If you want market rate housing, you can rely on the market. By definition.
If you want below-market rate housing, you can't. By definition.
No change to zoning or interest rates changes that. The market simply has more potential upside when those things happen.
In the wake of the S&L crises, the Federal Government crafted a scheme to provide below market rate housing using the sale of Tax credits. The reduction of corporate tax rates and wider use of trans-national financial engineering has devalued the tax credits underpinning that scheme.
Meanwhile Hope VI, removed the majority of subsidized housing inventory at all levels over the last thirty years.
But if you really want to understand what you are up against, the 1/3 of income for housing criterion is the same rate that landlords required of share-croppers on 1/3 shares (those that provided their own family's food and mule, those that couldn't were on 1/2 shares).
People not being able to buy a house is reversion to the mean...or just people you know falling into the fat part of the graph alongside all the people who couldn't afford a house before.
Weeeell let’s see what that translates to today. Assuming 30k houses for 100,000 people this effort would have budgeted… $77k per house in today’s dollars.
record stops
The median home today is $350k-ish. Whoops, Congress better be prepared to allocate more or lower housing costs before this article’s advice can be implemented
My pet theory is that we could solve 80% of society's problems by providing affordable housing. Most other things that plague us are just symptoms of this one issue.
You'd need to build a lot more around the houses. Many "bad neighborhoods" in various countries started as affordable housing projects, but that's not enough to have a healthy social situation.
We need the housing, but it doesn't solve most issues.
I agree with GP. I would amend their claim with "most problems* could be solved by building high density housing and services in areas with jobs." I.e., build real cities.
Building homes on federal land in the middle of no where will not do anything for people. We just need to allow people to build housing where there is a demand for labor.
Some things I think would be solved include:
- the housing crisis
- mobility => it would be easier for people to move to other parts of the country because they would be less tied to their homes
- labor mismatches
- climate change => less reliance on cars
- funding infrastructure => more dense infrastructure means you don't have as much infrastructure to repair and you have more people paying for it
- city government budgets => high density areas are more tax efficient
- home insurance => the homes on the outskirts of cities are most likely to burn down; if housing is cheap the cost to insure it will be cheaper as well
IMO, if housing is 30-60% of peoples budgets and transportation is another 10-20%, if you can bring those costs down you can de-stress a lot of people. That might make politics less intense too.
* "Most problems" is not strictly accurate. But "more problems than you might think are directly related to housing" doesn't really roll off the tongue.
Germany - where I live - built Housing like there‘s no tomorrow in the 60s, which lead to the most prosperous phase of the country‘s existence. Then we stopped. And now we‘re where we are. Companies can’t hire because people can‘t move. There‘s sub and 0.1% empty apartments in cities.
I was reading this yesterday and it's wild to me how much changed in Canada in 1995: https://progressingcanada.com/ - Seems like 95 through 97 set in motion some bad things for Canada?
Around the turn of the millennium many countries seem to have decided to underproduce housing, both by ending government programs like you describe and by erecting government barriers to private home construction.
My conspiracy theory is that homeowners vote at higher numbers and more reliably and like free money.
In a local election we had to stop talking about "Housing Afforbabiliy" as homeowners perceived that as "Shitty Apartments Brining Down My Property Value."
The thing that drives me insane is that this is endemic in extremely liberal cities. Ask them if they support Trump’s wall and his mass deportations, and when they freak out point out that the housing policies they favor are the same thing on a smaller scale with pretty much the same motives.
Most of the scarcity around houses are artificial. Home owners want housing to be scarce because they have an expectation of property value going up, forever.
If housing becomes more abundant, a lot of middle class people become decidedly poor. Well... that's bad. And they're the voters, so is that going to happen? No.
We can build denser, cheaper per-unit housing. We decide not to, because the only people that want that are the ones who don't have a house. As soon as they get a house their opinion will change.
I’m a gigantic believer in this and will hop on the nearest soapbox at any chance to evangelize it. High housing prices are literally destroying civilization, pricing the next generation out of existence and fueling every form of resentment.
Home equity or the future. Choose one.
If we keep pricing the next generation out of existence eventually the pyramid will collapse due to population decline. But I suppose the older homeowners living on it now will be dead so they don’t care.
Houses should not be investment vehicles and almost required for retirement as they are now. Doing so means they need to increase at a rate salaries can never catch up with. It makes zero sense. We tell the younger generation they need to buy housing to retire then lock them out in areas they can have a career. It’s sick behavior. Our society basically deserves to fail at this point if we don’t fix this.
I was at risk of falling into that trap. When we purchased our current home we did so within a few months of $major_national_shitty_homebuilder having closed the real estate transaction and submitting plans to raze a huge forested natural area directly behind our home and develop almost 100 new townhomes.
It was easy to miss that in the due diligence.
And it was really frustrating to experience. The development company cut so many corners that our own neighborhood had to engage several times with the city council and development bodies because their water management was threatening our properties. During construction of the water infrastructure they backflowed a toxic concentration of chemicals into the water supply. Their retention pond design is absolute garbage and while it was inspected and approval has already caused problems. They forgot to account for water going downhill while making assumptions about water volume that a week of heavy rain already invalidated.
We need the housing though, so it’s good we have that. I’m not sure we need more housing in the form of townhomes that cost $700,000+ each but at least it’s higher density than single family residences, which are killing the housing market in their own way.
Would just be nice if home building firms weren’t such a menace.
