Doing everything you think and get told you "should" do to succeed and life coming apart at the seams anyway is crazy making.
Poor nutrition because you have can't make ends meet after paying your ridiculous student loans that were supposed to propel you to a better life takes its toll.
Etc ad nauseum.
We've created a society that chews people up and spits them out. Then we act like it's a personal problem when they crack under the pressure.
I hear you but as an immigrant, I can’t relate. Maybe immigrants are grittier and scrappy, but when the going gets tough, we get out of Dodge and go anywhere else where we can not just survive but thrive.
Oh my goodness! America is huge and you don’t need to apply for a visa to go to another state. And you are free to move around anywhere and enjoy certain fundamental benefits that is available to all. When I first came to this country 22 years ago, I first lost my shit and then my mind when I found out that libraries are free! And anyone can checkout handfuls of books. I remember paying a monthly fee for a library card in India and can get only two books at a time. Standing in line outside American embassy and British council after school because you can’t fins Time magazine or Nat Geo elsewhere because they were expensive publication. Non vernaculars were not widely available. The Russian consulate had second Saturday chess matches and my mother would take me by bus and if I had a good play, I would get treated with ice cream. I rented a computer for a month when I found out what TCP/IP was and then had to get a phone connection for which the deposit was as much as our monthly rent.
I would hazard a guess that most immigrants would call the above problems mentioned as an uniquely first world complaint. Poverty, lack of opportunities..poor nutrition? It’s all crazy sounding to most of us. I remember when I studied for my college exams under candle light because the power grid in my Indian city was unreliable. And it’s not like I am quoting a Monty Python skit.
I won’t even get started about nutrition. It would literally sound like a MP skit. Student loans? My mother went into personal debt to put me through school and college. And she was a single mother. I can’t wrap my mind around what I see here in America. It is entirely unrelatable. It’s like..the country is a gazelle that has never been taught survival skills to be alive in the wild. And then...boom!!.. life happens.
I hear you but I want to let you know that for majority of people in the world, this would sound utterly bizarre and they’d gladly swap places with you.
My mother is an immigrant and this has helped me sidestep a lot of the pitfalls that are currently a significant burden for far too many Americans.
The fact that some people can manage to make things work for them here in no way changes the fact that the system has substantial issues that are in urgent need of remedy.
US housing policies have to change such that we can fix our housing supply issues. In a nutshell, the size of new housing has more than doubled since the 1950s and we have largely zoned out of existence the kind of housing that makes it feasible to live without a car or for single people with entry level jobs to have a place of their own without roommates.
We also need to fix our healthcare system which is an excessive cost burden on far too many Americans.
The first one though is about property rights. You cannot let govt legislate private property rights. It’s the corner stone of this nation’s founding.
There is housing supply in other parts of the country. Urban planning ought to be local governance that should be decided by the local tax payers. At least in CA, it’s regional governance where policy is decided by Sacramento and zoning for million dollar properties works well because of increased property tax.
They are not going to make a lot on affordable housing as taxes collected have to spent on new schools and new infrastructure and new community services etc.
Most of it goes to unfounded public sector pension liabilities.
Govt spending is a Ponzi scheme. But they spend a pittance of it in services.
The best way to deal with housing supply is build where there were no homes before. Not change zoning. The zoning laws have been auctioned off to builders because the state knows that’s where their $$ will come from.. unaffordablity is also a function of this.
I am speaking of California and one county here.
For example:
[..]Property tax revenues in Alameda County are due to hit a whopping milestone, and Fremont is part of the story. Newly elected Alameda County Assessor Phong La released the 2019-2020 local Assessment Roll on Wednesday, which showed that the gross value of all taxable property in Alameda County is a record $321.5 billion— a $21.4 billion or 7.13 percent increase above last year's roll.
Of the 14 cities and unincorporated areas within Alameda County, the City of Oakland remains the highest assessment jurisdiction with a total assessed value of $68.8 billion. The City of Fremont continues to have the second highest assessed value of $55.4 billion. Out in the Tri-Valley, the City of Dublin received the highest percentage increase in assessed value from the prior year at 10.3 percent.
The annual roll reflects assessments of more than 518,600 taxable properties.
