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CometII
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Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 4:41 pm

This is a most pressing emergency. You have teachers and nurses about to live in the streets, college graduates unable to take jobs in their assigned locations because they can't afford living outside mom and dad's house, there are islands being set aside for the homeless in Miami, rampant sanitation issues in San Francisco and Los Angeles, homeless related crime rising in NYC, massive gentrification waves, and now even gentrification of gentrified areas by out-of-state (and out of country) elites. Yet if it was up to Biden or whatever the opposition is to Biden IS, or even the media, you would think nothing is happening. But there is massive angst out there over this situation and eventually it will boil over. I'm even surprised that while we have had a gas prices thread here, nothing about housing. Perhaps the average user in this site is more insulated financially from the crisis, but it doesn't mean there is a massive crisis out there. And the problem is that any solution will be years and years away.

There need to be immediate measures to tackle this short and long term. The measures should affect in order of effects:

1. speculators/flippers
2. foreign buyers (of 2nd properties)
3. For profit home builders
4. foreign buyers (in general)
5. state and federal governments (through budget and taxation in order to pass legislation to deal with the problem)
6. Landlords
7. everyone else

The first measures should be to put a moratorium on flipping. You buy any property, you must hold it for at least 24 months, with 13 of those months either having the owner live there, or renting the property out. No more flipping for jacking prices. In tandem there should be a temporary ban on foreigners buying 2nd homes or apartments (perhaps condos excluded). Sorry, natives first on this one. I would then see how the market reacts to these measures, and perhaps some softer government action like accelerating permits for middle and lower class high-density living.

If the above do not crimp the crisis, then the next step is for federal legislation requiring private home builders to invest 30 cents for every dollar they devote to luxury housing for the upper and upper-middle classes. Enough is enough with this totally narrow focus on how money for projects is allocated. These builders must be made to offer no-thrills but affordable and modern housing for the majority of Americans and not just the top 20%. On top of this, foreign buyers would not be permitted to buy 1st time housing in such developments, or any that was financed in part by the government.

If after a couple of years the above don't stem the surge, then the big guns are needed. A "Marshall plan" to build housing should be a priority for the federal government and states. If necessary, then you institute national rent control for an undisclosed period of time (but cannot be permanent). Finally, raise taxes on the top four brackets in order to finance projects if need be.

All this needs to start now, because any effects will not occur until a cycle or two down the line.
 
luckyone
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 7:03 pm

CometII wrote:
Yet if it was up to Biden or whatever the opposition is to Biden IS, or even the media, you would think nothing is happening.

I don't disagree with you that this is a problem. But I don't know where you're coming from when you assert that nobody is talking about this. It's been headlines for several years now. I'm also not sure what you think a President can do about this.

As for your list of remedies, good luck with anything but limitations on foreign buyers, which IMHO should be limited and also taxed differently. No state or municipal government will allow the federal government to implement any of the policies you've described, much less the voters in those districts. The overwhelming cause of most of our housing problem is zoning restrictions, and most of that comes from voters at the municipal level. The US went on a massive public housing splurge in the post-WW2 era, and it ended in most of the projects deteriorating into crime infested neighborhoods that were glaring examples of how government shouldn't get involved in housing.

Pruitt-Igoe in St. Louis -- https://www.youtube.com/watch?v=NRnKMwJxKI4
The "State Street Corridor" in Chicago -- the worst of which were the Robert Taylor Homes https://en.wikipedia.org/wiki/Robert_Taylor_Homes
 
GalaxyFlyer
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Joined: Fri Jan 01, 2016 4:44 am

Re: Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 10:04 pm

Rising prices are signaling scarcity of housing. Any thoughts as to how your ideas will increase supply? Will taxing builders encourage more housing? Forcing builders to build unprofitable low cost housing us essentially a tax which will reduce supply. Will reducing profits encourage more builders to enter the market? I doubt it.
 
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casinterest
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 10:20 pm

The "Housing Crisis" usually has a solution. It is called market correction

Markets will correct for overpriced homes. We saw in 2007-2010, and we will see it again soon. Homes spiraled in prices, and with higher rates, buyers will vanish. Those that look to flip homes, invest in them may take a bath or have to charge lower rents to slow the bleed. Mortgages that are too high will be abandoned. Prices will fall, this will force rents down. Markets are already showing signs of a correction,


https://fortune.com/2022/09/11/housing- ... g-markets/

Among the 148 major regional housing markets tracked by John Burns Real Estate Consulting, 98 markets have seen home values fall from their 2022 peaks. In 11 markets, the Burns Home Value Index* has already dropped by more than 5%. Simply put: The U.S. home price correction is sharper—and more widespread—than previously thought.

“Our view is that you will see—and we’re seeing it right now—home prices will fall even though supply levels are not ripping higher. And I think that’s an interesting thing that is now starting to surprise a lot of people,” Rick Palacios Jr., head of research at John Burns Real Estate Consulting, tells Fortune.
 
ACDC8
Posts: 8962
Joined: Thu Mar 10, 2005 6:56 pm

Re: Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 10:46 pm

We're seeing the same problem here, in most parts of Canada, its become extremely difficult for the average family to ever own a home. There are many catalysts that are causing the problem such as foreign investment, domestic investment (flipping, etc.), short term rentals and so on. The way I see it, is housing needs to be treated as housing, not as a business - sorry to all the real estate investors out there, but buying up dozens of properties to get rich quick isn't what housing should be.

In regards to foreign investment, we have a major problem with that here in Vancouver, there are neighbourhoods that are literally bought up by the Chinese, houses torn up, massive mansions are built and they sit empty. Our Government's "solution" is that they created a speculator tax, which has zero effect since they buy the property for $1.5 million, put another million or two in in renovations, pay a hundred thousand dollars in "speculator tax" and turn around and sell it for $10 million plus.

When I first moved here, I looked at an apartment, the landlord was a young Chinese girl about 19 years old who is here on a student visa. I asked her how she can afford to buy this place, she laughed and said it wasn't hers, its her grandfathers who bought half the apartments in that building and other buildings in the neighbourhood. So I asked her why her grandfather isn't the landlord and she said that her grandfather lives in China and might move here some day. Then I asked her what she's studying here, and even though she's here on a student visa, she doesn't go to school and just lives off the money she makes through her grandfather. There was another example here just the other year, where a "student" was renting out an $8 million mansion, fortunately, he lost his visa and got sent home, but its rare when that actually happens.

Then of course, we have the Chinese money laundering problem through the casino and real estate here (just Google that if you want more info) that have skyrocketed home price here to almost unattainable levels - just a simple one bedroom apartment will cost you at least half a million. A house? Forget about it. The average household income here in Vancouver is about $70000 a year, but the household income needed to even qualify for mortgage is about $230000.

I'm lucky as I make above the average household income (but not even close to what I need to buy a house) and I scored a decent bachelor suite for $1420 a month (plus utilities) but its pretty darn hard to find a place for that cheap. A one bedroom apartment here costs on average about $2200 a month rent.

The Government's solution is to build more houses, but honestly, what is the point of that if they allow them to be snatched up by foreign investors? You go to any new condo project here, and during the pre-sales event, they're sold out within weeks and 3/4s of them are sold to people who don't even live here.

When I sold my old place a few years ago, I made a small profit, the way it should be - profit over longterm, not overnight.
 