>We need the housing though, so it’s good we have that. I’m not sure we need more housing in the form of townhomes that cost $700,000+ each but at least it’s higher density than single family residences, which are killing the housing market in their own way.
An optimistic theory is that new high-value housing leads to good outcomes for everyone: developers make a better profit, the area becomes more appealing, wealthier families can upgrade to the new houses, the local government gets more real estate taxes, and the previous houses of the relocators can be bought by less wealthy families (repeat this last step down the wealth scale).
It’s mostly about home equity, and this is a very common collective behavior called a cartel.
It’s illegal for corporations to do this in most cases, but individuals certainly can. Housing is probably the main area where they do, with neighborhoods forming organic cartels to restrict supply to raise price.
As with all cartels the solution is to break it up or take away its ability to restrict production using lawfare and other means.
Clearly that’s not what I meant, and you seem to have figured that out yourself. I meant the common good of society. The greater good, if that makes more sense.
In corporate environments people often get into a frame of mind where they acknowledge they are behaving irrationally but are convinced - convinced! - that behaving rationally would bring terrible results and everyone is going to move in mad lockstep. I think it is some sort of groupthink-related phenomenon. They're pretty much always wrong about the bad results if someone can force change.
It can be true that sudden change can lead to bad results and I wouldn't necessarily advise shock therapy, but making the basis of a system more rational usually leads to good outcomes. Being honest about how valuable something is won't cause society to sink beneath the ocean and neither does letting people just build houses on land they own. Someone is already eating economic losses here, we just don't quite know who or how much. Letting them do better will surely outweigh the negatives.
I don't advocate for the current system - but the western capitalist system is (rightly or wrongly) based heavily around property.
> Someone is already eating economic losses here, we just don't quite know who or how much.
It's an intergenerational transfer of wealth from the young to the old.
Rough and dirty you could probably reverse back the amount by taking the change in Average house price-to-earnings ratios. Very basic estimate is from 4x earnings to 7x, which on the stock of US housing is about $20 trillion.
If you believe this site economics are equivalent to reality and rich people losing money is the end of the world. I don't think you're going to convince them.
I think if you go even deeper: it's that humans primitively require novel and emotional experiences, it got us out of the cave. These systems are a way to generate.
> there won't be enough housing, food or medicine for everyone.
This scarcity of resources is true and it has nothing to do with capital allocation methodology. It's just economics. Human beings collectively have unlimited wants. You can't solve it by changing the allocation method.
When there's a stable supply of food, medicine, and housing people reproduce. More aggregate people implies more aggregate demand.
Suppose only 5% of the population breeds like rabbits in the presence of food, medicine, and housing. It won't take long for that cultural subpopulation to dominate.
Humans are not unlike microorganisms in a petri dish when one adds nutrients. All life is.
Decommodification of housing is the exact last thing that you want if your goal is to make housing more affordable. How did that particular buzzword get off the ground?
There is a lot of affordable housing; it's just that no one wants to live there for reasons such as work, location, crime, etc. Sure, there is no affordable housing in places like NYC, because too many people want or need to live there.
A quick search on realtor.com for a place like Cleveland. Plenty of houses for 150k.
Yeah, the problem is that if housing is cheap, chances are you can't afford it unless you have an independent income stream (say retirement). And those who benefit from it usually prefer more expensive areas and/or have a need for more premium services like specialist hospitals in the area because they are old.
If you build all those houses, people will have a ton of babies, and you'll be back to square one within a generation: only with more pollution, more ugly, more traffic, more crowded parks, trails, and parking lots, and a less water and beauty. And lots more carbon in the air. This is how the planet is choked off: one house at a time. Habitat control is the only solution.
There are places in the West where this has been done and all you get is ghettos full of scum and crime. You have to pair this with jobs and a way of promptly removing undesirable elements from the neighbourhood. Cf. section 8.
Which might reduce the value of existing homes 20%. Current homeowners (who are more likely to vote) really don't want their homes to decrease in value 20%.
The plain reading of “There ought to be more affordable housing,” is not “Society needs 100% taxation administered by a genocidal ministry of housing.”
> The West isn't ready for the conversation about what would be necessary to "provide" affordable housing.
The majority of the developed world (including the United States) has already built affordable housing developments. Austria and Japan both have extensive public housing projects.
Lots of breathless waxing about the ambition and scope of the project, so I was surprised that when I followed through to source material I found this:
> 9,543 single and 3,996 semi-detached homes while 5,000 apartments
So 18.5k homes of one kind or another over ~2 years. That’s, umm, nothing? Like seriously - the current rate of housing completions is over 2 orders of magnitude above that (it’s hovering just over 1.4M/yr right now).
I'm just confused as to why the US population needed to grow by almost 100 million since I was born without any sort of infrastructure undertaking to sustain that massive immigration. My local community is terrifically swollen with people and everything built for 1/3rd the population is now crumbling under that weight.
Most of suburban America wasn't built yet when you were born. I don't understand this point at all. You don't think sprawl counts as infrastructure? It may not be the housing you (or I) personally think should have been built, but it's absolutely housing. And it was built in great quantity at great cost, and even turned out to be great investments. And it came with schools and strip malls and freeway interchanges and substations to connect it all. Living in the modern US is paradise in almost all quantifiable ways.
It's also, it needs be said, wasn't built to support (sigh[1]) "massive immigration". You can find a few H1B holders peppered around, but the sprawl is for the middle class, 100%.
[1] Seriously, why must everything become a callout to right wing grievance politics these days?
