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I agree zoning laws are part of the issue, but it seems like Americans only want single family homes in much of the country.
Unfortunately, builders do not build starter homes because they are not as profitable (i.e. capitalism) so they build McMansions and luxury townhomes around here which are out of reach for most people.
Large wage gaps cause issues when corporations can outbid the little guys and drive up the entire market. Think about small players like me with a handful of properties, and larger regional RE players, and then the big boys like Blackrock that do it on a national scale. Cumulatively we/they drive the price of everything up. This is the reality of US housing market today.
Agree on zoning and approval process but many americans are ok with other than single family in the major urban markets - Building single family homes is practically non-existent in many large city centers.
Builders do not build starter homes much anymore because few want them and save very little. By the time add permits, regulations, the cost of land and delays - the small differences between a starter and a slightly larger home will cause many to want the larger ones. Only in multifamilies does smaller size places make much sense.
Wage gaps have nothing to do with the RE market - wage gaps are normally referenced as differences in wages due to race, ethnicity, etc. I think what you are talking about is the fact that incomes are rising at a slower rate than housing - that is not a wage gap issue - that is due to wage increases lagging inflation or housing which is normal as inflation changes. The other impact of price increases is that higher income individuals can absorb higher housing prices easier - the main impact of that is that higher end properties grow at a faster rate than those at the lower end - that is what makes higher end properties more profitable for builders in this type of market.
RE Corporations may have more capital and can handle increases better but they still pay market rates like anyone else - otherwise they will need higher rates for rentals and renters want the better value for rents. These rapid increases will pass - now is not the time to be buying rental properties unless really a need.
Innovation pushes salaries, not housing. The housing is being held up by government approvals - you can't build housing faster than the permit process allows. There have been many innovations in housing but the government approval processes are slowing implementation.
We don't even need it. We figured out how to build lots of affordable housing for families after WWII. Somehow we forgot.
We don't even need it. We figured out how to build lots of affordable housing for families after WWII. Somehow we forgot.
We didn't forget how to build it, but government requirements, regulations and processes have gummed it up badly - so many environmental surveys and approvals, construction requirements for things like high efficiency systems, requirement for sheer walls for earthquakes and special windows for hurricanes, etc that were not part of the picture 75 years ago. The stat is that about 25% of a new house cost is due to governmental regulations, adding approx $100K to a new single family construction project.
We didn't forget how to build it, but government requirements, regulations and processes have gummed it up badly - so many environmental surveys and approvals, construction requirements for things like high efficiency systems, requirement for sheer walls for earthquakes and special windows for hurricanes, etc that were not part of the picture 75 years ago. The stat is that about 25% of a new house cost is due to governmental regulations, adding approx $100K to a new single family construction project.
We don't even need it. We figured out how to build lots of affordable housing for families after WWII. Somehow we forgot.
https://www.hindawi.com/journals/ijpr/2012/207532/
"In 1950 the metropolitan population was just over a half at 56.1 percent of the total US population. By 2010 the figure was 83.6. The US population is increasingly and overwhelmingly concentrated in metropolitan areas. More than 90 percent of the country’s entire population growth in the last decade occurred within MSAs."
But Americans still want single-family homes. Where will you put them?
I see no other out other than a collapse caused by a revolution, an uprising, possibly a civil war.
Been saying this since Reagan was President, when corporations were deregulated; which now have taken over politicians.
"The super wealthy and the corporations are stashing dollars in overseas accounts thus taking them out of circulation. The Federal Reserve is printing dollars to shore up the American economy and, thereby, reducing the value of the illusory wealth of folks." https://www.theunion.com/news/twi/am...not-democracy/
This is unsustainable, and notice how almost a 10 year old article is even more relevant today.
We don't even need it. We figured out how to build lots of affordable housing for families after WWII. Somehow we forgot.
Now what were building/zoning laws like back then ? Environmental impact studies for endangered insects ?
We've had quite a few regulation changes over the years and it impacted building not in a good way I might add.
We did this to ourselves.
My condo association has a beach cabana that was built in 2000. After 20 years the repairs were too costly so it was going to be replaced. Not enlarged, not changed. Just a one for one replacement. It took 2 years to get the permits and clearance from all the environmental studies to replace pilings that were already there.
Now imagine how long it would take to build something new ?
How about something like Denmark, i.e., capitalism with a bigger social safety net?
I applaud those who have succeeded as capitalists but I don't think everybody is cut out for that.
And I really don't have a problem with the upper crust having massive wealth. But the way things have worked out, nearly 85% of the population has little or no wealth. Shouldn't we work on distributing the largesse a little more? The wealthy can continue to remain immensely rich, but there's no reason for everybody else to have nothing.
Builders do not build starter homes much anymore because few want them and save very little. By the time add permits, regulations, the cost of land and delays - the small differences between a starter and a slightly larger home will cause many to want the larger ones. Only in multifamilies does smaller size places make much sense.
Disagree.
Starter homes are ~1000 sq ft. McMansions are 3000.
Sure, it won't be triple the cost, but we're not talking about 10s of thousands of dollars difference here. Just in building materials and labor alone it will be $100k+ and that's not chump change for the demographic looking for starter homes.
Many are looking for starter homes. Builders just aren't building them.
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