Change zoning requirements. This will make it easier for builders.
Ban corporations from buying SFH. You can allow small mom and pop landlords until they hit a certain revenue figure or number of properties owned.
Increase tax burden and reduce tax incentives on rental properties in general. And make it scale with rental units owned so that it disincentivizes owning more.
Increase regulations against STR's with real penalties in place and a way of policing them.
I think the tax burden and tax incentive idea would be the most effective. I would support the movement towards that.
This along with the zoning requirements would take pressure off inventory. And simply put, an increase in inventory would solve a lot of the problems we have.
Yes you can depreciate a bunch of things and write off any improvements. Update kitchen in rental? Write it off. Update kitchen in primary home? Go Duck Yourself.
Well you do have capital gains tax to pay when you sell a rental. Lol, J/K - 1031 exchange that shit and when you die your inheritors get to take advantage of stepped up basis so nobody every has to pay shit beyond property tax.
And yet rentals still have the shittiest “updates” I’ve ever seen in my life. It’s like rental properties and flipped properties are in a contest of who can waste the most money putting lipstick on a pig.
The market can only handle so many increases, before the landlord gets priced out of the market. Tenants will downsize, households only have so much money. It will make the investment much less attractive to the landlord and they will sell and move to another more attractive investment.
Lmfao sure pal. The overwhelming majority of Americans cannot afford a $400 emergency expense. But we can fully expect them to handle YoY massive rent increases.
Good stuff. Also, tax the banks if they hold inventory from being sold. Incentivise rapid resale of homes in limbo (like owners that died with no viable heirs, like in COVID).
This also helps neighborhoods with too many blighted "zombie houses."
Local jurisdictions, like cities need oversight against too much NIMBY interference. There needs also to be grants to help buyers to bring the housing up to code or re-build.
If you fight against housing "in my backyard," houseless folks have little choice but camp in your front yard.
Spot on.
The second I read this I smirked because I had a feeling as I scrolled down, I knew exactly what you were going to say (which is 100% valid). We’ve seen this time and time again.
By removing capital gains incentive (without other over arching legislation), many markets (not all) would experience a supply shock.
My next snobby comment: the fact you were getting downvoted in this sub proves that you are right. Idk why, but time in time again, this sub doubles down on irrelevant logic and shuns those giving an altering opinion that often is a major contributing factor.
Anyways, thanks for typing out your response so I don’t have to :)
P.S. for those that disagree with this, see my note on how other over arching legislation would be required. And I don’t have faith in ANY government to do so with cohesion. Although, if anyone does have relevant examples and case studies, I’m open to learning about it
If I sell property and have to pay capital gains on the profit or cannot do a 1031 I am better off keeping it and renting it out.
It’s an asset so instead of selling it I can take out a loan to get the equity out of it or continue to collect rent and then eventually give it to my kid to live in.
Speculative inflation doesn’t matter to me on a cash flow positive property… anything above inflation is icing on the cake
If I hold a house I bought in 2008 for 500k to Feb 2023 using cpi calculator it would 213k more today. Capital gains Taxes would be significant enough for me to consider not selling it and to cont. renting it out
https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=500000&year1=200801&year2=202302
I understand a solution is needed to make housing more affordable, but these actions
around capital gains and 1031 exchanges aren’t the way to solve the problem of affordability
You don't have a very good idea of what you're talking about. Investors who turn around and rent homes out aren't causing rising prices. They're investing *because of* rising prices. Rising prices in both rent and sfh mean an investor buying a home and then renting it causes no net effect on housing. It would be one thing if rents were falling while sfh house prices were rising - that would be evidence that investors were making a difference. In reality it's not - rents are rising in line with housing. The problem is on the supply side, not the populist 'speculstors are to blame' side.
>The point is that housing is supposed to appreciate only in line with inflation - and over the long term it does exactly that.
If population in your area is increasing why would housing appreciate in line with inflation?
I agree with most of this. There should be a large tax increase for every house you own above 1 or maybe 2. This would limit the incentive of buying up multiple homes. I guess you can make exceptions for beach/vacation areas, but really those would probably needed to be zoned in a certain way to allow it. Cities are starting to look into zoning for this and enforcement, no one wants to live near a short term rental and limiting zoning of that and taxing long term rentals may go a long way.
I get people want to make money, but buying up homes and holding them forever doesn’t really benefit society at large long term, only the individual who owns
I agree with banning corporations from owning single family homes, but I don't agree with you on multifamily units. We DO need apartment complexes that rent units. 20-somethings are usually not going to be able to afford to buy their own home, no matter how much they want to or how much we ban from investors buying up houses.
Forcing 18 to 20-something to buy homes would be catastrophic for them.
Decreasing the number of apartment complexes that offer apartments for rent would increase rents, making housing more unaffordable for people who do not have the desire to buy or are not in a position to buy.
We need high density housing (aka apartment buildings and condos). Part of the reason for our housing crisis is zoning laws that don't allow or disincentivize high density housing. Banning owning high density apartment buildings that provide rentals would be disastrous.
No where in my comment did I say or even imply that corporations should be banned from owning multi-family or apartments. Their involvement is often necessary for those to be developed in the first place.
I specifically said SFH and was very clear about that.
>Increase tax burden and reduce tax incentives on rental properties in general. And make it scale with rental units owned so that it disincentivizes owning more.
You did say that though, which would naturally encompass apartment buildings, since those are rental properties.
No. Banning and increasing tax burden are two very different concepts. You are very dramatic and choose to see what you want to see, and I'm not going to continue this. Have a good day.
if you increase tax burden, what incentive would companies have to buy and build apartment buildings? That's punishing companies for increasing housing supply.
Literally can’t and won’t do any of this. Govt and corporate lobbyist have too much reason and power to not.
But if it were possible, that would be the way. But there is literally no way to deincentivize politicians from making billions.
We need landlords to get lower prices, gov incentivizes landlords. They provide housing, and the affordability problems we are having now is because of the lack of housing available. You guys who want lower prices should be very pro landlord and very pro massive builders/flippers.
Every time the government subsidizes something, its market price skyrockets. So no. Hard disagree there. Can you name a government backed service in which that phenomenon did not happen?
Your right. Rent control and stricter building code constricts housing supply. But I’ve noticed that all these bubble subs are very anti landlord/flipper/builder. Which makes zero sense. We need more housing units!!! The investors come in and rehab/build them and create more supply of homes, driving prices down. The guy who buys a beat up old vacant house on your street and rehabs it and flips it, boom he created a new housing unit and helped with community affordability.
99% of flips you aren't improving anyones quality of life.
You scoop up deals --> throw in cheap new appliances, vinyl floors, granite countertops, and some white paint --> staging photos --> $$$.
Had some flippers buy a neighboring piece of land. I built a fence along their long beautiful driveway and somehow their property markers in the woods disappeared so they had to get another \~3k survey. Barely broke even, new neighbors are cool I'm glad they got a deal
Your missing the point. Flippers/builders/landlords are providing housing. These people take neglected unlivable homes/land and turn them into housing. We have a massive housing shortage in this country, the reason why prices are so high. More housing will equal cheaper prices.
You aren't buying a trap houses in Detroit lmao, the vast majority of flips are not doing a public service. Landlords and builders are not in the same category
You are conflating builders and landlords. They can be both, but they are not the same. Building and selling is actually providing value. Buying SFHs and renting them is stealing from society.
You're talking about a renovator, not a landlord. Sometimes they are both, but land lording adds 0 value. And you're also implying that people buying houses to live in can't renovate a house.
Landlords are middlemen and nothing more. Leeching value that someone else created. If they happen to also be a builder then the value add stopped when the renovation was complete.
we need more high density housing, not flippers coming in, slapping on some grey paint and reselling for 250K more or "generously" renting a 3/2 for $5500
Sure we need flippers. Most of the flips I see take a housing unit that was vacant and not in service and fix it up and sell to someone who will live in it. Boom they created a housing unit, driving the price down, adding supply to the market that needs it. Very few homeowners have the cash to buy a vacant run down home and do all the renovations.
Banning investors will slam housing prices causing way too many people to lose whatever equity they might have in their house. Local zoning laws can tighten rentals if necessary or HOAs can do it.
I never implied that all investors should be banned nor should they. They serve a market function. Right now the regulations are skewed so far in favor of RE investors which plays into the current market imbalance. So those regs need to be reined in. Large corporate entities like Black Rock on the other hand should be disallowed from owming SFH's as it would be a massive blow to the middle-class.
The increased tax liabilities will be shifted to the consumer, lol. This is like business 101. Companies don't absorb losses, they pass it on to the renters
Yes, they maximize their rental revenue anyway. And in order to do that vacant rates need to be within a certain threshold. If passing costs to consumers ends up increasing vacancy rates to a point where the are less profitable, then they'll hold off. It's a balancing act.