I think you trying to transmute this to polemic weakens the points you've attempted to make.
Obviously we disagree but the point I feel most compelled to push back against is your assertion that "living in the modern US is paradise in almost all quantifiable ways".
This is such a problematic statement that clearly labors heavily under the burden of its own premise. A crude metric is quite telling: suicide has trended upwards in the past 20 years. I presume if the data went back further the picture would be more stark.
Living in a time with gizmos and gadgets and economic plenty that is weakly distributed and calling that "paradise" is very insulting to people's lived experiences and part of the reason I think the economic message of the politics you represent alienates average folks.
Based on your posts it seems like you've been a wealthy developer for decades and likely have employed, or employ, cheap labor. Kind of feels like a rugpull, Ross.
Personally, I've managed many teams with cheap foreign developers, I'm just straight about it.
Also, when do you think I was born? You think the US hadn't been built in 1982? Absurd claims all around.
I think the situation is likely significantly more nuanced than either of your points of view allows.
Suicide and basic needs being met is likely not highly correlated. On the other side suicide stats likely don’t include dependency related death, alcoholism can be a coping mechanism, if you didn’t commit suicide but instead murdered your liver and died early is that really a different statistic in your assessment?
The only way you can measure is access to basic needs, housing, shelter, medical care, nutrition. A century ago those things were significantly lower for the average person vs now. Could the world be in a better situation? Very likely yes, but is could also be much worse.
If you want to significantly change things then better, advocate for more social workers and to make sure the social welfare system works through them. They are in my experience very good at sussing out whether someone is a leech to society and is just looking for a handout of someone who is truly in need.
Advocate for adequate housing, more suburbs doesn’t help low-middle class people, you need more dense housing close to infrastructure or workplaces.
I respect your thoughts here because I think they come from a good place and that you want to help people.
I just don't know how to express to you how philosophically naive I think the kind of utilitarian assertion you've made is.
We can easily construct a thought experiment world that you and I would both agree is a living hellscape where all human needs were simultaneously being met. Most horror science fiction is predicated on those premises.
I don’t disagree, the world is much much more nuanced than a black or white take can express.
I just think we don’t need to debate this, things are better than a century ago but they are still not great.
Quality of life isn’t solely based on basic needs alone, but for the vast majority of people those basic needs are now met when they weren’t before. That doesn’t mean we get to say, “That’s good enough let’s pack up” there’s still a lot of work to do.
Fundamentally the question to me becomes "what is the meaning of life" and I don't actually think the answer is even "to be extremely comfortable".
This is my core disagreement with tech enthusiasts (specifically AI) people. It's just a naive way of understanding the human organism.
(You know, it occurs to me that most Americans aren't even extremely comfortable because they live in comfort with a massive amount of real or perceived precarity.)
I do want to see your point of view but I’m not seeing it clearly right now.
I can tell you my point of view is that we aren’t even sure what we should do. I know reasonably well how to solve the basic needs, in my experience that doesn’t mean you are going to be happy, I was the unhappiest in my life when I had the most I’ve had. Well maybe the second unhappiest, there was a point in my life I will never want to go back to, but I don’t think I will.
When everything was going well, I needed nothing, I was achieving all my life goals, I fought through the worst depression, I had to seek medical help.
I'm not sure what point you think is being made but your own chart shows suicide exploding during the exact timeline we're discussing.
It's probably not causative, as that would be quite silly, but economic plenty for extremely wealthy people caused by a massive influx of cheap labor is clearly not a net boon on this metric.
The US made its bones well before this insane population explosion we only very recently had.
(Yes, we've had large amounts of immigration before. We also built infrastructure and were vastly less developed).
It shows it increasing after a notably low period. It’s increased back to a level similar to 1950, which are both dramatically lower than 1900-1940. What’s the “right” reference point? Was 2000 an anomaly while today’s rate is a mere reversion to the mean? Or a reversion to a measure which is still better than the 100-year mean?
Putting aside my concerns about the integrity of the data, the clearly "correct" reference point is the one it takes to falsify the parent comment's claim: that this extremely brief period of gizmos, gadgets, economic plenty and mass immigration is somehow an unparalleled land of milk and honey. You could directly correlate our literal exact debate as negative evidence of his assertion.
I assume then that you agree that the data I cited refutes your presumption here:
> A crude metric is quite telling: suicide has trended upwards in the past 20 years. I presume if the data went back further the picture would be more stark.
The y axis on the chart starts at 10, not zero... It shows a rise of perhaps 40% over the last twenty years. This looks to be similar to the range of total variation since 1950, though the trajectory of the curve is worrisome.
And yeah, the rates pre-1950 were much, much higher.
I'm not interested in partisan political discussions. I don't agree that Trump or anyone else can, or is even attempting to address core problems, and also think falling for that premise is silly.
This is one of those things that sounds radical now but was completely normal policy 70 years ago. The federal government used to directly build housing—lots of it—for working-class families. Projects like the New Deal and post-WWII housing initiatives weren't perfect, but they did provide millions of people with stable places to live.
What changed? Mostly a shift toward neoliberal policies in the '70s and '80s that framed government intervention as inefficient and market solutions as inherently superior. We offloaded housing policy to private developers and then acted shocked when affordability cratered.
We don’t need to reinvent anything—we just need the political will to do what we already did once, and quite successfully.
Instead of addressing systemic issues like housing, wages, climate change and healthcare, we started screaming about the culture wars (thanks Reagan). It was easier (and more profitable) to stir outrage over symbolic issues than to solve material problems. We could’ve been building homes, but we got tricked into yelling about bathrooms and book bans instead.