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Aaron747
Posts: 18392
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 11:03 pm

ACDC8 wrote:
When I first moved here, I looked at an apartment, the landlord was a young Chinese girl about 19 years old who is here on a student visa. I asked her how she can afford to buy this place, she laughed and said it wasn't hers, its her grandfathers who bought half the apartments in that building and other buildings in the neighbourhood. So I asked her why her grandfather isn't the landlord and she said that her grandfather lives in China and might move here some day. Then I asked her what she's studying here, and even though she's here on a student visa, she doesn't go to school and just lives off the money she makes through her grandfather. There was another example here just the other year, where a "student" was renting out an $8 million mansion, fortunately, he lost his visa and got sent home, but its rare when that actually happens.


You could repeat this story ad nauseam in SF, LA, Boston etc. NYC and Miami if we change half the rich teenagers to Russians or Saudi. It's absolutely maddening governments have done zilch on this kind of foreign investment.
 
KFLLCFII
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Joined: Sat Sep 11, 2004 7:08 am

Re: Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 11:27 pm

Housing prices are driven up when more people need housing than the number of dwellings available.

How's that border protection coming along?
 
johns624
Posts: 5944
Joined: Mon Jul 07, 2008 11:09 pm

Re: Housing Catastrophe: Where are the Feds? The opposition?

Mon Sep 12, 2022 11:45 pm

casinterest wrote:
The "Housing Crisis" usually has a solution. It is called market correction

Markets will correct for overpriced homes. We saw in 2007-2010, and we will see it again soon. Homes spiraled in prices, and with higher rates, buyers will vanish. Those that look to flip homes, invest in them may take a bath or have to charge lower rents to slow the bleed. Mortgages that are too high will be abandoned. Prices will fall, this will force rents down. Markets are already showing signs of a correction,


https://fortune.com/2022/09/11/housing- ... g-markets/

Among the 148 major regional housing markets tracked by John Burns Real Estate Consulting, 98 markets have seen home values fall from their 2022 peaks. In 11 markets, the Burns Home Value Index* has already dropped by more than 5%. Simply put: The U.S. home price correction is sharper—and more widespread—than previously thought.

“Our view is that you will see—and we’re seeing it right now—home prices will fall even though supply levels are not ripping higher. And I think that’s an interesting thing that is now starting to surprise a lot of people,” Rick Palacios Jr., head of research at John Burns Real Estate Consulting, tells Fortune.

This is the correct answer.
 
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seb146
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Tue Sep 13, 2022 1:14 am

KFLLCFII wrote:
Housing prices are driven up when more people need housing than the number of dwellings available.

How's that border protection coming along?


You do realize the number of people who need housing are Americans born in the United States, right? Go to any homeless camp. You will find American veterans and American families and American women. Of course there are illegals in this country. No one is saying that. But, if you go to any homeless camp, you will see a great, vast majority of people there are Americans.
 
MohawkWeekend
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Tue Sep 13, 2022 2:13 am

The US tax code has played a huge role in making real estate an amazing way for investors to get rich.

Shielding capital gains, liberal depreciation rules, and targeted tax credits should be eliminated for single family homes. Charge real market rates for flood insurance

And quit trying to find work arounds for property taxes.
 
KFLLCFII
Posts: 3643
Joined: Sat Sep 11, 2004 7:08 am

Re: Housing Catastrophe: Where are the Feds? The opposition?

Tue Sep 13, 2022 11:31 pm

seb146 wrote:
KFLLCFII wrote:
Housing prices are driven up when more people need housing than the number of dwellings available.

How's that border protection coming along?


You do realize the number of people who need housing are Americans born in the United States, right? Go to any homeless camp. You will find American veterans and American families and American women. Of course there are illegals in this country. No one is saying that. But, if you go to any homeless camp, you will see a great, vast majority of people there are Americans.


You do realize you just proved my point, right? The American veterans and American families in homeless camps who cannot afford housing cannot afford it for a reason...Because housing prices have been driven up after more people needed housing than the number of dwellings available. If, as 1) you agree that there are illegals in this country, and 2) you also claim that the vast majority of people in homeless camps are Americans, then therefore where are the millions of illegals housing themselves if not in a homeless camp? Certainly the vast majority are not otherwise just roaming the streets...Especially in the large "sanctuary" urban areas where the number of illegals in non-homeless housing probably far outnumber those Americans, as you mentioned, in homeless shelters and worse, living on the streets.
 
leader1
Posts: 422
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 12:04 am

KFLLCFII wrote:
seb146 wrote:
KFLLCFII wrote:
Housing prices are driven up when more people need housing than the number of dwellings available.

How's that border protection coming along?


You do realize the number of people who need housing are Americans born in the United States, right? Go to any homeless camp. You will find American veterans and American families and American women. Of course there are illegals in this country. No one is saying that. But, if you go to any homeless camp, you will see a great, vast majority of people there are Americans.


You do realize you just proved my point, right? The American veterans and American families in homeless camps who cannot afford housing cannot afford it for a reason...Because housing prices have been driven up after more people needed housing than the number of dwellings available. If, as 1) you agree that there are illegals in this country, and 2) you also claim that the vast majority of people in homeless camps are Americans, then therefore where are the millions of illegals housing themselves if not in a homeless camp? Certainly the vast majority are not otherwise just roaming the streets...Especially in the large "sanctuary" urban areas where the number of illegals in non-homeless housing probably far outnumber those Americans, as you mentioned, in homeless shelters and worse, living on the streets.


What do illegals have to do with the homeless population? Are you suggesting they’re taking homes from Americans and driving them to the streets? If this is your premise, then it is absolutely bonkers. I’ve never seen a study suggesting that.

Most homeless in the bigger cities are in their situation because of the effects of drugs. Nothing to do with illegals, which is a different issue entirely. You can’t tell me that illegals made a place like Kensington in Philadelphia the homeless magnet and hellhole that it is. It all revolves around drugs.
 
GalaxyFlyer
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 12:31 am

Homeless aren’t on the street due to high cost of houses, drugs, mental illness, are two of the biggest reasons. They’re not going to qualify for a mortgage regardless of cost. Need help, of course, lots of it, but giving them a house won’t solve their problems.
 
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seb146
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 2:02 am

GalaxyFlyer wrote:
Homeless aren’t on the street due to high cost of houses, drugs, mental illness, are two of the biggest reasons. They’re not going to qualify for a mortgage regardless of cost. Need help, of course, lots of it, but giving them a house won’t solve their problems.


Stop reading "give them free stuff" into everything. No one is saying "give them free stuff" but Republicans. Democrats and "liberals" say AFFORDABLE which is not free. Milk, for example. We have $1.99 a gallon store brand milk or $7 a gallon organic, locally sources, single farm, blah, blah, blah but not free. Affordable. Not free.
 
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seb146
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 2:04 am

KFLLCFII wrote:
seb146 wrote:
KFLLCFII wrote:
Housing prices are driven up when more people need housing than the number of dwellings available.

How's that border protection coming along?


You do realize the number of people who need housing are Americans born in the United States, right? Go to any homeless camp. You will find American veterans and American families and American women. Of course there are illegals in this country. No one is saying that. But, if you go to any homeless camp, you will see a great, vast majority of people there are Americans.


You do realize you just proved my point, right? The American veterans and American families in homeless camps who cannot afford housing cannot afford it for a reason...Because housing prices have been driven up after more people needed housing than the number of dwellings available. If, as 1) you agree that there are illegals in this country, and 2) you also claim that the vast majority of people in homeless camps are Americans, then therefore where are the millions of illegals housing themselves if not in a homeless camp? Certainly the vast majority are not otherwise just roaming the streets...Especially in the large "sanctuary" urban areas where the number of illegals in non-homeless housing probably far outnumber those Americans, as you mentioned, in homeless shelters and worse, living on the streets.


