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A record number of Americans can't afford rent

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Re: A record number of Americans can't afford rent

#21

Post by pdonis »

tmnvix wrote: post #5

A useful starting point in dealing with this (and the housing crisis in general) would be to determine what proportion of homes are not being used as a primary residence. I suspect it has risen dramatically over the past couple of decades. If it turns out that that is the case, the next step would be to find out why.

A graph from Statista [1] indicates the opposite: the fraction of US housing units occupied by the owner in 2022 was almost double what it was in 1975.

Another pertinent question would be the overall supply of housing: one obvious factor that could help explain the graph I just described is that the overall supply of US housing has gone down, meaning that fewer owners are in a position to rent out property at all. Hence the supply of rental properties is significantly decreased, which will drive up the price.

[1] https://www.statista.com/statistics/187576/housing-units-occ...

Re: A record number of Americans can't afford rent

#22

Post by tmnvix »

causi wrote: post #14
tmnvix wrote: post #5

A useful starting point in dealing with this (and the housing crisis in general) would be to determine what proportion of homes are not being used as a primary residence. I suspect it has risen dramatically over the past couple of decades. If it turns out that that is the case, the next step would be to find out why.

There's something very gross about owning a home you don't live it.

In the past, owning a 'second' or 'holiday' home was an expensive proposition - it actually cost you money. For some time now - because of rapid capital gains and the short term rental market - it makes you money. Many more people are willing and able to do it.

Re: A record number of Americans can't afford rent

#23

Post by tootie »

Idk why this is such a mysterious or unexpected thing. Housing construction crashed through the earth following the subprime crisis and the deficit in available housing has not yet recovered. Prices are up due almost entirely to supply and demand. Current pace indicates the problem will probably sort itself out in a few years barring any further disaster. Some YIMBYism could speed it up.

https://www.axios.com/2023/12/16/housing-market-why-homes-ex...

Re: A record number of Americans can't afford rent

#24

Post by tmnvix »

pdonis wrote: post #21
tmnvix wrote: post #5

A useful starting point in dealing with this (and the housing crisis in general) would be to determine what proportion of homes are not being used as a primary residence. I suspect it has risen dramatically over the past couple of decades. If it turns out that that is the case, the next step would be to find out why.

A graph from Statista [1] indicates the opposite: the fraction of US housing units occupied by the owner in 2022 was almost double what it was in 1975. Another pertinent question would be the overall supply of housing: one obvious factor that could help explain the graph I just described is that the overall supply of US housing has gone down, meaning that fewer owners are in a position to rent out property at all. He…

If I'm not mistaken, the graph you have referred to shows the total number of owner occupied homes - not the proportion.

Edit: I'm also not sure that their definition of owner occupied excludes second homes. From the linked page:

> Owner occupied housing is where the person who owns a property – either outright or through a mortgage – also resides in the property. Excluded are therefore rental properties, employer-provided housing and social housing.

Re: A record number of Americans can't afford rent

#25

Post by cglan »

This is basically the late stage of us continually not building enough housing for years and years. I'm not sure how anyone thought this would turn out differently. As long as housing is an "investment", which in turn means that people lock up big portions of their net worth into housing, and then vote against policies that would make housing cheaper (it's the rational thing to do) then this will be the outcome. Just look at the 30 year fixed rate mortgages. They're an insane subsidization for homeowners.

This is not to say that people shouldn't own their homes. I think in an ideal world, most people would own, or even all people would own and the market would just be liquid in terms of selling and buying. I think ownership has a lot of downstream benefits to communities, but by enacting so many policies to safeguard owning as an investment we've basically killed homeownership in the future.

Edit: 30 year fixed rate mortgages are just an example, there's tons of other issues. We've basically given homeowners the keys to power to fight back against any and all building developments. Zoning too is part of the issue, and is frequently used to fight back against building. If you want change, vote for a land value tax which is a good start to aligning incentives properly

Re: A record number of Americans can't afford rent

#27

Post by EA-3167 »

nox101 wrote: post #16

In LA there are tons of "co-living" spaces where they're basically renting out bedrooms for $2500-$4000 a month! It's the similar to living with roommates except each roommate has their own lease and you have no choice in who becomes your roommate. I don't know any actual stats, only that in searching for an apartment they came up a lot in searches and I assumed it was partly to make more money (a 3br apartment with…

This is inevitable when vast numbers of people all want to live as close to the centers of a handful of major cities as they can. You either build megacities, let the market dictate who can afford to live there, or maybe start seriously realizing that from an economic and environmental point of view... maybe remote work is the solution.

Re: A record number of Americans can't afford rent

#28

Post by throwll202402 »

blackt0wer wrote: post #4

It is worth pointing out that those who cannot afford rent often will not subsidize their situation by renting out extra space and taking on roommates, but instead suffer in isolation living alone. This false premise that "living alone" is some sort of social achievement needs to end.

>It is worth pointing out that those who cannot afford rent often will not subsidize their situation by renting out extra space and taking on roommates

small unit (will say that "cannot afford" does not really come up for me anymore. I will not rent <650 credit score, good savings, income ratio, recommendations, work etc. tenant protections are so strong and courts so backed up now its just wildly expensive to get rid of people. so after two bad experiences of taking a chance now I don't take chances on people would rather have a unit be empty for months then pay 1-2 years or more for a bad tenant. but you are wrong to blame tenants current situation is hard on all sides. painful to impossible to replace/expand old buildings, hard to make things cheaper, good tenants get screwed by bad ones just as good land lords do, bad landlords abuse things, everything is way more inefficient then it should be. everyone just does their best with the various perverse incentives.

Re: A record number of Americans can't afford rent

#29

Post by wnc3141 »

tmnvix wrote: post #5

A useful starting point in dealing with this (and the housing crisis in general) would be to determine what proportion of homes are not being used as a primary residence. I suspect it has risen dramatically over the past couple of decades. If it turns out that that is the case, the next step would be to find out why.

we absolutely need to progressively tax property by number of properties owned.

As you own more of a scarce asset, margins on rents are driven toward zero.

An aside, I often see worry of corporate ownership of property. While of course this is an issue, the bulk (72%) 1. of the problem lies with simply affluent people who own (fewer than ten) investment properties. I do think however, a fair penalty is to just tax based on the degree of rentiership from property investing, therefore a marginal tax on number of properties owned seems reasonable.

1 https://www.pewresearch.org/short-reads/2021/08/02/as-nation...

Re: A record number of Americans can't afford rent

#30

Post by wnc3141 »

Ultimately there has been a substantial shift from the wealth made from income opposed to returns on capital. This is just an illustration of that.

I think this chart explains much of the disfunction in multiple arenas of American life. https://fred.stlouisfed.org/series/W270RE1A156NBEA

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