s just foreign investors parking their money. More than half of my new community is renters, I’m shocked ppl can rent at 4-5k a month. My HoA meetings have like 10ppl that are actually owners lol
CA got hammered with massive population growth and land development. Its not about them wanting their existing homes to rise in value, its that the quality of life gets severely diminished with this growth level.
Corporations are a major reason for the shortage of 'affordable' housing. If a company's margin is say 30%, do they build $200k houses, or $400k houses? (On a finite supply of land) Multi-family rentals are inflationary also due to company's manipulating the prices because each 'phase' of the development construction uses a different name. 😬 So when advertised online, instead of 10 developments with rentals, there are 40-- with coordinated prices. This has the effect of pricing power (from a minority player.) (Coordinated prices are used to raise the 'standard' of expected rents-- not necessarily be the same.) Thanks for the interesting talk....
Algorithms do contribute to our overall cost of living problem. Think of the Bell Curve...in the past this was a long wider "Hill" for the curve then we are seeing today with an algorithm. The hill turns into a mountain and moves towards profit, more and more. Any smart business will want more profit for their goods, housing or otherwise, and use these algorithms to help them decide how to price. This practice will squeeze this bell curve to be steeper and shorter....not wide and fairly and certainly not to the left, for pricing one off's. The machines will even help a slum lord...it doesn't care.
as usual the comments are just people trying to avoid the need to build more housing by bringing up all sorts of small tangential issues that are just obviously not the real core issue with housing. Cities like Santa Monica and Sunnyvale in CA have already banned Airbnb and theyre still the most expensive in the country. We just need to build more housing
I’m totally pro density As long as parking is handled on-site Our streets are so crowded that adding even more cars to the already limited parking available only benefits people who have access to off street parking
Let the market decide to provide parking with housing or not. And the market can decide to build convenient parking at a cost. Not everyone owns a car and those who don’t should have to absorb the costs.
The only city in the USA that has a growth mindset is Austin texas, the california expat capital of texas the red state. Huh, how wierd is that, that the city of Austin is trying to keep rent low intentionally, in order to keep Californians coming to texas. Is there something we should be reading into this?
Thank you for talking about this Prof G! We do not need more apartments and rentals owned by corporate equity landlords who price gouge rents. And unfortunately a lot of these new construction "starter homes" start around $500K which is just not affordable for most first time home buyers. I can tell you that high inventory in the sunbelt does not reflect the rest of the country. And women and families are moving out of those red states because it's not safe to get pregnant there.
Jenny's premise is objectively false- permitting follows growth. Many of the sunbelt markets are structurally oversupplied because of overbuilding which hasn't done a thing to improve affordability. Places like Nashville have always been builder friendly- and the permitting is so far outside of historical norms, even when normalized and compared across other markets. City center, population growth has slowed considerably, is flat, or declining in those 3 markets. And people can say this is just a multifamily issue when that's also not true- it's elevated on the single family side as well. This is some pro development propaganda.
A lot of talking about building more houses by people who are not building houses. Too many administrators. I’m referring to Scott and his guest in particular.
Ah, yes. The small government argument. Maybe, just maybe, it's a little more complicated than that. Maybe it might have something to do with the terrible living standards of builders in America and their lack of access to proper health care? Maybe it's the commodification of housing. Maybe it's foreign ownership .....
Maybe we shouldn't deport the people who actually build the houses. I'm talking about the guys who are on the roof, laying shingles, not the contractor stopping by for twenty minutes to check on the workers.
I understand the core of your argument, that there is too much bureaucracy behind getting authorization to build a house, but why are you taking a shot at Galloway and his guest? They’re not part of the process, they’re not administrators. Their private citizens commenting on a process that’s frustrating everybody. Chill dude.
Buying a house in an expensive market is a total scam. DO THE MATH PEOPLE! Invest in the markets. Renting is GREAT. Make someone else do the maintenance BS. I’ve owned 2 houses, and may never own one again.
Yeah I do like the simplicity of renting. I'm just concerned about high inflation in the future and how owning property would protect me while renting leaves me exposed
Its not just build more. You have to build cheaper. And you need massive governmemt intervention, preferrably through incentives, to do so. Any other ideas will not work.
If she'd bought her house in the last 3 years she'd be singing a very different tune. Instead, she dismisses everybody as NIMBYs. Truly detached from the problem she pretends to be expert in.
The problem is that we're leaving a lot of our big-picture- and micro-urban planning decisions to people who either don't have the experience and expertise (local planners) or are incentivized against it (nimbys, developers of single-family homes).
We don't need more houses. We need more appealing places to live with employers within 30 miles radius. You currently have too few employment centers that offer livable level wages.
