Why housing may be so expensive...
https://www.axios.com/2023/12/16/housin ... -inventory
https://www.axios.com/2023/07/07/homebuilding-hot-spots
Some of this may have to do with illegals entering the country???
https://www.pewresearch.org/short-reads ... in-the-us/
Why did the number of illegals in the country decrease between 2008 and 2016?
And by the way, how do illegals get housing without a SSN number, check book, etc?
And with 7 million illegals entering the country the last 3 years, no wonder there is a shortage of 3 million affordable units.
Shortage of affordable housing in the US
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Shortage of affordable housing in the US
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Re: Shortage of affordable housing in the US
Maybe a little.Ernie wrote: ↑Tue Dec 19, 2023 7:58 pm Why housing may be so expensive...
https://www.axios.com/2023/12/16/housin ... -inventory
https://www.axios.com/2023/07/07/homebuilding-hot-spots
Some of this may have to do with illegals entering the country???
No construction jobs to do. Great Recession. That was right after the real estate crash.
Forged documents. Easy to get. Just need to avoid jobs that E-Verify, and there are plenty of jobs that don’t.
Maybe so. They are also the ones building the houses, so without that, there would still be a housing supply shortage on the scale of the pandemic supply chain fiasco. No one could get houses built fast enough, prices would go even higher, and inflation would go up.
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Re: Shortage of affordable housing in the US
Honestly I think you have it backwards.
The main reason we have a shortage of housing in the US is because we haven't built enough. There are a lot of complicated reasons for that, most of them local. But that is the long and short of it. And the title of your post is really too restrictive. It isn't that we have a shortage of AFFORDABLE housing in the US. We have a shortage of housing period.
There isn't some separate special market in affordable housing that operates apart from the overall housing market. Where immigrants and other people compete with each for some pool of affordable housing. It is all just one housing market. If you restrict housing construction at the higher end of the market, all that means is that the wealthy who HAVE money will simply move down into the next tiers down in the housing market where they will ABSOULTELY be able to buy whatever they want as remodels, tear downs, or whatever. Since they have more money. And you just create a musical chair phenomena all the way down to the very bottom of the market where at each step in the ladder those who have more money will be able to out-compete those who have less. Around here we have liberal activist types who always oppose new luxury housing projects because they don't include "affordable" housing. Which only shows how ignorant they are of basic economics.
We saw the same exact thing during the pandemic with the car market. Various supply chain disruptions in Asia with chips and so forth which mean new car construction was severely curtailed for about 2 years. What happened? Wealthy and upper middle class people who could absolutely buy whatever car they wanted and when new cars were not on the lots they bought up all the nice late-model used cars and without worrying about price because if you were going to buy a $60,000 new SUV then a 2-year old one for $40,000 is cheap any way you look at it. And the because expensive new cars were in short supply, used car prices all the way down to the $2000 beaters all went way up in price. People shopping for $70,000 SUVs are not the same people who are looking for $2000 beaters. But they are directly connected through a supply and demand daisy chain.
As for undocumented workers? I suspect the opposite is true. While they add to demand, at the same time they bring DOWN housing prices by bringing down construction prices. Vast numbers of construction crews in places like Texas are all immigrants and probably mostly undocumented. You have building contracting companies run by Hispanic businessmen who hire crews of undocumented through a nested Russian doll arrangement of subcontractors. You need 20 concrete guys at a work site tomorrow? You call your guy and he calls his guy and they show up the next day, do the job, then disappear on to the next job somewhere else in the giant metroplex. That is one reason why housing is cheaper in places like Texas. They can slam up new houses and apartments virtually overnight. with cheap (or cheaper) labor. When we lived in Waco we were on the fast-growing southern edge where new subdivisions were going up overnight. I was always shocked at how fast houses got built there. When you drop 25 guys onto a job site with modern power tools who know what they are doing and willing to work hard, stuff gets built FAST.
