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The market would work if these lower skilled workers all moved to some of the more affordable areas in the country and left the expensive metros with no blue collar workers. Their situation would immediately improve because they would have jobs and houses in a new area. Then see how fast low income housing gets built in the areas that workers are leaving. Demanding that someone else, like the government, handle their lives for them is not how the market works.
There are jobs that pay $20 or more an hour in parts of the country that have reasonable costs of living. Skills shortages even. I blame the workers who insist on living in expensive metros instead of showing some initiative and applying for jobs other places.
All that would do is increase housing in that affordable areas making them affordable. Plus places with expensive housing still have to have people to do jobs that do not pay well if they did not businesses would shut down.
Could it be a land ownership conceptualization failure?
As long as we allow power games where some people have to pay other people to live on the planet, the people wih the power are going to keep the system going. If tax dollars were used to build these:
Couldn't we have enough inexpensive housing to drive down the rents and prices of the privately owned housing? but who with enough political influence would allow that?
The most significant problem is we have essentially a bifurcated economy.
In economy 'A,' mostly the major coastal metros and capital/major cities of interior states, those who want to do well can do well. This is where the jobs are. In most areas, new housing is being built, though not necessarily as quickly, at the price point, or of the type the "common person" can afford. Outside of the coasts or certain "hot" cities like Austin, Denver, or Nashville, mid-major metros in the interior of the country have a solid job base, and a cost of living well in line with local wages. Places like Columbus, Pittsburgh, and Indianapolis are going to have a much favorable wage/COL ratio vs. San Francisco, NYC, or even Nashville for most people.
Jobs and people are increasingly consolidating into economy 'A.' You could call the coastal areas AA and the interior metros mostly single A, but both areas are winners. As people from other metros and from outside of A areas pour into commutable distance of A metros, prices rise rapidly. Nashville, Denver, and Austin have seen this.
Outside of economy 'A,' you have economy 'B' consisting of mostly medium sized metros, small towns, and rural areas, outside of the rich coastal states. There are fewer and fewer decent jobs in these areas, and those jobs are leaving for 'A' metros. 'B' is cheaper - but often not much more so than certain 'A' metros, even if you account for cost of living.
Ultimately you have more and more people chasing relatively few housing units in the cities where the jobs are.
There is always a housing shortage. Everywhere. There isn’t anywhere in the world where someone wouldn’t want more housing. That’s the basic tenet of economics. The amount supplied goes up with price, the amount demanded goes down with price, and where the two meet is what the price ends up being.
When someone singles out a specific region as having a “housing shortage” what they mean is that housing costs have exceeded what they consider to be reasonable. What’s reasonable is subjective—if you grew up in rural Arkansas what you consider reasonable is vastly different than if you grew up in Hong Kong.
We can make more objective measures, based on either historic precedent or some minimum haptiable dwelling that minimum wage can secure. The failure of a particular market to meet those standards is not a failure of the market. You can call it a government failure, but I suspect there would be disagreement even on that point. First on whether guaranteeing some minimum hapitable housing standard is even something the government should be involved in and second on what that minimum should even be.
I was lucky to be born in a desirable area: PNW. We have acreage and a home all paid for. Homes in my neighborhood sold for bewtween $550k -$1.2 million in the past two years. We could not afford to buy our property today that we bought 35 years ago for $100k that seems like a lot back then. My husband was in refinery maintenance and I was self-employed. Our neighborhood used to be mainly blue collar; now it is turning professional. If we didn’t have an agricultural open space designation for property taxes, we would have a more difficult time paying the assessed value taxes that are almost twice as much on our retirement income. A retired neighbor (log truck driver) who has been here over 20 years qualified for senior low income rate which is way less than half. The people who bought the four homes in the last two years have been professionals from out of state (no, not California, lol). So, it is not only those who move here without the jobs skills; it is middle income people who are long-time residents who are struggling.
But why is it other people's (the government) responsibility to make sure you can afford to stay in your current home? If people who make $14K per year can't afford to live somewhere they should move where they can afford to live.
I was lucky to be born in a desirable area: PNW. We have acreage and a home all paid for. Homes in my neighborhood sold for bewtween $550k -$1.2 million in the past two years. We could not afford to buy our property today that we bought 35 years ago for $100k that seems like a lot back then. My husband was in refinery maintenance and I was self-employed. Our neighborhood used to be mainly blue collar; now it is turning professional. If we didn’t have an agricultural open space designation for property taxes, we would have a more difficult time paying the assessed value taxes that are almost twice as much on our retirement income. A retired neighbor (log truck driver) who has been here over 20 years qualified for senior low income rate which is way less than half. The people who bought the four homes in the last two years have been professionals from out of state (no, not California, lol). So, it is not only those who move here without the jobs skills; it is middle income people who are long-time residents who are struggling.
