We Are In A Housing Trap. Can We Escape?
Housing is an investment. And investment prices must go up. Housing is shelter. When the price of shelter goes up, people experience distress. Housing can’t be both a good investment and broadly affordable-yet we insist on both. This is the housing trap.
www.housingtrap.org/
This standalone video can also be used as a companion to our new book, "Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis"
00:00 Introduction
01:16 1. Shelter or Investment?
03:22 2. Building the Trap
05:01 3. Setting the Trap
06:19 4. Trapped
07:38 5. Zoning Lockdown
09:56 6. Not in My Backyard
10:57 7. Yes in My Backyard
12:12 8. Affordable with a Capital "A"
13:20 9. Systems or Solutions?
15:22 10. Unleash the Swarm
16:22 11. Financing a Housing Revolution
18:18 12. Building a Strong Town
Hey friend! If you found any of the ideas here interesting, you''ll definitely enjoy our BRAND NEW book release where Daniel and Chuck cover all of this in much more detail. Learn more here: www.housingtrap.org/
Sure we can escape it, just move to cheaper country.
Where was that archival footage of the 1950s factory workers from?
If we did a big reset to 1950s-1960s codes and laws, and get rid of most housing codes ( other than improvements to seismic/hurricane/etc safety, as well as some enhanced energy efficiency housing. Prices would drop tremendously. Do an even bigger reset where stuff is simplified further and the economy would be bustling and many small businesses would restart/start up. Bush and baby Barry Obama are portrayed in a photo together and Barry's step dad Soetero was an Standard Oil exec. Much of politics is too cozy and a puppet of big interests. We need to change that.
@@MetalGearMk3 this is a possibility if you stop ignoring the criteria of the declaration of independence.
I preordered the audiobook.
There's no middle class housing. It's not just low income, it's middle income housing that is gone. People are looking for half a million dollars for houses and condos. IN the cities it's even worse. You're looking at half a million dollars for a studio or one bedroom condo. Who the hell needs a half million dollar one bedroom? What are you supposed to do with that? We've allowed our housing to become a stock market.
Same in my community, there is no middle. Just McMansions as far as the eye can see, or run down unlivable homes that you can't afford a mortgage for because a developer will pay that much to knock it down for another McMansion.
Half a million for a house!!! What a steal, I wish it was that cheap
and strangely the exact kind of homes you would expect the middle class to live in is the very kind of housing that is illegal to build in most of the US. and the transit middle class used to use is the transit that is least effective in a car based world.
It's always been a stock market. The system has just finally reached its end point, late stage capitalism. The problem is capitalism. We need land reform.
Because we made housing into a commodity and financial instrument instead of a place to live.
My grandparents can't even downsize. They need a smaller home without stairs separating the living spaces. Short of moving into a retirement home or retirement condo there are no options for them. They've even looked at buying a plot of land so they can build what they need from scratch! I find this especially troubling because all this equity everyone is so hyped to build is getting harder to tap into. You cannot downsize if your housing options are all the same or similarly expensive.
All the small houses were taken down and replaced with much larger ones
Most of the smaller homes are in neighborhoods with too much crime. Best thing is to build a bedroom and bathroom extension on the ground floor and have family members move in with them to help out. Retirement homes are very expensive for the better ones, here in Canada 🇨🇦 the housing is very expensive, the retirement homes charge $5000 per month or more. The cheap retirement homes charge $2000+ probably closer to $3000 now. Condos are very expensive here too, $500k for tiny one bedroom. If someone has to use a wheelchair later on, it just won’t fit in the bedroom or bathroom!
I’m in the same boat would love to down size but just can’t afford it.
@@michaelepp6212 then the block you from using the best building practices while lying about 4,000 year old still functioning clay walls in Jericho.
Throw a doublewide on a small lot
“Luxury” is not a legal term. It is almost always used to sell lemons. After 10 years, the cheap construction begins to show cracks, but the people who built the units are long gone, leaving the problem to the people who fell for the trap. Luxury is code for cheap but unit are sold at extravagant prices
i know its off-topic, but do you happen to know where the term "sell lemons" comes from? from context i imagine it means trying to sell something as more valuable/exotic than it actually is... but i dont understand why on the topic - yeah thats honestly another pretty big problem as well, especially in the UK from what i hear, where people get saddled with horrible build quality that falls apart after a few years
@@SharienGaming It originated (mostly) from the practice of selling bad cars - either poorly made, poorly maintained or simply too old - as being in great condition/new/worth the value (a "sweet deal"), which then leads to the buyer getting the vehicle only to find out it's gone and turned into a "sour deal" shortly after buying it (something goes wrong). And since lemons are sour the practice came to be known as "Selling Lemons".
@@ParagonFury ah thank you =)
Luxury is code more for cheap foundations with a new coat of paint.
I see a lot of very expensive finishing being used. You might not realize what this stuff costs. No matter what is used, it is out of style and worn after 20 years. Also, you get damage. Your $30,000 floor can be ruined in a week. I build with cheaper standard commodity materials because I know it all gets old anyway. Works for me.
I love Philadelphia because they’ve built the mid-rise housing that’s illegal to build almost everywhere today. However, this video raises the great point that merely fixing zoning nationwide isn’t sufficient to restart the now-lost housing dynamism that we so desperately need.
As a Philadelphian you'll have to explain why this is a good thing. Development has been fever-pitch for well over a decade, prices only go up and the neighborhoods are basically just Dorm Part Two: Much Pricier!
@@TheVincentKyle Philadelphia is by far one of the most affordable major metros in the US in terms of housing. The entire country is in a urban housing crisis, but home prices have stayed significantly lower in Philly than average. No city is insulated from the crisis, but I think a strong argument could be made that Philly is doing things right and that's why its prices have stayed relatively low. It could be a lot worse.
@@DijonFrisee Thanks for the context - is there somewhere reliable to look up numbers? And not that I'm trying to fight, but could it be said that the deflated numbers are a result of building atop previously-worthless urban blight? I only came to Philly in the late 90s but even then I knew there was a stark difference between it and, say, some of the rougher areas of Brooklyn.
Copy China they were right all Along
@@DijonFrisee haha Philly has stayed cheap cause of the crime everywhere and the locals. Let’s be real here.
My wife from Peru grew up in a 3 story house with 20 rooms, lots of families, many generations. It started out as a single story detached home with a backyard. Over the course of 40 years, they built 2 more floors, built into the backyard, bought the house next door and combined them. Now, half of it is a boarding house for other people, the other half for the remaining family members. There is no backyard but there is a 3rd floor rooftop deck with amazing views, a nice gathering place. The city has grown so much around it that the rents in the area are quite high relative to local incomes. This asset is providing at least $10,000 per month in housing for all its ~20 tenants (the alternative they would cumulatively pay in rent). Its a source of savings and income for the family. Its cheap accommodations for college students, and new people coming to city. The US has shot itself in the foot by not allowing this type of simple, gradual, incremental growth. So much wealth aborted for about 80 years.
Yes!!!!function as a family. Each family helping and passing property on, not throwing away houses.
That sounds like a wonderful place to live! :D
To be made into a giant ghetto ?
@@stephenpavlov8942 what do you propose?
And this American foot continues to bleed
You forgot to say the quiet part out loud - Housing should be a commodity not an instrument for wealth. It needs to stop being a faux investment for the middle class, most people just get bigger and bigger mortgages.. always in debt. Do we need another real estate bubble and crash before we start regulating the housing market?
One way to mitigate this would be to stop foreign investors from snatching up houses and tracts of land and developing them into luxury housing. I see it all around me near my home in coastal LA.
The main reason housing - an otherwise depreciating commodity that requires annual costly maintenance - is because our government forces us to use fake money that they print to themselves and their buddies and the value melts away in our hands. The response therefore is to convert that money into the most valuable things that aren't USD. Mainly houses, stocks, gold, bitcoin. As long as we are forced to use fake money that is increasingly printed out of thin air and is increasingly worthless we will continue to see prices rise. Prices crash when the risk premium on the money we print via credit lines becomes to much to stomach and the banks briefly stop loaning fake money they don't have.
the gov regulating the housing market will go over about as well as setting the lending rates and permitting requirements.
@@tann_man Well said!
Bingo! Regulations should be used to confine speculative investments into PRODUCTIVE assets, not commodities
The summary here is on point. A static city, locked into place by NIMBYs and zoning laws, is never going to provide what an ever changing and growing society needs. And the difference between what housing we can provide and what housing is needed is spreading wider and wider with every passing day.
Also to deal with these NIMBYs cities need to ignore any feedback from anyone over 55. The harsh reality is that these people are going to die in a few years anyway and should have no say about a future that they won't be around for. And for each neighborhood resident that is allowed to speak, one person from outside the neighborhood should be required to speak.