You lost me at the private equity response. People need to come before profits and institutional investment has driven up costs by artificially inflating rental and purchase prices after buying all the available stock throughout a region. Ban them all.
Dealing with this in my community...people fighting adding housing around a subway station. Exactly where housing should go. So much of, not in my back yard.
Try building anything in East Boston. You get a few _loud_ people against. Everyone on the approval board is an activist. Meeting all the city requirements is never enough and new 'rules' emerge meeting to meeting. Board members regularly don't show up to ensure there is no quorum.
14:27 For me and most people who earn under 100k homeownership is an essential part of our retirement plan. I can afford to retire if my house is paid off, and my only cost is taxes and insurance. I couldn't imagine retiring not know how much my housing will cost. Especially since rent can have will swings in price increases.
Completely agree. I live in Canada and I did mathematical analysis of rent+investment vs buying a home, all the way to 80 years old, and retiring at 67 years old. The average investment return would need to be 9-10% to ensure it makes economic sense. This was based on average rental cost increase of 3.8% per year, which is obviously variable, but my rent would be around $8.2k per month at retirement, climbing to over $11k at 80 years old.
@pjell wow 11k sounds scary, but it's not far fetched. My grandma is turning 100 and she talks about how she bought her house for 15-20k. She sold it 2 years ago for around 400k
What about AIRBnB? Maybe turning single family homes into hotel rooms wasn’t great.
Definitely one of many factors that affected supply. The other one was Boomers aging in place more than any other generation and then Covid causing a sudden, violent eruption of dormant coastal equity...an explosion that allowed coastal people to buy multiple homes in other places, tearing through the existing supply in a heartbeat. Thankfully, the builders are rapidly solving that one problem. Ultimately, the root of the housing problem is deficit spending from Washington though, plus terrible monetary/interest rate policy and some lack of corporate regulation.
why do you only care about and value single family homes
When I vacation I don’t want to be stuffed into a tiny pod. Hotels don’t like competition so they’ve pushed this narrative. On a large scale it is negligible. But it is a factor in some cities I will give you that
@@jasonforward6639it’s not a “narrative” Airbnb has negatively impacted communities by reducing inventory and inflating housing cost. Just because you like to utilize Airbnb on vacation, that doesn’t make the downsides any less true.
@@tedtalksrock Yeah and making it illegal doesn’t work. I’ve stayed in Airbnb’s in SF, LA, NYC, Honolulu, etc. It’s actually super easy to get around those laws. Airbnb is here to stay whether you like or not. The solution is provide more supply, but Karens love to complain about high affordable density housing.
Great interview Scott, Jenny seems to have the nuanced view of the housing issues we face.
Just imagine if we didn’t treat housing as a commodity and the only people who could buy homes were people planning to live in them. This is one reason young people are angry at older people. If you’re a young person who’s renting and wants to buy a home but needs to borrow, how do you compete with older people who can buy homes with cash and turn them into rentals?
So renting right now is 55% cheaper than buying. So buying a house to rent out right now doesn't make sense. One of the problems is laws are giving renters more power to make it difficult for housing providers to manage their rentals the way they need to when they get bad renters. This in turn raises prices of rentals in two ways. The liability potential increases for housing providers which increases prices and also reduces rental supply because people like me are considering getting out of rentals because of these laws. As soon as you need to hire a lawyer to get rid of a bad tenant is when this doesn't work anymore. Way too expensive and stressful to be worth it. What people don't get is that it is a two way street and folks need to quit demonizing housing providers. Only a very small percent of housing providers are bad and they end up paying the price for that. Most housing providers work to keep renters happy to keep turnover lower which ends up being better for the housing providers and tenants.
Grow up
@@Sweet..letssurfin other words, you couldn’t refute my argument. lol
We would basically need to get rid of capitalism at all levels to justify your approach here. As bad of a wrap as capitalism gets, if you look at history all over the world and look at all the other ways people have tried, it is the best in terms of freedom. Socialism or communism could be good but people always end up corrupting those systems for personal gains. Capitalism does have a mechanism that helps keep corruption at bay, competition and freedom of enterprise.
@ nice try. You take my position on housing to argue that I’m advocating we end all capitalism, which I’m not. Then you use that strawman to attack socialism, which I never even brought up. It’s hilarious to hear you say socialism can be corrupted, as if capitalism can’t. What color is sky in your world and what country have you been living in? Capitalism is easy to corrupt. The US is proof of that.
