View Full Version : The rent crisis in America is going to get worse
mojaveman
09-21-2015, 21:05
Forget buying a house, it seems like even renting an apartment can be a challenge for the average person. It now takes two incomes to get a decent apartment near where I live and still have money left over for a car and groceries.
http://www.bloomberg.com/news/articles/2015-09-21/the-rent-crisis-is-about-to-get-a-lot-worse
MOO, conservatives could make some serious inroads with voters from different walks of life if they could find more ways to participate meaningfully in conversations about affordable housing.
^^^^^Affordable housing? What does that even mean? Affordable to who?
So do you expect the property owner to provide cheap housing below the mortgage amount?
This has always been a problem for young folks...
1stindoor
09-22-2015, 06:22
This has always been a problem for young folks...
So is living beyond their means. I constantly remind my children of the small car we had to cram in to take vacations when I was a kid. The size (and squalor) of my first apartment. The neighborhood my first rental house (actually a duplex). I try to get them to realize they're not going to be able to afford the big car and big house right out the gate. Takes years and some sacrifices to get there.
Forget buying a house, it seems like even renting an apartment can
be a challenge for the average person. It now takes two incomes to get a
decent apartment near where I live and still have money for a car and groceries.
mojaveman is offline
Join Date: Feb 2009
Location: Sur de California
Posts: 2,140
Well, there's a large part of the problem.:p
Bring that money to Tennessee and see what you can buy/rent.
Did I mention no state income tax?
Trapper John
09-22-2015, 08:26
Sigaba has a reasonable point.
It seems that we (Dems and Repubs alike) always address the economic issues from the POV of government policies and regulations: Price controls, raise the minimum wage, etc.
This is exactly why the conservatives need to beat the drum of economic reform, tax reform, and free market enterprise and stop with the "conservative" social reform crap. There is a positive vision for America in the economic reform theme. Shit, just emphasizing infrastructure rebuilding will solve the jobs problem. And this can be done with private sector money - recall the War Bonds program? And while we are at it we can link welfare reform to these jobs and provide a skill for the participants in the process. It's a win-win-win and a no-brainer folks!
Stimulate the economy and achieve 4+% annual growth in GDP (a minimum IMO), provide > 500,000 new jobs/year, reduce the tax burden, balance budgets, etc. and the social issues will correct themselves as a natural consequence of increasing prosperity.
Just my $0.02 worth
^^^^^Affordable housing? What does that even mean? Affordable to who?
Broadly, housing is affordable if it costs less than 30% of one's income.
An aim of affordable housing policies is to encourage private development of housing in urban areas for qualifying lower-income applicants. (The determination of lower income is based upon local criteria.)
In return, developers may qualify for bonuses/incentives. For example, a developer could build a multi family building in an urban core with a density higher than code and a parking requirement for the entire complex lower than code.
Hypothetically, this could mean a twenty story building with the affordable housing units packed a bit more closely on several floors and the rest of the units having more traditional floor plans. If you live in one of the conventional units, you're going to save money because the developer will be passing along fewer construction costs--specifically parking--to you. Your savings can also increase if the building is part of a larger transit orientated design (TOD) project.
IME (based upon fieldwork), affordable housing complexes in the L.A. area are inhabited by citizens who understand the rules and play by them. They know they're getting good bang for their buck and if they screw it up they're going to be driving more than two hours a day to work.
An aside. If Trump becomes the next American president, I augur that there will be a historic surge in urban development. This surge will include an acceleration/stream lining of the affordable housing approval process. While such a development will be great for my company (my division and department in particular), I will not vote for him.
GratefulCitizen
04-10-2016, 23:56
Sigaba, there are occasions where I really enjoy your writing style and appreciate your vocabulary (sincerely).
Augur.
Excellent word choice.
Broadly, housing is affordable if it costs less than 30% of one's income.
Again, so what? 30% of my income and 30% of my daughters income are radically different. What is affordable to me is not affordable to her.
When politicians talk about making housing "affordable", they are not expecting any critical thought as to what that means.
Most affordable housing problems are laid at the feet of local politicians.
Most of those politicians are liberal.
Most of the "I've got mine" folks aren't going to vote conservative just so the others can have affordable housing.
They like their posh little enclaves.
The CO floods a year or so ago took out a bunch of trailer parks - "affordable housing" - near Denver. Built on cheap land years ago that were on flood plains.
Nobody is going to build expensive homes on that land.
Builders have to make a profit to stay in business. Costs include development costs which cover fees to the local government and site development. Those can be pretty steep depending on location. Then there is the actual construction costs and the contractor's profit.