La credited the record-breaking roll to a recovering economy and increasing real estate values. Other factors included the 2 percent mandatory inflation index being applied to all properties' assessed values that were not affected by assessment declines in prior years, according to La. This factor added $5.6 billion. Sales/transfers of real estate also added $11.3 billion and new construction activity added $2.5 billion.
Additionally, many companies in Alameda County have flourished, becoming a key factor in the growth in the assessment roll, as business property assessments have increased by $1.1 billion, according to La.
Since 2014, the assessment roll has increased 35 percent or $73 billion. Revenue generated by the assessment roll supports schools, public safety, parks, roads, and other essential services, La said.
[..]
Your seeming assumption that I want the federal government to dictate what gets built is in error. I mostly want them to stop dictating what gets built.
The Federal government plays a significant role in deciding what kind of housing can be readily financed. This plays a really substantial role in what actually gets built.
They've done this since shortly after WW2. It's a de facto stranglehold on the housing market.
There are also substantial tax breaks etc that influence the housing market.
2. Can I have a reference re how the federal govt dictates what gets built?
3. Tax breaks are another story and I don’t know how this affects homelessness or affordable housing. References will be helpful to understand your perspective
The federal government has myriad housing programs. It's not hard to look them up. FDA. Freddie Mac. Etc.
They generally provide assistance for purchasing or improving single family detached housing. There is much less support for other types of housing.
When Americans try to build innovative housing, such as co-housing, they can't find financing for it. This means forms of housing used to provide affordable housing in Europe can only be built in America by groups of wealthy individuals who can afford to self finance. It's also generally harder to build condos and the like because of the lack of financing support generally in the country for anything other than single family detached housing.
Tax breaks intended to make housing more affordable in the big city aren't actually designed to do that. That's not really the outcome you get.
Instead, they are designed in a way that actively encourages people to buy larger homes. This contributes to the size inflation of single family homes and deepens the divide between the have and the have nots. Those who can afford a house at all buy bigger homes, helping to further crowd out those who are poor.
In the 1950s, the average new home was 1200 sqft and housed about 3.5 people. Today, the average new home is around 2500 sqft and houses about 2.5 people, or about one less person.
We are having few children on average, but our houses are larger than ever. We have destroyed about a million SROs and have largely zoned out of existence a variety of smaller home styles currently being called Missing Middle housing.
Fannie Mae and Freddie Mac are publicly traded companies that deal with secondary mortgages.
The HUD does have multi family housing loans, rural loans, affordable housing loans and even loans for farm labourer dwellings.
A loan depends on the ability of the borrower to pay it back. Everywhere, land has appreciating value and the dwelling itself is a depreciating asset. It is obvious why because land is limited and we can’t create new land. Also given that the population growth is exponential, the value of land keeps rising and hence the cost of housing.
There arent tons of financing programs for co housing and group homes because lenders like to select only borrowers who have collateral that can be resold. The reason is that Americans don’t want Co housing or group homes. If there is a demand and trend of qualified borrowers who can build and hold and increase assured re sale value, there is no reason why there wouldn’t be loans for it.
Remember ..for a lender..to back a loan for a co housing project, he has to see a viability to sell it to more than one competitor. And there just isn’t demand because low housing stock and housing affordability is an uniquely tier 1 city problem. Middle America and most economically depressed parts of the country still have lots of land.
It comes back to density. I have looked at this every way possible. Although I can’t claim to have worked on this issue, my mother worked thirty years in the affordable housing sector. I spent most of my after school hours doing homework at her place of work in meeting rooms while listening in... Favoring high density at the cost of stressed infrastructure is desirable only in the United States. No one else who have lived in high density cities around the world will get it.
That’s because there is a difference between crowded and high density. Former is cramming a lot of people with fixed or diminishing resources. The latter is densely packing more people while allocating resources and infrastructure equitably to everyone to optimize sustainability indices. America doesn’t understand high density sustainability.
Property is the most desirable form of investment because as I mentioned before we can’t create more land. We can create more living space by building vertical etc but again, more land is more vertical value and this still operates on scarcity principle. The outcome would be housing unaffordablility.
Living with room mates is rather common in most parts of the world. One can’t modify a financial instrument like a mortgage to manipulate value of an appreciating immovable non replicating asset like land.
It’s an interesting problem, but it’s not a financial problem. It’s a cultural one.
