Someone earning $55,000 a year should be able to afford their own apartment. The fact that he (and many others including myself and I have a higher salary) is the crux of the housing crisis. That is why I will vote for Elizabeth Warren, none of the other candidates are talking about the housing crisis. Or the fact that evictions are at an all time high.
I live in the Bay Area in California. The current affordable housing crisis is just a repeat of what happened in 1945-1950 in this area, as hundreds of thousands of modest income "GI's" decided to stay in California and needed affordable homes. Thus was born the "GI Home", as the Veterans Emergency Housing Act made it much easier to build small homes on former farm land outside of the cities than to build bigger, more expensive homes or build in the cities. The mistake now that the Governor and others make is to try to force more housing into already overcrowded urban and suburban areas. The answer is to build further out and provide legitimate mass transit options for commuting to jobs in the area. There is plenty of cheap ranch land east of Livermore, just as there was plenty of cheap farm land in San Lorenzo and Castro Valley in 1945. But sadly mass transit from east of Pleasanton (e.g. Ace Train) is a joke, and the freeways are totally jammed. Extend BART another 30 miles, or make ACE a legitimate service, and the problem can be largely solved for this area for another 25 years. Everyone can't live on Knob Hill, or Pleasanton for that matter.
I rent in a community that is LIHTC. Which stands for low income housing tax credit. I had to qualify to live in this community. The rent rates are not for the individual with low income at $900+ each signing of a lease renewal the rent goes up. I am on Social Security but must work in order to afford to live here. I would like to retire but the property manager informed me that if I can't pay the rent I need to apply for a housing voucher. That could be a two year wait. I'm 66 yrs. old. When are the Senior Citizens going to get a break. Will we be force to live in slum neighborhoods? Many communities in this area are LIHTC and they are not for the renters but for the property owners bank account. I would love to see something to help low income renters.
1. Younger people have overinflated expectations about housing. If three adults have to share one bath, that does not mean you are living in a garbage dump. It just means you have been spoiled. 2. If you are 30 years old and haven't bought a condo yet it might be because developers now do not build condos nearly as much as overpriced rental units. I have heard its because banks are not giving as many mortgages because they now prefer to loan to businesses and not individuals. I hear its because both the banks and developers make more money this way. 3. If you live in a lower density neighborhood your community should not be punished by refusing to become an urban center. 4. I feel your pain. Increasingly there is nowhere to go if you have a lower middle income or less. We have been on the road to what's been called Californication ("drive to you qualify") for too long, but punishing people will not solve anything. Build some truly moderate housing (most kids can share betedrooms without dying) and people will rent and buy them.
1
My daughter just sold her house via Offer Pad and paid off her and her husband's student loans and medical debt. They are renting a brand new home in a brand brand new neighborhood. It's 5 bedrooms and 3 baths for $1800 a month. A Chinese investor owns it along with 3 other houses on the street. Profits are being shipped overseas to the Chinese already.
2
Both political parties are guilty of allowing inflated, escalating housing costs which can eat up over fifty percent of a family's income. "A chicken in every pot" might now be more appropriately "A house for every family."
1
I purchased my newly built house 20 years ago for 110K now a new house in my area starts at 210K. Rentals have increased, also. My salary has not increased proportionally; I would be having a very hard time at this point to afford anything.
4
I have been in housing and development 50 years. We are now facing exceptionally high construction costs, partially due to a world-wide competition for materials. The bottom line is cost and the only way to mitigate that is to return to the kinds of subsidized housing programs we had in the 1970’s. Zoning never had and now has very little to do with cost. The zoning argument is like the anti-vaccine arguments, i.e. false. But it will allow avaricious San Francisco developers to build multi-million dollar condos where before there were million dollar homes. And that is its real purpose.
We need subsidies for almost all income groups now but we also need to facilitate ownership do that a major mechanism for wealth building is shared by all.
5
@Balynt . Basically right. There is also world-wide demand to work here.
Keep chanting to yourself, "This is what Capitalism looks like." On the Peninsula here are the economic rules: 1.) Office (jobs) crowd-out housing. Luxury housing crowds out "affordable" housing. "Market rate" housing *always* crowds out "Non Market Rate" housing. Keep chanting.