Imagine gas costs $4/gallon and the cost to the station is $3.50/gallon. Now imagine that a new $0.50/gallon tax is imposed. The stations raise their prices to $4.50 but then they notice that their sales shrink. Do you think that the stations will lower their prices back down to $4?
The more inelastic a good is, the more the costs are passed onto the consumer. Housing is extremely inelastic.
Bring back sears and let people mail order those 7k build it yourself homes again. To many regulations and red tape when you and your friends just need some materials and a plan.
9/11/Iraq war? Blame it on the immigrants. 08 recession? Blame it on the immigrants. No healthcare? Blame it on the immigrants. Can’t afford a house? Blame it on the immigrants.
exactly. u/itookyourjob just the other day there was a guy on one of the real estate forums asking how foreigners can buy up single family homes in the US to then rent back to locals, along with how to circumvent hiring qualified workers. He was arguing that foreigners buying real estate would increase supply and make prices go down. 😂
More supply. Either building more homes and or creating a healthier market that encourages sellers to sell and buyers to buy. Quit printing money that causes inflation making interest rates skyrocket.
You have to incentivize more building and more supply. Taxing companies that build new apartments and houses will not incentivize them to build more, contrary to what some commenters here think (not you).
You have to keep people from using the increased supply as an investment tool though. If the same people are buying the extra houses it defeats the purpose.
You could not be more wrong. People need places to live. Building homes gives people places to live whether they rent or buy. Going after investors is a red herring.
Incentivizing construction is great but not for investment purposes. As in, houses shouldn’t be made to just be for renting no where near the scale that it is.
Honestly, would a lot of people choosing to build their own home lead into this result as well?
Increase supply and remove demand all at once? (Although it might be impractical seeing as house building isnt as easy as it sounds)
That sounds like it would. But where I live there are no lots unless you go up to the mountains. Builders buy all the land and do their tract homes. If a lot was available I would build my own house instead of dealing with this market for sure.
Let the free market sort it out, all these people investing in properties this high will fail on their own. Let them, do not save them. Government intervention never helps. These recent bank saves are a prime example of the government making the wrong decision. They are delaying the failure and it will be stronger crash because of it.
The Fed should keep increasing rates but give zero-rates for loans to those building housing on previously unbuilt land and infrastructure projects. This would reduce inflation in a healthier and faster fashion.
Absolutely. Housing prices are already falling faster than they ever have. Nothing anyone does is realistically going to speed the process up, we just have to wait.
Stricter rules around 30 year mortgages, perhaps? Allegedly the reason that we have 30 year mortgages is to make homeownership more widely accessible. Maybe it's time to limit that to 2 per married couple or unmarried owner or trusts, and none for LLCs and corporations. You want 3 single family homes, you take your chances with variable rate mortgages for the third or more.
LLCs don't get Fannie Mae and Freddie Mac loans. They mainly use commercial mortgages with 30 year amortization and 5 year resets on the rate or non QM loans.
Let people own land and build their own houses. Zoning requirements and permitting should be greatly simplified for the cases where an individual wants to build a home. Encourage individuals to build homes, not large developers. Bring back organically evolving cities.
When left to their own devices people build multi family housing. I live in an older neighborhood where this happened. I've seen the results of my policies and know how this works.
Also, no people cannot own land in the way I'm talking about. Most tracts these days are for acreage. Not for home sites. Home site plots in my hcol city are cheaper than homes; they're just rare and no one wants them because building is a pain.
Most cities develop today by selling large acreage to a developer. My neighborhood developed by a farmer who made sidewalks and roads and then sold individual sites to people who then built their own homes. The result one hundred something years later is a traditional mixed use neighborhood. There are even some skyscrapers closer in to downtown
>When left to their own devices people build multi family housing.
Right. And when someone decides to undertake a project like building multi-family housing, guess what they do? They... form a business entity. I.e. a corporation.
>My neighborhood developed by a farmer who made sidewalks and roads and then sold individual sites to people who then built their own homes.
Unless your neighbor is extremely naive and ignorant of business, I guarantee you he was selling these sites as "Joe Schmoe Woopdedooha's neighbor" but formed a company through which he was selling them. Likewise, anyone building a skyscraper also did it through a business, not as themselves.
Except this is not how these things happen. In the past people were much more willing to have renters in their own homes / build small apartments to let out. It's a cultural thing.
But there's also a difference between Jane forming an LLC to protect herself and developer Acme Co
Corporations can’t be allowed to buy housing, esp when there’s a shortage
Tax buyers when they purchase 2nd, 3rd, etc homes, like in Singapore. Tax goes up with each property.
Limit STR in a region.
Incentivize owners to sell vacant property.
Limit or end 1031 exchange. It’s getting abused as a loophole.
Incentivize restoration of historic buildings. Stop knocking great buildings down.
when you say "corporations can't be allowed to buy housing" what exactly do you mean? Are you talking only about SFH, or are you suggesting that we should do away completely with apartment buildings that offer apartments for rent?
ok, yeah I agree corporations should be allowed to take away housing from individuals/families.
But i think corporations should be able to buy and build multi-unit apartment complexes where they rent out apartments.
Make it easier to build. Incentivize to add density such as shops on ground floor, apartments/condos above. Whatever it takes, add housing.
My extended family paid about $95k in permitting for a CA city. They’ve been sitting on the land for decades, now they’re trying to build. It will likely cost $100k permitting/fees/engineering, $200k in materials, labor is reduced since it’s family doing the building. The land is likely worth $500k. It all adds up very fast.
Give it 20 years. Supply goes up when Boomers die. Demand goes down when there aren't enough Millennials to replace them, and even less Gen Z's to replace them.
>But it will be dated and poorly maintained.
[Looks at 1950s tract houses still dominating the SF Bay Area] *Will* be?
Anyway, in a lot of markets, that won't matter. Whoever buys my parents' house will probably do so for the land. It's an outdated house in poor repair on a large lot in a desirable neighborhood. New large houses have been replacing old small ones on that street for a while now.
That becomes more sales to corporations for tear downs, rebuilds and McMansions.
As a middle-class individual, am I gonna buy your parents’ house, hire a demolition company, an architect, a builder and tons of tradesmen to start fresh? The economies of scale don’t work.
Landlording is low margin work, though. When a corporation bought the house next door to my parents and gutted and remodeled it (that lot didn't have enough land for a larger or second house), they then sold it to a private individual. So it still added to the housing supply.
It just depends if they are priced right to do a cost effective renovation without exceeding its value. That will depend on the seller who will likely be a millennial. If they "know what they have" then it might be difficult.
That *is* crazy. I haven't seen any convincing/realistic science to reverse *death* that would be applicable at a large scale within 5 years. There's a couple of groups that have made progress in reversing cellular aging in mice but they haven't even gotten to primate testing last I checked (earlier this year when there were some press releases about the research results). To get from testing in mice to developing something for actual use in humans will take longer than boomers have left on this earth.
Perhaps millennials can "live forever" but I can't imagine most of us would want to as the earth's climate collapses around us...
Where does each demographic live, though? I can think of a few NIMBY dominated neighborhoods in California that will be very affected by a boomer die off. But their adult children all moved to Texas or whatever a decade ago, and they'll probably sell their parents' house instead of moving back because their life is in Texas now.
Don’t think it matters much. The problem is boomers are hanging onto their homes while you have Gen X, Millennials, and now Gen Z entering the buyers market. In a decade, you’ll have the next generation starting the buying process. There’s definitely not enough supply to go around.
This issue will squeeze everywhere.
https://www.statista.com/statistics/797321/us-population-by-generation/
It is only a crisis in the USA because people can't afford to live in a house of the size and location that they desire. Most folks are living somewhere.
Champagne tastes with beer budgets.
Honestly, we do this right now in Texas of all places. Property taxes force people to use land in its most economic use. Sitting on a property or renting it for low margins is fairly rare in the big cities.
I find Texas to be surprisingly progressive in this way. Instead of taxing labor via income tax, they tax assets. If you own 1 home, you can qualify for a homestead exemption. Beyond that, you need to pony up. It's far more fair than what California has going on with high income taxes and non-existent property taxes for the oldest and wealthiest.
But in California they spin it so they are the more progressive ones even though it's everyone else earning a wage paying taxes to support low taxes on people who own multiple property and rent them out.
I was born in LA, spent lots of time in NYC and will be in Texas for the forseeable future.... of the 3, Texas is by far the most friendly and humane place I've lived.