The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, is a public government-sponsored enterprise (GSE)
On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA (see Federal takeover of Fannie Mae and Freddie Mac). The action has been described as "one of the most sweeping government interventions in private financial markets in decades".
A government-sponsored enterprise (GSE) is a type of financial services corporation created by the United States Congress. Their intended function is to enhance the flow of credit to targeted sectors of the economy
The desired effect of the GSEs is to enhance the availability and reduce the cost of credit to the targeted borrowing sectors primarily by reducing the risk of capital losses to investors
Well known GSEs are the Federal National Mortgage Association, or Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac.
Fannie Mae was founded in 1938. Freddie Mac was founded in 1970. Freddie Mac ranks 38 on the Fortune 500, which means it's quite powerful.
One can’t modify a financial instrument like a mortgage to manipulate value of an appreciating immovable non replicating asset like land
Home mortgages aren't really for land per se. They are mostly for fostering the development of specific kinds of buildings on that land. We absolutely routinely "manipulate" what kinds of development we wish to actively encourage. We very often do that via various financial instruments, such as tax breaks, grants and loan guarantee programs.
All mortgages are about ability to repay and it’s not for land because one still needs a building structure. Having said that, value of building is minimal compared to value of land.
Example: an acre in Detroit is significantly less than an acre in the Bay Area. The cost of the building is somewhat the same..maybe a little higher due to labour cost differences. But Home Depot stocks the same things across the country.
The manipulation happens at state level to ‘manipulate’ how much tax levies can be extracted from properties. That’s why higher value properties are preferable. And people who can afford to pay millions of dollars for a dwelling are generally the kind of people who would not like to live in a co housing situation.
This is an affordability issue. The affordability issue is also partly because people insist upon living in areas where they cannot afford to live. It is as simple as that. With remote work and soon to come automation, low wages jobs are simply not going to be necessary. And if they are like manual or menial labour, it will be built into the larger landscape. An example of this is Singapore. Singapore is a city-state where housing is very clearly segregated by wealth. And in the wealthier parts of town, it is mandatory to build in a room for live in help.
So there is no such thing as a need for affordable housing in the tony part of Singapore. It’s a system that works. Home prices rival or exceed Bay Area prices in parts of high density Singapore, but every single home beyond a certain price range must have a room and bathroom for live in help. In America, we are very allergic and sensitive to segregation of any kind because of the rather nasty history. In most other countries, it is not and in higher density cities, it works and things move on smoothly because the system in place gives more important to resource allocation and quality of life than social justice. But in a way, there is no greater social justice than providing a safety net and reasonable quality of life for everyone. In Singapore, for example..there are no homeless people on the street or the economically vulnerable struggling to be sheltered. But housing is wealth segregated. And it works.
Other problems in America: technology is not democratized and there is no public transport network. Technology is not cutting edge. Not consumer technology but tech for living. (Example: how we deal with our trash and garbage. Compared to Sweden or Norway or Singapore is just embarrassing). This country runs on job and employment stats. There is sprawl. Which is bad and unsustainable. But the solution is not high density. The real solution is low to medium density that is well networked with other low to medium density. For this we need a good transportation network. The interference of federal, local and regional governance into each other’s territories make a mess of everything and nearly impossible to get anything done. (California’s High speed rail disaster is a great example). Big Gov fails if it gets too complicated. Small self sustainable communities networked with each other and having autonomy over their governance is the way to go. The future is not nations, but city states.
Given that you a. dismissed the idea that Freddie Mac is a federal program and b. completely ignored the rebuttal of that erroneous assertion to blather on about your world view and insist you are right and I am wrong anyway, I don't see any constructive value in continuing this discussion further.
FWIW, I found your points interesting, and I agree that all mortgages are about the ability to repay. Wasn't that at the root of the 2008 subprime mortgage crisis?
And ability to repay, in my understanding= Capital, Capacity, Credit history, Collateral
Living in a broken society is crazy making.
Doing everything you think and get told you "should" do to succeed and life coming apart at the seams anyway is crazy making.
Poor nutrition because you have can't make ends meet after paying your ridiculous student loans that were supposed to propel you to a better life takes its toll.
Etc ad nauseum.
We've created a society that chews people up and spits them out. Then we act like it's a personal problem when they crack under the pressure.