Here's the political rule. Let's blur the treu meaning of "affordable" housing, pretend to help those who can no longer afford market-rate housing of any kind without subsidies, and create policies that shoe-horn in market rate housing for incoming tech workers making high salaries and who then crowd-out even more traditional wage earners who make less.
So long as no-one can say, "No." to tech jobs, re-zonings keep allowing the problem to get worse faster while pretending to make it better.
You can try to re-zone a $5m West Menlo single family home for a four plex, but each of the four plex units must then cost $1.5M, and, I promise you none of the victims of escalating rents can afford the new four-plexes. Or, as just happened in Redwood City, the city can upzone downtown to 12 stories, build 2500 new units in a heartbeat only to have property managers from Google, Facebook, and Stanford call the developers to rent entire buildings en bloc for their employees. Again, none of the poor renters have a chance.
1
If we need minimum wage and employment laws to insure that employers treat employees fairly, then we need maximum rent laws based on square footage and amenities as well as regulations that guarantee quality and proper maintenance of rental properties to insure that landlords do not take advantage of tenants. Landlords who are unable or unwilling to comply with meeting the standards have the option to get out of the business and sell their properties. This could result in more properties available for sale and bring the currently inflated price of housing down to more affordable levels.
6
There are not just early homesteaders--
Many of us at Senior end make decisions to downsize, which in bedroom communities (read:3-5 bedrooms) means looking to rents.
Yes, condos, but that is a more expensive choice than we may want.
Walkable, central choices are rare.
If a wise landlord made decision to create Senior housing, they'd not only have quiet, reliable, responsible and likely less turnover renters!
3
Don’t blame the high cost of housing solely on the backs of developers and builders.
When is the last time you heard a homeowner, land owner, or small local landlord say, “I will sell for less than fair market value, because of social justice.”? It’s natural to want the most economic value for the security of one’s family.
Abandoning vocational programs in high school like home building, in preference for college for everyone, has made it difficult to enter the building trades and exacerbated labor shortages.
Prevailing wage provisions in awarding low income housing projects adds to costs.
Besides inflation, federal, regional, local regulations and impact fees, and building codes make obtaining entitlements and construction far more costly than just two generations ago. By way of example, my parents bought their brand new home in suburban NJ 55 years ago for what the costs of upgrading the flooring from carpet to oak would be today.
Housing in the USA is relatively cheap compared to other developed countries.
2
@David K prevailing wage is what all construction labor would get paid (rightfully so) if they were unionized! dont blame the workers for demanding their right to a fair wage.
4
@David K
In 1968 West Long Branch NJ, my parents who then had never finished high school undersold their split-level home to a young newly married couple. Whether the latter was educated and well-off or mom and dad assumed all newlyweds were impoverished, I do not know.
Two things that need some explanation re soundness of policy:
allowing foreign investors to buy up our housing stock;
and allowing people of substantial means be the beneficiaries of rent protections.
Another area: figuring out how to incentivize empty nesters to move and downsize in ways that enhance their lives (and not harm their pocketbook), which will make the properties available to younger families.
13
@Patricia J. A friend's daughter was trying to buy in a Boston suburb and was outbid over and over again by Russian and Chinese buyers who are (so she heard from a realtor) using US real estate as a way to get their significant resources out of their home countries. Perhaps some of it is money laundering too. It should not be legal for foreigners to buy homes here unless under some monitored process that will avoid stockpiling and driving up costs for US residents and citizens.
16
Using Landlords and greedy in the same sentence is another example of the new class war against people that have. There are always going to be people with more for many reasons. I for one am tired of the hate! Start with the salaries and perks of our political leaders, make the corporations pay more taxes and reduce their influence, but most of all address global warming or none of this matters.
13
@SueBee class warfare is legitimate as the haves routinely vote against the interests of the have nots. the limousine liberal class that make up the majority of the NYT's readers do not have their hands clean.
2
Gotta love capitalism, that wonderful treadmill on which people keep running, running, running, with no finish line ever in sight.
