This is also a problems of public policy to protect the Bottom Half of America. 1) As a real estate agent I receive calls from agents who represent deep pocket buyers. This seems harmless enough, except when you see so many of the homes across the region snapped up by institutional organizations who either tear down what would have been a starter home to replace with a McMansion, or hold the property until prices rise to reap a profit. Why is it acceptable for organizations seeking profit to reduce starter home stock? 2) Across the country the percent of people who can bargain for working conditions, or livable salary compensation has fallen dramatically across 40 years. Wealthy corporations, in cahoots with legislators, advocate and pass policy changes to make organizing labor harder or not possible. 3) Why is it okay for some people to amass wealth beyond ability to spend when a massive proportion of others in our country (especially those in rural areas) work full time but never amass wealth in their lives? In the economy, when corporations raise prices usuriously, and truly produce inflation that is harmful to the bottom half of America, the Fed Raises Interest Rates, that again harm the bottom half of America. Instead, we should have tax policies to remove profit from those corporation.
I agree with your thoughts, here, Ed. None of this is acceptable, and it seems, can only be resolved with different public policy choices by our elected officials. It is incumbent on each of us to make sure we understand the issues and vote only for those who demonstrably care about the "bottom half" of our citizenry.
By the way, what Wall Street/private equity started doing during the pandemic and perhaps before (I don't have the numbers handy), is purchasing lower-priced, single family homes to rent, thus keeping the inventory of starter homes low and otherwise out of reach of lower-income, first time homebuyers—denying and/or postponing any wealth building opportunities for this particular population.
If you are lucky enough to own a starter home, how about not breeding until you can purchase a larger place. Maybe remodel the basement if you have one.....
This is an income inequality problem, from my perspective. The top half of America is doing fine and can pay for housing, cars, food etc. and have enough leftover for the new phone and some fun outings. The bottom half cannot scrape up enough for a down payment without luck. We could be building many more housing units but NIMBY is an issue, as is our antiquated process. Did you see the NYT piece about how other countries have streamlined their construction so they can build quality houses/apartments quickly? I recently posted a note reminding everyone homelessness was not a big societal problem until the 1980s. Another Reagan legacy. We're choosing to let the poorest Americans starve on the streets.
That said, where I live even a writer can afford to purchase a house. Come live in central Illinois if you do remote work and want cheap housing.
Certainly agree that the current housing crisis for the forgotten bottom half (or bottom 2/3!) is a good deal attributable to income inequality. I didn't see The NY Times piece but will look it up...and I did see your post and was going to link to it in my post but quite literally forgot....I'll restack it to Notes.
The next step is guaranteeing a right to counsel in eviction courts, which boosts representation of tenants, and is also very effective, preventing 50-80 percent of could-be evictions: http://civilrighttocounsel.org/bibliography/sections/161
Of course their effectiveness is all contingent on whether governments can enact such reforms as taxing land value, upzoning, allowing taller single-staircase buildings, and abolishing parking minimums, and it’s unclear if all these initiatives have bipartisan support, but that’s what the government needs to do at bare minimum.
We could do what Vienna does, which is to build housing that all classes will find attractive; American public housing is strictly for the poor, which means that they have the least amount of power, and when things get tight whatever government owns it becomes a slum lord. No maintenance or repairs are done with the management and the police are often abusive to the tenants.
In mixed income housing, the renters have enough income and power to force proper maintenance and repairs, the housing tends towards the highest quality and service because of upper class renters, and the Viennese allows renters to keep their apartments no matter what their income while also adjusting for income.
It is not a perfect system, there are some issues, but it seems to have worked for a century or before World War One. It certainly is better than all the luxury apartments and condominiums being built that most people cannot afford and sit empty in places like the San Francisco Bay Area.
However, not only is the government frequently corrupt, it is often dominated by developers. The incentives for the politicians and frequently for the NGOs is to **not** solve homelessness as that would end or greatly decrease the federal and state funding and decrease the income of their donors as well.
Very true, I would have included that, but I figured that in the interest of conciseness, what Montgomery County, MD is doing is close enough, if a bit more competitive.
I also agree that there are powerful disincentives to solve homelessness for politicians and NGOs. That definitely needs to be addressed--perhaps by tenants’ movements and the unhoused themselves leading marches on Washington and lobbying harder than ever.
This is also a problems of public policy to protect the Bottom Half of America. 1) As a real estate agent I receive calls from agents who represent deep pocket buyers. This seems harmless enough, except when you see so many of the homes across the region snapped up by institutional organizations who either tear down what would have been a starter home to replace with a McMansion, or hold the property until prices rise to reap a profit. Why is it acceptable for organizations seeking profit to reduce starter home stock? 2) Across the country the percent of people who can bargain for working conditions, or livable salary compensation has fallen dramatically across 40 years. Wealthy corporations, in cahoots with legislators, advocate and pass policy changes to make organizing labor harder or not possible. 3) Why is it okay for some people to amass wealth beyond ability to spend when a massive proportion of others in our country (especially those in rural areas) work full time but never amass wealth in their lives? In the economy, when corporations raise prices usuriously, and truly produce inflation that is harmful to the bottom half of America, the Fed Raises Interest Rates, that again harm the bottom half of America. Instead, we should have tax policies to remove profit from those corporation.