There are many places in rural America, from upstate New York to the Midwest where factories have left and populations have started to decline where there are plenty of homes for sale for very , very modest prices. It would be great if people to find work in these abandoned places before these homes collapse in disrepair which also happens. Perhaps the expansion of high speed internet and remote work will help. Crazy how these two problems can’t be fixed at the same time.
Hey man, I live in WNY, (Roc, Buff, Cuse) there is minimal housing being built here too :/, rent is about $1300 for a "good" one bedroom.... (No utility included)
@ right, I was thinking more Norwich , Sherburne, etc.. some of those big old homes for for 200k. I was there a while ago. Here in Wisconsin central and northern Wisconsin you can get a 3 bedroom 2 bath home for $150k or less, same for central and southern Illinois. No jobs for 100 miles now, factories and paper mills in Asia now, people are moving out, but homes are still there and in good shape , for now. I fear it will be Detroit soon, square miles of bull dozed homes.
I worked along side homeless people for years in Seattle. They, for the most part, were not locals who got priced out. They were people from all over the country who quickly learned that they could come to the city, sleep anywhere for free, set up a tent anywhere, go to needle exchanges for free drugs when they could not get their street drug of choice, could shoplift with no consequences, could urinate and defecate in the street at will, get free food anytime at pantry, etc etc.
And for the people who say that surveys of homeless people showed that there were local... those were bent stats based on the fact that if someone had no i.d. or had been in the city for more than 3 months were then considered local. It seemed like southern accents were half as common as west coast accents.
The people are the street are 99% drug addicts. There is massive support for homeless ppl in Seattle and moms and kids dont end up on the street unless they refuse service.
Build it and they will come.
Where should they pee and poop if they don’t have a bathroom anywhere. If you were stuck outside, how long could you hold it in?
@@claireh.7605 it's the city, there are bathrooms everywhere open for everyone, from public restrooms to fast food places that anyone can use, to libraries and park bathrooms, to homeless facilities that offer all that. they dont take it and they dont care cuz they just want to get high on drugs and hang on the street. when you are wasted you dont care.
Also what we're not doing is urban planning in that regard which is to say we should be building light rail out to highly dense urban communities within existing Urban boundaries.
bingo
It’s easier said than done. They have been trying to build it out in Minneapolis for a while now.
Adding capacity and diversity to the housing stock is important but also we have to stop building crappy buildings that have huge costs for maintenance and upkeep because this drives the ultimate price up as well, so while they're cheap on the front end their cost of maintenance and habitation increases over time.
Nothing is more expensive to maintain than an old home.
@@robertnobles8189 it depends upon the type of old home. And also many of the so-called homes being built today are being made with such crappy material that in 50 years they'll need to be torn down and rebuilt what's the cost of that in a declining global resource market? Building a house of concrete stone brick hardwoods and quality roofing materials is expensive but they can last for hundreds of years. How do we know? We have the existing homes that were well built to prove it.
@@JonathanLoganPDXthe examples we have remaining is the small compared the existing homes from the past that have not survived.
@robertnobles8189 have you been to Europe? Millions upon millions of homes hundreds of years old and doing just fine. If you build a home well with brick, concrete, steel, hardwoods, glass, tile, etc., it can last for 100s of years.
@ if you build like they built hundreds of years ago? We don’t build housing like that anymore and Europe hasn’t built like that for over 100 years either. We can’t go back in time. We build within the current time with the current capabilities. You can’t ignore hundreds of years of development because there are some surviving examples of old housing that are very expensive to maintain.
I took a marketing course years ago in my school’s planning department. I will never forget a guest lecturer who responded to an earnest question about affordable housing: “Just because there is a need for something doesn’t mean that there is a market for it.” Yes over regulation and gaming the system stop too many things. But is there proof that anyone would be interested in providing non-luxury units? Also, are we just externalizing long term infrastructure costs? I expect that including these would more than make up for eliminating parking minimums.
Scott, thanks for getting another thoughtful topic in the conversation. I’m in the San Francisco Bay area getting the building permit repairs much less it’s an absolute. As a contractor and builder I’ve recently started a remodel on my parents home and the permits because of the third-party outsource planning agency and cost me over $58,000..00. Caron cost on the property almost $200,000 in time for a home visit for 60 years. My property tax basis went to $8000 and $42,000 as I can claim as my principal residence. this must change.
Take softwood tariffs off of Canadian lumber price will fall by thousands per house.