15
@nestor potkine
You mean the capitalism that provides electricity, modern medicine, smartphones, increased food production, the internet, computers, batteries, cars, ...
7
@Enough Humans
Much of the funding for the research that led to modern medicine, smartphones, food production, the internet, and computers came from the federal government. Then the capitalists moved in and privatized the wealth generated by these investments while also making them generally available to the public.
This isn't to say that capitalists or capitalism is bad. It's just that it's important to recognize that capitalism is neither inherently good nor entirely responsible for the increase in living conditions in the modern world and that it's worthwhile to examine the effects that doctrine and ideology have on society and our individual lives.
11
That’s true for some, but it’s a choice.
There’s a bounty to enjoy if you’re not so worried about keeping up with your neighbors.
2
Housing is a particularly important issue for retirees like me, who don't own homes but are still many years away from "assisted living." I can't afford a home, and many apartment complexes are expensive and won't rent to lower income tenants. Rents are too high, they have almost doubled in my area in the last 10 years.
21
Yes both parties and the entire media make it a point to ignore renters even though they are the majority. When is our media going to wake up?
16
@joe Hall The Media can be (and usually is) part of the problem. Consider their owners...
5
If you subsidize renters, greedy landlords will become richer and buy more properties for prices that ordinary people can't afford. Then they will raise the rent, and the income gap will widen yet more. It's a backward approach.
8
@JustaHuman 1) Subsidize renters with tax breaks, like Kamala Harris proposes; 2) put rent control into place to prevent exorbitant rental increases; 3) give tax incentives to developers who build affordable moderate income housing; 4) expand FHA mortgage programs; 5) keep the home mortgage interest deduction.
The principle should be that anyone with a job can afford to buy a home.
3
One issue that I didn't see mentioned was that after the 2008 financial debacle, Wall Street firms were buying up thousands of foreclosed homes all over the country, at really cheap rates. They were able to outbid individuals looking to buy these properties. Now they can charge what the market will bear and they are too far away from the site to take proper care of it. If I am not mistaken, Wall Street firms are among the biggest landlords in the country.
I was always mystified by how poorly run Obama's attempt to help people with their mortgages went- it actually seemed to hurt people more than it helped. Now I wonder if the housing bubble and its consequences was intended as a way to kick people out of their homes and acquire properties at low rates, then turn around and charge an arm and a leg for rent, all the while being out of reach of tenants who need things fixed or cleaned. This whole scenario bears looking into.
20
@filancia times
And here in California Kamala Harris as Attorney General helped the process along. Kamala may talk street but she loves her benjamins.
5
@filancia times THIS.
I have a tendency to think in "worst-case scenario mode" first and my thoughts have been that they (Banksters) created a situation they knew would result in property loss and won on three fronts... loans, subsidies, and land acquisition.
They killed 3 birds with one stone... so to speak.
5
@Cloudy
One doesn't have to exclude the other.
Every human should have a free home. No human government can fix this greedy system we live in and that men have created. God intended the earth to be rent free. Soon God's government by Christ Jesus, will take over this earth and replace human governments with a king just government. God's government does not need your money, and has the wisdom and power to fix all earths problems. even reversing death and sickness. It is supernatural and loving.
Anyone can become it's citizen, showing it by obeying it's laws, listening and obeying Jesus as ruler. Learn to obey his government now, live in hope, protection, and happiness now. His guidance and protection are very comforting. His government will bring to ruin those ruining the earth. -Rev 11:16. Greedy and wicked people will be gone. Psalms 37:9-11,29.
I can't wait till Jesus takes over rulership.
4
@T N Yeah the rich have been bamboozling the poor with this pie in the sky canard since the dawn of time.
There's a big problem when you increase the density of housing in an area -- you get flooding, traffic congestion (more in areas where there is already high traffic) and mostly then, these developers just want to build high-end housing anyway. I don't know what the solution is, but I would not push for more density. I'd instead hit builders with sharp impact fees if they want to put up yet another luxury high rise condo as if the world needs another luxury high rise condo and give them tax credits for building modest income housing. How about increasing the stipend for those on subsidized housing, given that rent now takes up so much of a person's salaries these days. I live in a state where all they've done is build. There's too many of those luxury high rise condos too close to the water and no construction on the opposite end of the income spectrum, and what they have built is environmentally damaging, at that.