@@fallenshallrise agreed. Old people should have no stake or say
@@fallenshallrise Also it should ignore anyone who accepts open borders, or has no children, bug pod fertility rates are completely unsustainable.
@@zero7523 Along with people who do not pay net taxes, or haven't been in the country for atleast 3 generations.
@@churblefurblesThat isnt very loving and tolerant of you.
Post WWII there were a lot of small (900-1200sq. ft.) 2 & 3 bedroom houses built in the Midwest city I grew up in. No one will finance or build these types of houses anymore because there's hardly any profit margin in them. The ones that are being built are done as cheaply as possible and it shows. This means that the housing stock in the city continues to get older and poorer. New houses in the outer suburbs start at $400K and up, effectively excluding the upcoming younger generation from being able to afford quality housing.
It's not really because of the profit margin---it's because things have crept into the "standard" model that don't necessarily have a great reason to exist... like attached garages, and big kitchens. Those things take up a lot of space themselves, and because they are limited in shape also create dead space that would have been better used before.
@@josephfisher426 That's true, but (car guy here) you really can't have a big enough garage! But, you're right. And how about Owner's Suites that are bigger than my entire first house? A contractor that was doing some work for me about 15 years ago told me that he wouldn't even consider building a new house under 1600 sq ft because he'd barely make any money after he paid off his subs. And it's just gotten worse since then. Also, no one that can afford it is going to build a $400K house in an old large city that is viewed as being in decline. As they say; "Location, location, location!"
@@joeyager8479 A lot of the cost to the builder is imposed externally. When I started looking for rural land 6 or 7 years ago, the construction cost for basic 1.5 story 3B was still about $150K. Probably because they had one inspector who did everything. Urban and suburban inspection processes tend to really pile on the overhead. And the time. That's a fixable problem. It's true that the contractor's cost on plumbing, electric, and HVAC is not going to change much as a house gets bigger. Some of that could be planned out in the design, though... if you make it simpler so that the plumber is in and out on a predictable schedule and isn't waiting on anyone else, he doesn't have to charge you as much. One "affordable" project that I am working on (my employer did the site design) ended up having a drain brought down "through" a regular 4" wall. And the plumber actually tried to do that.
Well then, the government needs to buy and sell them
@@rchot84 more government will definitely make things better
I’m from the U.S. but live elsewhere now. The house I own is considered quite large here but would be quite small in the U.S. - less than 2000 square feet. It’s the perfect size for a family of 4. It has a small lawn, just big enough for a couple dogs to play in. If I reach out the window, I can almost touch my neighbor’s fence, and he could do the same. I don’t want a larger house. I don’t want a larger yard. I don’t need more isolation. It’s hard enough to maintain my property at the size it is, and I couldn’t afford anything larger. I like knowing my neighbors. I love having groceries and other businesses within walking or biking distance. I was able purchase land, build the house, and pay it all off in 10 years. There is no way I could do that in the U.S. with comparable income. Personally, I think car dependency, unaffordable housing, and the lack of public health care are fueling a lot of the problems America is facing. It’s why in a booming economy with low unemployment, people don’t feel prosperous. Scarcity, fear, and isolation fuel gun violence and political polarization. I hope these issues can be fixed, but that would take political skill and courage, which are also sadly in short supply right now. The one thing that is encouraging is that more people are starting to recognize the problems.
wtf where do you live i wanna move
@@stereo-soulsoundsystem5070 Nah. I need you to stay there and fix things so that I have the option of returning some day. 😉
Real @@OfTheGaps
@@stereo-soulsoundsystem5070 anywhere in europe probably..
Im loving your property and this is the kind of life I'd love. I can technically walk to 3 different grocery stores, but it's a 20 minute walk and there are really no other shops that carry the products I need within walking distance
Great video as always. I do want to echo what another commenter said. Middle class housing is gone near me. All houses are so inflated that its beyond ridiculous. A house that sold in 2019 for $240k just went back up for sale in my town for $1.2 million. No significant work done. My town is full of renters that all work at the engineering firms around us, all these workers you would traditionally think of as well paid. We can't afford houses and there just arent enough houses for sale. When new developments are actually built I havent seen one listed for less than $700k. Thats a 2 bed 2 bath. Its crazy.
"A house that sold in 2019 for $240k just went back up for sale in my town for $1.2 million" Would love to see the listing for this, I just find this hard to believe. Got an address?
This is screaming Boston to me!
A bungalow went up for sale around the corner from me last week and sold in 3 days on the market (listed Friday, open houses Sat & Sun and sold Sun evening). It's 2 bed 2 bath, a little under 780 sqft above ground, and went for $1,750,000. The listing is gone, otherwise I would have included it. Given my area, it was likely bought as an investment, and the rent would be no more than $3,600 per month. If there was debt used to by this (though no bank would provide a loan on that rent to price ratio), the equivalent of 20% down and 80% borrowed would mean the mortgage payment is around $8,200 per month, before property taxes, utilities, and repairs. Welcome to Toronto Canada, where the real estate religion has its most devoted followers.
Where I live no homes are on the market below $800K and when something does get added it is gone in a few weeks at most.
@Exquisite_Poupon same. Going from 240k to 1.2 million is insane appreciation in just 5 years. Even the stock market doesn't appreciate like that.
Yes, I've been saying this for years. When you treat a house as an investment you are willing to pay the cost it takes to buy that investment, not the lower price that is it's value as a home. We expect investments to appreciate faster than inflation and so we are willing to pay higher and higher prices because it's an investment. And then comes the day when people realize they can't afford a house.
There's so much wrong with the housing situation. The prices for single family homes, the car dependency of the suburbs due to bad zoning, the lack of consequences for bad neighbor behavior that make people not want to live in denser housing. Makes it difficult to impossible for 95% of people. But above all....banks and companies should NOT own homes. Families and basic people should own homes.
I want to live in the suburbs.
@@parler8698 Then do so. Just don't stop me from moving in and building a fourplex.
People want to live in a safe environment, they don’t want to deal with drug dealers, single mothers, and pit bulls next door! It would be really, really nice to have affordable housing without all the drama and bedbugs! We need a major overhaul of society, people need to be more accountable for their actions.
@@annetoronto5474 That's a false dichotomy. Most cities are the safest places in the country, dangerous dogs are a problem of the suburbs, bed bugs are a problem no matter where people live, and if you want affordable housing don't block it from being created. And please explain why you have a problem with single mothers, that sounds pretty suspect.
@@annetoronto5474I'm scared of black people too
When we created the tools for the expectation that the cost of housing would rise, we created the expectation that the cost of housing would ALWAYS rise. At first, this just incentivized anyone who owns a home to oppose any new housing anywhere near them to protect their asset, but ever since 2008, housing has straight up become a stock market. Something like 30-40% of homes that are bought aren't bought by people who want to use them as a product, but by people who already own property who want an appreciating asset. we need to somehow get back to a point where housing isn't an investment, but the thing is, that is going to piss off a lot of people. There's no political will for it.
Oh there is political will for it.
@@BicycleFunk Not from people who already own property, which it sucks to say is a vastly overpowered segment of the population when it comes to political action. Imagine telling all the millions of people who spent $750k on a home "your house will not be more valuable when you sell it than is now." That is a really hard sell to people who have grown their whole lives thinking that owning a home creates generational wealth.
@@PalmelaHanderson sure, but over 100 million people in the US do not own, or about 35% of the population. That is enough to make a difference.
@@PalmelaHanderson we would have no idea what effect on the real estate market would really be if we actually built semi detached or multi unit housing for families. People could still recoup their money for sfh. Because you compare like with like. We just don’t build it. Plus there such sprawl and poor land use, what if we stopped subsidizing the suburbs, it would be more expensive as well
@@jasminewilliams1673 there is no way to make housing affordable and protect peoples investment in their homes. these things are in direct opposition to each other.
Man, if I could get a loan to build an ADU in my backyard, I would 100% do it.
Me, too!
I would love to add an adu to my land. Nice extra money and a better use than my lawn
Duuudeee all those 2 story garage appartments that Menards has plans for really have me acting a certain way
Same. In a heartbeat. We have the allowance by local government here in Minneapolis, but the financing isn't there. It's fronting the money and being cash-poor for an ADU that gives us pause.
Typically people will take an equity line of credit or remortgage against the primary home to fund the ADU. Depends on the local housing market but I know in Vancouver many laneway houses were financed that way. I agree we need more accessible financial products for this though!
one thing that immediatly stood out to me is when talking about nimbys and development was that development apparently means "more of the same"... but an area with basically exclusively residences doesnt need more housing... it needs more shops, schools, small offices, services like doctors, dentists and public services... that collection of houses needs to become a town... and it needs to be less empty space and the places where these services already exist, need more housing, to turn a business enclave into a town
Here in El Salvador, there are zones that are house after house after house, actually like a suburb, but plenty were allowed to be turned into stores, dentist clinics, restaurants (pretty big houses), and even kindergartens, I didn't notice that until I started watching these videos
Ah but then you need working class and lower income people to work at those businesses, and the suburb people don't want "those types" moving in close to them. So then any businesses that open can't find enough employees cause the suburb folks all commute into the city for their high paying jobs, and will then complain "no one wants to work" because the poor can't afford to commute to their suburb to work a low income job at their cafes, restaurants, shops, etc.