Where do they live? There is a massive underground market in off-the-books rentals. Large numbers of houses in downscale parts of big cities have been converted into informal rooming houses where maybe 8 guys live in a 3 bedroom ranch on bunk beds and basically are just there to sleep. Those are the homes you see where they pave over the front yard and have 7 cars sitting in front. That is why they are in downscale neighborhoods, it is more under the radar. Plus there are plenty of downscale apartment buildings that are in the same informal off-the-books economy where you can just rent by paying cash with no credit checks or property managers and the like. And if you are willing to pay cash you can buy pretty much anything you want in this country including houses.
Solutions? Mostly they are local. Make it easier to build housing and make it legal to build a bigger variety of housing, not just single family homes which are the most expensive of all possible housing types. But that are also the only legal type of housing that can be built in vast stretches of this country.
The main reason we have a shortage of housing in the US is because we haven't built enough. There are a lot of complicated reasons for that, most of them local. But that is the long and short of it. And the title of your post is really too restrictive. It isn't that we have a shortage of AFFORDABLE housing in the US. We have a shortage of housing period.
There isn't some separate special market in affordable housing that operates apart from the overall housing market. Where immigrants and other people compete with each for some pool of affordable housing. It is all just one housing market. If you restrict housing construction at the higher end of the market, all that means is that the wealthy who HAVE money will simply move down into the next tiers down in the housing market where they will ABSOULTELY be able to buy whatever they want as remodels, tear downs, or whatever. Since they have more money. And you just create a musical chair phenomena all the way down to the very bottom of the market where at each step in the ladder those who have more money will be able to out-compete those who have less. Around here we have liberal activist types who always oppose new luxury housing projects because they don't include "affordable" housing. Which only shows how ignorant they are of basic economics.
We saw the same exact thing during the pandemic with the car market. Various supply chain disruptions in Asia with chips and so forth which mean new car construction was severely curtailed for about 2 years. What happened? Wealthy and upper middle class people who could absolutely buy whatever car they wanted and when new cars were not on the lots they bought up all the nice late-model used cars and without worrying about price because if you were going to buy a $60,000 new SUV then a 2-year old one for $40,000 is cheap any way you look at it. And the because expensive new cars were in short supply, used car prices all the way down to the $2000 beaters all went way up in price. People shopping for $70,000 SUVs are not the same people who are looking for $2000 beaters. But they are directly connected through a supply and demand daisy chain.
As for undocumented workers? I suspect the opposite is true. While they add to demand, at the same time they bring DOWN housing prices by bringing down construction prices. Vast numbers of construction crews in places like Texas are all immigrants and probably mostly undocumented. You have building contracting companies run by Hispanic businessmen who hire crews of undocumented through a nested Russian doll arrangement of subcontractors. You need 20 concrete guys at a work site tomorrow? You call your guy and he calls his guy and they show up the next day, do the job, then disappear on to the next job somewhere else in the giant metroplex. That is one reason why housing is cheaper in places like Texas. They can slam up new houses and apartments virtually overnight. with cheap (or cheaper) labor. When we lived in Waco we were on the fast-growing southern edge where new subdivisions were going up overnight. I was always shocked at how fast houses got built there. When you drop 25 guys onto a job site with modern power tools who know what they are doing and willing to work hard, stuff gets built FAST.
Where do they live? There is a massive underground market in off-the-books rentals. Large numbers of houses in downscale parts of big cities have been converted into informal rooming houses where maybe 8 guys live in a 3 bedroom ranch on bunk beds and basically are just there to sleep. Those are the homes you see where they pave over the front yard and have 7 cars sitting in front. That is why they are in downscale neighborhoods, it is more under the radar. Plus there are plenty of downscale apartment buildings that are in the same informal off-the-books economy where you can just rent by paying cash with no credit checks or property managers and the like. And if you are willing to pay cash you can buy pretty much anything you want in this country including houses.
Solutions? Mostly they are local. Make it easier to build housing and make it legal to build a bigger variety of housing, not just single family homes which are the most expensive of all possible housing types. But that are also the only legal type of housing that can be built in vast stretches of this country.
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Re: Shortage of affordable housing in the US
Is there a reason the U.S. needs to go on some kind of building frenzy? Why can’t the existing American housing be reserved for Americans?
