It’s a multitude of factors - limited supply in certain (most?) markets, “cheap money”, supply chain factors with certain common building materials, “corporate owned homes”.
One thing that has definitely not helped is hostile building codes that prevent density. In some cities in the US, building height is constrained by the nearest single family home. Then there’s the parking minimums for buildings that allocate more space for parking than for building space for people.
In Austin, TX (USA), you frequently see buildings with massive amounts of multilayered parking but a smaller fraction of the building used for residential or commercial space. Some “clever” developers have tried to disguise the parking structures as part of the building itself to hide this fact from public view.
Problem with America is that we think this is 1950 and we can scale by building more deadass suburbs, expensive regional highways, and further strain our limited pool of resources (water, sewage, electrical infra) to support suburban living without any consequences.
> Problem with America is that we think this is 1950 and we can scale by building more deadass suburbs, expensive regional highways, and further strain our limited pool of resources (water, sewage, electrical infra) to support suburban living without any consequences.
That doesn’t explain why it’s so hard and expensive to build things. We built those suburbs in the first place when we were much less rich as an economy. Indeed, we built all the water and sewage and electrical infrastructure all over the place too.
For one - all the easy places to build now have things in the way. Because they had things built there.
In the 50’s these were mostly empty range land, or timberland, or farms, or swamp, or whatever. One (or just a few) owners, low property values, little to no political/environmental resistance - relatively easy to buy someone out and develop.
Now? HOAs, tons of urban zoning rules and environmental rules, thousands of stakeholders for any sizable project.
Which also now means more stakeholders, more political resistance, more BS if you want to increase density there. Or building in not-so-easy places, like steep hillsides, more remote locations, etc.
Most of the existing folks don’t want change. In 1950, especially out west, there essentially were no ‘existing folks’. Even the natives had been wiped out.
And as an economy, we were used to building things at a war economy pace, and had reasons to continue to want to do so.
Now everyone would rather blame someone else (or ensure they get their sizable cut) rather than do anything about it.
As the boomers slowly die out and assets change hands, the momentum will change. Eventually. But we’re talking about a decade plus.
Then it will be the millennials turn to be the ‘bad guys’.
I recently visited a Baltic state and was impressed with a refurbished Soviet style brutalist building used as a hotel/ long term stay. It definitely seemed like a good solution.
While it is a multitude of factors, a bunch of those factors could be solved in an instant with a simple new regulation: a cap on how many homes a single entity/person can own, with steep taxes applied to every home above that cap. This would flood the market with homes as investors and corporate landlords moved to unload inventory and the prices would fall drastically. One could even have a cap that lowers over a long period of time to avoid shocking the market too hard with stock and keep current homeowners relatively stable, but ultimately, we can't keep letting corporations and wealthy people lock up perfectly usable housing behind private property nonsense. It's literally killing people.
Ultimately, these empty homes are investments and sometimes investments fail, and if they're big enough sometimes those failed investments cause people to lose a lot more than what they invested. That's literally the definition of investment risk. We can't keep doing status quo with this shit while the market continues to sail further and further out of reach of all the people who actually need what it's selling.
It seems to me that such a cap would help affordability for people who are currently renting homes that they can't afford to buy, but it's not going to make more homes available (and might slow down the rate of building due to the value of a newly built home being lower), so won't help anyone who isn't already in a home, or who already owns their home. (The latter of which it will hurt by decreasing their home value.)
Hard disagree. The market is complex but a massive driver of price hikes is investment companies and private owners coming in to an already hot market and making cash offers that are higher than any aspiring homeowner can match with loans, which are inherently tied to the stated assessment of the property. It's the largest factor in the absolutely ridiculous prices we're currently seeing, and also the most straightforward to address.
It won't fix everything, of course, but it will give us a much more normalized market to then attempt further reform on, rather than the current one which has more in common with a casino floor than a market.
I'm not really clear on what you're disagreeing on. I've acknowledged that prices could go down for people who are already in homes and who don't own them - that's the only portion of the market that your post and proposal addresses.
I'm not watching that clickbaity nonsense, but I will happily flip through the studies they cite as their sources, and doing so tells me several things.
For one, the city did not "ban housing investors," they banned some investors from purchasing a subset of homes, which is already weak, and only made weaker by the fact that the first study analyzes only a few months of market activity under that new restriction.
That being said, both studies do indeed conclude that a link cannot be established with certainty between the policy and house price reduction.
> Results from the difference in difference analysis show that the null hypothesis that the policy effect on home prices and days on the market is not significantly different from zero cannot be rejected. This means that it cannot be concluded that the buy-to-let restriction reduced housing prices or increased the days on the market.
However, this is one city, not in America notably where the problem is at it's worst, and they did not restrict lower income housing which is the most liable to be outbid on by private investors and rented, so I would hardly say these two studies by themselves utterly disprove anything in the way your dismissive comment implies they do. I don't think a partial restriction on a housing market in one metropolitan area out of the roughly ten-thousand currently on the planet is definitive proof.
It was such a small study that it favorably attracted outsiders that finally got a chance at owning, which gentrified the community. If this was more of a global policy, the study would have reveal massively different results.
One thing that has definitely not helped is hostile building codes that prevent density. In some cities in the US, building height is constrained by the nearest single family home. Then there’s the parking minimums for buildings that allocate more space for parking than for building space for people.
In Austin, TX (USA), you frequently see buildings with massive amounts of multilayered parking but a smaller fraction of the building used for residential or commercial space. Some “clever” developers have tried to disguise the parking structures as part of the building itself to hide this fact from public view.
Problem with America is that we think this is 1950 and we can scale by building more deadass suburbs, expensive regional highways, and further strain our limited pool of resources (water, sewage, electrical infra) to support suburban living without any consequences.