I believe you are referencing 'mixed use zoning'. Think like the old downtown in cities. Bottom floor is shops and the top is apartments. Wide streets to accommodate pedestrians. Those are illegal to build in the US because of our zoning. No doubt the obsession over car culture also plays a huge factor. Both of those would have to be removed.
This is due to the insanity that is American zoning. Americans have somehow been brainwashed into thinking, “This type of thing should be here, but that type of thing should be over there.” There’s no logical or rational thinking to that; it’s just what we’ve been convinced of over the course of the past 75 years or so.
These systems are not broken. I really dislike this narrative. These systems are working exactly as designed. They're just designed to make the rich richer, and the poor poorer, and more numerous. More desperate.
They had us in the first half not gonna lie
really its a matter of framing: The system works exactly as intended if you view it as a capitalist, where society is meant to extract as many resources as possible to generate as much capital as possible. The system is extremely broken when you believe society is meant to grant everyone a high standard of living by distributing labor and resources fairly among the population.
yes the USD is a scam. Printed to the tune of trillions to be handed out to the government and their buddies while your labor melts away in your hands.
It's not a conspiracy. Just organic incentives, follow them and it gets us where we are today.
In my country you have to pay 50k-100k before you lay the firsts brick or hammer the first nail, I have been working with a developer and they are paying almost an eights of their costs in finance, Also materials are insanely expensive, I also believe we need to open up more land for development
You can have all the supply in the world, but if you allow that supply to be hoarded by investors, you will still have affordability problems. You can't get out of the housing trap without effectively addressing the inflation investors bring about. On another note. If our banking system was a public utility as opposed to another profit-driven tool for investors, we could easily fund our housing needs.
I had to stay in an older neighborhood in Philly for work for a while. I was staying in a regular old house. Nearby were old rowhouses. And also nearby were little delis, private little take out food restaurants, a mini mart, private little grill bars, etc. Even though the particular area was old and kind of run down, it felt wonderful. It felt like way more of a neighborhood than where I live in suburbia. My newer, more modern, development feels like the dark ages. My five year old daughter is obsessed with the idea of going on a bike ride for ice cream. It is literally impossible to do here.
Zoning has locked US cities out of so many useful housing and neighborhood types. It's not just apartments, but also more "gentle" density -- single family homes on smaller lots. Other regulations make it more expensive, too. It's a tremendous irony that Cali has so many rules demanding develops include "affordable housing units," but because of all the regulations and paperwork, the cheapest housing is still $1k+ per square foot to build. It's insane. Get rid of the regulations. Let people build smaller, denser, more affordable housing.
Those rules are specifically designed to benefit the bottom line of large corporate developers, and they're unlikely to change, since most rules in America these days are written by and for large corporations.
Cities are bad so I don't live in one. The US has plenty of room for lateral growth instead of horrifically expensive vertical growth only benefitting rich developers. Dense expensive suburbs are bad so I don't live in one. Those areas already serve the purpose other Americans bought THEIR land for. Coercing them to fit more humans is silly as GROWTH DESTROYS QUALITY OF LIFE for everyone except those cashing out to retire elsewhere.
@@gregmark1688 there “rules” are colorable, Defacto no constitutional standing whats so ever. the U.S is a foreign human trafficking corporation. NOT a “country”. U.S. CITIZENS don’t have a territorial claim to North America only the natural heir unconditional. a naturalized citizen cannot demand rights or sovereignty on land that is not their own. 🇲🇦
@@acealoha Well, I see your point, but ... yes, they can. They simply need to use a popular tool of diplomacy known as a "gun". Typically, governments make sure they have lots and lots of those.
I live in a Boston suburb (or exurb, if you want) and I'm thrilled to see four (FOUR!) mixed-use developments under construction as I write this. Retail on the ground level with apartments above within the walkshed of our heavy rail line that runs into the city. One developer even fought to have less parking! It's like a dream come true... Or at least it's a beginning.
Right, wait until you see the rents, probably easily 2500 a month plus!!
Isn’t Boston the city that decided decades ago to tear down their public parks and build schools on them? So now there are almost no parks? I only heard about that because I was visiting once and was stunned at the lack of green space in residential areas and around universities. Not sure I would trust city land use decisions in a place that has a history of not being able to accommodate more than one critical need at a time.
The biggest myth of homeownership is that you NEVER own your home. The focus of banks being heartless and foreclosing if payments become difficult because the only mortgage offered was a variable pales in comparison with what your local government does if you miss a property tax payment. You may pay off your mortgage in 30yrs but you’re NEVER done paying property taxes. And THAT is increasingly becoming more difficult to manage.
That’s the way it works!
I rent from California now, having paid the bank. We have Prop 13, which prevents them from jacking up the property taxes every year. This causes all kinds of revenue and mobility problems, but it means I won't be priced out of my own home by taxes. Now HOA fees, on the other hand...
Allodial title. Research it.... difficult but possible. Buried in the real estate title industry...
A few thoughts...backdrop is in these parts in Nebraska, there's massive pressure for 'property tax relief' as the talking point is that 'property taxes are too high'. In addition to a housing crisis. 1) R1 zoning, from its very creation, was always intended to be expensive and exclusionary. It was always intended to make it impossible for poor people to live in a place. That is literally the entire point, and why Duncan McDuffy invented it ~1920: to stop a black dance hall from being built, by buying the land and subdividing it into large and expensive single family detached lots that only rich (read white) people could afford. Of course R1 housing is expensive. That is literally the entire point of it. It was illegal to racially bias home ownership in government finally in 1910, so instead the strategy was to just ban poor people (read minorities) with R1 exclusionary zoning. The issue though...is R1 zoning spread across the USA to every town/city like a bad TikTok video and is no the dominant form of housing--if there's even anything else allowed. 2) Here, our property taxes do cost people a good chunk of money...because of abysmal land use from R1 and suburbanization which leads to artificial scarcity of land and housing, which drives up prices. Exactly as intended in (1). The entire point of R1 is to be expensive. This isn't a 'bug', this was always the intended 'feature'. 3) We need some systematic zoning reform from the State. Local action is needed for certain....here in Nebraska our legislature has a 'that should be a city level solution' to housing.... Except even in this rural backwater of a state there are 583 different incorporated towns/burgs and cities each with its own distinct version of restrictive R1 zoning in addition to 93 counties which may have some kind of zoning (even if the city doesn't) too. You call an architect to design a house or ADU; if you decide to change the target-city for the build; that house design will need restarted from scratch. Some systematizing is needed and desirable.
It did feel like they intentionally danced around the racist/economic caste aspects of why these legal apparatus were erected and defended. I think they're trying to avoid scaring people who have visceral reactions when presented with historical facts. It isn't necessarily an unwise decision; it may prove to be both disappointing yet the correct one. Would you rather have more people doing good things for flawed reasons, or fewer people doing good things for better reasons? Each problem will have its own calculus to this, and they seem to think the math here plays out better by just getting momentum and then fixing things on the fly later.
I feel like R1 zoning could be used as a decent mechanism to start fighting back. R1 means residential, we should make a law that anything zoned R1 must be owned by the resident. No corporate ownership of single family homes… at very least, not for the purposes of renting them out. I could see corporate/banks owning R1 in the event of a foreclosure or new builds, but that should be temporary and should incur penalties if not sold off quickly.
@@UnderBakedOverEngineered My gripe with leaving out the history, is that people who do not learn the history are forever doomed to repeat it. People who don't know that--dream we can do arcane economic stimulus to get outrselves out; not knowing that there has always been a housing problem in the USA. This property-tax 'too high' nonsense is a part of it. Here in Nebraska, like a lot of places, we have a crisis-shortage of child and senior care workers. And no policy maker or group is talking holistically about the interrelationship of these problems. Instead people feel entitled to expensive inefficient housing that they feel should be cheap--because they don't know that it never was nor can be. Of course there's a child and senior care worker shortage. Why on Earth wouldn't there be? Per BLS, you need a 4-year degree in early childhood development to be a childcare teacher (that is the caliber of knowledge you genuinely want in those workers). That is $50,000 of student debt, easily. And per BLS you know what the median wage of those daycare teachers is? $15/hour. $30K per year. Just affording a car, that is required, is $10,000/year in insurance and gas and maintenance. You will not find an apartment in these parts for less than $1,000 per month sans utilities--and if you need Section 8 Housing the landlord will laugh and tell you to get out--as the shortage is such landlords outright deny anyone without cash. That leaves you
In most suburban-type environments, "R1" has long since become a designation of where public utilities are not going to be made available. Almost everything new in even the worst suburbia is on much smaller lots than that.