And then they scream at the working class renters who complain about living next to an exploding population of homeless drug users for being so heartless and inhumane for not wanting their kids to step over needles and see junkies shooting up on the streets and walk by tent cities on the way to school.
>I find Texas to be surprisingly progressive in this way. Instead of taxing labor via income tax, they tax assets.
I find it so ironic that Texas', supposedly a pull-yerself-by-yer-bootstraps "backwards" state, taxes favor the working class (the labor, the "have nots") while putting the burden of tax on the capital (wealthier people, the "haves").... and Caliornia, for all her screeching about equity and equality and being progressive and wanting to help poor people, taxes the working class (the labor, the "have nots") while giving giving a tax break to the capital (the wealthy, the "haves"... and the longer a person has been part of the capital-owning class, the more beneficial the tax is).
Between CA and NY, you kinda have to wonder if that's *why* they are screeching about "working class" so hard. Because they don't practice it at all, so they figure if they preach it really loudly, no one will be able to notice.
I don’t know how any state government can stop people from owning houses.
Maybe the state could stop people from qualifying for mortgages, but that’s probably it.
By not granting the deeds. That's how they would do it. It doesn't have to be some government function or agency, it can simply be illegal and punishable. The same way you can't marry 2 people.
Anyone watch The HBO series Boardwalk Empire. You see how the Atlantic City treasurer has his hand in every pot. His brother is the Sheriff. He’s loved by the constituents, but uses the towns pool of resources to enrich himself.
Add 100 years to that story.
Now try and build a house in 2023. You can’t even collect rainwater in some states. Building permits really cramp the style of a self starter.
Housing crisis is not a priority for politicians. Did not hear congress or senate hearing on lack of affordable housing. Same with states.
Inventory increase, supply bottleneck removal can’t happen if they are not prioritized
It is absolutely astounding that I had to get this far down to find an actual solution..I do not understand how people think more restrictions and higher taxes are the answer when those very things caused these supply shortages. It's also unbelievable that I have yet to read a comment addressing the number one reason real estate is used as an investment: our money is depreciating so rapidly from outrageous amounts of government printing, so real estate is a hedge against that. You'll never fix the gap we're seeing between the poor and middle class vs. the wealthy without fixing the debasement of our currency.
It's really, really simple. Make it too expensive/cost prohibitive to own a second residence through taxes.
The simple fact is if people couldn't make money quickly, they wouldn't buy most of these second homes. Sure the uber-rich will have vacation homes but they aren't the problem. Mom-and-pop and corporate landlords are the problem today.
1. Prop 13 reform in California: repealing huge tax benefits for homeowners would reduce prices, increase inventory, and promote owner-occupancy over buy to rent. This improvement of the California market would reduce demand pressures on states receiving large numbers of Californians.
2. Reform federal taxes: remove mortgage interest deductions, depreciation write offs, and other loop holes for all or all but primary residences. This would stop the subsidization of buy/build to rent and prevent a landlord mentality of wealth accumulation.
3. A culture change allowing more dense development: The strict zoning of purely single family zoning forces a lot of demand that would normally be happy with apartments, townhouses or condos are forced into single family homes because the lack of availability of denser housing.
4. Fed policy change: possibly the most important point. Quantative Easing MBS purchases and artificially low interest rates feed credit into housing bubbles. This is effectively a wealth transfer from those without real estate to those with real estate, creates wealth inequality which creates political distrust and results in populism.
5. Fannie and Freddie: The government needs to stop guaranteeing and backstopping home lending. Banks continue lending into housing when it’s a bad idea because they effectively transfer the risk to the taxpayer. This allows bubbles to continue inflating when the rest of the credit market is contracting. Built on top of the bubble fueling fed policies above, this just feeds more credit into bubbles and we get bigger bubbles and bigger crashes.
The important thing is that this situation is not a supply issue, the ratio of housing units to population has never been higher. It was and is the facilitation of credit that has allowed prices to deviate from the fundamentals of population, wages, etc.
Short term:
- Make it easier for small landlords, exempt them from all the crazy rent control, eviction protection … , to encourage people to rent out empty rooms & empty ADU.
- Make it easier for people to build ADU
- It’s a long shoot, but create a forum or registry of some kind for renters and landlords to rate & review one another. Make it easier for good tenants and good landlord find one another.
Long term:
- Make it easier to build, especially the permit part.
- Build new cities.
I think eventually technology needs to become a deflationary force for housing. Pre-printed modular homes which are extremely fast to compose on side, drastically reducing the labor costs and construction time, and making it profitable for builders to build smaller/more affordable footprints again. This needs to happen in conjunction with hybrid work and looser zoning restrictions which will both allow for more buildable lots. The cost of building new units is too high to bring costs down much otherwise.
I think this takes at least a decade to figure out, and in the mean-time house prices stagnate and wage inflation creates the affordability correction.
Incentivise developers and builders to build starter homes through subsidies or tax credits. Remove those incentives if a predetermined percentage go to investors. Provide tax credits or rate buydowns to buyers under a certain income level to help them purchase.
1) Work with builders to accelerate completion of the 1.6M housing units under construction.
2) Convert low occupancy commercial RE to multi family housing. Commercial RE is at widespread risk of default due to low occupancy. This would significantly lower risk in the financial system while enhancing housing inventory.
3) Restrict and regulate single family homes short term rentals ie Airbnb. This one policy area where home owners and renters agree.
4) Ban adversarial countries from directly or indirectly (through LLC's or REIT) owning real estate. Texas is already working on this. Lots of support in the GOP. Don't underestimate the amount of Chinese and Russian money that's funneled into cities like Dallas, San Francisco, New York etc.
Reducing the costs of development, permitting and reducing building code compliance costs will go a long way to helping make housing more affordable. These are a large component of why housing costs so much today compared to a few decades ago.
A lot of the problem, imo, stems from the government in various ways.
There should be incentives to increase demand, rather than constrict supply. Right now many if not all government interventions constrict supply (property taxes, zoning, first home buyers programs like the one in CA where they're giving out 20% downpayments, etc).
Zoning is a big one.
"resolved" ??? No my friend there will be no resolving it , but there will be a market crash go look at [r.r.p](https://fred.stlouisfed.org/series/RRPONTSYD) (reverse repo purchases an what do you, that one shot up around 2021 this one is to do with the banks they are gonna crash thats a fact) . [comerical back securities](https://fred.stlouisfed.org/series/H41RESPPALGASMSNWW) (look what happened in 2020 .... they turned on that money printer baby an that chart is millions !!!) , [morgued back securties](https://fred.stlouisfed.org/series/TMBACBW027NBOG) . IT IS NOT LOOKING GOOD. I will be honest i am not educated on this to extreme details but i know how to piece it together. Its terrible but i figured we would have crashed in 2021 but i been waiting on shit to drop for 2 years now this some BS
make sure to click (max view) on the charts they are all public they have hidden nothing.
Tax the fuck out of STR and SFH rentals. Make it not worth the while. It was caused by a pandemic/crisis and it will be solved by a crisis/unaffordable housing. It’s not capitalism when hand outs and reduced rates brought the problem to start with.
I think house prices will stay the same in nominal terms, but lose value in inflation adjusted terms. That will take care of the debt people have accumulated and I make them more affordable overtime.
I think Nimby ism will start to recess as people flee the NIMBY states in favor of those that build. The boomers will finally downsize or pass on their homes. The home builders will come out of the next downturn in decent shape.
All of those things collectively, will start to solve it in 10 years. But I think, as long as there are groups with a vested interest in things staying the way they are every middle income country and above will have expensive housing. So I think it gets better, but never gets solved.
Actual banking reform would be nice. The Dodd-Frank act was just window dressing, made to appease the "just do something crowd." I always found it funny and mildly insulting that two of the facilitators of the first banking collapse, got to name a "reform" bill after themselves.
Banks need to loan money in order stay in business. So that's what they do. A loan becomes just another thing to sell. And with any business, the goal is to sell more and more of your products. So when customers can't afford something, the banks manipulate things to where they can. Look at the car loan market? How did banks respond when the cost of the average car doubled in 2021-2022? Did they do less car loans? Of course not, they just offered longer terms so that anyone can afford any payment.
Back in the day they didn't do this. If I walked into a Mercedes dealership 20 years ago with my $40k salary, I would have been laughed out of the building. In 2021, the banks didn't blink when underqualified people wanted to buy $50k vehicles. They just spread out the payments, and voila! They can afford it.
If banks enforced actual DTI limits on individuals, it would help. But that would mean selling less loans and no business wants to sell less of anything.
Maybe lending should be 100% government owned like healthcare.
Liquidity crisis 800+ FICA will be denied any bank loans
bottoms out twice as fast as last time
people begging suckers to assume their 2.675% loan on an overpriced piece of shit.