I agree with your thoughts, here, Ed. None of this is acceptable, and it seems, can only be resolved with different public policy choices by our elected officials. It is incumbent on each of us to make sure we understand the issues and vote only for those who demonstrably care about the "bottom half" of our citizenry.
By the way, what Wall Street/private equity started doing during the pandemic and perhaps before (I don't have the numbers handy), is purchasing lower-priced, single family homes to rent, thus keeping the inventory of starter homes low and otherwise out of reach of lower-income, first time homebuyers—denying and/or postponing any wealth building opportunities for this particular population.
If you are lucky enough to own a starter home, how about not breeding until you can purchase a larger place. Maybe remodel the basement if you have one.....
Certainly a choice!
This is an income inequality problem, from my perspective. The top half of America is doing fine and can pay for housing, cars, food etc. and have enough leftover for the new phone and some fun outings. The bottom half cannot scrape up enough for a down payment without luck. We could be building many more housing units but NIMBY is an issue, as is our antiquated process. Did you see the NYT piece about how other countries have streamlined their construction so they can build quality houses/apartments quickly? I recently posted a note reminding everyone homelessness was not a big societal problem until the 1980s. Another Reagan legacy. We're choosing to let the poorest Americans starve on the streets.
That said, where I live even a writer can afford to purchase a house. Come live in central Illinois if you do remote work and want cheap housing.
Certainly agree that the current housing crisis for the forgotten bottom half (or bottom 2/3!) is a good deal attributable to income inequality. I didn't see The NY Times piece but will look it up...and I did see your post and was going to link to it in my post but quite literally forgot....I'll restack it to Notes.
I’d say the most immediate and obvious thing governments can do is pass ‘just cause’ eviction laws that refine the legal basis for evictions. They may only lower evictions by about 0.8 percent according to one study, but they’re a start: https://jpia.princeton.edu/news/effect-just-cause-eviction-ordinances-eviction-four-california-cities
The next step is guaranteeing a right to counsel in eviction courts, which boosts representation of tenants, and is also very effective, preventing 50-80 percent of could-be evictions: http://civilrighttocounsel.org/bibliography/sections/161
The final things I think governments should do in the short term are aggressively ramp up antitrust investigations for corporate landlords and their helpers (https://boondoggle.substack.com/p/5-ways-corporate-power-is-wrecking), double down on aid to community land trusts that shunt low-income housing off the speculative market (https://stateline.org/2022/05/25/cities-support-community-land-trusts-to-protect-affordable-housing/), and create public competitors in the RE development sector (https://www.dezeen.com/2024/04/01/montgomery-county-maryland-social-housing-revival/).
Of course their effectiveness is all contingent on whether governments can enact such reforms as taxing land value, upzoning, allowing taller single-staircase buildings, and abolishing parking minimums, and it’s unclear if all these initiatives have bipartisan support, but that’s what the government needs to do at bare minimum.
We could do what Vienna does, which is to build housing that all classes will find attractive; American public housing is strictly for the poor, which means that they have the least amount of power, and when things get tight whatever government owns it becomes a slum lord. No maintenance or repairs are done with the management and the police are often abusive to the tenants.
In mixed income housing, the renters have enough income and power to force proper maintenance and repairs, the housing tends towards the highest quality and service because of upper class renters, and the Viennese allows renters to keep their apartments no matter what their income while also adjusting for income.
It is not a perfect system, there are some issues, but it seems to have worked for a century or before World War One. It certainly is better than all the luxury apartments and condominiums being built that most people cannot afford and sit empty in places like the San Francisco Bay Area.
However, not only is the government frequently corrupt, it is often dominated by developers. The incentives for the politicians and frequently for the NGOs is to **not** solve homelessness as that would end or greatly decrease the federal and state funding and decrease the income of their donors as well.
I'll have to look into what Vienna is doing–sounds like an uplifting solution in many different ways.
Very true, I would have included that, but I figured that in the interest of conciseness, what Montgomery County, MD is doing is close enough, if a bit more competitive.
I also agree that there are powerful disincentives to solve homelessness for politicians and NGOs. That definitely needs to be addressed--perhaps by tenants’ movements and the unhoused themselves leading marches on Washington and lobbying harder than ever.
This article might be worth a read: https://www.verifythis.com/article/news/verify/social-justice/20-billion-not-enough-eradicate-homelessness/536-87f9cba3-5654-4f5b-845c-2f57716c8850 I think a 2 percent land value tax, a tax on third houses, and means-testing the mortgage interest deduction would easily cover this cost.