Thank you for the history lesson - I did not know that about R1 zoning. I knew about redlining, but not that.
I'm moving to a new city and the housing choices i've been able to find exemplify the root of the "luxury vs affordable" problem. I have an income high enough to afford the "luxury" apartments, but beacuse there is so much demand from people with my income and *higher* and such a constrained supply, I am having an incredibly difficult time actually getting into units that have waitlists a hundred people long. Meanwhile, the old stock of homes from the 50's that have been split into duplexes go for half the price, but beacuse a constrained and unfree market cannot provide me with the housing product i truly want (a really nice place), I may have no choice but to displace a low income person from low price housing stock. This is bad; bad for developers, bad for me, and bad for low income people.
Not just housing... For my entire life, the anwer to every economic problem has been to make fiance/investing more profitable. We're in another guilded age now, and despite the name, that is a very bad thing.
What do you mean by making it more profitable?
The banking system is broken as well. I was in my jome in 2009, i asked for a modification. I was told by the bank after submitting my income and expenses that i needed to EAT LESS. YES you heard me right, the bank said i was spending too much on food. I did eat out, i shopped at low budget stores and cooked all my meals in bulk, but yet i am told we eat too much. I paid $180,000 for my home, i lived in it for 9 years, i foreclosed, they sold it to someone else for $125,000, how is that fair? If a bank is willing to take more than a $40,000 hit why couldn't they have le ME stay there for that amount or higher.
You paid on a house for 9 years and was still foreclosed on? And it was only a $180,000 house? Your mortgage payment should have only been a little over $1000.
I really like this video. I really like the previous "Ned Flanders Drops". The "boots on the street" videos are great for getting the feeling and experiences to come across in video. This style of video really helps plainly lay out the problem, give some of the data, and go through solutions in a way that doesn't feel like an academic lecture - even if the topic is deserving of one. I could go on about how much I liked this video, but I'll stop there. We have got to unlock our cities and communities!
It will be painful, but it sounds like what we need is for the housing bubble to completely burst again, but this time let the big banks fail for leading us into this mess, and instead prop up the individual homeowners like we should have done in 2008. Then come back in with these new products to get more people into homes at an affordable rate.
All new developments in my area are branded as “luxury housing”. A few years ago they built “luxury” SFRs (which had a lot less land than homes built in the 60’s-80’s). Then came “Luxury Townhomes”. Then came “Luxury Condos”. And now a nation of renters are offered expensive “Luxury Apartments”. Not sure how “Luxury” and “Apartment” can be in the same sentence. The QOL for middle-class America has gone down so much. With the interest on our national debt about to exceed tax revenue, I know there are even harder times ahead.
One of the last large plots of land (almost a full block in size) in my suburban city became available. Developer built a handful of super expensive townhouses. Land could have easily held over 100 apartments, but its 20 luxury townhouses.
Once you build apartments the demographics change, so does the political climate in the area. Democrats want to install subsidized housing and apartments in conservative areas and change the voters.
Good. Thats less density. At least that's some improvement
Because they can sell the townhouses straight up. Someone would have to hold the apartments; it's riskier in the long term.
Twenty is probably as many as can be squeezed into a block and still have room for a few bushes and trees, and keep their cars from taking away all the street parking. But it is exceptionally small number of residences for a financially viable townhouse complex. Long after the developer has taken his money and run, the owners are going to start seeing big costs for repairs of community assets that can only be split 20 ways. I’ve seen it happen elsewhere and it’s going to be painful. Hopefully they aren’t responsible for a pool, playground, a private street, or parking lot. Also, I hope they are each responsible for their part of the roof and exterior, but there are reasons why those are often community responsibilities.
Yup, i waa trying to buy an entry level home and i wasnt able to because of the demand for homes. I kept losing them, being outbid. These homes I was looking at would be illegal to build today, they are all "too small" to br able to rebuild new.
It kills me because in America if you think housing is bad, you need to look north. To me the Idea of making housing an investment vehicle is a huge issue. In my area housing grows at a rate faster than even markets. It means anyone with housing already is actually gobbling up more housing as investments. Then using the rent system to just make the payments till they can refinance and do it again. I don't want people to lose their homes but the market can't correct without correcting. You see this even in China where there is enough housing but it's still expensive because it's a investment. Make renting affordable and long term safety and you will fix housing.
Your right. If you want to fix housing then housing should not be an investment. There should be limits on the amount of homes people can own.
@@lachlanbrown3112 You should not be able to purchase a home if you are not going to be the primary resident.
@@MrGoalie2012or at least you should be a local resident before you can buy up homes that aren’t your primary home. And some type of limit and how many you can own yes.
17:15 isn’t this what Airbnb and similar options are for? You can rent out a spare bedroom if you want right now
Capitalism 🇺🇸
Something I see with a lot of this type of work, which doesn't invalidate the message but that I think needs to be considered more carefully: One of the speakers, early on, talks about "people not being able to live where or how they WANT to live, people who can't move where they WANT to be." And I don't want to single the gentleman out, because it's something I hear constantly from commentators and economists and politicians. It feels like a conscious choice, to soften the tenor of the conversation. But, make no mistake: in many cases, if not most, we're not talking about desires, but necessity. People who MUST live some place, or lose their job, or childcare, or be put in a dangerous position due to disability or identity or circumstance. We need to stop talking about wants. We need to acknowledge in our language that we're talking about things where the other side of "functional" is "destitution" or "imminent danger" or "death". Stop saying "want." Say "need."
Very well said! Our government, unfortunately, would rather send our money to other countries rather than put it back into getting us out of this mess. I really think that's a large part of the problem. Capitalism has reached a peak feeding frenzy that can only serve to destroy itself. I want to move away from here, but my daughter has to be here for her job, so we stay here. It's not a choice anymore, it's survival.
@@ellen4956 I don't think that "Our government .... send(ing) money to other countries" is anywhere close to the root of the problem. Even the large sums they are sending to help Ukraine and Israel are a relative pittance compared to the overall budget, and the cost of NOT sending that money would be much greater in the near future. It's not a money problem, per se, it's a structural problem. Restrictive zoning and parking minimums could be eliminated for next to nothing. Building public transportation and bike paths would cost relatively little - and if they were done INSTEAD of large road construction projects, they'd actually save money.
@@OfTheGaps also they arent actually sending money... they are sending over pretty much exclusively their old stockpiles of military equipment that they will replace with newer stuff anyway... they could send all of that equipment and not replace anything and it would barely make a dent in the military capability of the US... and the military budget is fixed anyway isnt it? its mandatory spending and it is humongous this is just the military industrial complex using a crisis to make more money - but it doesnt really have an impact on the size of government budgets... just where the military budget is allocated
@@OfTheGaps More public transit is always good,. Zoning is up to individual cities isn't it? Near my home, city planners are encouraging people who own large lots to build what they used to call an "in-law house" at the back of the lot as a rental. I think that is an excellent idea, and people used to build second dwellings on their lots, as seen in most cities. But when you consider what could be done if a fraction of tax money went into better public transit, trade schools for those who can't afford to pay off student loans, and rebuilding industry right here instead of allowing corporations who exploit slave labor in other countries sell their products here, don't you agree the situation would change for the better fairly quickly? I agree that parking minimums are a big waste, but both houses I've owned had only street parking. It's going to take an FDR style program and mandate to put the money back into the economy at local levels (not banks) to make these changes happen. I agree, it's structural to a point, but we still need to claim federal funds to make these changes a reality. My point is that the multiple billions sent out of the U.S. is needed more right here, right now. I will not drag politics into this discussion further than that. Our own country is experiencing economic hardship and people are losing hope.
@@ellen4956 I think we largely agree. I do think federal funds should be allocated to help make our lives better, and that our federal spending priorities are out of whack. My only quibble was pitting foreign assistance against the needs of the American public. I think foreign aid, for the most part, supports the well-being of American citizens. Corporate welfare, on the other hand, hurts us all.
"how do we get back to a bubble?" Hit the nail on the fin head. never before has this situation been clearer. time for the pitchforks..
asserting that when people say "we don't want luxury housing, we want affordable housing" really means they want subsidized housing is insanity
I don't understand why all the new build housing is 2500+ square feet. Why don't they build smaller affordable houses? Why did greedy people buy up all the older, cheaper houses and remodel them to flip them for massive profits? That's what happened to all of the starter homes.
He's right. Many of the people saying we need affordable housing don't have a clue what it cost to build and maintain. So whether they realize it or not, many people can't even afford what is considered affordable housing without their rent being subsidized.