> To meet demand, there needed to be sufficient worker housing near shipyards, munitions plants and steel factories.
There was an era where the landed gentry were aware of this.
There was an era where company owners were aware of this.
There was an era where governments were aware of this.
Now it's bad for return on capital and/or socialism.
Is it really the case that primary residence is the largest asset of most of the upper class? My impression is that many upper class people have far more money invested in stocks and businesses than in their house.
For the vast majority of the upper middle class, it probably is. Think of all the millionaires in California who are millionaires because they bought their houses 40 years ago and managed to control the supply of housing since then.
>Now it's bad for return on capital and/or socialism.
As fun as it might be to dunk on strawman republicans, those developments weren't exactly showered with praise from the left either. The same housing was being decried as being "company towns" or whatever.
>Company scrip is what a lot of people take issue with, I assume, as they should.
No? People also complain how it limits your career prospects (because there aren't any competitors to jump ship to), or how the company ends up with outsized political influence.
This article seems to romanticize a time of long ago
Most of these developments were meant to be temporary wartime measures and were heavily discriminatory. Housing hasn’t been seen as a public good so that’s partially the reason why we don’t do more of these types of projects. Habitat for Humanity is one organization that builds similar public housing projects notably not on the best real estate. Our housing situation is deliberately chosen over the last 100 years. We could have continued down that path beyond WW1 but realize it was done for a specific purpose at a specific point in time because the government realized it needed to bootstrap a nation for war.
When I was a baby, my Baby Boomer parents and I lived for a year or so in a Quonset hut, which was military housing repurposed for civilians after World War II: https://en.wikipedia.org/wiki/Quonset_hut
The reason most Western countries won't see affordable housing, at least, not for a few decades, is simple: housing has been commoditized, and the average Western boomer is parking a huge chunk of their net worth in their home. House prices need to stay high to prop up their wealth, and given the electoral participation rate of the Western boomer, any politician whose policies reduces housing values will likely be rewarded (read: punished) by being voted out of office.
No amount of banging on and on about immigrants will change that.
So, like Cronus eating his kids, many countries around the world have chosen to sacrifice affordability for their kids in order to squeeze out a few more decades of good living.
It's just like the problem the US & its peers have with unfunded liabilities: a huge chunk of retirement savings in tied up the stock market, specifically, the SP500 that has a PE ratio of 30. Are you willing to bet that these companies will stay profitable at their current rate for 30y, without slipping?
It's a question without easy answers, because as the workforce reduces (low birth rates), there are fewer workers paying into Social Security and bidding stock markets to new heights. As a result, everyone withdrawing ends up with less cash and fewer goods.
Everyone wants to think it’s BlackRock instead of the reality that the reason housing shortages exist is to protect the retirement nest egg of Boomers, ie their house equity, by making it effectively illegal to build housing. Sorry to say it’s not a cartoon capitalist villain, but instead your neighbors trying to protect their (inflated) “home value”.
If you want market rate housing, you can rely on the market. By definition.
If you want below-market rate housing, you can't. By definition.
No change to zoning or interest rates changes that. The market simply has more potential upside when those things happen.
In the wake of the S&L crises, the Federal Government crafted a scheme to provide below market rate housing using the sale of Tax credits. The reduction of corporate tax rates and wider use of trans-national financial engineering has devalued the tax credits underpinning that scheme.
Meanwhile Hope VI, removed the majority of subsidized housing inventory at all levels over the last thirty years.
But if you really want to understand what you are up against, the 1/3 of income for housing criterion is the same rate that landlords required of share-croppers on 1/3 shares (those that provided their own family's food and mule, those that couldn't were on 1/2 shares).
People not being able to buy a house is reversion to the mean...or just people you know falling into the fat part of the graph alongside all the people who couldn't afford a house before.
Weeeell let’s see what that translates to today. Assuming 30k houses for 100,000 people this effort would have budgeted… $77k per house in today’s dollars.
record stops
The median home today is $350k-ish. Whoops, Congress better be prepared to allocate more or lower housing costs before this article’s advice can be implemented
waiting for Godot
My pet theory is that we could solve 80% of society's problems by providing affordable housing. Most other things that plague us are just symptoms of this one issue.
You'd need to build a lot more around the houses. Many "bad neighborhoods" in various countries started as affordable housing projects, but that's not enough to have a healthy social situation.
We need the housing, but it doesn't solve most issues.
I agree with GP. I would amend their claim with "most problems* could be solved by building high density housing and services in areas with jobs." I.e., build real cities.
Building homes on federal land in the middle of no where will not do anything for people. We just need to allow people to build housing where there is a demand for labor.
Some things I think would be solved include:
- the housing crisis
- mobility => it would be easier for people to move to other parts of the country because they would be less tied to their homes - labor mismatches
- climate change => less reliance on cars
- funding infrastructure => more dense infrastructure means you don't have as much infrastructure to repair and you have more people paying for it
- city government budgets => high density areas are more tax efficient
- home insurance => the homes on the outskirts of cities are most likely to burn down; if housing is cheap the cost to insure it will be cheaper as well
IMO, if housing is 30-60% of peoples budgets and transportation is another 10-20%, if you can bring those costs down you can de-stress a lot of people. That might make politics less intense too.
* "Most problems" is not strictly accurate. But "more problems than you might think are directly related to housing" doesn't really roll off the tongue.