Illegals can not make a down payment for a mortgage. Illegals can not prove income for rent for an apartment. Illegals are not driving people out of homes. Housing costs are driving people out of homes. Some people do have addiction issues and that drives them out. But, mostly, it is property owners who are seeing an opportunity to make profit.
 
Kno
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 3:00 am

ACDC8 wrote:
We're seeing the same problem here, in most parts of Canada, its become extremely difficult for the average family to ever own a home. There are many catalysts that are causing the problem such as foreign investment, domestic investment (flipping, etc.), short term rentals and so on. The way I see it, is housing needs to be treated as housing, not as a business - sorry to all the real estate investors out there, but buying up dozens of properties to get rich quick isn't what housing should be.

In regards to foreign investment, we have a major problem with that here in Vancouver, there are neighbourhoods that are literally bought up by the Chinese, houses torn up, massive mansions are built and they sit empty. Our Government's "solution" is that they created a speculator tax, which has zero effect since they buy the property for $1.5 million, put another million or two in in renovations, pay a hundred thousand dollars in "speculator tax" and turn around and sell it for $10 million plus.

When I first moved here, I looked at an apartment, the landlord was a young Chinese girl about 19 years old who is here on a student visa. I asked her how she can afford to buy this place, she laughed and said it wasn't hers, its her grandfathers who bought half the apartments in that building and other buildings in the neighbourhood. So I asked her why her grandfather isn't the landlord and she said that her grandfather lives in China and might move here some day. Then I asked her what she's studying here, and even though she's here on a student visa, she doesn't go to school and just lives off the money she makes through her grandfather. There was another example here just the other year, where a "student" was renting out an $8 million mansion, fortunately, he lost his visa and got sent home, but its rare when that actually happens.

Then of course, we have the Chinese money laundering problem through the casino and real estate here (just Google that if you want more info) that have skyrocketed home price here to almost unattainable levels - just a simple one bedroom apartment will cost you at least half a million. A house? Forget about it. The average household income here in Vancouver is about $70000 a year, but the household income needed to even qualify for mortgage is about $230000.

I'm lucky as I make above the average household income (but not even close to what I need to buy a house) and I scored a decent bachelor suite for $1420 a month (plus utilities) but its pretty darn hard to find a place for that cheap. A one bedroom apartment here costs on average about $2200 a month rent.

The Government's solution is to build more houses, but honestly, what is the point of that if they allow them to be snatched up by foreign investors? You go to any new condo project here, and during the pre-sales event, they're sold out within weeks and 3/4s of them are sold to people who don't even live here.

When I sold my old place a few years ago, I made a small profit, the way it should be - profit over longterm, not overnight.


This is what we have going on in Boston and it’s a nightmare.
 
ACDC8
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 3:22 am

GalaxyFlyer wrote:
Homeless aren’t on the street due to high cost of houses, drugs, mental illness, are two of the biggest reasons. They’re not going to qualify for a mortgage regardless of cost. Need help, of course, lots of it, but giving them a house won’t solve their problems.

Not quite, there are yelling at trees, hanging butt crack homeless as we generally know it, but there is a whole other group of homeless that are normal functioning people of society, many with good paying full time jobs and they are literally living out of their cars because they can't afford rent let alone buy a home.
 
mxaxai
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Joined: Sat Jun 18, 2016 7:29 am

Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 7:46 am

ACDC8 wrote:
GalaxyFlyer wrote:
Homeless aren’t on the street due to high cost of houses, drugs, mental illness, are two of the biggest reasons. They’re not going to qualify for a mortgage regardless of cost. Need help, of course, lots of it, but giving them a house won’t solve their problems.

Not quite, there are yelling at trees, hanging butt crack homeless as we generally know it, but there is a whole other group of homeless that are normal functioning people of society, many with good paying full time jobs and they are literally living out of their cars because they can't afford rent let alone buy a home.

Homeless shelters and transitional homes exist, you could call these "free housing". Getting a bank account, a job or even any official mail is a lot harder without a fixed address. For many people, those measures help return to a more stable situation (even though some homeless people prefer life on the street over the often poor living conditions in shelters).

Mental illnesses and drugs certainly contribute to the problem, although not all homeless people fall into those two groups. Illness prevents people from having a sufficient income and can sometimes make it difficult to keep control over their spending. Many veterans are found in this group. Drugs additionally add expenses which, thanks to addiction, are difficult to cut without help. However, both situations tend to deteriorate without a stable home, so any help should provide shelter alongside a treatment of any underlying problems.

Kno wrote:
This is what we have going on in Boston and it’s a nightmare.

It's not just foreign investors, there is plenty of money from domestic investors too. Banks have had access to "free money" for several years now and needed to invest it somewhere. Properties and housing are relatively stable long-term investments. We might see an effect of the recent increase of Fed interest rates but I wouldn't bet on it.

The problem is obviously, if the government lets the housing market crash, we'd find ourselves right back in 2008 with banks failing and mass layoffs.
 
ACDC8
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 8:38 am

mxaxai wrote:
Homeless shelters and transitional homes exist, you could call these "free housing". Getting a bank account, a job or even any official mail is a lot harder without a fixed address. For many people, those measures help return to a more stable situation (even though some homeless people prefer life on the street over the often poor living conditions in shelters).

Mental illnesses and drugs certainly contribute to the problem, although not all homeless people fall into those two groups. Illness prevents people from having a sufficient income and can sometimes make it difficult to keep control over their spending. Many veterans are found in this group. Drugs additionally add expenses which, thanks to addiction, are difficult to cut without help. However, both situations tend to deteriorate without a stable home, so any help should provide shelter alongside a treatment of any underlying problems.

Sorry, I don't think you quite understood what I meant. The people I'm referring to are simply people who used to have a home, they have a job, and in many cases some have very good paying jobs, but they can't afford to put a roof over their heads anymore because rent prices have skyrocketed. Housing shortage is becoming a very serious problem here, and so is a rental shortage.

Another problem here is because rent is so high as is, landlords can only raise the rent on a yearly basis and is capped to a percentage set by the Province, for next year its capped at 2%, so a landlord can only raise the rent by 2%. Now, in theory, that sounds awesome, but here's the problem, a landlord can evict a current tenant under the pretence of doing renovations to the rental (we call them renovictions), do some cheap renovations and re-rent the unit to someone else at a higher price. Now the original tenant is out on the street and has to find a new place to live, and with a rental vacancy rate of about 1% to 1.5%, good luck trying to find a new place let alone one you can afford.

Here's an example, minimum wage here is $15.65, but let's say you're making $21 an hour and working full time at 40 hours a week. So, you're making about $3300 a month pre-taxes. After taxes and deductions, you should be getting about $2200 a month. Now, the average rent here for a one bedroom apartment is about $2200 month, so even though you're making $5 more an hour above minimum wage, you cannot afford the average rent for a one bedroom apartment, thats your whole income. But, lets say you got lucky and found a place a few years ago when the vacancy rate was 7% that only costs you $1500 a month, now, the landlord can only increase your rent by another $30 next year. The landlord doesn't like that and gives you a "renoviction" notice, so what are you going to do? You won't find anything for $1500 a month in a city with a vacancy rate of 1% so you're now homeless - even though you have no drug addiction, no mental illness, you have a full time job and you pay your taxes on time and go to Church every Sunday.

Now, if you go to a place like San Francisco, where the average rent for a one bedroom apartment is about $3100 a month, you're screwed even more. I make just over $90000 a year, and even though I could technically "afford" that, it would be a challenge financially long term.
 