San Francisco is part of the problem. But instead of NIMBYism, could the focus be put on HOW a city is developed, especially one as small as this one? Shoving up a 30-story tower in a low density neighborhood in the remotest part of the peninsula nowhere near existing transportation makes no sense. Replacing existing moldy old frame housing stock in the south Mission with 6-story block square multiuse structures with green space in the middle just costs more -- so developers don't want to do it. Too bad. You want to be part of developing this city? You need to follow some rules. And describing the entire severely behaviorally unable population as "homeless" isn't accurate. Michael Shellenberger has described how placing someone unable to care for themselves into their own apartment is not the answer. We need a new generation of custodial (you can't recover from addiction if your dealer visits you in the hospital) behavioral health campuses to house this population -- in some cases very long term. Behavioral illnesses take years to stabilize. Some will need various levels of supportive housing for the rest of their lives. And if we can pay prisoners to work, we can pay hospital residents to work as well when they're able to, without losing their housing, friends, and medical care. It's time to address this issue as well. Our streets have become open wards for the behaviorally ill. That is not compassion.
The real problem is that anyone other than the buyer and the builder have any say on whether something makes sense or not.
Thank you Scott,
Once agin, great topic and info...
So appreciate :)
Great guest. Cities need to remove single family zoning and replace it with mixed use zoning having all different kinds of housing options. Public transportation will need to be improved as well
I love the talk about converting offices into housing! We have found a way to accomplish this in San Francisco, and I am working to convert office buildings into homeless shelters at Brownstone X!
Austin prices have been continue to drop since Covid and still are (both rental and purchase)
1. address corporate and investment fund ownership of homes (either to flip, rent, hold to drive values up)
2. some other countries don't allow land ownership for foreign entities...
3. there is NO incentive to reduce housing prices - the ONLY person benefitting from lower prices is the buyer. agents on both sides want % of $$$. taxes feed local govt.
commodification of housing is simply unsustainable in a capitalist system where salaries are not effectively rising. 2008 showed the problem but it was never fixed, just swept back under the rug - nothing to see here - move along
Agree 💯
Corporate funds realized a long time ago, that local jurisdictions would constrain supply for a long time. Therefore the cost of housing would go up, its a market constrained by government regulation and the hedge funds profits would continually rise. If you actually allowed people to build housing, to relieve supply problems, housing would not be as attractive of an asset class to investors. That's where corporate money should be going, not into capturing a market through rent seeking behavior.
How exactly you incentivize to reduce housing prices?
1. that has nothing to do with the housing crisis. We had unaffordable housing for years before hedge funds got involved
2. another completely tangential distraction that is meant to avoid the need to build more housing
you just dont want to admit we have a housing shortage
No, just build more
With the billionaires in full control of our government we will see Wall Street and private equity buying of single family home go from 26% to 50%? Maybe more? We will be all renters soon. If you make 50k a year and your house is now worth 500k you cant afford the taxes and are forced to sell pay a huge percentage of your equity in Capital gains tax . Now you are a renter .
How about strictly prohibiting turning residential property into commercial property/de facto hotels via STR platforms like Air B&B
Does no good to build houses that the majority of people can't afford. Fix the income inequality and there will be incentives to build houses. Instead of allowing investors to price families out of the housing ownership market.
I don't know anyone in my neighbourhood that could actually afford to buy their house. Nobody
More supply at any level always drives entry level prices down. I don’t care if the city builds 1,000 luxury units. More housing is more housing.
@robertnobles it's not just supply and demand. All assets prices are skyrocketing. All over the world. Currencies are being debased. Build all you want, won't change much.
Having grown up in the suburbs of Boston and still having most of my family in that area and then myself getting into farming and living in the Midwest and rural upstate NY I really have come to the conclusion that it's a subculture problem where left wing areas really believe they should have the right to veto anything that they do not think should be built in their town whereas where I live now and rural upstate New York where it's very conservative no one thinks they should have the right to tell other people what to do on their own land even in town and small cities. I was talking to two of my neighbors to live right across the road for me about this They said the same thing as me they're like I just don't understand why another person thinks they have the right to tell someone else what to do in their own land I don't want someone else telling me what to do I might not like what you're doing over there It might be ugly but I still don't think I should have the right to veto it.
Where is when I go to my sister's who's in a rich suburb of Boston One of their neighbors put up a white picket fence every other one of the neighbors went to the HOA and the town to complain that it didn't fit in and it needed to be taken down, im pike who cares it doesnt even look bad.
I think fundamentally if you do not change that subculture where you think you have the right to tell other people what to do on their own land I don't really care what you do policy-wise. Technically where I am and upstate New York still has all the same policies from environmental housing regulations and so on that they do downstate but up here no one follows them and no one turned someone in when they know their neighbor didn't follow them.
Like the house I live in we built it ourselves with help from the Amish in a couple other friends We never got a building permit no environmental study ever got it inspected or got occupancy. The only pushback we got was when the appraiser came he said looks like you got a new building there I'm going to have to raise your appraisal lol.
