Why Can't We Build an Affordable House?

Don't forget "project", "ghetto", and "minorities"

> People didn't "buy houses they couldn't afford". They bought houses who's value was 40-50% inflated and then had that value disappear, almost overnight.

If they can't pay for their houses, they can't afford said houses, no matter what said houses are worth or how said worth changes.

Mortgages aren't "called" when a house's value changes. Mortgages aren't "called" when the lender goes bankrupt (someone else buys the mortgage). The terms don't change when the house value changes.

They're losing their houses because they can't afford to pay for them.

And have 5000 regulations for safety, external prettiness, etc... Those may be good things, but they cost money, and poor people aren't given the option to choose which features they can live without.

There are a lot of reasons.

1. Asthetics: While people are comfortable all looking alike with an iPod, they don't want their homes to look alike. Such customization demands increase the price dramatically.

2. Land. People want to live in places already built-up. You aren't going to be creating new housing in a desirable Boston neighborhood without knocking something down first (assuming you could ever get permission to knock a building in Boston). For this reason, most property purchases are trades of currently erected buildings rather than construction of new buildings.

3. Labor. On one side, it's hard to find skilled construction workers today. The 20-somethings of today have been programmed that it's college or bust. That has left a short supply of electricians, plumbers, carpenters, etc. As such, wages are huge because property is valuable and people who want to build can't find enough workers. On the other side, we're a lot safer in our construction than we used to. Workplace injuries aren't as common and that's a good thing.

4. Regulations. There are a lot of them and they are meant to improve the quality of houses, but they cost money.

5. Improvements in Quality. Do you think you're going to build a house today without cable and Cat-5 jacks everywhere? Of course not! Old homes have similarly been retrofitted with such amenities. Double-paned windows are now the norm in colder climates, dishwashers and garbage disposals, garage door openers, etc. all add to the price of homes. Heck, even the number of electrical outlets in new homes is quite different from homes built in the 70s.

5. US tax laws. It makes sense to buy as much house as you possibly can scrimp for due to US tax laws which treat home ownership as this panacea of good citizenship. That drives prices sky high.

So, housing prices are a combination of factors.

Nimbys.