$100k is about $1.2 million at 7% for 35 years...
if you had invested it back then, is there a reason you cant afford it today? all youd be trading is the form of money, stocks to real estate, but it isnt any different for net worth
its what i dont get about people who claim they were lucky to buy things decades ago, it isnt like the "investment" did better than any other form of investment
There is always a housing shortage. Everywhere. There isn’t anywhere in the world where someone wouldn’t want more housing. That’s the basic tenet of economics. The amount supplied goes up with price, the amount demanded goes down with price, and where the two meet is what the price ends up being.
When someone singles out a specific region as having a “housing shortage†what they mean is that housing costs have exceeded what they consider to be reasonable. What’s reasonable is subjective—if you grew up in rural Arkansas what you consider reasonable is vastly different than if you grew up in Hong Kong.
We can make more objective measures, based on either historic precedent or some minimum haptiable dwelling that minimum wage can secure. The failure of a particular market to meet those standards is not a failure of the market. You can call it a government failure, but I suspect there would be disagreement even on that point. First on whether guaranteeing some minimum hapitable housing standard is even something the government should be involved in and second on what that minimum should even be.
Intrusion of government into "minimum habitability standards" is, by itself, a failure of government to do the right thing. But it is not a failure of government insofar as it is exactly what the protectionist homeowner majority WANTS.
But why is it other people's (the government) responsibility to make sure you can afford to stay in your current home? If people who make $14K per year can't afford to live somewhere they should move where they can afford to live.
California homeowners decided that it is government's responsibility to protect people from being displaced by newcomers - when they passed Prop 13. In this case, the "why is it government's responsibility?" is "because homeowners had the votes to legislate it."
If people can afford to live somewhere, why should they be displaced by people who come to town tomorrow?
IF a truly free housing market existed, you would be correct. But the housing market is highly regulated - not free - therefore I disagree with you.
California homeowners decided that it is government's responsibility to protect people from being displaced by newcomers - when they passed Prop 13. In this case, the "why is it government's responsibility?" is "because homeowners had the votes to legislate it."
If people can afford to live somewhere, why should they be displaced by people who come to town tomorrow?
IF a truly free housing market existed, you would be correct. But the housing market is highly regulated - not free - therefore I disagree with you.
California Voters... not enough Homeowners to have carried Prop 13 to victory...
The most significant problem is we have essentially a bifurcated economy.
In economy 'A,' mostly the major coastal metros and capital/major cities of interior states, those who want to do well can do well. This is where the jobs are. In most areas, new housing is being built, though not necessarily as quickly, at the price point, or of the type the "common person" can afford. Outside of the coasts or certain "hot" cities like Austin, Denver, or Nashville, mid-major metros in the interior of the country have a solid job base, and a cost of living well in line with local wages. Places like Columbus, Pittsburgh, and Indianapolis are going to have a much favorable wage/COL ratio vs. San Francisco, NYC, or even Nashville for most people.
Jobs and people are increasingly consolidating into economy 'A.' You could call the coastal areas AA and the interior metros mostly single A, but both areas are winners. As people from other metros and from outside of A areas pour into commutable distance of A metros, prices rise rapidly. Nashville, Denver, and Austin have seen this.
Outside of economy 'A,' you have economy 'B' consisting of mostly medium sized metros, small towns, and rural areas, outside of the rich coastal states. There are fewer and fewer decent jobs in these areas, and those jobs are leaving for 'A' metros. 'B' is cheaper - but often not much more so than certain 'A' metros, even if you account for cost of living.
Ultimately you have more and more people chasing relatively few housing units in the cities where the jobs are.
It's not quite that simple in your "economy 'A'". If you have the good fortune to be born healthy and with above average intellect, sure. If you want to do well, you can do well. The top-20% do great. The next 30% can do OK if they really work at it. The bottom 30% to 40% have little shot at any kind of economic success. There's a fairly steady outward migration of 'average people' in those high cost of living places. They simply can't add enough value to command the pay that would allow them to afford the high housing costs.
Also, most people in those metro areas live in the 'burbs, not the cities. Take Boston, for example. The population of the city is only 675K. Boston metro is 4.6 million. In general, housing cost is tied to proximity to the big employers (or on commuter rail/subway) and quality of the school system. If you have both, it's sky-high housing costs.
New York City is really the only urban area where upper middle class people often live in the urban zip codes. Everywhere else, the lousy urban school systems chase most people out unless you make huge piles of money and can afford private schools.
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