We are self insured, money have been invested into hardening our place. Stone walkways, drainage, all stone, concrete, solar panels, batteries, irrigation… all vegetation has been cut back, no more problems with bugs, pests. Also whole property have not seen any chemicals for last 8 years.
socks to bed = better sleep quality and dreams😅😅🎉🎉😅🎉🎉😅
Knocking boots also
I am fascinated by this topic because it seems to me that there was a substantial group of people against building new housing in the last 25 years due to environmental concerns. Is that suddenly not a thing? 🤔
Hempcrete and 3d house printers are the newest methods out there. Takes days not months. One clay houses printer uses local materials.
Have house design competitions for passive housing designs in regular neighborhoods. Small towns are awesome.
The feds can give incentives to cities replacing abandoned buildings with apartment buildings/housing.
Progressive cities have policies that attract people experiencing homelessness; these are the places that the services exist, for better or worse. The rub is and will always be there …
Shocking this wasn’t mentioned, as though the people living on the streets in LA would have a job and a well ordered life if rents were lower.
@@Meishach2112Not totally surprising given this conversation is about housing. You could talk for 10 hrs about all the reasons homelessness is big in those states.
Who do we hire to build houses when building houses won’t put you on a path to owning a house?
I can't help but think the situation will rapidly worsen as climate and overshoot impacts continue to accelerate. And yes, I think it will even impair the lifestyles of the 1%
Great discussion from a very astute and knowledgeable guest, unfortunately it was very superficial in terms of solutions. But awareness is a start I guess. but let's all never forget that the ever-widening wealth inequality is due at least 99% to the government simply spending more than it takes in and printing the rest to make up the difference. The borrowed money goes first to Wall street and in turn creates asset inflation which benefits the already asset-laden. Also, atrocious interest rate policy from the Fed made matters far worse than they needed to be. Let's also not forget the incessant and ongoing illegal bank/lender rescue packages that have not allowed the necessary credit cleansing cycle (that is there to wipe out excessive greed and gamblers) to happen. That being said, house prices are falling fast in many places, including California. Rents are cratering in certain places as well.
no community will give up their ability to review a project.
A local elected approval board should be bound to balance the expected demand and supply.
Good conversation. However, nothing will change.
Both of you are clueless about absentee ownership.
Absentee Ownership is the Destruction of Community, and Crypto Currency is a double layer cake of the Absentee Ownership abstraction.
"A Pattern Language; Towns, Building, and Construction", p 211
When shops are too large, or controlled by absentee owners, they become plastic, bland, and abstract."
"A Pattern Language; Towns, Building, and Construction", p212
Communities can only get this personal quality back if they prohibit all forms of franchise and chain stores, place limits on the actual size of stores in a community, and prohibit absentee owners from owning shops.)"
Absentee Ownership becomes a problem within a very small radius. The owner of the B... Estate got into big trouble within our beautiful town for trying to develop a beautiful historic estate that was only one mile from his home. The town and even his daughter convinced him to stop the plans. He eventually moved outside of town.
Excellent show. In my area (southern NJ), all of the housing development is geared towards upper middle come. Even high density development is all priced too high. There needs to be more building of smaller homes, everyone does not need 4 bedrooms and 3 bathrooms, a big dining room, a den, home office and a living room, or a grand entrance. Why not build some 3 bed, 1.5 bath cape cods.... I will answer the question, builders don't make enough money on them, it is good old American greed.
Once more Boomers start meeting their maker, more inventory will open up.
No. Corporations will buy these houses, hoard them and control the supply.
@akiram yep. Plus the currency is being devalued. It's not just supply and demand
Scott, I think this issue gets at a lot of what you say about artificial supply constraints. In America we have put a lot of eggs in the housing basket. It's where a lot of Americans net worth is based. Therefore we have strong financial incentives to artificially constrain the supply to increase the demand.
Even if we assume a total free market- without any ADA, planning, or building code requirements- it remains unconvincing to argue that the supply side of the market would be capable or interested in providing housing that people can afford. A grad school guest lecturer remarked to my class years ago that just because there is a need for something does not mean that there is a market for it.
Colorado was the bellweather for CA exodus, 30 years ago. It was the first state they began moving to. It is now, essentially, Calirado.
Building houses and solving the issues around the building of houses is super, super, easy. The problem is INFRASTRUCTURE supporting more housing, i.e. water, sewer, power, transportation, services (police and fire, etc.). Solve those first, housing become easy.
Service Development Charges. SDC’s charged at permit issuance should pay for the additional infrastructure.