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Aesma
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 11:35 am

While this is an issue in a lot of places, I think the US has some specific problems. For example the endless suburbs with no building of any height (I mean 3-6 floors) in sight.

I live in a suburb of Paris, a "new town" (mentioned here as ville nouvelle : https://en.wikipedia.org/wiki/Planned_community#France), I was born here, ten years before it was a green field. It was planned as a sensible city so it has plenty of buildings in the city center around the railway station, and the further out you go the more you have individual houses, either in rows, or semi-detached, or detached. In a way it has its own suburbs.

Well, what's happening right now, on top of the continuous expansion that has gone on since then, with new quarters being built, is this : houses are being bought, razed, and replaced by higher density buildings. These houses were no more than 40 years old, in perfect condition, and built in concrete so could last centuries. But there is a need for housing, and expansion has to stop at some point, or we'll starve or miss having nature around. I have seen it happen in Paris itself and its immediate suburbs (that really are part of Paris). In fact my sister has bought a flat in one of these new buildings, a bit more affordable than what was there before, with modern insulation and amenities.

From my understanding this is very difficult to do in the US as local politicians would lose their jobs if they allowed it.
 
Vintage
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 11:59 am

ACDC8 wrote:
GalaxyFlyer wrote:
Homeless aren’t on the street due to high cost of houses, drugs, mental illness, are two of the biggest reasons. They’re not going to qualify for a mortgage regardless of cost. Need help, of course, lots of it, but giving them a house won’t solve their problems.

Not quite, there are yelling at trees, hanging butt crack homeless as we generally know it, but there is a whole other group of homeless that are normal functioning people of society, many with good paying full time jobs and they are literally living out of their cars because they can't afford rent let alone buy a home.

And there are a lot of homeless who just gave up in this job market. If a person is 35 years or more old and finds themselves unemployed without a connection of some kind or a needed skill, all they are ever going to find are minimum wage jobs and the less they pay you, the worse they treat you. So these people find themselves eating ka ka day in and day out and they can't even afford housing for themselves along with things like parking tickets, car insurance and medical. With no hope of it ever getting better the mental stress just weighs on them and they throw in the towel. Not everyone is up for suicide.
 
GalaxyFlyer
Posts: 10008
Joined: Fri Jan 01, 2016 4:44 am

Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 6:31 pm

ACDC8 wrote:
GalaxyFlyer wrote:
Homeless aren’t on the street due to high cost of houses, drugs, mental illness, are two of the biggest reasons. They’re not going to qualify for a mortgage regardless of cost. Need help, of course, lots of it, but giving them a house won’t solve their problems.

Not quite, there are yelling at trees, hanging butt crack homeless as we generally know it, but there is a whole other group of homeless that are normal functioning people of society, many with good paying full time jobs and they are literally living out of their cars because they can't afford rent let alone buy a home.


Then, they need to move. I can’t afford to live in Boston, so I don’t ask for someone to provide housing, I live 90 minutes away. Every time someone whines, they don’t deserve a bottle in adulthood.

You don’t see the connection between rent controls (limits on increases) and the shortage of housing?
 
mxaxai
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 7:53 pm

ACDC8 wrote:
Now, if you go to a place like San Francisco, where the average rent for a one bedroom apartment is about $3100 a month, you're screwed even more. I make just over $90000 a year, and even though I could technically "afford" that, it would be a challenge financially long term.

That's why everybody should demand at least $30/h in high-cost places like SFO or BOS. Yes, even those high-school dropouts flipping burgers.
Why work when it's not even enough to pay for housing, food and commuting? If 50% or more of your salary is being spent on rent, with much of the rest being required for other daily expenses, there's no way for you to save money for later, for example to buy your own house. You'll remain trapped as a wage-slave forever.

Might as well take the exit and move to a place that's more affordable. I hear Kansas is pretty cheap these days.
 
ACDC8
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Wed Sep 14, 2022 9:28 pm

GalaxyFlyer wrote:
Then, they need to move. I can’t afford to live in Boston, so I don’t ask for someone to provide housing, I live 90 minutes away. Every time someone whines, they don’t deserve a bottle in adulthood.

Many do, but their job is elsewhere, so now they have a lengthy and costly commute. I have a coworker for example, she lives in Chilliwack so she has to commute over 200kms roundtrip everyday, and at $2/litre for fuel, that becomes extremely costly, never mind the extra wear and tear on her vehicle and the the fact that she has to spend a minimum of 3 hours, everyday just to get to/from work/home. Now, she could work and do the same job there with the company that operates the same service as she's doing now, but she would have to take a significant pay cut as that company offers a much lower wage and doesn't offer the same benefits our company does, so either way you cut it, you lose.

GalaxyFlyer wrote:
You don’t see the connection between rent controls (limits on increases) and the shortage of housing?

I'm quite aware of the effects of rent controls and affordable rental inventory and I'm also quite aware of the effects of a free for fall in rent increases with affordable rental inventory.
mxaxai wrote:
That's why everybody should demand at least $30/h in high-cost places like SFO or BOS. Yes, even those high-school dropouts flipping burgers.
Why work when it's not even enough to pay for housing, food and commuting? If 50% or more of your salary is being spent on rent, with much of the rest being required for other daily expenses, there's no way for you to save money for later, for example to buy your own house. You'll remain trapped as a wage-slave forever.

You can demand all you want, but if you're going to have your demands met is something completely different.

mxaxai wrote:
Why work when it's not even enough to pay for housing, food and commuting? If 50% or more of your salary is being spent on rent, with much of the rest being required for other daily expenses, there's no way for you to save money for later, for example to buy your own house. You'll remain trapped as a wage-slave forever.

Thats the problem now isn't it? The cost of living is spiralling out of control and one of the reasons behind that is because we let housing become a business and not what it is, housing.

There's no easy solution to fix the problem and its going to require a lot of changes if we do want to fix the problem.

mxaxai wrote:
Might as well take the exit and move to a place that's more affordable. I hear Kansas is pretty cheap these days.

OK, but why is a more affordable place more affordable? In most cases, it's a lack of employment opportunities. Now, if you can find comparable employment in a city that has a cheaper cost of living, I totally agree, moving should definitely be a serious consideration. Comparable employment being the key though, which means if you can find employment in your respective field - moving to another city and giving up your respective field to flip burgers because thats the only job you can find, well thats just foolish.

Having said that, another problem to that idea, is once more people start to move to another city, then the cost of living in that city starts to go up and you end up being back to square one.
 
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seb146
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 12:59 am

ACDC8 wrote:
OK, but why is a more affordable place more affordable? In most cases, it's a lack of employment opportunities. Now, if you can find comparable employment in a city that has a cheaper cost of living, I totally agree, moving should definitely be a serious consideration. Comparable employment being the key though, which means if you can find employment in your respective field - moving to another city and giving up your respective field to flip burgers because thats the only job you can find, well thats just foolish.

Having said that, another problem to that idea, is once more people start to move to another city, then the cost of living in that city starts to go up and you end up being back to square one.


This aggravates me about people who say "well, just move!" to the people complaining about cost of living. Are you going to pay for their move? Tax payers as a whole? Companies with no obligation to their workers? Who? It costs money to move across the country. Some people don't want to do it because they are close to family. If a person can't afford rent in one town, how can they afford moving costs (which include gas and food and lodging) plus first and last and deposit on an apartment in another town where they are not guaranteed a full time job or even several part time jobs?
 