A sufficiently high housing price is a feature, not a bug.
The price isn't the feature - the growth in price is the feature.
Inflating away debt is less consistent but more miraculous than compound interest.
Both are features.
The Housing Theory of Everything.
Anyway, instead of the government building housing, we have the government stopping the building of housing as much as possible.
https://worksinprogress.co/issue/the-housing-theory-of-every...
Canada use to build social housing but stopped around 1995[1] and the housing affordability situation deteriorated over the next 30 years[2].
[1] https://x.com/g_meslin/status/1373689001866067969 [2] https://external-preview.redd.it/UGgkJlBT0dV7DwLgbEnJpgQzj4i...
Germany - where I live - built Housing like there‘s no tomorrow in the 60s, which lead to the most prosperous phase of the country‘s existence. Then we stopped. And now we‘re where we are. Companies can’t hire because people can‘t move. There‘s sub and 0.1% empty apartments in cities.
I was reading this yesterday and it's wild to me how much changed in Canada in 1995: https://progressingcanada.com/ - Seems like 95 through 97 set in motion some bad things for Canada?
Around the turn of the millennium many countries seem to have decided to underproduce housing, both by ending government programs like you describe and by erecting government barriers to private home construction.
My conspiracy theory is that homeowners vote at higher numbers and more reliably and like free money.
In a local election we had to stop talking about "Housing Afforbabiliy" as homeowners perceived that as "Shitty Apartments Brining Down My Property Value."
Sadly... they're kind of right.
“I’ve got mine, fuck you.”
The thing that drives me insane is that this is endemic in extremely liberal cities. Ask them if they support Trump’s wall and his mass deportations, and when they freak out point out that the housing policies they favor are the same thing on a smaller scale with pretty much the same motives.
> we could solve 80% of society's problems by ... magically generating billions of dollars worth of resources out of thin air
Yes, resource scarcity is a key factor underlying society's problems.
Most of the scarcity around houses are artificial. Home owners want housing to be scarce because they have an expectation of property value going up, forever.
If housing becomes more abundant, a lot of middle class people become decidedly poor. Well... that's bad. And they're the voters, so is that going to happen? No.
We can build denser, cheaper per-unit housing. We decide not to, because the only people that want that are the ones who don't have a house. As soon as they get a house their opinion will change.
I’m a gigantic believer in this and will hop on the nearest soapbox at any chance to evangelize it. High housing prices are literally destroying civilization, pricing the next generation out of existence and fueling every form of resentment.
Home equity or the future. Choose one.
If we keep pricing the next generation out of existence eventually the pyramid will collapse due to population decline. But I suppose the older homeowners living on it now will be dead so they don’t care.
> Home equity or the future. Choose one.
The masses (sadly) will choose home equity every time.
I have witnessed bitterly resentful people turn into local activists protesting against any new build the day after they purchase a property.
Houses should not be investment vehicles and almost required for retirement as they are now. Doing so means they need to increase at a rate salaries can never catch up with. It makes zero sense. We tell the younger generation they need to buy housing to retire then lock them out in areas they can have a career. It’s sick behavior. Our society basically deserves to fail at this point if we don’t fix this.
I was at risk of falling into that trap. When we purchased our current home we did so within a few months of $major_national_shitty_homebuilder having closed the real estate transaction and submitting plans to raze a huge forested natural area directly behind our home and develop almost 100 new townhomes.
It was easy to miss that in the due diligence.
And it was really frustrating to experience. The development company cut so many corners that our own neighborhood had to engage several times with the city council and development bodies because their water management was threatening our properties. During construction of the water infrastructure they backflowed a toxic concentration of chemicals into the water supply. Their retention pond design is absolute garbage and while it was inspected and approval has already caused problems. They forgot to account for water going downhill while making assumptions about water volume that a week of heavy rain already invalidated.
We need the housing though, so it’s good we have that. I’m not sure we need more housing in the form of townhomes that cost $700,000+ each but at least it’s higher density than single family residences, which are killing the housing market in their own way.
Would just be nice if home building firms weren’t such a menace.
>We need the housing though, so it’s good we have that. I’m not sure we need more housing in the form of townhomes that cost $700,000+ each but at least it’s higher density than single family residences, which are killing the housing market in their own way.
An optimistic theory is that new high-value housing leads to good outcomes for everyone: developers make a better profit, the area becomes more appealing, wealthier families can upgrade to the new houses, the local government gets more real estate taxes, and the previous houses of the relocators can be bought by less wealthy families (repeat this last step down the wealth scale).
When it comes to collective action, people will exhaust every option except the one where they work together for the common good.
I see a lot of working together to stop any new properties being built, for them it is the "common good" - by common they exclude all "outsiders".
It’s mostly about home equity, and this is a very common collective behavior called a cartel.
It’s illegal for corporations to do this in most cases, but individuals certainly can. Housing is probably the main area where they do, with neighborhoods forming organic cartels to restrict supply to raise price.
As with all cartels the solution is to break it up or take away its ability to restrict production using lawfare and other means.
Clearly that’s not what I meant, and you seem to have figured that out yourself. I meant the common good of society. The greater good, if that makes more sense.
This has been expressed as "the housing theory of everything," and there's some truth to it.
If you did society would collapse as the housing Ponzi scheme collapses.
In corporate environments people often get into a frame of mind where they acknowledge they are behaving irrationally but are convinced - convinced! - that behaving rationally would bring terrible results and everyone is going to move in mad lockstep. I think it is some sort of groupthink-related phenomenon. They're pretty much always wrong about the bad results if someone can force change.