9
I live in an area of super-development. It stinks, and I'm a renter. If we are going to juice housing development, we need to do so more carefully than it is currently done. The biggest problem is the thinking that building luxury apartment does anything to help the housing market. IT MAKES IT WORSE.
Not only does luxury development raise neighboring rents, but it brings in a class of people who can afford to pay more FOR EVERYTHING, so now your groceries cost more, the plumber costs more, and your favorite places to eat and shop -- OBLITERATED.
The worst blight on America is luxury development. It must be stopped. NOW. It's the primary cause for soaring rents.
31
@BillG I couldn't disagree more, but I understand that the short-term consequences are painful and frustrating.
The problem is that allowing only 100 new units means they will all naturally be luxury units, which are the most profitable. This brings hundreds of rich new neighbors in, who demand a Whole Foods and all the rest.
Allowing 5000 new units would mean that 500 would be luxury units, 3000 nice-but-not-luxury, and 1500 middle-class units.
Allowing 10,000 units would spread out the distribution even further still.
Our major cities simply don't have enough housing of *any* category, and therefore prices are high for everything. I live in the Bay Area and pay almost $3000 a month for a one-bedroom walk-up apartment without central air in a building built 50 years ago. My parents pay slightly less for their mortgage in a nice New York suburb. If San Francisco set an ambitious goal of adding 50% more housing units over the next decade to *partially* offset the millions more jobs that have been added in the Bay Area since development was essentially halted, rents would eventually flatten out and the influx of new moderately-priced units might even lower the average rent overall. If enough units are added, an apartment like mine might be rented by a teacher paying $2000 instead of a tech employee like me paying $3000, and I'd either pay less or have a nicer apartment. Everyone would, up and down the income ladder.
9
A less obvious solution is to massively fund public transportation. The reason people have to live in high rent areas is because the commute is often difficult if not impossible. In many countries, an extensive, low cost bus and rail network, allow people to live in the suburbs while working in the inner city. This reduces the need to build roads and opens up vast areas for housing. The solution is doable, is there the political will?
23
In order to create a fairer, more just society, the upper middle class will have to pay more as well as the uber wealthy. That is the big issue. When you create a more flat society, the gap between all levels must shrink. That is how socialism works. We have to think about creating better schools and neighborhoods everywhere instead of finding a way to enroll your child in a good school and leaving the mess behind. We need to understand that climbing out the swamp is not the solution. Some people are able to do it, but he vast majority will be stuck in the muck without a change to the system. Ultimately, everyone benefits. Even the current winners, who may be make less well off, will benefit from increase stability in the system and a safety net in case they fall from their high perches.
10
Obama and the democrats advocated for renting while he was president... is the press going to address this?
4
Republicans can't get elected without scaring their voters. Democrats can't get elected unless they promise people "free" stuff or tell them that they shouldn't have to pay bills. We have a consumption driven economy, if everyone's budget went entirely to the cost of housing, the economy would crash and unemployment would be high. You wouldn't see new cars on the road or trash piled high. There would be no new iPhones, craft beers, hotels, restaurants, etc. All would be going out of business. This is peak demagoguery.
3
This article argues that there is a housing problem, but I would argue that there is more of an income problem.
If the income of the average American had kept up with inflation and housing costs, most people could afford to rent or buy, as they wished. The problem is that vast amounts of income, and assets, have been siphoned from "Average Americans" to the 1% of the 1%.
17
Wild thought... maybe some incentives to get the jobs out of the tiny collection of huge cities and spread them more evenly around the country, so that (a) housing pressure goes down, (b) more places are thriving, which leads to (c) more supporting businesses cropping up in more places, which means more employment.
16
@Old Renter We did that. They were called suburbs. And now the fastest growing rates of poverty and population decline are in the suburbs. Those jobs are gone.