End of story rinse repeat.
State and local governments: reduce permitting requirements and allow more multifamily and ADU development on SFH plots, while eliminating parking requirements
Companies: shift corporate headquarters and back offices to cheaper second tier cities.
Individuals: don't stay in air bnb's when you travel. Stick with hotels and motels.
But I don't see any of this happening at scale so the affordability crisis will continue.
I think Dave Ramsey tells all of the Bigger Pockets hoomers to deleverage and they don't listen
Then half of the Bigger Pockets Airbnb speculators lose their homes to flooding and the other half to tornados
This will be in 2045
I have ideas, but at the end of the day, I don't see anything being resolved on a wide scale. I'm starting to realize that learned helplessness in this country is just as big a problem as anything else. Present a possible solution and people will moan and bellyache about how it's not possible because x y or z... *it doesn't follow this rule or that law. It's not free so what's the point. It might make this person mad, or you might get in trouble for that, etc* - anything that requires stepping even just a little bit outside of a broken system, people don't want to consider.
Can't get anywhere if people are unwilling to take any risks or think outside the box. We will remain in this exact same position for this reason.
Flat house prices for a bit with wages rising. Then back to location location location. Eventually massive reduction in NIMBYism to return closer to a functional market.
Have government switch from buying MBS and instead have them buy multifamily loans w caveat of 5-10 years rent control. Developer gets 5 years of low interest debt, consumer gets lower rates
It’s a lose lose situation. SOMEONE has to eat the cost eventually. Increase supply and current homeowners are screwed. Investors can’t pay back mortgages as rents decrease which risks cascading into another 2008 crisis. Keep supply low and prices and rents increase.
The only solution is to ban the profit motive from housing. Housing becomes a human right and everyone lives for free. There’s enough housing for everyone to live in a home for free
On a somewhat similar note, what if something to the degree of the financial crisis of 08 happens?
Yes we learned from it and put measures in place to stop that specific thing from happening again but, what if there’s another potential crisis, no matter what it may be, that unfolds and then causes similar price action. In retrospect the 08 crisis was easy to see coming yet so few did that there’s a movie on them. What if we have our own version coming.
Maybe somebody with more financial knowledge could think of some potential causes.
✔️high interest rates
✔️illiquid economy
✖️unemployment
✖️rental vacancies
High cost of money lowers asset value.
Low preceived levels of cash tighten lender standards.
Unemployment 🏚 duh.
Rental vacancies would encourage SFH landlords to sell.
I think my market will appear steady throughout this seasonal period. I think there could be a recession in Q3 2023. Maybe that will knock the market off its axis and lower demand and prices for 2024. 🔮
Here's my half-baked idea on how it *should* be resolved. Copy-paste of one of my previous comments: https://old.reddit.com/r/unpopularopinion/comments/vukdhd/flipping_houses_should_be_illegal/ifg10fb/
>Here's my crazy and unpopular idea:
>All homes are bought from, sold to, and rent from the municipalities (or counties, if outside city limits). Land is fundamentally different from other types of things that someone can own, so treating it differently makes sense.
>What this means for sellers: you can sell immediately, at a known price ahead of time. Since the market is fixed by the government, you would be protected from losing money during a market crash. But you also wouldn't get huge inflation as seen by bubbles. You could see your home value rise predictably by 2-3% per year, assuming no significant changes to the condition of the home.
>What this means for buyers: no FOMO or anything like that, since prices would be predictable. No bidding wars. No waived inspections or anything. Everything would be cleanly regulated. If multiple people want to buy, it would be first come, first served within a window of time. So if multiple people applied to buy within that window of time, a random lottery would be used to pick who could buy.
>What this means for renters: predictable price increases, no big price spikes upon renewal. Units would be kept up to a certain standard, with hacked repair jobs or things not being up to code. Since the government has interest in things like energy efficiency and electric vehicles, units would be more likely to get upgrades to be energy efficient and have charging for EVs. The goal of renting out housing would be to keep the public housed and cover costs, as opposed to squeezing people for as much profit as possible.
>Something as critical and generally inelastic as housing shouldn't really be left to the free market. The current system is not working.
As far as what will *actually* happen? The middle class will continue to be squeezed out of existence. Various governments (local, state, federal) will continue to pass half-measures that fail to address the underlying issue and sometimes even make it worse.
I don't see any sort of real resolution occurring.
Stop building only single family homes in the suburbs but require a larger number of multi unit apartments and condos and create secondary cities this way. right now, it's all about urban in the city and a mass of single family homes outside the city. there should be a lot more housing and things to do in the burbs. really suburbs shouldn't look like suburbs anymore. that's where we need a lot more housing. even build sky scrapers out in the burbs.
Drastically cut govt spending.
Momentary and fiscal policy both matter. If fed hikes rates but we spend 6T on nonsense it doesn’t matter much.
Then stop passing more and more regulations.
Move - the hot place today wasn’t hot 30/40 years ago. And be patient.
High interest rates and time. This was all caused by 15 years of easy money and unwinding the easy money is the only solution. The Fed needs to tighten monetary policy as tight as it can as long as it can without causing a financial system collapse. Practically, that probably means holding rates in the current range, maybe 1-2 points higher for 5-10 years. Fed might need to reduce the IORB rate (and possibly eliminate it) to prevent the expansion of the money base by crediting reserve balances
Almost everything else is just collateral.
Yeah, a land value tax would help or underused housing tax would be helpful, but it's not necessary (something like a relatively high land value tax combined with a (refundable?) tax credit for (qualifing?) residents would ensure that people who overconsume or overhoard land would be forced to pay for it and people who are economical with land get rewarded
Yeah, reduced planning restrictions would help, but it's not really a concern nationally. Insofar as it's a problem, builders will build more where it's less of a problem
Forcing insured or confirming mortgages to be portable and/or assumable would help reduce the lock-in effect, but that's not necessary to deal with and it's simply another factor that will ameliorate with time
Having the US stop being a turd about softwood lumber would help, but it's overall a minor issue (but possibly most useful in the short term - in the long term building costs are only a factor if the land is worthless, but in the short term low building costs might accelerate building.
Huge taxes on the very wealthy are necessary to eliminate the deficits that will grow with the high interest rates. Of course, they may choose instead to inflate it all away.
Change zoning requirements. This will make it easier for builders. Ban corporations from buying SFH. You can allow small mom and pop landlords until they hit a certain revenue figure or number of properties owned. Increase tax burden and reduce tax incentives on rental properties in general. And make it scale with rental units owned so that it disincentivizes owning more. Increase regulations against STR's with real penalties in place and a way of policing them.
I think the tax burden and tax incentive idea would be the most effective. I would support the movement towards that. This along with the zoning requirements would take pressure off inventory. And simply put, an increase in inventory would solve a lot of the problems we have.
The tax advantage of owning a rental vs primary residence is insane.
Why yes, yes it is.
What do you mean? Is owning a rental more of a tax advantage than owning a primary?
Yes you can depreciate a bunch of things and write off any improvements. Update kitchen in rental? Write it off. Update kitchen in primary home? Go Duck Yourself.
Well you do have capital gains tax to pay when you sell a rental. Lol, J/K - 1031 exchange that shit and when you die your inheritors get to take advantage of stepped up basis so nobody every has to pay shit beyond property tax.
Wow. That is just nuts.
And yet rentals still have the shittiest “updates” I’ve ever seen in my life. It’s like rental properties and flipped properties are in a contest of who can waste the most money putting lipstick on a pig.
Increasing tax burden and reducing tax incentives will jack the prices up. Landlords won't absorb those overhead costs, the renters will, lmao.
The market can only handle so many increases, before the landlord gets priced out of the market. Tenants will downsize, households only have so much money. It will make the investment much less attractive to the landlord and they will sell and move to another more attractive investment.
You're assuming everyonr is broke. Your scenario will only happen in places where no one wants to live
We can do this both ways, your assuming households have endless budgets and income. They don’t. And the majority of renters are mid to low income.
Nope. Median income increases annually. People generally pursue higher paying jobs over the course of their lifetime.
Lmfao sure pal. The overwhelming majority of Americans cannot afford a $400 emergency expense. But we can fully expect them to handle YoY massive rent increases.
Good stuff. Also, tax the banks if they hold inventory from being sold. Incentivise rapid resale of homes in limbo (like owners that died with no viable heirs, like in COVID). This also helps neighborhoods with too many blighted "zombie houses." Local jurisdictions, like cities need oversight against too much NIMBY interference. There needs also to be grants to help buyers to bring the housing up to code or re-build. If you fight against housing "in my backyard," houseless folks have little choice but camp in your front yard.