Several issues here. We started to build more suburbs and single family dwellings but forget the diversification of homes (including condos) for those who don't need or want a single family home. We started to build homes larger and larger to justify increased cost. The land itself should appreciate in value while the home decreases in value to off set the difference, why on earth does a home that becomes older (and typically) needs more upkeep increase in value?
North Idaho where I live has seen a massive boom in housing but every place is unaffordable. Studio apartments are no less than a thousand a month and houses that were built for around 70,000 in the 90s are over 400,000 now. And there are no jobs around here that pay enough to live alone.
FL is the new CA
My main problem thus far to be honest is, how? Right now at least, I know one councilperson (not MY councilperson, but someone who heard me and was sympathetic if not encouraging of Strong Town ideas) who is on board in my suburb. It is awfully easy to lose hope, given how little the rest care given how long I've spoken at council meetings thus far. I don't know what to even start doing after this, as I'm kind of alone for the moment. I don't have, pretty much any deep connection with my neighbors aside from passing by, so I'm not sure how I can turn the current situation around until next election cycle in 2026. My councilperson is kind of openly hostile (politically speaking) to any changes to the codes, and we know how bad local election turnout tends to be. Has anyone at Strong Towns have experience starting from such few people and finding ways to actually change anything within such a system?
A solution to this is something that Vancouver has implemented. A vacancy tax. Something like high vacancy taxes could work, where real estate companies and real estate owners who have homes that they don't live in and don't rent out would have to pay heavy vacancy taxes, thus heavily incentivizing them to bring those houses to the market to rent instead of keeping it out of the market so it could build up value as an investment over time. This would especially force massive real estate megacorps who have thousands of units or luxury apartments to have to put those up in much lower rental prices just so they don't have to deal with with the vacancy tax. Try speaking with your neighbors and people around your area, bring up this vacancy tax idea, stoke that anti-corpo hate, and try to get the vacancy tax onto a local referendum or at least use that as an actionable and popular policy to pressure your councilpersons and local representatives to implement. A reason why something like this, which a local town can use effectively on even massive real estate megacorporations, is the fact that real estate is not liquid; if the real estate megacorps don't want to bring their properties up to rent at prices that people are will to afford, they can't just pick up their houses and move it somewhere else. Their houses and real estate properties are stuck there. Does this help, friend?
@@ajiththomas2465 With all the respect, this tax didn't do anything to Vancouver's prices so as to any other Canadian city/provinces where it was added, so I think it's too bold to consider it a solution. Sure it forced to rent it out, but it's irrelevant if it's rented out on exorbital deficit market where you have way more demand over supply. Attempting to regulate pricing is also a false feeling you help, but would only trigger push burden on renters to subsidize insane mortgages on this housing, as so on...
7:10 this is exactly what is happening to me- the ADU in the back yard that I could downsize and move into next year is tied up in red tape- the city wants more ADUs but they have giant fees. Meanwhile, little sister across the country, recently lost her husband only 7 years after moving into their (giant) dream home. So she is in there all alone. And it's Florida: if localities start to do something popular, one can almost bet their governor will sign a law saying that no municipality can alter their zoning to be different than the rest of the state...
A solution to this is something that Vancouver has implemented. A vacancy tax. Something like high vacancy taxes could work, where real estate companies and real estate owners who have homes that they don't live in and don't rent out would have to pay heavy vacancy taxes, thus heavily incentivizing them to bring those houses to the market to rent instead of keeping it out of the market so it could build up value as an investment over time. This would especially force massive real estate megacorps who have thousands of units or luxury apartments to have to put those up in much lower rental prices just so they don't have to deal with with the vacancy tax. Try speaking with your neighbors and people around your area, bring up this vacancy tax idea, stoke that anti-corpo hate, and try to get the vacancy tax onto a local referendum or at least use that as an actionable and popular policy to pressure your councilpersons and local representatives to implement. A reason why something like this, which a local town can use effectively on even massive real estate megacorporations, is the fact that real estate is not liquid; if the real estate megacorps don't want to bring their properties up to rent at prices that people are will to afford, they can't just pick up their houses and move it somewhere else. Their houses and real estate properties are stuck there. Does this help, friend?
I like this idea
And it has not made any appreciable difference in solving the problem in Vancouver. I'm all for a vacancy tax ONLY in the sense that once it's implemented, people who think it's a silver bullet will realize that it didn't work, and get on board with taking bolder action to solve the problem. Vacancy rates are too low as it is. You need to have empty units in the game of musical chairs. Vacancies are what create competition in the market so that renters/buyers have leverage and can walk away from a crappy deal. If there are no other vacancies, that's when sellers/landlords are empowered to charge extortionate prices.
@@loganbryckyeah except the problem in America is the amount of vacant spaces and not a limit in supply
Correction: We need affordable housing *to buy* , not to rent. Houses don't need to be 2000+ sqft. Make them 1000sqft, or even 700 sqft, like they were originally. Mark these as starter homes, and set fixed pricing with inflation stipulations so investors can't gobble them up, sit on them, and wait to resell them later. And you make anything under the regulatory square footage in specified allocated housing is "interest free", thus denoting that the sale of the property isn't subject to interest, and providing the "starter" consumer who purchases said home to experience generation wealth without the bank making large quantities of money. And if this consumer never leaves? No big deal, regulation around upkeep and maintenance or hefty fines will exist, etc. The problem with the housing market is the basic lack of regulation around selling costs, the outrageous length of loan with pair interest rates (30-year should be illegal, anything over 15 shouldn't exist), and LLCs owning "investment property" who are registered in entirely separate areas. Creating a final regulation: Rental property owners must live within a set distance of property, be it short or long term, and subject to after tenant inspections to confirm it's up to code before a new tenant can stay. That should be federal. I still believe we need a non-profit housing market to enforce healthy competition against the private housing market, thus keeping capitalism in check...
17:46 great and all that, but that just leaves room to exploit the consumer. Why do we need to make "more" money off people's hardships or requirement for housing? We don't. At all. If we want to fix the problem, the solution isn't to make the consumer more vulnerable to exploration in a 0 day bug. The solution is to remove the capability for these private loans to make profit, and require larger banks, with hefty capital, to take this burden. And if you're smart, you'll easily know that the whole "but what if no payment" bs is just bs. Insurance covers that lol...and so would the federal stipulations and incentives provided to these banks. The solution is to stop allowing wealthy capital owners from making profit off the lower class trying to simply live.
Renting isn't really much of an issue if the rents are low enough. Where I live, the rents are so low that there just isn't much profit to be made in landlording and there isn't as much of a divide between renters and owners.
@@BrilliantHandle In the natural condition, rent will be higher because there is a profit margin and management expenses in the case of the rent, and those things are not part of the picture for an owner.
Some jurisdictions are trying stuff like this. But the proposals are primitive and not well thought out (who will manage the regulation of sales, and efficiently?), and the products are still all quite big. Code is part of the complication: new bedrooms must all have windows, which was not the case when middle bedrooms were put in longer rowhouses. Forces everything to be wider than is easily usable.
people who say that actually have no idea what a 700ft "house" is like. you have no clue. and thats why you keep typing this thinking its a solution, but all you are doing is showing you are clueless. let people who know actually build houses. if you cant afford them, i mean you can rent your i bedroom 700ft apartment instead..
I feel for NIMBYs when they say high rise development kills the charm of neighborhoods. I just wish we developed similarly to Montreal, Chicago, Philadelphia. The 3 story rowhomes are beautiful and done on a large enough could provide us all with adequate housing without cramming us into condos. That said I still think condo towers have a place, next to transit corridors for example. Having commercial/residential mixed zoning would also help a lot.
Not all condos are towers. I live in a 3 story courtyard building. Fish in a fountain in the courtyard. Cherry, dogwood, and maple trees that put on great shows every year. It's "flat" style with the living/dining facing the street, and the bedroom facing the courtyard, away from the noise of the city. Twenty households on land the size of two single family lots.
Only if they tie into the urban fabric. In my home city of Alexandria they just built up a 6-block by 2-block parcel with nothing but 3-story rowhouses. They are ugly buildings and the only third space is a 1 square block park. The closest retail is a gas station convenience store on the other side of a highway and a supermarket 6 blocks north of the development. We know what works and refuse to build it.
@@jyutzler sounds like they're ugly cause they're mass produced developer builds for profit. If each home was constructed by the family who'd live in them they'd more than likely be a lot more beautiful but who can afford to do that nowadays?
@@LaMach420 I agree, but the neighborhood would still stink even if the architecture were beautiful because of the lack of third spaces. They could have built a main street down the middle and had a mix of unit types, but that didn't happen.
@@jyutzler that do be an issue of our time.