3
Maybe in Illinois. As the US Census reported earlier this week, the suburbs in Texas are doing gangbusters in jobs and population.
3
Does this argument not boil down to compensation not keeping pace with cost of living? The middle class, who used to be the drivers of the economy, have been mostly pushed into lower income brackets while a fortunate few have made it to the higher income ranks. Middle and lower income people, my family included, will spend additional income on housing, goods and services, and keep the economy moving forward and growing. The top income earners are not spending, but rather hoarding cash which takes it out of the economy and reduces growth. I support policy which increases taxes on the rich, and promotes pay growth for the rest of us.
20
@Some Dude Increased compensation is truly a problem, however it would do nothing to address the simple fact that there is a general shortage of available housing in most cities and nearby suburbs. It's not just affordable housing that is missing. There aren't huge quantities of high priced housing sitting around, so if incomes all go up there will still be bidding wars won by whoever happens to have the most money.
1
A relatively simple, straight forward way to at least partially adress this issue is to tax second homes more heavily and put a minimum time limit on rental units. This would decrease the number of short term rental units being rented via AirBnB and VRBO as well as perhaps lower the number of units used as second home get aways by people. To have a housing shortage while second homes sit empty most of the year, makes no sense. To have a large number of apartments converted to short term rentals creates a housing shortage by removing those units from the long term rental market
Both short term rentals and empty second homes also destabilize neighborhoods.
14
Most areas already tax second homes at higher rates. The widespread adoption of Homestead exemptions creates two tiers of property tax rates, one for residents and one for non-residents. In many states the difference can range from 25-50 per cent on the same assessed value. It started as a way to reward long term state taxpayers, but has also become to levy higher taxes against people that cannot vote in that jurisdiction.
1
@Kris Bennett During the debate on the recent tax law, the Republicans actually proposed eliminating the mortgage interest deduction on second homes. That passed in the Republican House version of the bill, but did not make it through the Senate. Then Sen Al Franken gave a big speech about how Minnesotans loved their cabins as why second homes needed the deduction.
That would have gone some ways towards what you're asking for, but did not make it into law.
1
As a co-owner of a residential architecture and construction firm and an employee of a large software company serving the multi-family (i.e., apartments) industry, I'm very heavily invested in this topic. This attention to renters is great news for a very large segment of the population -- there are 20 million apartments units in the US -- that is critically under-represented in Government. There are also some indicators that suggest another housing crises could be on the horizon. For example, the level of home flipping is back at 2006 crisis levels. Couple that with global warming, which will drive utility costs up, and we have some serious price increases in the apartment community, across the board, putting huge pressure on people who already can't afford to get into a home. Tax breaks would be a great start, and I hope the Democrats hear the voices of this community because the Republicans certainly haven't shown any willingness to serve anyone other than the super-luxe renters in Trump Towers, and that is a very small segment of the population indeed.
9
Nothing new in the race for new votes by the politician wolves worshipping the Golden Calf, but disguised in the fur of sheep and friends of the poor.
3
I own rental properties in the South Bend area, home to Mayor Pete. My property taxes equal 3 months of collected rents. Every new increase in property taxes hits rental properties much harder then owner occupied units. This is done on purpose. A unit that I would pay $70,000 for could be taxed at $2200, as a owner occupied maybe $1000 and if you are a low income senior as low as $50 a year. Want lower rents in South Bend? Lower property taxes because me , along with all other landlords just pass it on to the renters.
10
Agreed. Most reported concerns about high rents do not take into consideration the effect of high property taxes, particularly on small landlords. High taxes are not only passed on to tenants, but give no incentive to landlords to improve their properties - improvements = higher taxes. Will non-profit developers of affordable housing be given property tax breaks? That would just increase the burden on other landlords and their tenants.
3
Same problem in NY. Rents rise because landlords’ costs rise. Taxes rise, maintenance costs rise, business costs rise, insurance costs rise, and municipalities impose mandatory inspection fees just to name a few factors that come into play when making a decision to increase rents.