It costs $200 a sq ft to build where I live mostly due to labour costs and material costs. That means a modest 1,500 sq ft house costs $300k to build. Not including the cost of permits, environmental studies, road building, impact fees to pay for building schools and so on. In California the cost is much higher. (There is virtually no restriction or laws around building where I live. No zoning. The only regulations at all actually are sewage / septic tank regulations.)There are a lot of complicated reasons for that, most of them local. But that is the long and short of it. And the title of your post is really too restrictive. It isn't that we have a shortage of AFFORDABLE housing in the US. We have a shortage of housing period.
Which is why we shouldn’t have so much immigration.There isn't some separate special market in affordable housing that operates apart from the overall housing market. Where immigrants and other people compete with each for some pool of affordable housing. It is all just one housing market.
Can you show us where this has actually worked? Construction costs have gone up.As for undocumented workers? I suspect the opposite is true. While they add to demand, at the same time they bring DOWN housing prices by bringing down construction prices.
The only way vast armies of illegal aliens will lower construction costs is by making labour costs go down. Which mean wages go down for everyone, which means the average American doesn’t have as much money to pay for a house.
Illegal aliens have to live somewhere too so more illegal aliens = housing gets more expensive.
Is this a good thing or desirable? I thought you were all about having honest businesses that pay proper taxes and follow applicable regulation. Over-occupancy housing is generally harmful, ranging from increased traffic to problems with fire capacity to the environmental impact from so many cars. Not to mention things like school overcrowding.Where do they live? There is a massive underground market in off-the-books rentals. Large numbers of houses in downscale parts of big cities have been converted into informal rooming houses where maybe 8 guys live in a 3 bedroom ranch on bunk beds and basically are just there to sleep. Those are the homes you see where they pave over the front yard and have 7 cars sitting in front. That is why they are in downscale neighborhoods, it is more under the radar. Plus there are plenty of downscale apartment buildings that are in the same informal off-the-books economy where you can just rent by paying cash with no credit checks or property managers and the like. And if you are willing to pay cash you can buy pretty much anything you want in this country including houses.
As I keep pointing out, most of America by land area doesn't even have any zoning. Where I live (and most of Ohio, too) has zero restrictions on housing types.Solutions? Mostly they are local. Make it easier to build housing and make it legal to build a bigger variety of housing, not just single family homes which are the most expensive of all possible housing types. But that are also the only legal type of housing that can be built in vast stretches of this country.
Still costs $200 a square ft to build an SFH. A trailer costs $150 a sq ft to buy not including cost of moving it and utility hookups, septic tank etc
Apartment buildings are even more expensive to build. Even a quadplex. And most of those get built in cities since they need utilities or else the developer would have to build their own water and sewer plants. And those are expensive too.
I think your vision of America with giant grey Soviet style apartment blocks with 8 unrelated people crammed into a 3 bedroom domicile, much like Soviet Russia did, because you encouraged all this illegal immigration, is a very bleak one.
And one that most Americans resoundingly don’t want.
Ultimately if people want low wages and poor quality housing with no regulation - why not just stay in the third world?
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Re: Shortage of affordable housing in the US
My state enacted a statewide building code less than 20 years ago. This increases the cost of building homes and makes homes less affordable in the lower price range. Even commercial real estate is made less affordable because of excessive regulations. I am currently working on an expansion of a parking lot at my business, a project which is costing $100,000 more than it really should because of our township requiring a complex underground stormwater storage and drainage system that the contractor and I believe is completely unnecessary. For new residential and commercial construction, the money that goes into regulatory compliance is pretty high. If people are going to support a highly regulatory environment, I don't want to hear one word of complaint from them about the increase in cost of living.Josh wrote: ↑Wed Dec 20, 2023 7:50 am It costs $200 a sq ft to build where I live mostly due to labour costs and material costs. That means a modest 1,500 sq ft house costs $300k to build. Not including the cost of permits, environmental studies, road building, impact fees to pay for building schools and so on. In California the cost is much higher. (There is virtually no restriction or laws around building where I live. No zoning. The only regulations at all actually are sewage / septic tank regulations.)