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c933103
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 1:22 am

CometII wrote:
This is a most pressing emergency. You have teachers and nurses about to live in the streets, college graduates unable to take jobs in their assigned locations because they can't afford living outside mom and dad's house, there are islands being set aside for the homeless in Miami, rampant sanitation issues in San Francisco and Los Angeles, homeless related crime rising in NYC, massive gentrification waves, and now even gentrification of gentrified areas by out-of-state (and out of country) elites. Yet if it was up to Biden or whatever the opposition is to Biden IS, or even the media, you would think nothing is happening. But there is massive angst out there over this situation and eventually it will boil over. I'm even surprised that while we have had a gas prices thread here, nothing about housing. Perhaps the average user in this site is more insulated financially from the crisis, but it doesn't mean there is a massive crisis out there. And the problem is that any solution will be years and years away.

There need to be immediate measures to tackle this short and long term. The measures should affect in order of effects:

1. speculators/flippers
2. foreign buyers (of 2nd properties)
3. For profit home builders
4. foreign buyers (in general)
5. state and federal governments (through budget and taxation in order to pass legislation to deal with the problem)
6. Landlords
7. everyone else

The first measures should be to put a moratorium on flipping. You buy any property, you must hold it for at least 24 months, with 13 of those months either having the owner live there, or renting the property out. No more flipping for jacking prices. In tandem there should be a temporary ban on foreigners buying 2nd homes or apartments (perhaps condos excluded). Sorry, natives first on this one. I would then see how the market reacts to these measures, and perhaps some softer government action like accelerating permits for middle and lower class high-density living.

If the above do not crimp the crisis, then the next step is for federal legislation requiring private home builders to invest 30 cents for every dollar they devote to luxury housing for the upper and upper-middle classes. Enough is enough with this totally narrow focus on how money for projects is allocated. These builders must be made to offer no-thrills but affordable and modern housing for the majority of Americans and not just the top 20%. On top of this, foreign buyers would not be permitted to buy 1st time housing in such developments, or any that was financed in part by the government.

If after a couple of years the above don't stem the surge, then the big guns are needed. A "Marshall plan" to build housing should be a priority for the federal government and states. If necessary, then you institute national rent control for an undisclosed period of time (but cannot be permanent). Finally, raise taxes on the top four brackets in order to finance projects if need be.

All this needs to start now, because any effects will not occur until a cycle or two down the line.

All 7 proposed target are meaningless in term of trying to solve the problem
The main reason house price increase is because there is a short supply and that push people who can't afford their own home off to street in order to accomodate the remaining amount of people
All "buyers", "speculators" and "landlords" are already dealing with a rapid increase in interest rate which increased their cost, but as you describe it didn't help calm the market
Punishing "for profit home builder" is even more foolish, it's like you actually don't want home to be built so that people can be left without their home.
 
ltbewr
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 2:26 am

In many places in the USA and Canada there is massive local opposition to 'affordable' housing as fear lower values of their homes, higher taxes for schools, persons who are not White able to live in their communities, more traffic, not enough street parking and others.
 
GalaxyFlyer
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 3:19 am

seb146 wrote:
ACDC8 wrote:
OK, but why is a more affordable place more affordable? In most cases, it's a lack of employment opportunities. Now, if you can find comparable employment in a city that has a cheaper cost of living, I totally agree, moving should definitely be a serious consideration. Comparable employment being the key though, which means if you can find employment in your respective field - moving to another city and giving up your respective field to flip burgers because thats the only job you can find, well thats just foolish.

Having said that, another problem to that idea, is once more people start to move to another city, then the cost of living in that city starts to go up and you end up being back to square one.


This aggravates me about people who say "well, just move!" to the people complaining about cost of living. Are you going to pay for their move? Tax payers as a whole? Companies with no obligation to their workers? Who? It costs money to move across the country. Some people don't want to do it because they are close to family. If a person can't afford rent in one town, how can they afford moving costs (which include gas and food and lodging) plus first and last and deposit on an apartment in another town where they are not guaranteed a full time job or even several part time jobs?


People don’t have a “right” to live in a particular location. They have to have sufficient income which they earn by having a skill in demand by an employer who can pay them sufficiently. I’ve had job offers in places I’d love to live, but not enough money.

High prices is the market saying there’s a shortage of the good-create an economic environment that will build more homes. But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.
 
pune
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 4:26 am

seb146 wrote:
KFLLCFII wrote:
Housing prices are driven up when more people need housing than the number of dwellings available.

How's that border protection coming along?


You do realize the number of people who need housing are Americans born in the United States, right? Go to any homeless camp. You will find American veterans and American families and American women. Of course there are illegals in this country. No one is saying that. But, if you go to any homeless camp, you will see a great, vast majority of people there are Americans.


As an outsider, it seems to me, that's again a Govt. thing. If the Govt. doesn't care for its veterans, housing is too tough a hill to climb upon.
 
ACDC8
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 5:18 am

seb146 wrote:
This aggravates me about people who say "well, just move!" to the people complaining about cost of living.

Moving, particularly long distance, certainly isn't an easy process as it once was.
GalaxyFlyer wrote:
People don’t have a “right” to live in a particular location.

Nobody suggested they did. It was simply pointed out that moving to another City or State isn't as easy of a process as it once was, and for some people, is simply unaffordable.
 
mxaxai
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 8:54 am

GalaxyFlyer wrote:
But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.

Environmental laws add a small fraction to the cost, perhaps 10% in total. The cost to build a standard home (with decent outfitting) is less than $600 per square foot, in CA. For most places, $200-500 is more realistic.
The average San Francisco home is being sold for over $1,000 per square foot, and that includes old buildings. Property prices have more than doubled over the past 10 years. There is plenty of profit to be made.

Still, zoning rules are a big contributor. Many people nowadays want to live close to their workplace, and many jobs are moving to specific parts of specific high-in-demand cities. This makes properties in those places expensive.
Outdated zoning prevents new higher density buildings, so the few homes in attractive places see much more competition than necessary. In many cases, even the existing owners in an area oppose laxer rules because they fear change and the risk of falling property values.
 
pune
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 1:43 pm

In Pune, where I live and nearby it's the same problems. For e.g. minimum wage for an 8 hr. job is supposed to be INR 300/- (About $5) although right now, it's a buyer's market so you could get labor at lesser than minimum wage. And there is no checking whatsoever, or even there is checking, even with genuineness, it is hard to prove the same. Most of the laborers don't know how to read and write and give a thumb imprint. If the middleman gives them INR 200/- and pockets the rest, They can't do anything about it.

Then let's turn to housing, now housing itself sucks. A 1 BHK (Bedroom, House, Kitchen) the maintenance alone would be around 2-3K/- forget the rent. In fact, even huts are sold or rented at high values. Even if you are earning say the top bucks, unless you are from a specific caste (say Brahmin) you won't get a house. That sadly is the reality. And I have not even added inflation. which after Govt. manipulation at numbers and still we have got 15% as inflation. The real rate is more towards 20%.
 
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seb146
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 2:15 pm

GalaxyFlyer wrote:
seb146 wrote:
ACDC8 wrote:
OK, but why is a more affordable place more affordable? In most cases, it's a lack of employment opportunities. Now, if you can find comparable employment in a city that has a cheaper cost of living, I totally agree, moving should definitely be a serious consideration. Comparable employment being the key though, which means if you can find employment in your respective field - moving to another city and giving up your respective field to flip burgers because thats the only job you can find, well thats just foolish.

Having said that, another problem to that idea, is once more people start to move to another city, then the cost of living in that city starts to go up and you end up being back to square one.