I would like to have economists look at the impact of private land ownership on the housing crisis. I'd like us to revisit what Henry George said about the subject. If society is the one to capture the value increase in the land only that is inherent in cities, then that money can be used for the public good. As it is, these housing bubbles have arisen because that value gets captured privately and I suspect that value is being concentrated up the wealth ladder. I think this feeds into the video's notion of citizens of communities having a vested interest in the wealth generated by the constant change happening in the community.
Good luck with that pipe dream
Things haven't become bad enough yet for us to do something. The water needs to be at a rapid boil before we even notice.
I'm an older millennial and we had a family young, so we bought our house just as things were starting to heat up in 2015. We paid $160k for it then (and that was a stretch financially at the time). Based on what similar homes are selling for around us today it would probably sell for closer to $350k. In less than a decade! We've fixed it up here and there but for the most part it's just become older in that time 😂. It's nothing fancy either, 1600sq ft with 4 small bedrooms and 3 small bathrooms. We probably couldn't afford it comfortably if we purchased the same house today. Just crazy!
I'm in Southern California with basically the same house and story...bought in 2010 for $160k, current value is $575k. There is a new build community that's a 5 minute walk from me and similar models are starting at $725k. It's absolutely crazy. Ive paid my house off already but instead of relaxing, I am now working harder because I know how much help my young kids will need in the next 15-20 years when the become adults.
It’s even worse in Canada! 300K homes bought in 2010 now sell for over a million in suburbs hours from major cities. Hopefully the US can catch the issue before you get to Canada’s level of pricing. I’m 32 and have accepted I’m not owning a house for at least another 10 years. I’m not taking on an 900K mortgage as a first time buyer. The average house price in Canada is 750K.
That's the exact same time period my parents talked me out of buying my first house. They thought the bubble would pop any minute. I've always wondered how my life would be different..
@@madderlakevideoproductions4560I’m really curious as to why things are worse in Canada than in the US. Your population is much less dense. I believe what you say, I see those prices for Canada homes on TV. But I don’t understand why?
New housing being built is most often over sized, 2 story homes...usually in hoa neighborhoods. Why not build reasonable ranch style homes? New homes are overpriced in part because they aren't modest. This means that a modest, 20 or 30 year old home inflates in value, because even at $250k, it's still a lot cheaper than the new $400k homes...even though the old home was only $80k when new.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 7% to 9% were typical. People will have to accept the possibility that we won't ever return to 5%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
I sold a property in Q4 of 2022 and I'm waiting for a house crash to happen so I buy cheap. In the meanwhile, I've been looking at dividend stocks as an alternative., any idea if it's a good time to buy? I hear people say it's a madhouse right now
Home prices will come down eventually, but for now; get your money as much as you can, out of the housing market and get into the financial markets or gold. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek a pro who knows about the financial markets.
Thanks for replying, You seem to know much, How did you go about it and can you recommend an advisor like yours?
Sharon Ann Meny is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I just googled her now and I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.
Keep in mind that during the 80’s people were encouraged to save due to the interest rates. Right now there’s very little incentive to save because those who are saving are watching those who are reckless taking it in. I’ve been trying to save for a home and it’s been discouraging to watch prices continue to not budge because there’s people willing to get into a mortgage where they’re paying 40% of their income. It’s insane.
The housing market in 2024 poses difficulties due to uncertainties about the Federal Reserve's ability to curb inflation and reduce borrowing costs without adversely affecting demand for assets like homes and automobiles.
Consider shifting from real estate to stocks during severe recessions. While market volatility presents short-term trading opportunities, it's crucial to approach with caution. This isn't financial advice, but investing during such times may be a strategic move, consider adopting the services of a financial expert.
In fact, I had no prior experience or understanding when I began investing in 2020, but by the end of 2023, I had made a profit of almost $850k. All I had been doing was going by what my financial advisor had told me. This demonstrates that all you truly need is a professional to assist you; you don't even need to be a great investor or put in a lot of work.
@@spacecadet6who is your advisor please, if you don't mind me asking?
"Gertrude Margaret Quinto" is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment
I'm going back to school in my mid-40s and after a couple terms of exploration I'm most likely going to go for a masters in urban planning. Stuff like this is fascinating because it indicates we are on the cusp of a huge opportunity to do a great amount of good through policy changes and more thoughtful application of existing statutes. I will be following your work closely
Where I live roughly 1-in-5 of the new McMansions and condo apartment units have owners but are vacant. They have been purchased by off-shore interests to hide money from their home country government's clutches, or as a relatively safe store of value not correlated to stock markets, or (some say) to launder ill-gotten gains. Unfortunately, this has added more "juice" to the upward price spiral that is making homes unaffordable for many people here. Not good. Cheers.
They need to streamline permitting, reduce gotchas and help fund housing development. Even looking at being a real estate developer it’s just seems like a land mine of rules, regulations, gotchas like contaminated properties, zoning and then don’t get started with funding. It’s all money up front with the hope of selling at profit after a million people get their cut. We need to go back to prefab homes like what sears used to sell. You order and all is shipped to you at a decent price and then you build. I’m absolutely certain 100 years ago zoning, laws, financing and soil contamination was much much less of a concern.
Cities that "relax" regs need to ensure that doesn't encourage speculaters and businesses to drive up prices.
It is incredible how this guys spoke for 19 minutes about how much we need the free market for housing, and still have people commenting "housing should not be treated as something to sell and buy"
we did NOT trap ourselves, they trapped us.
Regular people aren’t totally blameless either, I agree most of it lies with companies and policies but when we had cheap money via mortgage loans we started asking for more from our homes. Bigger garages, kitchens, custom bathrooms or large decks. This means developers charge more money and take longer per house to build and get permits for. This hurts supply which in turn drives up prices.
They started it, but home owners are gonna prevent changing it; no owner wants to see their property lose hundreds of thousands in value. It’s what needs to happen and is why house prices aren’t going down any time soon
@@BigHeadClanRight. I mean alot of the blame does fall on the investors but just like how over 90 percent of Americans who own Pickup's and SUV''s dont use them for their intended use but to pick up groceries and starbucks we are also to blame for everyone feeling entitled to a McMansion. The sizes of homes have inflated over the decades. I know alot of young childfree first time home buyers who want to immediately live in a 2500 sq ft home. Thats a starter home to alot of yuppies now.
@@TYBG85 A lot of those investors wouldn't have been able to afford those 70-80K trucks without cheap loans to begin with. Not saying the buyers are blameless (Far from it) but if you are giving people practically free money they are going to spend it stuff they don't need or have any practical use for and we'd have a lot fewer Trucks and SUV on the road. As for first time home buyers I'm not sure who you are talking to, but pretty much all of the people I've talked to from the generation below would be happy with with anything they could call their own without paying 2K in rent for a 1bed/bath apartment. I'm sure there are some out there who may expect larger homes for what they are spending but I can at least see how they got that perception most millenarians and gen Z grew up in houses 1700-2200Sq-Ft homes and probably thought it was the norm when just one generation ago it was more like 1200SQ-FT.
Yeah, who the fuck is this "we"
The problem in my view is the following. Stop allowing corporations from buying houses. (Less demand and more supply should lower house prices) Allow more zoning and construction of new developments Subsidize builders to reduce cost of building homes. Offer bigger tax incentives and discounts to first time home buyers. Lastly for the renters remove the software that syncs different agencies pricing structures that price gouge renters. Create legislation that creates fair rent allocation for units.
my town is 1000 people, 45 minutes away from the nearest town. The house built 25 years ago that is across the street just went up for sale for $289k. My house was built in 1883 I just bought 2 years ago. It's value went up 80% from 22 to 23. This seems like a good thing in the abstract. But that also means my taxes also went up in proportion. Property taxes are expensive no matter where you live. Owning a home is NOT an investment unless you intend to flip it, or rent it. The total cost of home ownership over 30 years is about 100% of it's value. You will have replaced everything by then. roof, siding, windows, furnace, AC, flooring, appliances.
Question to Chuck and Strong Towns: Can we build Vienna style public housing, cutting out Wall Street and the landlord profits?
Not without a significant shift in political consensus. Public housing grew in Vienna during the "Rotes Wien" (Red Vienna) period of the First Republic (which followed the conclusion of WWI until the mid-1930's). Roughly a tenth of Vienna's population then lived in public housing. Cheers.
Public housing complexes in the USA didn’t work. These places were extremely dangerous for the many of the residents. Look up Cabrini Green housing development.
Vienna's style has a very big footprint; where is that available, other than the likes of the demolished parts of Detroit?
Why should we care about landlord profits?
@@MylesKillis landlords should get real jobs.
The American car dependent culture resulted in low density housing - urban sprawl. When there are not enough housing to meet demand, prices go up. Many workplaces have parking lots that are +3x that of the building itself. Local governments should provide sticks and carrots to convert 20-40% of workplaces with +200 to dense, affordable housing. Employees of those places can skip the commute and $12k/year cost of owning a car.