It can be true that sudden change can lead to bad results and I wouldn't necessarily advise shock therapy, but making the basis of a system more rational usually leads to good outcomes. Being honest about how valuable something is won't cause society to sink beneath the ocean and neither does letting people just build houses on land they own. Someone is already eating economic losses here, we just don't quite know who or how much. Letting them do better will surely outweigh the negatives.
I don't advocate for the current system - but the western capitalist system is (rightly or wrongly) based heavily around property.
> Someone is already eating economic losses here, we just don't quite know who or how much.
It's an intergenerational transfer of wealth from the young to the old.
Rough and dirty you could probably reverse back the amount by taking the change in Average house price-to-earnings ratios. Very basic estimate is from 4x earnings to 7x, which on the stock of US housing is about $20 trillion.
Ireland had a property bubble that popped and society didn't exactly collapse there.
https://en.wikipedia.org/wiki/Irish_property_bubble
Government borrowing 100% of GDP over a few years helped ease the collapse (and re-inflate the prices again).
If you believe this site economics are equivalent to reality and rich people losing money is the end of the world. I don't think you're going to convince them.
I mean there is currently a housing crisis in Ireland, particularly in Dublin.
I just want a home for my kids and a garden to grill. I don‘t care about it’s value, or the increase of it.
I never know the attribution of the quote but it springs to mind, "If it can be destroyed by the truth then it should be destroyed."
https://quoteinvestigator.com/2016/03/13/destroy/
… because?
If you dig down deep enough it’s always about valuing money over humans.
I’d like to dig down deep enough that we reach causal explanations.
I think if you go even deeper: it's that humans primitively require novel and emotional experiences, it got us out of the cave. These systems are a way to generate.
All of society is built on the housing “Ponzi scheme”?
I think it's too simple. Housing is but one symptom of our dysfunctional societies. That said, I'm all for decommodified housing.
As long as capital allocation is decided undemocratically, there won't be enough housing, food or medicine for everyone.
The scarcity of ground to build on is the only artificial supply limiting factor in these examples.
> there won't be enough housing, food or medicine for everyone.
This scarcity of resources is true and it has nothing to do with capital allocation methodology. It's just economics. Human beings collectively have unlimited wants. You can't solve it by changing the allocation method.
The want for food, medicine and housing is not unlimited.
When there's a stable supply of food, medicine, and housing people reproduce. More aggregate people implies more aggregate demand.
Suppose only 5% of the population breeds like rabbits in the presence of food, medicine, and housing. It won't take long for that cultural subpopulation to dominate.
Humans are not unlike microorganisms in a petri dish when one adds nutrients. All life is.
It would make a huge difference though. Cheaper housing would mean more people could walk away from shitty jobs with low risk of ending up homeless.
This increases the power of the labor class and would hopefully lead to better working conditions.
My pet theory is many of societies problems would significantly improve if we gave more people the ability to walk away.
Decommodification of housing is the exact last thing that you want if your goal is to make housing more affordable. How did that particular buzzword get off the ground?
There is a lot of affordable housing; it's just that no one wants to live there for reasons such as work, location, crime, etc. Sure, there is no affordable housing in places like NYC, because too many people want or need to live there.
A quick search on realtor.com for a place like Cleveland. Plenty of houses for 150k.
Just make it more affordable to build.
it stops being affordable when you take the Cleveland salary
Yeah, the problem is that if housing is cheap, chances are you can't afford it unless you have an independent income stream (say retirement). And those who benefit from it usually prefer more expensive areas and/or have a need for more premium services like specialist hospitals in the area because they are old.
If you build all those houses, people will have a ton of babies, and you'll be back to square one within a generation: only with more pollution, more ugly, more traffic, more crowded parks, trails, and parking lots, and a less water and beauty. And lots more carbon in the air. This is how the planet is choked off: one house at a time. Habitat control is the only solution.
There are places in the West where this has been done and all you get is ghettos full of scum and crime. You have to pair this with jobs and a way of promptly removing undesirable elements from the neighbourhood. Cf. section 8.
[flagged]
All that’d require is making it legal to build, in most cases.
Which might reduce the value of existing homes 20%. Current homeowners (who are more likely to vote) really don't want their homes to decrease in value 20%.
Bingo. That is the problem.
The plain reading of “There ought to be more affordable housing,” is not “Society needs 100% taxation administered by a genocidal ministry of housing.”
> The West isn't ready for the conversation about what would be necessary to "provide" affordable housing.
The majority of the developed world (including the United States) has already built affordable housing developments. Austria and Japan both have extensive public housing projects.
Lots of breathless waxing about the ambition and scope of the project, so I was surprised that when I followed through to source material I found this:
> 9,543 single and 3,996 semi-detached homes while 5,000 apartments
So 18.5k homes of one kind or another over ~2 years. That’s, umm, nothing? Like seriously - the current rate of housing completions is over 2 orders of magnitude above that (it’s hovering just over 1.4M/yr right now).
[0] https://www.census.gov/construction/nrc/current/index.html
Classic government inefficiency, I believe state housing projects have similarly low figures.
I'm just confused as to why the US population needed to grow by almost 100 million since I was born without any sort of infrastructure undertaking to sustain that massive immigration. My local community is terrifically swollen with people and everything built for 1/3rd the population is now crumbling under that weight.