This aggravates me about people who say "well, just move!" to the people complaining about cost of living. Are you going to pay for their move? Tax payers as a whole? Companies with no obligation to their workers? Who? It costs money to move across the country. Some people don't want to do it because they are close to family. If a person can't afford rent in one town, how can they afford moving costs (which include gas and food and lodging) plus first and last and deposit on an apartment in another town where they are not guaranteed a full time job or even several part time jobs?


People don’t have a “right” to live in a particular location. They have to have sufficient income which they earn by having a skill in demand by an employer who can pay them sufficiently. I’ve had job offers in places I’d love to live, but not enough money.

High prices is the market saying there’s a shortage of the good-create an economic environment that will build more homes. But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.


That is another thing: they acquire a particular skill, which is in demand in one part of the country, but can not move there because of education debt.

Also, do you want 1000 tar paper shacks built next to an oil refinery all in the name of affordable housing? That is why there were so many deaths and high cancer rates after the Bhopal disaster. Just throw up a building in the name of affordable housing and we get deaths from floods and earthquakes like in Afghanistan and Brazil. We need those building codes. And we need to follow them. Otherwise we end up with Surfside in Miami and Millennium Tower in San Francisco.
 
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c933103
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 2:36 pm

mxaxai wrote:
GalaxyFlyer wrote:
But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.

Environmental laws add a small fraction to the cost, perhaps 10% in total. The cost to build a standard home (with decent outfitting) is less than $600 per square foot, in CA. For most places, $200-500 is more realistic.
The average San Francisco home is being sold for over $1,000 per square foot, and that includes old buildings. Property prices have more than doubled over the past 10 years. There is plenty of profit to be made.

Still, zoning rules are a big contributor. Many people nowadays want to live close to their workplace, and many jobs are moving to specific parts of specific high-in-demand cities. This makes properties in those places expensive.
Outdated zoning prevents new higher density buildings, so the few homes in attractive places see much more competition than necessary. In many cases, even the existing owners in an area oppose laxer rules because they fear change and the risk of falling property values.

Environmental regulation main impact is reducing supply. Just like energy supply now. Yes labor are a bit more expensive after the war start but that's not the main reason of fuel become their current level expensive. Main reason energy become this expensive is because of short supply. Housing is the same.
 
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c933103
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 2:38 pm

pune wrote:
seb146 wrote:
KFLLCFII wrote:
Housing prices are driven up when more people need housing than the number of dwellings available.

How's that border protection coming along?


You do realize the number of people who need housing are Americans born in the United States, right? Go to any homeless camp. You will find American veterans and American families and American women. Of course there are illegals in this country. No one is saying that. But, if you go to any homeless camp, you will see a great, vast majority of people there are Americans.


As an outsider, it seems to me, that's again a Govt. thing. If the Govt. doesn't care for its veterans, housing is too tough a hill to climb upon.

Governments aren't all mighty god. You can't say theee is a problem and the government didn't use their magic ward to fix it so that is government's fault.
 
GalaxyFlyer
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 3:16 pm

mxaxai wrote:
GalaxyFlyer wrote:
But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.

Environmental laws add a small fraction to the cost, perhaps 10% in total. The cost to build a standard home (with decent outfitting) is less than $600 per square foot, in CA. For most places, $200-500 is more realistic.
The average San Francisco home is being sold for over $1,000 per square foot, and that includes old buildings. Property prices have more than doubled over the past 10 years. There is plenty of profit to be made.

Still, zoning rules are a big contributor. Many people nowadays want to live close to their workplace, and many jobs are moving to specific parts of specific high-in-demand cities. This makes properties in those places expensive.
Outdated zoning prevents new higher density buildings, so the few homes in attractive places see much more competition than necessary. In many cases, even the existing owners in an area oppose laxer rules because they fear change and the risk of falling property values.


If there’s plenty of profit, explain why there isn’t an influx of building? It seems much of the rest of the country has no housing shortages shown by rising prices. Texas and Florida are building like crazy.
 
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Tugger
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 3:34 pm

GalaxyFlyer wrote:
mxaxai wrote:
GalaxyFlyer wrote:
But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.

Environmental laws add a small fraction to the cost, perhaps 10% in total. The cost to build a standard home (with decent outfitting) is less than $600 per square foot, in CA. For most places, $200-500 is more realistic.
The average San Francisco home is being sold for over $1,000 per square foot, and that includes old buildings. Property prices have more than doubled over the past 10 years. There is plenty of profit to be made.

Still, zoning rules are a big contributor. Many people nowadays want to live close to their workplace, and many jobs are moving to specific parts of specific high-in-demand cities. This makes properties in those places expensive.
Outdated zoning prevents new higher density buildings, so the few homes in attractive places see much more competition than necessary. In many cases, even the existing owners in an area oppose laxer rules because they fear change and the risk of falling property values.


If there’s plenty of profit, explain why there isn’t an influx of building? It seems much of the rest of the country has no housing shortages shown by rising prices. Texas and Florida are building like crazy.

Zoning, building codes and permitting needs can all be planned for. In places like CA the other is local opposition. Building any larger number of home takes years and battles with local groups that do everything they can to stop projects from being built near them. My guess is probably ten years to get to a project with more than 100 homes built. That's ridiculous but the reality.

Tugg
 
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Aaron747
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 3:40 pm

GalaxyFlyer wrote:
mxaxai wrote:
GalaxyFlyer wrote:
But, then look at zoning rules, building codes (esp CA environmental building codes which are pretty expensive), permitting delays, etc and that raises costs. Want to require solar panels in the name of renewables, fine, but it costs. Want more safety in cars, it costs.

Environmental laws add a small fraction to the cost, perhaps 10% in total. The cost to build a standard home (with decent outfitting) is less than $600 per square foot, in CA. For most places, $200-500 is more realistic.
The average San Francisco home is being sold for over $1,000 per square foot, and that includes old buildings. Property prices have more than doubled over the past 10 years. There is plenty of profit to be made.

Still, zoning rules are a big contributor. Many people nowadays want to live close to their workplace, and many jobs are moving to specific parts of specific high-in-demand cities. This makes properties in those places expensive.
Outdated zoning prevents new higher density buildings, so the few homes in attractive places see much more competition than necessary. In many cases, even the existing owners in an area oppose laxer rules because they fear change and the risk of falling property values.


If there’s plenty of profit, explain why there isn’t an influx of building? It seems much of the rest of the country has no housing shortages shown by rising prices. Texas and Florida are building like crazy.


Infill development has been huge in the Bay Area, San Dee, and LA County over the last 20 years, in spite of all the local pockets of vehement NIMBYism. When I was growing up in Silicon Valley, there were vacant lots and single-story warehouses all over the SJC area. Now when I visit all have converted into apartment complexes or office parks.
 
MohawkWeekend
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 3:53 pm

No one has replied to my post about why the tax code incentives housing speculation. There isn't a better way for an investors to get rich -
"THE COMPLETE GUIDE TO USING REAL ESTATE AS A TAX SHELTER". https://www.mashvisor.com/blog/tax-shelter-real-estate/

Make some changes to the tax code - start with taxing capital gains as ordinary income, get rid of depreciation allowances for single/duplex/triplex family homes, and no more 1031 exchanges.
 
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c933103
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 4:04 pm

MohawkWeekend wrote:
No one has replied to my post about why the tax code incentives housing speculation. There isn't a better way for an investors to get rich -
"THE COMPLETE GUIDE TO USING REAL ESTATE AS A TAX SHELTER". https://www.mashvisor.com/blog/tax-shelter-real-estate/

Make some changes to the tax code - start with taxing capital gains as ordinary income, get rid of depreciation allowances for single/duplex/triplex family homes, and no more 1031 exchanges.