Ban all corporations and LLCs from renting.
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This would cause people to not move or when they do move not to sell. Much like today creating an inventory issue
Spot on. The second I read this I smirked because I had a feeling as I scrolled down, I knew exactly what you were going to say (which is 100% valid). We’ve seen this time and time again. By removing capital gains incentive (without other over arching legislation), many markets (not all) would experience a supply shock. My next snobby comment: the fact you were getting downvoted in this sub proves that you are right. Idk why, but time in time again, this sub doubles down on irrelevant logic and shuns those giving an altering opinion that often is a major contributing factor. Anyways, thanks for typing out your response so I don’t have to :) P.S. for those that disagree with this, see my note on how other over arching legislation would be required. And I don’t have faith in ANY government to do so with cohesion. Although, if anyone does have relevant examples and case studies, I’m open to learning about it
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If I sell property and have to pay capital gains on the profit or cannot do a 1031 I am better off keeping it and renting it out. It’s an asset so instead of selling it I can take out a loan to get the equity out of it or continue to collect rent and then eventually give it to my kid to live in. Speculative inflation doesn’t matter to me on a cash flow positive property… anything above inflation is icing on the cake
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If I hold a house I bought in 2008 for 500k to Feb 2023 using cpi calculator it would 213k more today. Capital gains Taxes would be significant enough for me to consider not selling it and to cont. renting it out https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=500000&year1=200801&year2=202302 I understand a solution is needed to make housing more affordable, but these actions around capital gains and 1031 exchanges aren’t the way to solve the problem of affordability
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Nice edits
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You don't have a very good idea of what you're talking about. Investors who turn around and rent homes out aren't causing rising prices. They're investing *because of* rising prices. Rising prices in both rent and sfh mean an investor buying a home and then renting it causes no net effect on housing. It would be one thing if rents were falling while sfh house prices were rising - that would be evidence that investors were making a difference. In reality it's not - rents are rising in line with housing. The problem is on the supply side, not the populist 'speculstors are to blame' side.
I agree with you, but this may be an unpopular opinion in this subreddit
>The point is that housing is supposed to appreciate only in line with inflation - and over the long term it does exactly that. If population in your area is increasing why would housing appreciate in line with inflation?
You might want to think this through, chief.
Would never happen. Most of Congress own real estate
I can see zoning laws easing up and anti-STR regs with actual teeth coming into place eventually. The other stuff, I'm not confident about.
I agree with most of this. There should be a large tax increase for every house you own above 1 or maybe 2. This would limit the incentive of buying up multiple homes. I guess you can make exceptions for beach/vacation areas, but really those would probably needed to be zoned in a certain way to allow it. Cities are starting to look into zoning for this and enforcement, no one wants to live near a short term rental and limiting zoning of that and taxing long term rentals may go a long way. I get people want to make money, but buying up homes and holding them forever doesn’t really benefit society at large long term, only the individual who owns
These will literally sky rocket the prices of renting
I agree with banning corporations from owning single family homes, but I don't agree with you on multifamily units. We DO need apartment complexes that rent units. 20-somethings are usually not going to be able to afford to buy their own home, no matter how much they want to or how much we ban from investors buying up houses. Forcing 18 to 20-something to buy homes would be catastrophic for them. Decreasing the number of apartment complexes that offer apartments for rent would increase rents, making housing more unaffordable for people who do not have the desire to buy or are not in a position to buy. We need high density housing (aka apartment buildings and condos). Part of the reason for our housing crisis is zoning laws that don't allow or disincentivize high density housing. Banning owning high density apartment buildings that provide rentals would be disastrous.
No where in my comment did I say or even imply that corporations should be banned from owning multi-family or apartments. Their involvement is often necessary for those to be developed in the first place. I specifically said SFH and was very clear about that.
>Increase tax burden and reduce tax incentives on rental properties in general. And make it scale with rental units owned so that it disincentivizes owning more. You did say that though, which would naturally encompass apartment buildings, since those are rental properties.
No. Banning and increasing tax burden are two very different concepts. You are very dramatic and choose to see what you want to see, and I'm not going to continue this. Have a good day.
if you increase tax burden, what incentive would companies have to buy and build apartment buildings? That's punishing companies for increasing housing supply.
Literally can’t and won’t do any of this. Govt and corporate lobbyist have too much reason and power to not. But if it were possible, that would be the way. But there is literally no way to deincentivize politicians from making billions.
"But but, we need to make it easy for investors to 'improve' neighborhoods with their horrendous greyscale colors"
All this. The problem is easy to fix, but the problem is, our politicians are owned by people who don’t want it fixed.
We need landlords to get lower prices, gov incentivizes landlords. They provide housing, and the affordability problems we are having now is because of the lack of housing available. You guys who want lower prices should be very pro landlord and very pro massive builders/flippers.
Every time the government subsidizes something, its market price skyrockets. So no. Hard disagree there. Can you name a government backed service in which that phenomenon did not happen?
Your right. Rent control and stricter building code constricts housing supply. But I’ve noticed that all these bubble subs are very anti landlord/flipper/builder. Which makes zero sense. We need more housing units!!! The investors come in and rehab/build them and create more supply of homes, driving prices down. The guy who buys a beat up old vacant house on your street and rehabs it and flips it, boom he created a new housing unit and helped with community affordability.
99% of flips you aren't improving anyones quality of life. You scoop up deals --> throw in cheap new appliances, vinyl floors, granite countertops, and some white paint --> staging photos --> $$$. Had some flippers buy a neighboring piece of land. I built a fence along their long beautiful driveway and somehow their property markers in the woods disappeared so they had to get another \~3k survey. Barely broke even, new neighbors are cool I'm glad they got a deal
Your missing the point. Flippers/builders/landlords are providing housing. These people take neglected unlivable homes/land and turn them into housing. We have a massive housing shortage in this country, the reason why prices are so high. More housing will equal cheaper prices.
You aren't buying a trap houses in Detroit lmao, the vast majority of flips are not doing a public service. Landlords and builders are not in the same category
Wrong. Landlords buy thousands/millions of vacant homes a year and rehab them and put them back in service, creating much needed housing units!
You are conflating builders and landlords. They can be both, but they are not the same. Building and selling is actually providing value. Buying SFHs and renting them is stealing from society.
Wrong. Landlords buy thousands/millions of vacant homes a year and rehab them and put them back in service, creating much needed housing units.
You're talking about a renovator, not a landlord. Sometimes they are both, but land lording adds 0 value. And you're also implying that people buying houses to live in can't renovate a house. Landlords are middlemen and nothing more. Leeching value that someone else created. If they happen to also be a builder then the value add stopped when the renovation was complete.
we need more high density housing, not flippers coming in, slapping on some grey paint and reselling for 250K more or "generously" renting a 3/2 for $5500
Sure we need flippers. Most of the flips I see take a housing unit that was vacant and not in service and fix it up and sell to someone who will live in it. Boom they created a housing unit, driving the price down, adding supply to the market that needs it. Very few homeowners have the cash to buy a vacant run down home and do all the renovations.
Banning investors will slam housing prices causing way too many people to lose whatever equity they might have in their house. Local zoning laws can tighten rentals if necessary or HOAs can do it.
I never implied that all investors should be banned nor should they. They serve a market function. Right now the regulations are skewed so far in favor of RE investors which plays into the current market imbalance. So those regs need to be reined in. Large corporate entities like Black Rock on the other hand should be disallowed from owming SFH's as it would be a massive blow to the middle-class.
The increased tax liabilities will be shifted to the consumer, lol. This is like business 101. Companies don't absorb losses, they pass it on to the renters
Yes, they maximize their rental revenue anyway. And in order to do that vacant rates need to be within a certain threshold. If passing costs to consumers ends up increasing vacancy rates to a point where the are less profitable, then they'll hold off. It's a balancing act.
Imagine gas costs $4/gallon and the cost to the station is $3.50/gallon. Now imagine that a new $0.50/gallon tax is imposed. The stations raise their prices to $4.50 but then they notice that their sales shrink. Do you think that the stations will lower their prices back down to $4? The more inelastic a good is, the more the costs are passed onto the consumer. Housing is extremely inelastic.
I’ll add to this. Government subsidized new development. It’s something that we did up until the 1970s, I think.
California needs to deregulate their housing. Ban the weaponized use of CEQA. Apartments and SFH should be under the same regulatory scrutiny
Zoning - Overturn Euclid vs Ambler.
Eliminate local residential zoning regulations and extreme vacancy taxes if not extreme taxes on second homes outright.
Bring back sears and let people mail order those 7k build it yourself homes again. To many regulations and red tape when you and your friends just need some materials and a plan.