Homeowners generally see an increase in their housing costs each year (which if you have an escrow on your home shows up in your monthly payment) as well as increased costs for repairs and maintenance on owner occupied homes. Why should tenants be exempt from these increased housing expenses? The annual increased housing costs are felt by all. No is, or should be exempt, because they rent.
2
@dave jones
Agreed as well! I'm a small landlord and due to enormous increases every year in my property taxes, I have no choice but to increase rents to stay afloat!
Like you, my property taxes is 3-4 months of rental income!
2
I can't speek to the housing crisis in other states but here in California a lot of the problem is the amount of fees involved in creating new lots and houses. When developing a subdivision you will spend about $50,000 a lot on fees and red tape. Then you will spend between $50,000 and $70,000 for a building permit with sewer and water connections, school mitigation fees and traffic mitigation fees. Now add in for all the mandated building codes like fire sprinklers, solar panels, extra insulation, argon filled windows and on and on. Your $150,000 starter home now costs over $300,000.
12
If there is to be a rent tax deduction it should be available to everyone. But, as usual, the Democrat proposals means test this so that the "poor" can live a middle class life through subsidized housing, education, child care, transportation, utilities, food, etc, and the middle class can sink under the cost of the paying full freight for the same while also picking up the tab for these programs. MA has a set rent deduction, a fraction of actual rents in the greater Boston area, Feds could do the same. That would be a fairer way of limiting the benefit while spreading it equally.
14
@Daphne I believe the credit is based on the amount of rent you pay in excess of 30% of your income, so that is not typical "means testing" at all. Not based on net worth, and varies based on your circumstances so not absolute amount...although I would guess they will have some top limit when you get to the luxury rental levels...but that isn't affecting "middle class".
2
@Daphne As a retired person of modest means, I do not receive subsidized anything,'though I do get the occasional senior discount. I am happy to live within my means. I've paid plenty of taxes in my life, far more proportionally than the Trump family. Did you have a problem with him giving himself and his cronies a huge, unneeded tax break ("You all just got a lot richer" - isn't that how he put it)?
Blaming "'poor' people" and immigrants is bogus and lazy. What I find obscene is that in today's America, it's no longer certain neighborhoods or towns that are unaffordable, it's now entire cities, indeed entire geographical regions. Cutting 'poor people' off at the knees isn't gonna do a thing about that.
8
@DesertFlowerLV
Cutting poor people off at the knees is the life and soul of capitalism. Without the poor, there are no rich.
3
Home ownership is the primary means to financial security for most people and so it would be good national policy to present incentives to buy&own. Even though the IRS replacement of property tax/mortgage interest/state tax credit on sched A with a larger standard deduction may actually reduce the US income tax burden for people where housing prices are at or below the national median, it is still a big blow to people living in coastal cities (blue state people of course) where those three housing (location) related expenses are at the extreme high end of the national range, even for owners of the most modest homes.
It would be fairer to bring back the mortgage deduction but adjust it by county, say, so that one can deduct mortgage expense up to some limit close to whatever would cover a house priced at the county median. This way you encourage young people of average (local) income to buy in, but don't overly reward the McMansion people.
As for trying to implement rent and zoning control at the national level... other than when/if it can outlaw the most egregious abuses, it is hard to imagine this could ever work. Housing markets vary so widely across the nation, that this is better managed locally. My guess is that any kind of rent control that creates a hardship for small landlords, eg. the retiree who owns a 4-plex, lives in one unit, rents out the other three, thereby being always answerable to tenants, is going to do more harm than good.
3
@maggie the only change to the mortgage deduction was new mortgages only being deductible up to $750K instead of a Million. The loss of the income and property tax deduction (limited to 10K) is the killer in the blue states.
1
@CCNY The SALT deduction limitation also affects homeowners much more than renters. At any income level, homeowners have much more SALT due to property tax. Property tax for landlords is still fully deductible on the Schedule E.
The recent tax law was very good to renters compared to homeowners.
Get rid of illegal aliens. They go mostly to inner cities not rural areas. Pew Research says 500,000 illegals in NY metro area. Even at 10 people per household ( and they do double and triple up to save on cost) that is 50,000 housing units off the market.