I think you misunderstood the site.
It mention the use of depreciation, which happens with any and all purchase of any form of properties, be it a house, car, plane, machine, or even an interior design if you like to.
Depreciation come from the action of spending money, not from earning money.
The reason depreciation exists, is that if you spent 3 million purchased a house, with the house expected to have a 30 years life, you can say it is equal to you use up 100k of the house's value in every single year until the life of the house end after all the time, instead of saying you suddenly have 3 million dollar balue gone from your account.


Edit: The reason why home particularly stand out among other assets is because it cost a lot but is easy to buy. It conserve value greatly even after decades. And it is easy to take a loan of it which will be counted as liability, aka something you need to pay for, hence cancel against income
 
Alias1024
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 5:23 pm

The housing market is already cooling as interest rates rise. This will flush out the speculators that don’t actually bring value. The last thing they want is to be left holding a cashflow negative rental in a flat market. They’ll sell out eventually.

CometII wrote:
The first measures should be to put a moratorium on flipping. You buy any property, you must hold it for at least 24 months, with 13 of those months either having the owner live there, or renting the property out. No more flipping for jacking prices.

I think your first measure is a poor one. Life circumstances change and sometimes people need to sell before 24 months are up. Job loss or change in role and salary, divorce, transfer to a new location for work, family that needs help in another location, etc…. And who’s going to enforce it?

Also, flippers can provide a useful service to homebuyers. I’m not talking about the ones that slap on a new coat of paint, mow the grass, change carpet and ask for $30,000 more than they paid. I mean the ones that do major rehab work. Many buyers don’t want the hassle of living in a home or hotel during renovations, and they cannot afford to keep their old home while renovating a new one. The flipper takes on the burden and risk of renovating the home and hopes for compensation in the form of increased sale price above the cost of renovations.
 
mxaxai
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 8:22 pm

c933103 wrote:
The reason depreciation exists, is that if you spent 3 million purchased a house, with the house expected to have a 30 years life, you can say it is equal to you use up 100k of the house's value in every single year until the life of the house end after all the time, instead of saying you suddenly have 3 million dollar balue gone from your account.

A 30 year lifespan seems pretty short, though. Of course a house needs regular maintenance but it can easily last 100 years or more.

Tugger wrote:
Zoning, building codes and permitting needs can all be planned for. In places like CA the other is local opposition. Building any larger number of home takes years and battles with local groups that do everything they can to stop projects from being built near them. My guess is probably ten years to get to a project with more than 100 homes built. That's ridiculous but the reality.

Tugg

A supermarket / mall near me closed shop in 2009, in an area with very high housing demand. It wasn't sold until 2017 - multiple investors were interested and prices kept rising, so negotiations kept dragging on - and actual construction didn't start until 2019. The first homes were completed in 2020, with about one third of the planned 200 apartments being finished as of today (mostly three- and four-story buildings). So yes, 10 years is perfectly realistic.

Zoning laws were put in place very early on determining the exact height and floor plan of the buildings, even the exterior materials and colors. And these homes are far from cheap. I recall significant outrage in the local community over the density of the new buildings, being worried about traffic, parking lots and the fear that "it ends up looking ugly". Heck, some even worried if there would be enough retirement homes nearby once the families, which would buy these homes, grow old.

The more rules people already living in a place can set up to prevent other people from moving there, the higher the challenge for investors to actually invest money. It'll still be profitable but you'll need to account for years and years of delays.
 
User avatar
Aaron747
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 11:03 pm

mxaxai wrote:
c933103 wrote:
The reason depreciation exists, is that if you spent 3 million purchased a house, with the house expected to have a 30 years life, you can say it is equal to you use up 100k of the house's value in every single year until the life of the house end after all the time, instead of saying you suddenly have 3 million dollar balue gone from your account.

A 30 year lifespan seems pretty short, though. Of course a house needs regular maintenance but it can easily last 100 years or more.


Yes, I'm not sure where that figure came from either. Inner ring suburbs in coastal US cities often feature homes from the 1900s-1930s and sometimes earlier.
 
MohawkWeekend
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Thu Sep 15, 2022 11:48 pm

Aaron747 wrote:
mxaxai wrote:
c933103 wrote:
The reason depreciation exists, is that if you spent 3 million purchased a house, with the house expected to have a 30 years life, you can say it is equal to you use up 100k of the house's value in every single year until the life of the house end after all the time, instead of saying you suddenly have 3 million dollar balue gone from your account.

A 30 year lifespan seems pretty short, though. Of course a house needs regular maintenance but it can easily last 100 years or more.


Yes, I'm not sure where that figure came from either. Inner ring suburbs in coastal US cities often feature homes from the 1900s-1930s and sometimes earlier.




Investors use the depreciation to shield most of the rental income. So the renter pays your mortgage and in 30 years you have a million dollar asset (for example) that you only pay 20% capital gains tax on the million dollars. Sure beats the deal Grandma gets with CD's.

Tax the capital gain as ordinary income. And then what is the capital gain? How does the IRS figure out what improvements you made that you claim reduces your capital gain. You can claim just about anything - how would they know that refrigerator is in your house and not the rental?
 
GalaxyFlyer
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Fri Sep 16, 2022 1:49 am

MohawkWeekend wrote:
Aaron747 wrote:
mxaxai wrote:
A 30 year lifespan seems pretty short, though. Of course a house needs regular maintenance but it can easily last 100 years or more.


Yes, I'm not sure where that figure came from either. Inner ring suburbs in coastal US cities often feature homes from the 1900s-1930s and sometimes earlier.




Investors use the depreciation to shield most of the rental income. So the renter pays your mortgage and in 30 years you have a million dollar asset (for example) that you only pay 20% capital gains tax on the million dollars. Sure beats the deal Grandma gets with CD's.

Tax the capital gain as ordinary income. And then what is the capital gain? How does the IRS figure out what improvements you made that you claim reduces your capital gain. You can claim just about anything - how would they know that refrigerator is in your house and not the rental?


Don’t forget much of that 30-year gain was merely inflation, so it’s fair that it gets taxed at a lower rate. Government shouldn’t profit from the inflation they caused.
 
MohawkWeekend
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Fri Sep 16, 2022 12:08 pm

GalaxyFlyer wrote:
MohawkWeekend wrote:
Aaron747 wrote:

Yes, I'm not sure where that figure came from either. Inner ring suburbs in coastal US cities often feature homes from the 1900s-1930s and sometimes earlier.




Investors use the depreciation to shield most of the rental income. So the renter pays your mortgage and in 30 years you have a million dollar asset (for example) that you only pay 20% capital gains tax on the million dollars. Sure beats the deal Grandma gets with CD's.

Tax the capital gain as ordinary income. And then what is the capital gain? How does the IRS figure out what improvements you made that you claim reduces your capital gain. You can claim just about anything - how would they know that refrigerator is in your house and not the rental?


Don’t forget much of that 30-year gain was merely inflation, so it’s fair that it gets taxed at a lower rate. Government shouldn’t profit from the inflation they caused.


Individual's homes have the one time step up which is ok. I imaging savy REIT's and investors who are buying and selling properties all the time are killing it. Especially when they have smart tax attorneys. Maybe the way to stop speculation is to get rid of the tax on capital gains and instead have a 5 to 10% tax on appraised value every time the title transfers.
 