Missing from this video: private equity buying up starter homes and preventing families from entering the market as owners. The fed needs to step in to regulate this class of "investment" in favor of individuals, not corporations.
Absolutely! Fiduciary responsibility should not be part of the commodity that is housing.
No corporations -- from mom&pop LLCs to Blackrock -- should be allowed to own single family homes.
In my area, Lennar sold 28 homes on 1 street to first key homes (private equity). First key now has several listed for sale nearly 25% below the 2022 list price. Just posted about it
I see a lot across the street from my apartment building and I want to build a few townhomes for myself and my family. I wish I could. I guess I have another book to read this week. Let's Go!!!
my town has had immense growth that is noticeable in a lot of ways. I love it. Lots of housing being built - lots of shops an restaurants.
Great info here. I'm in a limited equity housing cooperative in Chicago. We desperately need share loans, but banks don't want to offer them.
I live in Canada, so perhaps the discussion is slightly different. In my country, rampant speculation is the root of our problem. And the problem is two-fold: there are many empty homes but they are used only for flipping, and, a downturn will destroy many retirees who are relying on artificially inflated housing.
There are many solutions, but here's my two favorite (realistic) ones to speculate about. 1) Disallow any individual or entity from owning more than two (maybe one) properties at once. If property scalpers (or "investors") can't buy up something in demand without using it, the prices can't skyrocket. Least, not as out-of-control as we see now. 2) Have the government build and maintain flophouses (or some very minimal housing) and only charge the amount to maintain them; including capital cost divided by expected days of operation. No profiting, but no luxuries. If developers only build expensive housing while nobody is forced to buy them, they won't buy them, the lots will rot, and this property gouging business will be financially insolvent.
My old family home is now over $500,000 bucks. It was bought new in the 1970's for like $80,000's. It's in a Cheap HOA, and right off a Main Street. It has no pool, single level home, 4 bedrooms and 2 baths. I've seen the pictures of what it looks like after the flip, looks lovely. But at the same time, the cost is vial.
Love to see practical ways trying to break this problem down.
Something like high vacancy taxes could work, where real wstate companies and real estate owners who have homes that they don't live in and dont rent out would have to pay heavy vacancy taxes, thus heavily incentivizing them to bring those houses to the market to rent instead of keeping it out of the market so it could build up value as an investment over time.
Just to add to the record, there's also runaway material costs, a skilled labor shortage, and the fact that currency is being debased (money printer go brrr), inflating asset prices - including, and especially, real estate (which shouldn't even be an asset class, but that's a whole other topic/debate).
spot on ! these other comments are viewing the superficial aspects.
There is not a skilled labor shortage. There is a wage shortage for entry level skilled labor. You cannot create skilled laborers when entry level jobs pay the same as fast food.
I’m so happy I found this video. I’m one of those citizen, real estate developers. I want to make affordable housing for people. I don’t care about money. I just want people to be safe in their homes. I’m definitely subscribing because I want to help. Thank you for the video
I liked that first guy. Really spelled things out and presented ideas clearly and articulately. The second guy really talked in circles. I know that planners hate Nimbys, but they are not in any way a problem. People move to places they like and set up lives their. It's unreasonable to expect them to be welcoming to outside institutions trying to move in with a bunch of projects that fundamentally redefine their neighborhood. At the end of the day it is their neighborhood and it is up to outside forces to work with them. Now I want to be clear that I am talking about the people active in their local governments and not institutional or corporate lobbying. The latter is something I can get on board with being problematic and not serving peoples interests.
Even is you build new houses, how do you stop investment firms from buying up the supply? They have the capacity to offer much more money than what you would be able to get from a family that needs a house. And then the investment firms will keep the prices high, because to them housing isn't a necessity, but a way to make a lot of money with. To me the end of the video feels a bit like the residential selective garbage collection: pay no attention to the large industrial polluters, only individuals can save the planet!
Regulation..
Housing would not be a good investment if you build enough supply to curb demand (and continue to do so). Investors are a symptom of an overregulated market.
@@rogerk6180 Lobbying. The investment firms will bribe politicians to not make any changes that would devalue their assets, or make it more difficult to profit.
Building houses doesn’t help the fact that tiny lots now cost $300k. The same lots that cost $25k 10 years ago
@@brandonmackenzie1203 More a symptom of an opportunity to make a lot of money. There is a lot of way to make a lot of money and lack of regulation is probably the most powerful one. The sector with the most absurd rate of investment is probably tech, look any faang stock market, compare the value of their share to the money they actually make. Does it look overregulated to you ? Housing in (big) cities is a limited market, you cannot simply build as many houses than you want. Land is very limited, but also depend on transportation, electric grid and water connection, sewage lot a thing that make it something that cannot indefinitely growth and need a lot of public investment in infrastructures. Also, building price goes up : You need natural resource to make the building material that a more rare today, and more expensive to extract and transform than yesterday. Inflation is affecting everybody, so labour in construction price is also going up. So building prices goes up, independently of the market, just because the cost of fabrications are going up. And those cost of fabrications are going up because we only have one planet and a limited amount of resources to share. We have less oil, less coal, less steel, less sand... available than 50 years ago. Limited market + capitalism = oligopoly Oligopoly ⇒ less competition, fewer incentives to drive price down for investors What can be done ? Easy solution, massive investment from a non-profit organization (in theory could be a private one, but we know only public have this kind of will and power). Rent slightly up of the cost of maintenance to force competition back. Rent goes down, less money to make, less shark investors in the market.
Zoning is a huge issue, and so is building codes that have been overblown due to lobbyists, making it unnecessarily expensive to build.
Here in the neighbourhood I live in Lima, it originally started as a single family zone albeit with many caveats: 1st is that the dev would not offer you a home but instead the plot of land with already installed utilities like water, sewage and electricity in which the buyer is expected to build its home, provided that it follows the regulations set by the local government of course. Overtime, because of the need for more housing many residents would ditch the single family aspect and would start upgrading, tearing down to make apartment buildings or converting them into mixed use buildings like cornershops, restaurants, etc. 2nd this place had at least in mind public transit bus lines like line 48 for instance, which connected the hood to the rest of the city. 3rd this place actually has places to go to in like schools a market, many convenience stores, drug stores[boticas/farmacias as we call them] and churches and most important of all: THEY ARE JUST AT WALKING DISTANCE FROM ANY DWELLING. 4th it has relatively well maintained parks. 5th you actually have live community from all walks of life[minus billionares, those are even more rare in Peru but you get the point] doing activities within the neighbourhood. That does not mean everything is perfect though, despite the place having pedestrians in mind many still turn up to their cars[due to cultural factors like people thinking an SUV will bring you status] and as a result you see traffic congestion on ocassion. Another problem is the logging of trees to make way for street parking[for cars of course] or even in worst cases just pouring concrete where there was a tree. Lastly there's an issue with stray plastics and micro plastics which at least from where I am it's a pain to clean and will lead to conflict because some people just throw trash at your house and you have to clean it by yourself everytime it happens[the worst thing is that you can't catch the culprits because the might have done it when you were not at home]. Side note: the neighbourhood here in Lima is one of many different types, next to it and separated by a hill there's a slum which has expanded from 2013 onwards but i would have to make a book to detail how housing here doesn't work but i digress. Still, inspite of that i would prefer my hood 1000 times over the crap that is the single family home maybe even closed off American suburb.
EXCELLENT! Thank you! I appreciate & live the way you broke all of that down & explained it in such a clear, concise way!
One thing that was left out of this conversation is the effect of Airbnb. The amount of inventory that is locked by small investors as well as big investors. We need policy to address what percentage of single family homes are owned by investors.
Infrastructure based Transferable Development Rights (TDR) could be a possible solution for the problem. The idea is to assign a maximum amount of development potential to each land area based on the existing infrastructure. Land owners could then build, buy or sell surplus TDR within their area, as long as they follow the building codes and pay property tax. This would create incentives for efficient land use and resource allocation.
Efficient for people you mean. Where is suburban wildlife in this equation? Are we going to cut down the few remaining trees used by squirrels and songbirds, tear away the last bushy corner where a fox or groundhog was denning, build over the lawns and gardens from which the deer fed at night? Their forest homes have been cut down, their fields have been paved over. The suburb that you are all hating on has been their final refuge and now you plan to take that away too.
So, the inevitable question after this is, how do we get everyday people enough funding to be able to make their own projects, and how do we make sure that larger real estate investors don't try to stop them. So much of our housing is used like a stock market. I would love people doing things like this in my community. I don't even want a large suburban house. But we have huge investors making large suburban housing projects, not to mention silicon valley outside our door selling us snake oil solutions of "future" cities. These people have an investment in making sure housing stays expensive. There would have to be a legislation side to this to make sure that there is no backlash. I wouldn't be surprised if the people trying to do small scale things in my area are being shut down in one way or another already. How do we stop that from happening?