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Re: Shortage of affordable housing in the US
On the flip side. My quadrant of the state is out of storm sewer capacity, so if more impermeable surfaces are paved, there will be worse flooding. There really isn’t anyway out of this that isn’t expensive.mike wrote: ↑Wed Dec 20, 2023 8:06 amMy state enacted a statewide building code less than 20 years ago. This increases the cost of building homes and makes homes less affordable in the lower price range. Even commercial real estate is made less affordable because of excessive regulations. I am currently working on an expansion of a parking lot at my business, a project which is costing $100,000 more than it really should because of our township requiring a complex underground stormwater storage and drainage system that the contractor and I believe is completely unnecessary. For new residential and commercial construction, the money that goes into regulatory compliance is pretty high. If people are going to support a highly regulatory environment, I don't want to hear one word of complaint from them about the increase in cost of living.Josh wrote: ↑Wed Dec 20, 2023 7:50 am It costs $200 a sq ft to build where I live mostly due to labour costs and material costs. That means a modest 1,500 sq ft house costs $300k to build. Not including the cost of permits, environmental studies, road building, impact fees to pay for building schools and so on. In California the cost is much higher. (There is virtually no restriction or laws around building where I live. No zoning. The only regulations at all actually are sewage / septic tank regulations.)
Wal-Marts etc will pay to tear up an abandoned building and abandoned parking lot and return it to a field so they can pave a new parking lot. Small residential construction is thankfully exempt from this still but huge development projects have to pay for stormwater mitigation.
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Re: Shortage of affordable housing in the US
If you read the first article I posted in the OP, I understood it to say that there is plenty of higher end housing.Ken wrote: ↑Tue Dec 19, 2023 10:20 pm Honestly I think you have it backwards.
The main reason we have a shortage of housing in the US is because we haven't built enough. There are a lot of complicated reasons for that, most of them local. But that is the long and short of it. And the title of your post is really too restrictive. It isn't that we have a shortage of AFFORDABLE housing in the US. We have a shortage of housing period.
There isn't some separate special market in affordable housing that operates apart from the overall housing market. Where immigrants and other people compete with each for some pool of affordable housing. It is all just one housing market. If you restrict housing construction at the higher end of the market, all that means is that the wealthy who HAVE money will simply move down into the next tiers down in the housing market where they will ABSOULTELY be able to buy whatever they want as remodels, tear downs, or whatever. Since they have more money. And you just create a musical chair phenomena all the way down to the very bottom of the market where at each step in the ladder those who have more money will be able to out-compete those who have less. Around here we have liberal activist types who always oppose new luxury housing projects because they don't include "affordable" housing. Which only shows how ignorant they are of basic economics.
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Re: Shortage of affordable housing in the US
Housing markets are entirely local. We don't have one big American housing market. We have hundreds of smaller ones. You can buy a used car in Texas and bring it back to California. But not a used house. Sure there are factors like interest rates and costs of raw materials that affect costs nationally. But actual supply and demand of housing is local. That changed a bit during the pandemic with work from home. But that is already reversing. There are vast stretches of the US where housing is very cheap. Like rural Nebraska. https://www.zillow.com/homedetails/430- ... 2922_zpid/Ernie wrote: ↑Wed Dec 20, 2023 9:36 amIf you read the first article I posted in the OP, I understood it to say that there is plenty of higher end housing.Ken wrote: ↑Tue Dec 19, 2023 10:20 pm Honestly I think you have it backwards.
The main reason we have a shortage of housing in the US is because we haven't built enough. There are a lot of complicated reasons for that, most of them local. But that is the long and short of it. And the title of your post is really too restrictive. It isn't that we have a shortage of AFFORDABLE housing in the US. We have a shortage of housing period.