In Madison, Wi there is no shortage of developers building. The problem is these developer’s are pricing people out. Who wants to pay on average $3500 for 1 bedroom apartments and het no equity. Plus, are developer’s just throwing buildings up without consideration to rain run off and flooding because a laxed rule to zoning.
Renting and owning are not equivalent from a lifestyle perspective, and it’s totally disingenuous to simply equate the two in financial terms as to which is a better investment. Multi-family units come with too many restrictions. Carpets that are filthy that can’t be ripped out and replaced with something clean, old appliances that landlords refuse to upgrade, shared laundry facilities that are poorly kept by the management, plumbing issues that are never really fixed. Landlords never live up to their end of the maintenance contract. Home ownership is freedom from the landlord’s restrictions on how we want to live as free people. Screw landlords from east coast to west coast.
Sure it is. Have you ever made 4 trips to Home Depot to fix one plumbing issue? Freedom my ass! There is truth in the lack of equivalence, but the rest is the result of a contest where tenants don't want to pay so landlords don't spend.
@Barnaby33YT I spent years as a home maintenance worker before becoming an engineer. Yes, I have spent a lot of time fixing plumbing, electrical, and other issues on older homes. I’d still rather have the ability to upgrade and accept the liability of repairs than to live in a minimally maintained space I have no control over.
The chamber of commerce is so pro business and anti-consumer 😮
The real reason housing is expensive is because interest rates were 2% for 2 years. Don’t understand why people don’t talk more about this. My dad’s house in NJ was on the market for 1+ year 2019 into 2020. Then sold in 2 months and had 20 offers. It all had to do with the demand.
How about interest free bridge loans?
It's not just supply and demand. It's also a currency debasement issue. All assets are skyrocketing. Not just housing.
We have a homeless and housing crisis. We need more houses.
Before we do any of what was talked about here we need legislation that limits or eliminates private equities ability to purchase single family housing.
Eh not really the problem, it’s more of a symptom
@@degenshaw6386well of course there's a combination of a lot of different factors like cost to build due to the increase in material cost, zoning issues across the nation etc...but this is an opportunity for legislation to jump in.
It's a problem especially in some southern and western markets but it's not the biggest problem by any means.
Agree so much. Ownership is clearly almost always a better deal than renting and all these smart commentators are trying to convince us it’s not. Make investors build new homes and restrict existing supply to homestead buyers only. Only populist opinion I feel strong about.
Is it a regulatory problem, a housing availability problem, an affordability or a vacancy problem or some combination? I think the amount of homes that are taken off the the market by institutional investors and b and b ers is the major change along with the number of people in a household decreasing. Allowing single family homes to be converted to duplexes and limiting the number of houses institutional investors can own (max single family homes from 10 to 25) could relieve some of the market shortages in different communities.
Not mentioned here; upgrading existing utilities to accommodate higher density ie power, sewer, water, parking, schools.......who pays for that? I agree there's a supply problem and more housing is needed and higher density is inevitable, but I was in construction and a general contractor in Southern California in the 80's. Additional infrastructure has to be paid for, in the costs to the builder, the buyer, and the cities through higher taxes. Add on HOA's, homeowners, flood, or earthquake insurance and you have the insane problem California has had for 30 years. First time buyers have a high bar there, always has been.
Not talk about private equity’s role?
A pleasure to listen to such an intelligent and lucid conversation. This is like therapy after the events the last couple weeks thank you both.
Fixed rate mortgages don't rise. Rents do.
Homes escalate in value, and even if they don't, at the end of the mortgage you build equity.
More important: you don't get a $500k capital gains tax deduction/exemption on stocks....you do on your home.
There is the thing, NO ONE is addressing
If most of someone's net worth is tied up in a home and I start to view my home as a retirement plan....it is hard to justify/explain that I should transfer my retirement savings to developers. I live in a area where developers will gladly build housing...but it has to be +$1M for each unit. The county wants to rezone properties in my neighborhood to allow duplexes on properties that used to have one house. The ironic thing is the house they will purchase might by worth 2M, but they will sell 4 duplexes for $1.5 - $2M each. This does not solve the affordability problem. Cities need to purchase office buildings and demolish/convert them to affordable housing. I have no issues with rezoning and putting more housing my my neighborhood....I do have issues with short term rentals, profiteering and profit at the expense of a neighborhood. Most of my net worth is not in my house....but most of my neighbors...this is probably true. There is land to build everywhere....the problem is that developers won't make 90% margins....instead it will be 20% (making a point).
Also, there are a lot of "hood" properties that are close to the city and the metro that developers will not touch because it is not as profitable as they would like.