If he's building rental homes all those costs need to be covered by the market rent.
Market rent is based on supply and demand. Few units - higher rents. Over build and you can't get rents to cover costs.
Which is why, as Sig noted, local governments try and tweak the system by offering deals to developers - we'll give you a permit to build a 20 floor multi use building if you make 3 floors of affordable housing.
Builders put a lot of study into any deal like that because they want a profit at the end.
FWIW - lots of new housing being built around the area out here and people seem to be finding ways to finance them without the crazy risk so common a decade ago.
Homes are energy efficient with large solar arrays which reduce electricity costs and allows them to put 'excess' electricity back into the local power grid and further reduce their costs.
Homes were being built with smaller square footage a few years ago and hardly moving on the market, but construction is going full-swing again and the houses are now larger and many of them are offering a 'multi-generational' arrangement whereby the house includes a large, separated suite for a relative. Many of the younger families (Gen-X, Millenials) buying these homes are including this option as they have a parent move in with them. This arrangement off-sets having a parent living alone or in an assisted living facility, allows more flexibility in having a live-in child care provider so the younger generation can more easily follow their career paths, it keeps the family closer together, and the grandparent assists in off-setting the financing arrangements. It also helps the neighborhood because it provides a more visibly secure environment as you see the grandparents out walking and visiting among themselves throughout the day - the neighborhood doesn't become a sort of 'ghost town' during the day when thee kids are in school and the parents are at work.
These houses are being sold as quickly as they can be built, and the area around here has become a sort of 'bedroom community' for the Bay Area whereby people live here in the Sac-Joaquin Valley because they cannot afford housing closer to the coast and are willing to endure the several hours a day commute to buy into the housing market.
Will it last? Time will tell.
But so it goes...
Richard
Streck-Fu
04-11-2016, 08:05
Which is why, as Sig noted, local governments try and tweak the system by offering deals to developers - we'll give you a permit to build a 20 floor multi use building if you make 3 floors of affordable housing.
Builders put a lot of study into any deal like that because they want a profit at the end.
And then the existence of 'affordable housing' in a development suppresses the values of the rest of the units because those that can afford the primary residences don't want to share or be co-located with 'affordable' tenets.
Dean Jarvis
04-11-2016, 11:16
Here's what's killing the housing market. It's a generation of young adults in hock up to their eyeballs with Student Loans and a loss of middle class jobs. You've all heard last week that Ford is building a new plant in Mexico. These are $85K a year jobs leaving the U.S.
I'm a Cruz supporter but he spouts tax cuts like the Republicans have been spouting for years and it's meaningless. A lame tax cut on a lame income doesn't get you squat, let alone enough to make a house payment.
Burney and Trump have it right.....NAFTA and China getting free duty rates on most of their imports is killing the middle class jobs.
Back in 1999 I bought a Dodge truck with a Cummins diesel. It was made in the U.S. A friend of mine bought the same truck made in Mexico. So do ya think he got a better deal because they only paid 50 pesos a day to the workers that made his truck...HELL NO, he paid the same a me. So where did the money go:confused: Bigger profits at the expense of the U.S. auto workers.
So all this hysteria of INFLATION is not necessarily true. It's just about more profits and bigger margins.
My suggestion to enable more people to afford houses is to put a halt to NAFT and increase tariff rates on China imports so that decent good paying jobs come back for the U.S. workers.:lifter
An interesting perspective on "affordable housing:"
Thomas Sowell - Affordable Housing Fallacies
https://m.youtube.com/watch?v=bbPYedkDU8Y
Again, so what? 30% of my income and 30% of my daughters income are radically different. What is affordable to me is not affordable to her.My previous post on this topic addresses this question. What specifically defines "affordable" in a geographic area is determined by calculating the area median income (AMI) within that area. The attached provides the calculations for counties in California for 2015.
When politicians talk about making housing "affordable", they are not expecting any critical thought as to what that means.The projects I've worked on that are related to affordable housing developments suggest otherwise. A handful of forward leaning municipalities are looking long and hard at their standard answers to the age old question: how much parking is enough parking?And then the existence of 'affordable housing' in a development suppresses the values of the rest of the units because those that can afford the primary residences don't want to share or be co-located with 'affordable' tenets.Do you have verifiable examples of multi-family developments that failed due to the specific dynamic you describe? By verifiable I mean the names of development companies, projects, and points of contact in municipal planning/urban/economic development departments?
Golf1echo
04-14-2016, 07:26
Interesting insights in all the posts.