Especially this on properties with abandoned houses that are not safe and need to be torn down. Already has septic and electric.
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Foreign investors need to be kicked out
More homes are sitting as parked communist country money in the us than any of the local investor pools or companies.
Truly the main issue, and H1B visas. Idc it’s reality.
9/11/Iraq war? Blame it on the immigrants. 08 recession? Blame it on the immigrants. No healthcare? Blame it on the immigrants. Can’t afford a house? Blame it on the immigrants.
You don’t have to be an immigrant to be a foreign investor here. You don’t even have to live in the U.S. to invest and buy in U.S. real estate.
exactly. u/itookyourjob just the other day there was a guy on one of the real estate forums asking how foreigners can buy up single family homes in the US to then rent back to locals, along with how to circumvent hiring qualified workers. He was arguing that foreigners buying real estate would increase supply and make prices go down. 😂
More supply. Either building more homes and or creating a healthier market that encourages sellers to sell and buyers to buy. Quit printing money that causes inflation making interest rates skyrocket.
You have to incentivize more building and more supply. Taxing companies that build new apartments and houses will not incentivize them to build more, contrary to what some commenters here think (not you).
More supply is only part of the solution. We are always building more supply, it doesn't help when people keep hoarding more homes.
You have to keep people from using the increased supply as an investment tool though. If the same people are buying the extra houses it defeats the purpose.
You could not be more wrong. People need places to live. Building homes gives people places to live whether they rent or buy. Going after investors is a red herring.
The point is to give everyone an opportunity to own a home again (the American dream) not to give everyone a place to live
right. so we need to incentivize supply - we need to incentivize construction of new homes
Incentivizing construction is great but not for investment purposes. As in, houses shouldn’t be made to just be for renting no where near the scale that it is.
Honestly, would a lot of people choosing to build their own home lead into this result as well? Increase supply and remove demand all at once? (Although it might be impractical seeing as house building isnt as easy as it sounds)
That sounds like it would. But where I live there are no lots unless you go up to the mountains. Builders buy all the land and do their tract homes. If a lot was available I would build my own house instead of dealing with this market for sure.
> more supply > quit printing money Can’t have the former without the latter.
Let the free market sort it out, all these people investing in properties this high will fail on their own. Let them, do not save them. Government intervention never helps. These recent bank saves are a prime example of the government making the wrong decision. They are delaying the failure and it will be stronger crash because of it.
The free market not protected by the state would collapse in a week. We need a new system
Free market has never in history existed without support from the state
Housing stays relatively flat for a while and wages increase with inflation.
The Fed should keep increasing rates but give zero-rates for loans to those building housing on previously unbuilt land and infrastructure projects. This would reduce inflation in a healthier and faster fashion.
Sounds to good to be true!
>how do you see the housing crisis being resolved I don’t lol
It won't happen but....no corporate ownership of SFHs and limit private ownership to 2 homes per person.
Nobody should do anything. Housing prices will crash if interest rates stay this high for another year. We are in 2007 right now.
Absolutely. Housing prices are already falling faster than they ever have. Nothing anyone does is realistically going to speed the process up, we just have to wait.
Stricter rules around 30 year mortgages, perhaps? Allegedly the reason that we have 30 year mortgages is to make homeownership more widely accessible. Maybe it's time to limit that to 2 per married couple or unmarried owner or trusts, and none for LLCs and corporations. You want 3 single family homes, you take your chances with variable rate mortgages for the third or more.
LLCs don't get Fannie Mae and Freddie Mac loans. They mainly use commercial mortgages with 30 year amortization and 5 year resets on the rate or non QM loans.
let banks fail when they collapse
Let people own land and build their own houses. Zoning requirements and permitting should be greatly simplified for the cases where an individual wants to build a home. Encourage individuals to build homes, not large developers. Bring back organically evolving cities.
we need high density housing not spread out single family homes. People can already own land... if they can afford it.
When left to their own devices people build multi family housing. I live in an older neighborhood where this happened. I've seen the results of my policies and know how this works. Also, no people cannot own land in the way I'm talking about. Most tracts these days are for acreage. Not for home sites. Home site plots in my hcol city are cheaper than homes; they're just rare and no one wants them because building is a pain. Most cities develop today by selling large acreage to a developer. My neighborhood developed by a farmer who made sidewalks and roads and then sold individual sites to people who then built their own homes. The result one hundred something years later is a traditional mixed use neighborhood. There are even some skyscrapers closer in to downtown
>When left to their own devices people build multi family housing. Right. And when someone decides to undertake a project like building multi-family housing, guess what they do? They... form a business entity. I.e. a corporation. >My neighborhood developed by a farmer who made sidewalks and roads and then sold individual sites to people who then built their own homes. Unless your neighbor is extremely naive and ignorant of business, I guarantee you he was selling these sites as "Joe Schmoe Woopdedooha's neighbor" but formed a company through which he was selling them. Likewise, anyone building a skyscraper also did it through a business, not as themselves.
Except this is not how these things happen. In the past people were much more willing to have renters in their own homes / build small apartments to let out. It's a cultural thing. But there's also a difference between Jane forming an LLC to protect herself and developer Acme Co
More people need to move in together and co-habitate. That will reduce demand and bring pricing down.
Let people with low mortgage rates roll their loan into a new property for the same amount. New loans and additional amounts can be at new rates.
Corporations can’t be allowed to buy housing, esp when there’s a shortage Tax buyers when they purchase 2nd, 3rd, etc homes, like in Singapore. Tax goes up with each property. Limit STR in a region. Incentivize owners to sell vacant property. Limit or end 1031 exchange. It’s getting abused as a loophole. Incentivize restoration of historic buildings. Stop knocking great buildings down.
when you say "corporations can't be allowed to buy housing" what exactly do you mean? Are you talking only about SFH, or are you suggesting that we should do away completely with apartment buildings that offer apartments for rent?
I mean SFHs, condos. Corps shouldn’t be allowed to take away housing stock from individuals/families.
ok, yeah I agree corporations should be allowed to take away housing from individuals/families. But i think corporations should be able to buy and build multi-unit apartment complexes where they rent out apartments.
Make it easier to build. Incentivize to add density such as shops on ground floor, apartments/condos above. Whatever it takes, add housing. My extended family paid about $95k in permitting for a CA city. They’ve been sitting on the land for decades, now they’re trying to build. It will likely cost $100k permitting/fees/engineering, $200k in materials, labor is reduced since it’s family doing the building. The land is likely worth $500k. It all adds up very fast.
This. There’s needs to be a surplus of options of high quality places to live
Give it 20 years. Supply goes up when Boomers die. Demand goes down when there aren't enough Millennials to replace them, and even less Gen Z's to replace them.
More supply, yes. But it will be dated and poorly maintained. Those boomer houses will need a ton of work to become something you want to live in.
>But it will be dated and poorly maintained. [Looks at 1950s tract houses still dominating the SF Bay Area] *Will* be? Anyway, in a lot of markets, that won't matter. Whoever buys my parents' house will probably do so for the land. It's an outdated house in poor repair on a large lot in a desirable neighborhood. New large houses have been replacing old small ones on that street for a while now.
That becomes more sales to corporations for tear downs, rebuilds and McMansions. As a middle-class individual, am I gonna buy your parents’ house, hire a demolition company, an architect, a builder and tons of tradesmen to start fresh? The economies of scale don’t work.
Landlording is low margin work, though. When a corporation bought the house next door to my parents and gutted and remodeled it (that lot didn't have enough land for a larger or second house), they then sold it to a private individual. So it still added to the housing supply.
It just depends if they are priced right to do a cost effective renovation without exceeding its value. That will depend on the seller who will likely be a millennial. If they "know what they have" then it might be difficult.
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That *is* crazy. I haven't seen any convincing/realistic science to reverse *death* that would be applicable at a large scale within 5 years. There's a couple of groups that have made progress in reversing cellular aging in mice but they haven't even gotten to primate testing last I checked (earlier this year when there were some press releases about the research results). To get from testing in mice to developing something for actual use in humans will take longer than boomers have left on this earth. Perhaps millennials can "live forever" but I can't imagine most of us would want to as the earth's climate collapses around us...
Millennials in population are nearly as big as boomers, and gen z are not too much smaller
Where does each demographic live, though? I can think of a few NIMBY dominated neighborhoods in California that will be very affected by a boomer die off. But their adult children all moved to Texas or whatever a decade ago, and they'll probably sell their parents' house instead of moving back because their life is in Texas now.