[flagged]
[flagged]
Most of suburban America wasn't built yet when you were born. I don't understand this point at all. You don't think sprawl counts as infrastructure? It may not be the housing you (or I) personally think should have been built, but it's absolutely housing. And it was built in great quantity at great cost, and even turned out to be great investments. And it came with schools and strip malls and freeway interchanges and substations to connect it all. Living in the modern US is paradise in almost all quantifiable ways.
It's also, it needs be said, wasn't built to support (sigh[1]) "massive immigration". You can find a few H1B holders peppered around, but the sprawl is for the middle class, 100%.
[1] Seriously, why must everything become a callout to right wing grievance politics these days?
I think you trying to transmute this to polemic weakens the points you've attempted to make.
Obviously we disagree but the point I feel most compelled to push back against is your assertion that "living in the modern US is paradise in almost all quantifiable ways".
This is such a problematic statement that clearly labors heavily under the burden of its own premise. A crude metric is quite telling: suicide has trended upwards in the past 20 years. I presume if the data went back further the picture would be more stark.
Living in a time with gizmos and gadgets and economic plenty that is weakly distributed and calling that "paradise" is very insulting to people's lived experiences and part of the reason I think the economic message of the politics you represent alienates average folks.
Based on your posts it seems like you've been a wealthy developer for decades and likely have employed, or employ, cheap labor. Kind of feels like a rugpull, Ross.
Personally, I've managed many teams with cheap foreign developers, I'm just straight about it.
Also, when do you think I was born? You think the US hadn't been built in 1982? Absurd claims all around.
I think the situation is likely significantly more nuanced than either of your points of view allows.
Suicide and basic needs being met is likely not highly correlated. On the other side suicide stats likely don’t include dependency related death, alcoholism can be a coping mechanism, if you didn’t commit suicide but instead murdered your liver and died early is that really a different statistic in your assessment?
The only way you can measure is access to basic needs, housing, shelter, medical care, nutrition. A century ago those things were significantly lower for the average person vs now. Could the world be in a better situation? Very likely yes, but is could also be much worse.
If you want to significantly change things then better, advocate for more social workers and to make sure the social welfare system works through them. They are in my experience very good at sussing out whether someone is a leech to society and is just looking for a handout of someone who is truly in need.
Advocate for adequate housing, more suburbs doesn’t help low-middle class people, you need more dense housing close to infrastructure or workplaces.
I respect your thoughts here because I think they come from a good place and that you want to help people.
I just don't know how to express to you how philosophically naive I think the kind of utilitarian assertion you've made is.
We can easily construct a thought experiment world that you and I would both agree is a living hellscape where all human needs were simultaneously being met. Most horror science fiction is predicated on those premises.
I don’t disagree, the world is much much more nuanced than a black or white take can express.
I just think we don’t need to debate this, things are better than a century ago but they are still not great.
Quality of life isn’t solely based on basic needs alone, but for the vast majority of people those basic needs are now met when they weren’t before. That doesn’t mean we get to say, “That’s good enough let’s pack up” there’s still a lot of work to do.
I think I probably disagree.
Fundamentally the question to me becomes "what is the meaning of life" and I don't actually think the answer is even "to be extremely comfortable".
This is my core disagreement with tech enthusiasts (specifically AI) people. It's just a naive way of understanding the human organism.
(You know, it occurs to me that most Americans aren't even extremely comfortable because they live in comfort with a massive amount of real or perceived precarity.)
I do want to see your point of view but I’m not seeing it clearly right now.
I can tell you my point of view is that we aren’t even sure what we should do. I know reasonably well how to solve the basic needs, in my experience that doesn’t mean you are going to be happy, I was the unhappiest in my life when I had the most I’ve had. Well maybe the second unhappiest, there was a point in my life I will never want to go back to, but I don’t think I will.
When everything was going well, I needed nothing, I was achieving all my life goals, I fought through the worst depression, I had to seek medical help.
I looked for older suicide rate data and it doesn’t support what I think is your view above.
At the turn of the previous century, suicide rates were markedly higher than today, even though today is worse than 20 years ago.
https://jabberwocking.com/raw-data-us-suicide-rates-since-19...
I'm not sure what point you think is being made but your own chart shows suicide exploding during the exact timeline we're discussing.
It's probably not causative, as that would be quite silly, but economic plenty for extremely wealthy people caused by a massive influx of cheap labor is clearly not a net boon on this metric.
The US made its bones well before this insane population explosion we only very recently had.
(Yes, we've had large amounts of immigration before. We also built infrastructure and were vastly less developed).
It shows it increasing after a notably low period. It’s increased back to a level similar to 1950, which are both dramatically lower than 1900-1940. What’s the “right” reference point? Was 2000 an anomaly while today’s rate is a mere reversion to the mean? Or a reversion to a measure which is still better than the 100-year mean?
Putting aside my concerns about the integrity of the data, the clearly "correct" reference point is the one it takes to falsify the parent comment's claim: that this extremely brief period of gizmos, gadgets, economic plenty and mass immigration is somehow an unparalleled land of milk and honey. You could directly correlate our literal exact debate as negative evidence of his assertion.
I assume then that you agree that the data I cited refutes your presumption here:
> A crude metric is quite telling: suicide has trended upwards in the past 20 years. I presume if the data went back further the picture would be more stark.
No, not really.
1. The data going back 70 years, which is 50 years more than 20, show that suicide has sharply risen.
2. The integrity of data much older than that is substantially in question.
Allow me to literally quote from the article I linked:
> After two decades of slowly rising, the US suicide rate has stabilized over the past few years. It is now at the same level as the 1950s.