There are a lot of pressures on housing that didn't exist in the past...like many things in the world we face today. On the front end is it an asset or a liability, with the average family occupying a home for 13 years and in their jobs an average 4.4 years, what once was an asset can easily become a liability. Increased regulations, costs, taxes, etc.... make for more external pressures than perhaps many assume. On the back end those regulations have been written by government regulators, bankers, realtors, politicians, the industry, etc... what could possibly go wrong?
Recent examples:
Goldman Sachs settlement: http://www.mcclatchydc.com/news/politics-government/article24561376.html
This American Life: Audio: http://www.thisamericanlife.org/radio-archives/episode/405/transcript
ADA abuse: San Francisco coffee shop targeted by frivolous ADA lawsuit « Faces of Lawsuit Abuse
The conversation about affordable housing historically is a story of economic disparity which comes to a head when worker housing becomes the issue. I have seen many creative solutions to creating that housing but only to a mitigating affect. Our bed room communities continue to grow outwardly in vibrant communities changing the textures of those areas into something else.
Gutting the middle class, more taken from every dollar, allowing illegal immigration ( a large component of worker housing) and it's affect, increased tax pressures, poorly planned community and over burdened infrastructures are just some of the reasons why I question whether a model of expansion and increased returns is viable. Complex and yet basic problems with some pretty practical solutions which, I imagine, would be easier to tackle if we weren't so politically divided. I am convinced a sustainability model is a better long term approach for something that is relevant and will protect the virtues of the communities we chose to move to, perhaps inspiring others into the same approach. Above all this needs to be done in a fiscal manner, if the budget or grants aren't there......the project isn't there either. Priorities are good as long as they fit into a comprehensive budget.
Sigba I realize you are trying to inform us of a regulation but Sinjefe is correct at the most basic of levels.....which is the level that matters most to a home owner or buyer.
If one gets a chance the green highlighted Audio is worth a listen to understand how the government connection can be so broken. The mentioned audio highlights some causation of the housing crash and reasons for it's extent. Sadly I'm not sure much has changed regarding those regulations.
mark46th
04-14-2016, 08:05
I always viewed these kind of problems as an incentive to work harder, become better educated and improve my financial situation. I have never said or felt that anyone owes me anything.
I always viewed these kind of problems as an incentive to work harder, become better educated and improve my financial situation. I have never said or felt that anyone owes me anything.
Amen!
ddoering
04-14-2016, 14:39
I always viewed these kind of problems as an incentive to work harder, become better educated and improve my financial situation. I have never said or felt that anyone owes me anything.
That's because you are old school. New school is all about fairness.
Divemaster
04-14-2016, 19:17
I always viewed these kind of problems as an incentive to work harder, become better educated and improve my financial situation. I have never said or felt that anyone owes me anything.
You unrepentant, self-sufficient capitalist oppressor of the lazy-faire proletariat!
mark46th
04-14-2016, 22:06
"You unrepentant, self-sufficient capitalist oppressor of the lazy-faire proletariat!"
Dive Master
I try!
Trapper John
04-15-2016, 10:48
Burney and Trump have it right.....NAFTA and China getting free duty rates on most of their imports is killing the middle class jobs.
My suggestion to enable more people to afford houses is to put a halt to NAFT and increase tariff rates on China imports so that decent good paying jobs come back for the U.S. workers.:lifter
EXACTLY Dean! Ross Perot warned of this when he ran 3rd Party: NAFTA will create a "giant sucking sound coming out of Detroit."
I am thinking that Bernie and Donald should run on 3rd party ticket. To invoke Ross Perot: That would create a giant sucking sound as voters evacuate the REPs and DEMs. :D
ddoering
04-16-2016, 13:11
We need a viable 3d party. The two we have now are rotten to the core.
Affordable housing? Right!!! Just sold my townhouse to move into a condo
as in downsize. Monthly payment is less but ALL the fee, taxes, transfer costs
eat up equity I made quickly. Rent would be 1/3 more than I spend now. :munchin
Affordable housing? Right!!! Just sold my townhouse to move into a condo
as in downsize. Monthly payment is less but ALL the fee, taxes, transfer costs
eat up equity I made quickly. Rent would be 1/3 more than I spend now. :munchin
You were able to buy it, so how is it not "affordable housing"?
:munchin
You were able to buy it, so how is it not "affordable housing"?
:munchin
Yes, Good point.:D Better than rent anyday! Just complaining, rant over the other costs. I bought this townhouse 16 years ago as a FISBO.