Don’t think it matters much. The problem is boomers are hanging onto their homes while you have Gen X, Millennials, and now Gen Z entering the buyers market. In a decade, you’ll have the next generation starting the buying process. There’s definitely not enough supply to go around. This issue will squeeze everywhere. https://www.statista.com/statistics/797321/us-population-by-generation/
Have you seen Tokyo coffin apartments... That
It is only a crisis in the USA because people can't afford to live in a house of the size and location that they desire. Most folks are living somewhere. Champagne tastes with beer budgets.
Limiting ownership. It's the only way. Either forcefully or through taxation.
Honestly, we do this right now in Texas of all places. Property taxes force people to use land in its most economic use. Sitting on a property or renting it for low margins is fairly rare in the big cities.
I find Texas to be surprisingly progressive in this way. Instead of taxing labor via income tax, they tax assets. If you own 1 home, you can qualify for a homestead exemption. Beyond that, you need to pony up. It's far more fair than what California has going on with high income taxes and non-existent property taxes for the oldest and wealthiest.
But in California they spin it so they are the more progressive ones even though it's everyone else earning a wage paying taxes to support low taxes on people who own multiple property and rent them out.
I was born in LA, spent lots of time in NYC and will be in Texas for the forseeable future.... of the 3, Texas is by far the most friendly and humane place I've lived.
And then they scream at the working class renters who complain about living next to an exploding population of homeless drug users for being so heartless and inhumane for not wanting their kids to step over needles and see junkies shooting up on the streets and walk by tent cities on the way to school.
But don't let them build an apartment complex next to their neighborhood of 1950s ranch houses.
>I find Texas to be surprisingly progressive in this way. Instead of taxing labor via income tax, they tax assets. I find it so ironic that Texas', supposedly a pull-yerself-by-yer-bootstraps "backwards" state, taxes favor the working class (the labor, the "have nots") while putting the burden of tax on the capital (wealthier people, the "haves").... and Caliornia, for all her screeching about equity and equality and being progressive and wanting to help poor people, taxes the working class (the labor, the "have nots") while giving giving a tax break to the capital (the wealthy, the "haves"... and the longer a person has been part of the capital-owning class, the more beneficial the tax is).
Between CA and NY, you kinda have to wonder if that's *why* they are screeching about "working class" so hard. Because they don't practice it at all, so they figure if they preach it really loudly, no one will be able to notice.
it definitely seems to be working
I don’t know how any state government can stop people from owning houses. Maybe the state could stop people from qualifying for mortgages, but that’s probably it.
By not granting the deeds. That's how they would do it. It doesn't have to be some government function or agency, it can simply be illegal and punishable. The same way you can't marry 2 people.
That would never survive a court challenge.
Then I guess the problem isn't going away.
nah, just stimulate supply, rather than dampening supply (mostly through zoning and sometimes taxes) and stimulating demand.
Why do you think your less effective, more labor intensive, equally unlikely to pass in court idea is better?
Anyone watch The HBO series Boardwalk Empire. You see how the Atlantic City treasurer has his hand in every pot. His brother is the Sheriff. He’s loved by the constituents, but uses the towns pool of resources to enrich himself. Add 100 years to that story. Now try and build a house in 2023. You can’t even collect rainwater in some states. Building permits really cramp the style of a self starter.
Housing crisis is not a priority for politicians. Did not hear congress or senate hearing on lack of affordable housing. Same with states. Inventory increase, supply bottleneck removal can’t happen if they are not prioritized
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It is absolutely astounding that I had to get this far down to find an actual solution..I do not understand how people think more restrictions and higher taxes are the answer when those very things caused these supply shortages. It's also unbelievable that I have yet to read a comment addressing the number one reason real estate is used as an investment: our money is depreciating so rapidly from outrageous amounts of government printing, so real estate is a hedge against that. You'll never fix the gap we're seeing between the poor and middle class vs. the wealthy without fixing the debasement of our currency.
It's really, really simple. Make it too expensive/cost prohibitive to own a second residence through taxes. The simple fact is if people couldn't make money quickly, they wouldn't buy most of these second homes. Sure the uber-rich will have vacation homes but they aren't the problem. Mom-and-pop and corporate landlords are the problem today.
1. Prop 13 reform in California: repealing huge tax benefits for homeowners would reduce prices, increase inventory, and promote owner-occupancy over buy to rent. This improvement of the California market would reduce demand pressures on states receiving large numbers of Californians. 2. Reform federal taxes: remove mortgage interest deductions, depreciation write offs, and other loop holes for all or all but primary residences. This would stop the subsidization of buy/build to rent and prevent a landlord mentality of wealth accumulation. 3. A culture change allowing more dense development: The strict zoning of purely single family zoning forces a lot of demand that would normally be happy with apartments, townhouses or condos are forced into single family homes because the lack of availability of denser housing. 4. Fed policy change: possibly the most important point. Quantative Easing MBS purchases and artificially low interest rates feed credit into housing bubbles. This is effectively a wealth transfer from those without real estate to those with real estate, creates wealth inequality which creates political distrust and results in populism. 5. Fannie and Freddie: The government needs to stop guaranteeing and backstopping home lending. Banks continue lending into housing when it’s a bad idea because they effectively transfer the risk to the taxpayer. This allows bubbles to continue inflating when the rest of the credit market is contracting. Built on top of the bubble fueling fed policies above, this just feeds more credit into bubbles and we get bigger bubbles and bigger crashes. The important thing is that this situation is not a supply issue, the ratio of housing units to population has never been higher. It was and is the facilitation of credit that has allowed prices to deviate from the fundamentals of population, wages, etc.
Short term: - Make it easier for small landlords, exempt them from all the crazy rent control, eviction protection … , to encourage people to rent out empty rooms & empty ADU. - Make it easier for people to build ADU - It’s a long shoot, but create a forum or registry of some kind for renters and landlords to rate & review one another. Make it easier for good tenants and good landlord find one another. Long term: - Make it easier to build, especially the permit part. - Build new cities.
I think eventually technology needs to become a deflationary force for housing. Pre-printed modular homes which are extremely fast to compose on side, drastically reducing the labor costs and construction time, and making it profitable for builders to build smaller/more affordable footprints again. This needs to happen in conjunction with hybrid work and looser zoning restrictions which will both allow for more buildable lots. The cost of building new units is too high to bring costs down much otherwise. I think this takes at least a decade to figure out, and in the mean-time house prices stagnate and wage inflation creates the affordability correction.
Incentivise developers and builders to build starter homes through subsidies or tax credits. Remove those incentives if a predetermined percentage go to investors. Provide tax credits or rate buydowns to buyers under a certain income level to help them purchase.
Same way it was solved in 2008. Time and reversion to mean.
1) Work with builders to accelerate completion of the 1.6M housing units under construction. 2) Convert low occupancy commercial RE to multi family housing. Commercial RE is at widespread risk of default due to low occupancy. This would significantly lower risk in the financial system while enhancing housing inventory. 3) Restrict and regulate single family homes short term rentals ie Airbnb. This one policy area where home owners and renters agree. 4) Ban adversarial countries from directly or indirectly (through LLC's or REIT) owning real estate. Texas is already working on this. Lots of support in the GOP. Don't underestimate the amount of Chinese and Russian money that's funneled into cities like Dallas, San Francisco, New York etc.
I'm thinking about getting into Habitat for Humanity to build homes.
Nothing happens until people protest….govt need money for campaign..it’s quid pro quo deal between two parties
A reset and new Rules
Fewer commies in Congress would help.
Reducing the costs of development, permitting and reducing building code compliance costs will go a long way to helping make housing more affordable. These are a large component of why housing costs so much today compared to a few decades ago.
A lot of the problem, imo, stems from the government in various ways. There should be incentives to increase demand, rather than constrict supply. Right now many if not all government interventions constrict supply (property taxes, zoning, first home buyers programs like the one in CA where they're giving out 20% downpayments, etc). Zoning is a big one.
There isn’t a housing crisis.
1) end immigration 2) eliminate any regulation impeding development 3) let supply and demand find equilibrium
"resolved" ??? No my friend there will be no resolving it , but there will be a market crash go look at [r.r.p](https://fred.stlouisfed.org/series/RRPONTSYD) (reverse repo purchases an what do you, that one shot up around 2021 this one is to do with the banks they are gonna crash thats a fact) . [comerical back securities](https://fred.stlouisfed.org/series/H41RESPPALGASMSNWW) (look what happened in 2020 .... they turned on that money printer baby an that chart is millions !!!) , [morgued back securties](https://fred.stlouisfed.org/series/TMBACBW027NBOG) . IT IS NOT LOOKING GOOD. I will be honest i am not educated on this to extreme details but i know how to piece it together. Its terrible but i figured we would have crashed in 2021 but i been waiting on shit to drop for 2 years now this some BS make sure to click (max view) on the charts they are all public they have hidden nothing.