Developers don't do themselves any favours when they propose projects that are far too large to ever be approved, then backtrack, rather than starting out with a feasible plan. Seems to be a particular issue in Ontario, as other places seem to manage the process better.
Condensed housing requires upgrades to the mass transit system. The expertise of urban planners is essential in safeguarding the local quality of life & natural environment. Innovative, comprehensive community design solutions can meet new housing demands.
Let’s learn from successful urban planning project models in Europe & elsewhere. Is progress about “relaxing the rules,” or more about upgrading or “modernizing” the rules to perhaps better effect - to achieving even better housing?
Take a look at lumber, the one building material we grow and sequesters carbon … the price-per-square foot to build is going up, lumber and plywood have been in a historic free fall for two years. (I’m living it.) The problem is us, all of us. We all want affordable housing somewhere else, we want less regulation somewhere else, and we want others to live in spaces we do not want to live in. We want affordable building products and we want jobs, but we banks and municipalities come first. The layers above the actual production of housing are not going away, they are too lucrative; no one with a mortgage, no one who issued a mortgage, and no municipality collecting housing fees and taxes, wants housing supply to go up and prices to go down. Griping about housing and pointing fingers is far more beneficial to those who could make a difference.
Leaving CA for Phoenix or AZ in general- ok
lol I sure loved that “historic free fall “ of lumber from 2019 to 2022. What the fxck are you talking about?
How about changing the tax code by eliminating the 1031 exchange option on single family residential properties along with depreciation on SFR homes as investments. A good portion of the problem is VRBO and AirBNB homes that are becoming profit centers and take away from the necessary supply for all.
Dr. Galloway! How does my daughter apply for your college scholarship? She is a phenomenal student!
Cheers Jeff
Great interview.
What happens when it's time to retire and you've rented your whole life? For many people retirement isn't possible if you're paying rent or still making a house payment. Buying a home early in your 30's makes it more likely you'll be mortgage free by your 60's.
The issue with renting is retirement. Yes, rentals may be quarter by quarter smarter. But, how you going to afford ever increasing rent on SS
ez solution. Increase property tax because it is essentially a wealth tax. Then use that money to subsidize lower or middle income housing
single family homes for single families, not private equity
It's both a supply problem and a cost problem unless we put minimum wage up till like $25 don't expect people to be able to buy homes.
Man nobody can buy a home making 25 per hour. I make around 45 and it's tough in the market I'm in
Then pay the construction workers that much and see what happens to housing prices?
It's called keeping prices high and government letting business just build luxury high rise condos. Government is the problem.
Interesting conversation. Here in Auckland, New Zealand, planning restrictions have been removed, and new houses are springing up everywhere. Developers are replacing old homes with dense, unattractive, generic units. Street parking is scarce, there's no space for trees or birds, and on our street the overwhelmed sewage system is constantly being dug up for repairs.
More housing has stabilized rents, but at the cost of crowded, unattractive neighborhoods. Even so, I understand the urgency, kids can’t afford homes, and in a capitalist society, lacking capital is a problem.
There are no solutions only trade-offs...the answer I found is to move out of a city and back to the farm. Much better quality of life lower cost of living and in order of magnitude better for raising a family.
Some of these discussed solutions are quite worrying and lead to greater problems. I'm assuming a lot of these answers are based on theory and not practice.
What about home builders buying back stock instead of building homes
There needs to be a ban on foreign investment firms buying real estate here. We should also keep investment firms out of real estate until we have affordable housing.
There are approximately 10,000,000 empty homes and apartments in the US.
we had a flood, building getting a lot easier now and everyone wants new housing, homeless, tax base etc come on down we needed help and things are moving, not as slow as before
At least as far as wildfires are concerned new building materials are not being accepted as acceptable. There are too many building codes.
Who wants to live in Pittsburgh?
Even if we build a new community it’s just foreign investors parking their money. More than half of my new community is renters, I’m shocked ppl can rent at 4-5k a month. My HoA meetings have like 10ppl that are actually owners lol
CA got hammered with massive population growth and land development. Its not about them wanting their existing homes to rise in value, its that the quality of life gets severely diminished with this growth level.
California lost congressional seats in the last census. Their growth is slower than the country as a whole.
Corporations are a major reason for
the shortage of 'affordable' housing.
If a company's margin is say 30%, do
they build $200k houses, or $400k
houses? (On a finite supply of land)
Multi-family rentals are inflationary
also due to company's manipulating
the prices because each 'phase' of
the development construction uses
a different name. 😬
So when advertised online,
instead of 10 developments
with rentals, there are 40--
with coordinated prices.
This has the effect of pricing
power (from a minority player.)
(Coordinated prices are used to
raise the 'standard' of expected
rents-- not necessarily be the
same.)