The higher end areas complain that they don't have workers at the regular service jobs, but there aren't any homes or apartments for the workers 10 to 15 miles close to the town or city
Basically in housing now is it is everything or nothing with nothing in-between middle-tier housing for the middle-class
Great video, I like how you talk about incremental bottom up development. I've never thought about it before, but it is important and less obvious than the more commonly known problems like zoning and car dependency.
Pre-ordered the book. Can’t wait to read it tomorrow!
As a result of rent controls were removed in an attempt to encourage the building of rentals units you now have large corporate landlords owning hundreds of single-family homes charging maximum rent to achieve a 25 to 50% profit and they are also paid ot keep the units empty as well. Thus, we also have unaffordable rent in a very limited number of rental buildings
All anyone really wants or needs is peace and quiet and that can be found almost nowhere and rarely if ever is it affordable. So to hell with this world.
The problem I've seen in my hometown is our proximity to the DC metro area. Folks from there have bought up a vast majority of homes here but still commute to work in DC. This has caused a massive increase in our housing prices but has left the people who've grown up here and whose jobs are here in a position where we can't afford housing in our own hometown. It's also caused a shortage of space in our hospitals and schools as well. It's been so sad to see this happen to such a great town.
I have lived on campus in Washington DC in the summer of 2005
The growth around DC has just been explosive. Every company seems to want a headquarters there now, probably to make lobbying the government easier, because these aren’t companies that actually do government contract work.
@@aliannarodriguez1581 definitely true
It's so sad that the strong towns movement can't succeed in modern America. The problem isn't the message. The message is fantastic! The problem is that the institutional design of modern America disinscentivezes grassroots participation in the system so much that the barrier at this point is impossible to overcome enmass. The fact is that not only did cities at the time lack zoning, but they also had powerful local democratic systems and incentives to participate. We won't be able to fix most towns and cities until we fix the political structures that keep towns and cities the way they are.
UK viewer here. Reading one of the comments below about how far local workers have to travel to get into work makes me think of what happened to council and social housing here over the last 40 years. As Thatcher's conservative government began to fall out of favour one of their policies was to release social housing on to the private market, the thought being that property owners are more likely to vote conservative in future. (It did work.) Council housing wasn't only for poor people, it was for those who worked for the council, too. So you could live and work in your local area. These houses were offered to market in the late 80s, and various tranches of them periodically thereafter until very recently including the newer properties built to replace those that had been earlier in the process. The property was initially offered to the tenant, but if they were unable to buy it would be offered to the rest of the market, meaning that a substantial quantity of that social housing didn't make into the hands of those "future conservative voters", it went to those who already had the money to increase their portfolios. I live in inner London, already densely populated when the first housing was sold almost 40 years ago and more densely populated now. Where many of our terraces (row houses, I think you call them in the US?) once were now stand tower blocks, where the entire block was bought by developers, razed, and expensive flats sold off-plan put in their place. The area where locals lived and had their local lives, going to local schools, and working in local jobs, using local shops and services, this property is now bought by people who may live in London but maybe do not, and use it as an investment or pied a terre for the week they spend here a year. Entire floors of new-build blocks are bare concrete - no internal fittings, no flooring - because it's not necessary to put that level of work into real estate that's only there to accrue value for its owner. Meanwhile, the people who do live and work here might be sleeping 2 to a bed (one works days, the other nights) and 10 to a room simply to be able to afford to live here. Landlords are letting houses that are unfit for habitation through damp and mould, unsafe floors and roofs, vermin that tenants are unable to keep out, windows that leak, completely inadequate insulation and heating, and very publicly a few years ago was a raft of houses that had trees growing into and through the exterior walls into the properties themselves. The issues we have with housing here in inner London are different to those you have in the US (and the problems you have there are seen in the outer urban area of my city and those across all of Europe, good mass transit or no), but they're no less real, and we have to change because it's unsustainable and inhuman.
You don't seem to know how council housing was distributed. It was always rented to someone who had applied for council housing, it was only bought and sold after the Thatcher/Major government gave tenants the right to buy the council house they were already living in, and they stopped replacing the stock decades ago because Thatcher/Major ratified a stipulation that councils could not use the revenue from council housing rent or sales to build new council housing. Sorry to *BE* that guy, just thought you ought to know, or that I should out myself some way in case I've got it wrong and need correcting
@@ChartreuseDan People who worked for the council lived in council housing. Not all of them, but they did. I also know that it's no longer the practice. One of the worst things the governments at the time did was to encourage councils to "invest" the windfall from that sale of property, and councils not having investment managers made many poor decisions, hence the near bankruptcies now.
@@Jablicek Yep, even if the council winds up competent, pretending economy of scale doesn't exist and insisting on devolved bodies all footing the difference is an easy w for anyone trying to create underfunded councils anxious to sell assets off cheap to the rich
tax breaks to corporations that create jobs paying 50% of livable wage because we have a great network of donors is not a local answer...we can do better.
When I lived in SLC a lot of homes had basement apartments these were called “Hope” houses. Your family helps you buy a lot you get the basement and foundation done. You move in and then overtime as you and your family better yourself you finish the house over years. Today that just wouldn’t be allowed but it’s brilliant. Lots of folks have the ability to learn the skills to build a house I’m a plumber it’s not rocket science. Then the homeowner only needs to contract out the technical parts like heating , electrical, plumbing and family groups can do framing, Sheetrock cabinets etc over years. The basics are in the basement
Maybe also worth noting that boarding houses (roughly "efficiency apartments") used to be extremely common.
It’s so silly that homes are considered an “asset”. They wear and tear and COST money to maintain like a car, like a liability. Like debt. Sure, you can rent it out. But besides that, it’s totally unnatural that its price goes up in price. Unnatural. You won’t have vulture profiteers all over the world investing in homes if homes didn’t appreciate. Houses should depreciate
It makes some sense, a house isn't just a structure, it's access to the space and economy around it. A car can be replaced with any other car fairly easily, but a house dictates a large part of people's lives. A house appreciating in value is about the idea that the surrounding area is gaining economic value. Which, is about the best defense I can give to something like a NIMBY. I don't personally feel like I have an adequate understanding to really have a strong opinion besides homes cost too much.
Houses being locked up in the short term rental market (like Airbnb) is also contributing to the crisis. People treat houses like investments instead of homes. If we raised the real estate transfer tax to like 20% it would put a stop to housing speculation and fix the crisis. There are enough houses already, they are just empty.
Thank you for assembling and distributing this information, this gives me so much hope❤❤❤
Step 1: Make it legal. I hear that we don't need some massive government policy to build everything, but we do need legislative action to make it legal for us to fix our own problems.
so how much of this is nebulous cultural change and how much do you have concrete policy ideas for?
To summarize "Let people build what they want"....I built a very comfortable home all my self with zero previous experience for 45 grand not to "code" which has worked perfectly and hasn't fallen down. We have over regulated everyone into an inefficient and expensive corner with nowhere to go at a time where there has never been more knowledge freely available to do it yourself, its mental. Im not a rebel but Im sure as fark not going to be told I can't build myself shelter and then not be offered a reasonable alternative from them at the same time.
If you don't mind me asking, how did you build yours? Did you use an alternative building material?
I did the same for 60k but that was nearly a decade ago. Material would likely cost double now.
@@logoski589 Yeh the price increases have been crazy, I finished my build a month into the pandemic and it was the best/luckiest move I ever made as there is no way I could have afforded to do the project now and would now be a rent slave for life like many others.
@@CFlandre No I used standard 50mm coolroom panels and angled alluminium.
Brilliant video! The musical chair analogy is so on target.Homelessness makes you feel like it does when you don't get a chair except it's always there, 24 hours a day. Housing solves homelessness!
Wow this is a great video... really knocked it out of the park! This is something I'll be trying to share with my local town leaders to see what progress we can make.
And more movement of people means people meeting other sub-cultures reducing the bubble effect. When you neighbour is a nice latino there is less reason to demonise them.
The problem is that our school districts are tied to housing.
Our county used to not allow any ADU’s or even detached living space unless you owned at least 20 acres! They’ve relaxed the regulations on lot size, but they don’t allow you to use it as a rental of any type to supplement income.
And the really incredible part to me is that a $500k house isn't like $500k in gold bullion or some other permanent asset. Houses need constant high-cost care & maintenance, and depending on how, when & where your house was built it can eventually need to be completely torn down and re-built from the ground up. A lack of stability in housing prices is a very pernicious social problem. My house is in a marginal upper-lower to lower-middle neighborhood at best and has tripled in value over the last 10 years while interest rates have also almost tripled. Overall, if I bought my house today, with $55k down, my payment would triple. So, who out there thinks my income has tripled over the same 10 year period? This is complete madness...