There isn't some separate special market in affordable housing that operates apart from the overall housing market. Where immigrants and other people compete with each for some pool of affordable housing. It is all just one housing market. If you restrict housing construction at the higher end of the market, all that means is that the wealthy who HAVE money will simply move down into the next tiers down in the housing market where they will ABSOULTELY be able to buy whatever they want as remodels, tear downs, or whatever. Since they have more money. And you just create a musical chair phenomena all the way down to the very bottom of the market where at each step in the ladder those who have more money will be able to out-compete those who have less. Around here we have liberal activist types who always oppose new luxury housing projects because they don't include "affordable" housing. Which only shows how ignorant they are of basic economics.
And there is a shortage of all kinds of housing in the markets where housing prices are high. Like the larger cities on the east and west coast. Maybe NYC has a surplus of billionaire towers. But not a surplus of housing for the mere affluent like doctors and lawyers.
Last edited by Ken on Wed Dec 20, 2023 9:51 am, edited 1 time in total.
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Re: Shortage of affordable housing in the US
Sure you can. You can pick up a house and move it. Somebody I know north of Denver moved a house from Oklahoma or Kansas (can't remember which) to his new plot of land in Colorado.
As I pointed out earlier, the cost of construction is $200/sq ft in a place with very little regulation and cheaper labour, and it only gets more expensive from there in places like NYC. (Keep in mind this is pushing double what it cost in 2019.) I am getting these exact figures from people I know who are general contractors and do this for a living.And there is a shortage of all kinds of housing in the markets where housing prices are high. Like the larger cities on the east and west coast. I mean maybe NYC has a surplus of billionaire towers. But not a surplus of housing for the mere affluent like doctors and lawyers.
There simply isn't a way to build housing at those prices for people with average or below average incomes. Sorry. It simply can't happen. Someone who earns $15/hr can't repay the cost of buillding a 1,500 sq ft house where I live. According to Google's mortgage calculator, the current cost of a 1500 sq ft new build ($300k) is $2,746/mo on a 30yr with typical interest rates and fees right now. Someone earning $15/hr pulls in $2500 a month. Get a better job at $30/hr or both mom and dad work for that 1,500 sq ft house (which happens to be right around the average household income in my state)? Great, now they're grossing $5,200 a month and spending well over half of that on a mortgage. That's not sustainable either.
The figures are far worse in a place like NYC. Typical 1 bedroom apartment rent in NYC is $3,900/mo, and it doesn't get much cheaper even if you're willing to have a 1 to 2 hour commute. Raising a family in a 1 bedroom apartment is a bit... cozy, and raising a family with a 2 hour commute isn't a great idea either. NYC's median household income is $76k, so once again you're looking at it being well over HALF of a household's income to pay typical 1 bedroom rent.
There is no easy silver bullet out of this either. Importing more migrants simply means more demand for housing, and those migrants are earning lower wages, which means they can't afford to buy new housing either. Wages going down and rents going up doesn't make anybody better off. A lot of people are currently in rent controlled situations, or own a home they already bought, but for new arrivals, the math of living in America in a city or regional area just doesn't pencil out.
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Re: Shortage of affordable housing in the US
Agreed. Additionally the higher end housing is not selling, the owners are underwater in their mortgages and then there is the issue of all sizes of homes being converted to short term rental vacation homes.RZehr wrote: ↑Tue Dec 19, 2023 9:28 pmMaybe a little.Ernie wrote: ↑Tue Dec 19, 2023 7:58 pm Why housing may be so expensive...
https://www.axios.com/2023/12/16/housin ... -inventory
https://www.axios.com/2023/07/07/homebuilding-hot-spots
Some of this may have to do with illegals entering the country???No construction jobs to do. Great Recession. That was right after the real estate crash.
Forged documents. Easy to get. Just need to avoid jobs that E-Verify, and there are plenty of jobs that don’t.
Maybe so. They are also the ones building the houses, so without that, there would still be a housing supply shortage on the scale of the pandemic supply chain fiasco. No one could get houses built fast enough, prices would go even higher, and inflation would go up.
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Mt 24:35
Proverbs 18:2 A fool does not delight in understanding but only in revealing his own mind.
1 Corinthians 3:19 For the wisdom of this world is folly with God