Thanks for the interesting talk....
Algorithms do contribute to our overall cost of living problem. Think of the Bell Curve...in the past this was a long wider "Hill" for the curve then we are seeing today with an algorithm. The hill turns into a mountain and moves towards profit, more and more. Any smart business will want more profit for their goods, housing or otherwise, and use these algorithms to help them decide how to price. This practice will squeeze this bell curve to be steeper and shorter....not wide and fairly and certainly not to the left, for pricing one off's. The machines will even help a slum lord...it doesn't care.
as usual the comments are just people trying to avoid the need to build more housing by bringing up all sorts of small tangential issues that are just obviously not the real core issue with housing. Cities like Santa Monica and Sunnyvale in CA have already banned Airbnb and theyre still the most expensive in the country. We just need to build more housing
I’m totally pro density
As long as parking is handled on-site
Our streets are so crowded that adding even more cars to the already limited parking available only benefits people who have access to off street parking
Let the market decide to provide parking with housing or not. And the market can decide to build convenient parking at a cost. Not everyone owns a car and those who don’t should have to absorb the costs.
And the US isn't building more roads as well.
The only city in the USA that has a growth mindset is Austin texas, the california expat capital of texas the red state. Huh, how wierd is that, that the city of Austin is trying to keep rent low intentionally, in order to keep Californians coming to texas. Is there something we should be reading into this?
Thank you for talking about this Prof G! We do not need more apartments and rentals owned by corporate equity landlords who price gouge rents. And unfortunately a lot of these new construction "starter homes" start around $500K which is just not affordable for most first time home buyers. I can tell you that high inventory in the sunbelt does not reflect the rest of the country. And women and families are moving out of those red states because it's not safe to get pregnant there.
Jenny's premise is objectively false- permitting follows growth. Many of the sunbelt markets are structurally oversupplied because of overbuilding which hasn't done a thing to improve affordability. Places like Nashville have always been builder friendly- and the permitting is so far outside of historical norms, even when normalized and compared across other markets. City center, population growth has slowed considerably, is flat, or declining in those 3 markets. And people can say this is just a multifamily issue when that's also not true- it's elevated on the single family side as well. This is some pro development propaganda.
Ivory tower, meet ivory tower. This conversation seems so divorced from the reality on the ground.
12.5% low income housing tax credit
Not In My Back Yard! Housing's Berlin Wall. Will it ever fall?
“It’s a supply problem” no it’s an immigration problem
A lot of talking about building more houses by people who are not building houses. Too many administrators. I’m referring to Scott and his guest in particular.
*too
Ah, yes. The small government argument. Maybe, just maybe, it's a little more complicated than that. Maybe it might have something to do with the terrible living standards of builders in America and their lack of access to proper health care? Maybe it's the commodification of housing. Maybe it's foreign ownership .....
Maybe we shouldn't deport the people who actually build the houses. I'm talking about the guys who are on the roof, laying shingles, not the contractor stopping by for twenty minutes to check on the workers.
I understand the core of your argument, that there is too much bureaucracy behind getting authorization to build a house, but why are you taking a shot at Galloway and his guest? They’re not part of the process, they’re not administrators. Their private citizens commenting on a process that’s frustrating everybody. Chill dude.
Lol what? They're not in government nor real estate development
oh and NOW I SEE the US isn't even growing enough food. FFS
Buying a house in an expensive market is a total scam. DO THE MATH PEOPLE! Invest in the markets. Renting is GREAT. Make someone else do the maintenance BS. I’ve owned 2 houses, and may never own one again.
Yeah I do like the simplicity of renting. I'm just concerned about high inflation in the future and how owning property would protect me while renting leaves me exposed
People are leaving California because the cost of living sucks
Its not just build more. You have to build cheaper. And you need massive governmemt intervention, preferrably through incentives, to do so. Any other ideas will not work.
If she'd bought her house in the last 3 years she'd be singing a very different tune. Instead, she dismisses everybody as NIMBYs. Truly detached from the problem she pretends to be expert in.
Honestly, people just want the poors far away.
Another no value add knowledge expert with zero solutions who may as well be a reporter. Worthless episode.
The problem is that we're leaving a lot of our big-picture- and micro-urban planning decisions to people who either don't have the experience and expertise (local planners) or are incentivized against it (nimbys, developers of single-family homes).
We don't need more houses. We need more appealing places to live with employers within 30 miles radius. You currently have too few employment centers that offer livable level wages.
You lost me at the private equity response. People need to come before profits and institutional investment has driven up costs by artificially inflating rental and purchase prices after buying all the available stock throughout a region. Ban them all.