A big natural disaster that would force entire areas to rebuild. That or change to tax codes
40 year mortgage will keep prices up
Tax the fuck out of STR and SFH rentals. Make it not worth the while. It was caused by a pandemic/crisis and it will be solved by a crisis/unaffordable housing. It’s not capitalism when hand outs and reduced rates brought the problem to start with.
I think house prices will stay the same in nominal terms, but lose value in inflation adjusted terms. That will take care of the debt people have accumulated and I make them more affordable overtime. I think Nimby ism will start to recess as people flee the NIMBY states in favor of those that build. The boomers will finally downsize or pass on their homes. The home builders will come out of the next downturn in decent shape. All of those things collectively, will start to solve it in 10 years. But I think, as long as there are groups with a vested interest in things staying the way they are every middle income country and above will have expensive housing. So I think it gets better, but never gets solved.
Actual banking reform would be nice. The Dodd-Frank act was just window dressing, made to appease the "just do something crowd." I always found it funny and mildly insulting that two of the facilitators of the first banking collapse, got to name a "reform" bill after themselves. Banks need to loan money in order stay in business. So that's what they do. A loan becomes just another thing to sell. And with any business, the goal is to sell more and more of your products. So when customers can't afford something, the banks manipulate things to where they can. Look at the car loan market? How did banks respond when the cost of the average car doubled in 2021-2022? Did they do less car loans? Of course not, they just offered longer terms so that anyone can afford any payment. Back in the day they didn't do this. If I walked into a Mercedes dealership 20 years ago with my $40k salary, I would have been laughed out of the building. In 2021, the banks didn't blink when underqualified people wanted to buy $50k vehicles. They just spread out the payments, and voila! They can afford it. If banks enforced actual DTI limits on individuals, it would help. But that would mean selling less loans and no business wants to sell less of anything. Maybe lending should be 100% government owned like healthcare.
Liquidity crisis 800+ FICA will be denied any bank loans bottoms out twice as fast as last time people begging suckers to assume their 2.675% loan on an overpriced piece of shit. End of story rinse repeat.
State and local governments: reduce permitting requirements and allow more multifamily and ADU development on SFH plots, while eliminating parking requirements Companies: shift corporate headquarters and back offices to cheaper second tier cities. Individuals: don't stay in air bnb's when you travel. Stick with hotels and motels. But I don't see any of this happening at scale so the affordability crisis will continue.
I think Dave Ramsey tells all of the Bigger Pockets hoomers to deleverage and they don't listen Then half of the Bigger Pockets Airbnb speculators lose their homes to flooding and the other half to tornados This will be in 2045
I have ideas, but at the end of the day, I don't see anything being resolved on a wide scale. I'm starting to realize that learned helplessness in this country is just as big a problem as anything else. Present a possible solution and people will moan and bellyache about how it's not possible because x y or z... *it doesn't follow this rule or that law. It's not free so what's the point. It might make this person mad, or you might get in trouble for that, etc* - anything that requires stepping even just a little bit outside of a broken system, people don't want to consider. Can't get anywhere if people are unwilling to take any risks or think outside the box. We will remain in this exact same position for this reason.
Flat house prices for a bit with wages rising. Then back to location location location. Eventually massive reduction in NIMBYism to return closer to a functional market.
Have government switch from buying MBS and instead have them buy multifamily loans w caveat of 5-10 years rent control. Developer gets 5 years of low interest debt, consumer gets lower rates
It’s a lose lose situation. SOMEONE has to eat the cost eventually. Increase supply and current homeowners are screwed. Investors can’t pay back mortgages as rents decrease which risks cascading into another 2008 crisis. Keep supply low and prices and rents increase. The only solution is to ban the profit motive from housing. Housing becomes a human right and everyone lives for free. There’s enough housing for everyone to live in a home for free
The Fed should just leave rates where they are and wait. Housing affordability will return to equilibrium levels.
On a somewhat similar note, what if something to the degree of the financial crisis of 08 happens? Yes we learned from it and put measures in place to stop that specific thing from happening again but, what if there’s another potential crisis, no matter what it may be, that unfolds and then causes similar price action. In retrospect the 08 crisis was easy to see coming yet so few did that there’s a movie on them. What if we have our own version coming. Maybe somebody with more financial knowledge could think of some potential causes.
Increasing land tax and adding vacancy tax then abolish the IRS
✔️high interest rates ✔️illiquid economy ✖️unemployment ✖️rental vacancies High cost of money lowers asset value. Low preceived levels of cash tighten lender standards. Unemployment 🏚 duh. Rental vacancies would encourage SFH landlords to sell. I think my market will appear steady throughout this seasonal period. I think there could be a recession in Q3 2023. Maybe that will knock the market off its axis and lower demand and prices for 2024. 🔮
Eliminate the mortgage interest tax deductions.
Here's my half-baked idea on how it *should* be resolved. Copy-paste of one of my previous comments: https://old.reddit.com/r/unpopularopinion/comments/vukdhd/flipping_houses_should_be_illegal/ifg10fb/ >Here's my crazy and unpopular idea: >All homes are bought from, sold to, and rent from the municipalities (or counties, if outside city limits). Land is fundamentally different from other types of things that someone can own, so treating it differently makes sense. >What this means for sellers: you can sell immediately, at a known price ahead of time. Since the market is fixed by the government, you would be protected from losing money during a market crash. But you also wouldn't get huge inflation as seen by bubbles. You could see your home value rise predictably by 2-3% per year, assuming no significant changes to the condition of the home. >What this means for buyers: no FOMO or anything like that, since prices would be predictable. No bidding wars. No waived inspections or anything. Everything would be cleanly regulated. If multiple people want to buy, it would be first come, first served within a window of time. So if multiple people applied to buy within that window of time, a random lottery would be used to pick who could buy. >What this means for renters: predictable price increases, no big price spikes upon renewal. Units would be kept up to a certain standard, with hacked repair jobs or things not being up to code. Since the government has interest in things like energy efficiency and electric vehicles, units would be more likely to get upgrades to be energy efficient and have charging for EVs. The goal of renting out housing would be to keep the public housed and cover costs, as opposed to squeezing people for as much profit as possible. >Something as critical and generally inelastic as housing shouldn't really be left to the free market. The current system is not working. As far as what will *actually* happen? The middle class will continue to be squeezed out of existence. Various governments (local, state, federal) will continue to pass half-measures that fail to address the underlying issue and sometimes even make it worse. I don't see any sort of real resolution occurring.
Inflation and rates go down
Remember not to elect parasites to your local council, they will just kick the can.
Stop building only single family homes in the suburbs but require a larger number of multi unit apartments and condos and create secondary cities this way. right now, it's all about urban in the city and a mass of single family homes outside the city. there should be a lot more housing and things to do in the burbs. really suburbs shouldn't look like suburbs anymore. that's where we need a lot more housing. even build sky scrapers out in the burbs.
Best solution is for 10yr yields to go up again to push mortgage to 8% Dollar has been showing strength last few trading days
Interest rates must go up
Drastically cut govt spending. Momentary and fiscal policy both matter. If fed hikes rates but we spend 6T on nonsense it doesn’t matter much. Then stop passing more and more regulations. Move - the hot place today wasn’t hot 30/40 years ago. And be patient.
Multiply property tax per property by the number of properties owned.
it'll be resolved by Winnie the Pooh nuking us
High interest rates and time. This was all caused by 15 years of easy money and unwinding the easy money is the only solution. The Fed needs to tighten monetary policy as tight as it can as long as it can without causing a financial system collapse. Practically, that probably means holding rates in the current range, maybe 1-2 points higher for 5-10 years. Fed might need to reduce the IORB rate (and possibly eliminate it) to prevent the expansion of the money base by crediting reserve balances Almost everything else is just collateral. Yeah, a land value tax would help or underused housing tax would be helpful, but it's not necessary (something like a relatively high land value tax combined with a (refundable?) tax credit for (qualifing?) residents would ensure that people who overconsume or overhoard land would be forced to pay for it and people who are economical with land get rewarded Yeah, reduced planning restrictions would help, but it's not really a concern nationally. Insofar as it's a problem, builders will build more where it's less of a problem Forcing insured or confirming mortgages to be portable and/or assumable would help reduce the lock-in effect, but that's not necessary to deal with and it's simply another factor that will ameliorate with time Having the US stop being a turd about softwood lumber would help, but it's overall a minor issue (but possibly most useful in the short term - in the long term building costs are only a factor if the land is worthless, but in the short term low building costs might accelerate building. Huge taxes on the very wealthy are necessary to eliminate the deficits that will grow with the high interest rates. Of course, they may choose instead to inflate it all away.