The y axis on the chart starts at 10, not zero... It shows a rise of perhaps 40% over the last twenty years. This looks to be similar to the range of total variation since 1950, though the trajectory of the curve is worrisome.
And yeah, the rates pre-1950 were much, much higher.
I'm not interested in partisan political discussions. I don't agree that Trump or anyone else can, or is even attempting to address core problems, and also think falling for that premise is silly.
> Most of suburban America wasn't built yet when you were born.
That doesn't sound right.
They said that the US population has grown by almost 100 million since they were born. That would put their birth year around 1989.
Some searching suggests that in 1989 about 50% of the population lived in suburban areas. That would have been about 120 million people.
It is still about 50% which is 170 million people today. That suggests that around 70% of the suburbs were already built when they were born.
This is one of those things that sounds radical now but was completely normal policy 70 years ago. The federal government used to directly build housing—lots of it—for working-class families. Projects like the New Deal and post-WWII housing initiatives weren't perfect, but they did provide millions of people with stable places to live.
What changed? Mostly a shift toward neoliberal policies in the '70s and '80s that framed government intervention as inefficient and market solutions as inherently superior. We offloaded housing policy to private developers and then acted shocked when affordability cratered.
We don’t need to reinvent anything—we just need the political will to do what we already did once, and quite successfully.
Instead of addressing systemic issues like housing, wages, climate change and healthcare, we started screaming about the culture wars (thanks Reagan). It was easier (and more profitable) to stir outrage over symbolic issues than to solve material problems. We could’ve been building homes, but we got tricked into yelling about bathrooms and book bans instead.
> To meet demand, there needed to be sufficient worker housing near shipyards, munitions plants and steel factories.
There was an era where the landed gentry were aware of this. There was an era where company owners were aware of this. There was an era where governments were aware of this.
Now it's bad for return on capital and/or socialism.
In fact, it’s the middle and upper class, whose largest asset is their home, who keep it illegal to build more housing.
Is it really the case that primary residence is the largest asset of most of the upper class? My impression is that many upper class people have far more money invested in stocks and businesses than in their house.
For the vast majority of the upper middle class, it probably is. Think of all the millionaires in California who are millionaires because they bought their houses 40 years ago and managed to control the supply of housing since then.
>Now it's bad for return on capital and/or socialism.
As fun as it might be to dunk on strawman republicans, those developments weren't exactly showered with praise from the left either. The same housing was being decried as being "company towns" or whatever.
Company towns absolutely do still exist and are absolutely still built up.
Company scrip is what a lot of people take issue with, I assume, as they should.
>Company scrip is what a lot of people take issue with, I assume, as they should.
No? People also complain how it limits your career prospects (because there aren't any competitors to jump ship to), or how the company ends up with outsized political influence.
[flagged]
This article seems to romanticize a time of long ago
Most of these developments were meant to be temporary wartime measures and were heavily discriminatory. Housing hasn’t been seen as a public good so that’s partially the reason why we don’t do more of these types of projects. Habitat for Humanity is one organization that builds similar public housing projects notably not on the best real estate. Our housing situation is deliberately chosen over the last 100 years. We could have continued down that path beyond WW1 but realize it was done for a specific purpose at a specific point in time because the government realized it needed to bootstrap a nation for war.
affordable housing will never happen again in the USA, thats pretty clear
When I was a baby, my Baby Boomer parents and I lived for a year or so in a Quonset hut, which was military housing repurposed for civilians after World War II: https://en.wikipedia.org/wiki/Quonset_hut
and it was a huge failure and continues to be an issue in other countries. Just look at the UK with its council housing situation.
>and it was a huge failure and continues to be an issue in other countries. Just look at the UK with its council housing situation.
What is/are the continuing issue/s? What uk council housing situation should we be looking for/at?
The reason most Western countries won't see affordable housing, at least, not for a few decades, is simple: housing has been commoditized, and the average Western boomer is parking a huge chunk of their net worth in their home. House prices need to stay high to prop up their wealth, and given the electoral participation rate of the Western boomer, any politician whose policies reduces housing values will likely be rewarded (read: punished) by being voted out of office.
No amount of banging on and on about immigrants will change that.
So, like Cronus eating his kids, many countries around the world have chosen to sacrifice affordability for their kids in order to squeeze out a few more decades of good living.
It's just like the problem the US & its peers have with unfunded liabilities: a huge chunk of retirement savings in tied up the stock market, specifically, the SP500 that has a PE ratio of 30. Are you willing to bet that these companies will stay profitable at their current rate for 30y, without slipping?
It's a question without easy answers, because as the workforce reduces (low birth rates), there are fewer workers paying into Social Security and bidding stock markets to new heights. As a result, everyone withdrawing ends up with less cash and fewer goods.
Let me guess before clicking on the link: it was before the fall of the URSS.
Houses are suffering from being at the front of the interest of BlackRock and other almighty lobbies
>Houses are suffering from being at the front of the interest of BlackRock and other almighty lobbies
Blackrock and "other almighty lobbies" (Chamber of Commerce?) are showing up to city council meetings to block housing from getting built?
Everyone wants to think it’s BlackRock instead of the reality that the reason housing shortages exist is to protect the retirement nest egg of Boomers, ie their house equity, by making it effectively illegal to build housing. Sorry to say it’s not a cartoon capitalist villain, but instead your neighbors trying to protect their (inflated) “home value”.