CometII
Topic Author
Posts: 429
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Fri Sep 16, 2022 12:19 pm

luckyone wrote:
CometII wrote:
Yet if it was up to Biden or whatever the opposition is to Biden IS, or even the media, you would think nothing is happening.

I don't disagree with you that this is a problem. But I don't know where you're coming from when you assert that nobody is talking about this. It's been headlines for several years now. I'm also not sure what you think a President can do about this.

As for your list of remedies, good luck with anything but limitations on foreign buyers, which IMHO should be limited and also taxed differently. No state or municipal government will allow the federal government to implement any of the policies you've described, much less the voters in those districts. The overwhelming cause of most of our housing problem is zoning restrictions, and most of that comes from voters at the municipal level. The US went on a massive public housing splurge in the post-WW2 era, and it ended in most of the projects deteriorating into crime infested neighborhoods that were glaring examples of how government shouldn't get involved in housing.

Pruitt-Igoe in St. Louis -- https://www.youtube.com/watch?v=NRnKMwJxKI4
The "State Street Corridor" in Chicago -- the worst of which were the Robert Taylor Homes https://en.wikipedia.org/wiki/Robert_Taylor_Homes


Fair enough, we can agree to disagree on the right policy mix. I can tell you what won't work at all: letting the market manage itself. Builders do NOT want to build for anyone making less than 200K a year anymore. Therefore, they don't want to build for 98% of Americans. Zoning restriction reform will do almost nothing to change these practices.

casinterest wrote:
The "Housing Crisis" usually has a solution. It is called market correction

Markets will correct for overpriced homes. We saw in 2007-2010, and we will see it again soon. Homes spiraled in prices, and with higher rates, buyers will vanish. Those that look to flip homes, invest in them may take a bath or have to charge lower rents to slow the bleed. Mortgages that are too high will be abandoned. Prices will fall, this will force rents down. Markets are already showing signs of a correction,


https://fortune.com/2022/09/11/housing- ... g-markets/

Among the 148 major regional housing markets tracked by John Burns Real Estate Consulting, 98 markets have seen home values fall from their 2022 peaks. In 11 markets, the Burns Home Value Index* has already dropped by more than 5%. Simply put: The U.S. home price correction is sharper—and more widespread—than previously thought.

“Our view is that you will see—and we’re seeing it right now—home prices will fall even though supply levels are not ripping higher. And I think that’s an interesting thing that is now starting to surprise a lot of people,” Rick Palacios Jr., head of research at John Burns Real Estate Consulting, tells Fortune.


Completely disagree here. Otherwise, we would not have the problem we have now. 2008 would have fixed it.
 
CometII
Topic Author
Posts: 429
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Fri Sep 16, 2022 12:29 pm

GalaxyFlyer wrote:
ACDC8 wrote:
GalaxyFlyer wrote:
Homeless aren’t on the street due to high cost of houses, drugs, mental illness, are two of the biggest reasons. They’re not going to qualify for a mortgage regardless of cost. Need help, of course, lots of it, but giving them a house won’t solve their problems.

Not quite, there are yelling at trees, hanging butt crack homeless as we generally know it, but there is a whole other group of homeless that are normal functioning people of society, many with good paying full time jobs and they are literally living out of their cars because they can't afford rent let alone buy a home.


Then, they need to move. I can’t afford to live in Boston, so I don’t ask for someone to provide housing, I live 90 minutes away. Every time someone whines, they don’t deserve a bottle in adulthood.

You don’t see the connection between rent controls (limits on increases) and the shortage of housing?


Move where? In South Florida, you move 90 minutes away from anywhere (say Homestead), still 2000+ a month.

I don't mind the idea that you need to move to another part of town if you can't afford a certain part of town. But what is happening now is people have to move out of metropolitan areas entirely because they can't afford ANYWHERE in the region.

I have always wondered what would happen to retail and barista jobs if this process completely ran its course and rent/housing prices in cities like SF or Miami drove ALL of the available retail and hospitality workers away. Would salaries adjust, or would the cities just collapse?
 
CometII
Topic Author
Posts: 429
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Re: Housing Catastrophe: Where are the Feds? The opposition?

Fri Sep 16, 2022 12:38 pm

c933103 wrote:
CometII wrote:
This is a most pressing emergency. You have teachers and nurses about to live in the streets, college graduates unable to take jobs in their assigned locations because they can't afford living outside mom and dad's house, there are islands being set aside for the homeless in Miami, rampant sanitation issues in San Francisco and Los Angeles, homeless related crime rising in NYC, massive gentrification waves, and now even gentrification of gentrified areas by out-of-state (and out of country) elites. Yet if it was up to Biden or whatever the opposition is to Biden IS, or even the media, you would think nothing is happening. But there is massive angst out there over this situation and eventually it will boil over. I'm even surprised that while we have had a gas prices thread here, nothing about housing. Perhaps the average user in this site is more insulated financially from the crisis, but it doesn't mean there is a massive crisis out there. And the problem is that any solution will be years and years away.

There need to be immediate measures to tackle this short and long term. The measures should affect in order of effects:

1. speculators/flippers
2. foreign buyers (of 2nd properties)
3. For profit home builders
4. foreign buyers (in general)
5. state and federal governments (through budget and taxation in order to pass legislation to deal with the problem)
6. Landlords
7. everyone else

The first measures should be to put a moratorium on flipping. You buy any property, you must hold it for at least 24 months, with 13 of those months either having the owner live there, or renting the property out. No more flipping for jacking prices. In tandem there should be a temporary ban on foreigners buying 2nd homes or apartments (perhaps condos excluded). Sorry, natives first on this one. I would then see how the market reacts to these measures, and perhaps some softer government action like accelerating permits for middle and lower class high-density living.

If the above do not crimp the crisis, then the next step is for federal legislation requiring private home builders to invest 30 cents for every dollar they devote to luxury housing for the upper and upper-middle classes. Enough is enough with this totally narrow focus on how money for projects is allocated. These builders must be made to offer no-thrills but affordable and modern housing for the majority of Americans and not just the top 20%. On top of this, foreign buyers would not be permitted to buy 1st time housing in such developments, or any that was financed in part by the government.

If after a couple of years the above don't stem the surge, then the big guns are needed. A "Marshall plan" to build housing should be a priority for the federal government and states. If necessary, then you institute national rent control for an undisclosed period of time (but cannot be permanent). Finally, raise taxes on the top four brackets in order to finance projects if need be.

All this needs to start now, because any effects will not occur until a cycle or two down the line.

All 7 proposed target are meaningless in term of trying to solve the problem
The main reason house price increase is because there is a short supply and that push people who can't afford their own home off to street in order to accomodate the remaining amount of people
All "buyers", "speculators" and "landlords" are already dealing with a rapid increase in interest rate which increased their cost, but as you describe it didn't help calm the market
Punishing "for profit home builder" is even more foolish, it's like you actually don't want home to be built so that people can be left without their home.


So show me one place on the planet where the current system is creating affordable housing for every income level. What city, what country. Look at Seoul, look at China. Look at Mumbai. Everywhere you look, builders DON'T BUILD. And you can't blame zoning since in many places just mentioned they either have no zoning (or very rudimentary rules), or allow MASSIVE high-densities (Asia), yet prices soaring everywhere.
 
GalaxyFlyer
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Joined: Fri Jan 01, 2016 4:44 am

Re: Housing Catastrophe: Where are the Feds? The opposition?

Fri Sep 16, 2022 1:43 pm

There’s plenty of inexpensive housing in Asia, much in China going bust. Look at Zillow there’s plenty of housing under $200,000 in Florida. Heck, there’s plenty in Massachusetts.

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