19
@Reader In Wash, DC Seems to me that 50,000 housing units isn't all that much. Next?
1
@Reader In Wash, DC
It's called "scapegoating". Scapegoating is done by intellectually lazy people. Once you have found a scapegoat (almost always scapegoats are the poor, in one variant or another), you need not perform that difficult activity called thinking.
Illegal aliens have very little influence on the housing markets.
Lazy thinkers, on the other hand, wield far too much influence on the political markets.
9
@Reader In Wash, DC
Those units were on the market and people rented them and are now living in them and paying rent. And if you are insisting that they are all " illegal " and therefore do not deserve to live anywhere I would disagree in general and in specifics. In any 10 person household there are likely to be citizen children and citizen spouses or partners.
Be all of that as it may be a 10 person household trying to pay a high rent in an expensive city is not usually living in a great place. Very nice places will not rent to them. A bigger problem where you are is that nicer, more desirable units are increasingly being churned for high yield on the AIRBNB. Or they are owned by rich absentees; some international sorts. That is why so many units are off the market. Trying to blame immigrants for everything is counterproductive. No sign that they are responsible for the measles epidemic for example.
3
What a farce. By 2020, there will not longer be a "Democratic Party." It will be at the bottom of the garbage heap. It has already, bu its stupidity, ensured trump's lifetime presidency. Too bad The People are too lazy to form a serious party. Reminds me 1930s Germany.
11
Wow. I don’t like these policies either, but I’m not sure I’d put Elizabeth Warren in the same category as the Third Reich.
10
@Mike I think he is referring to the lack of serious competition too Trump, as put forward by unrealistic and unfunded policy proposals as the Third Reich (and Trump would be Adolf rising unopposed by a divided and weak opposition).
Thank God Biden is in. As long as he does not propose a bunch of the pandering insanity that has been put out, he can shove Trump out the door - if the voters remain united and focused on that goal first and foremost.
8
Affordable housing is a problem because the country is awash with unskilled, uneducated illeagal immigrants and phony asylum seekers. They compete directly with the working class, pushing down wages and increasing the price of low income housing. They also have too many kids which further increases the costs of housing.
18
@Enough Humans
you have personally interviewed each asylum seeker and found them "phony"? why aren't you working for this administration? and in my neck of the just-outside NY metro area, there is a specific group of thousands of illiterate, uneducated religious fundamentalists who can barely speak English, have too many kids and think public assistance, is their right. and they are white, and their families have been here for generations.
15
@MB
Yes, phony because 90% of their hearings will end in rejection. They are economic immigrants that use the asylum loophole in our laws. The fundamentalists are citizens so we have to do something with them as well as illiterate inner city citizens - they can not be deported someplace else. How about severely restricting immigration so working class wages rise and low income housing is available for them ? There are 8 billion humans on Earth and 6 billion live in undesirable countries. We our already overpopulated.
7
@MB I think I know which group of these hardcore Trump supporters you are referring to and they need to get vaccinated
5
Rent for a one bedroom apartment on the Texas Oklahama border: 650$
Mortgage payment for a 2b 1b 1100 foot house built in the 80s: 350$
?????
9
@Eli: why would one want to live on the Texas/Oklahoma border? And what work is there?
11
You might look at a satellite map of the area at night. The Dallas Forth Worth metroplex moves like the Marabunta in the Naked Jungle towards that border. Lots of great employers moving into this northern area.
2
@Michael Blazin -- but it is not there yet, so what are struggling people supposed to live on until it gets there?
Notice how journalist Emily Badger avoids using controversial generational identifiers and merely resorts to vague hints about to whom she is referring. Consequently, parts of this article read like someone who is trying to report from behind-enemy-lines and is fearful of being too specific.
Badger wrote: "Andrew Criscione, a 30-year-old renter in Boston. [...] Rather, he said, people his generation increasingly fear..."
^ Does this younger economically-blighted generation have name? (i.e. Millennials)
Badger wrote: "That represents a new reality from a generation ago..."
^ Does this older economically-blessed generation have a name? (i.e. Baby Boomers)
One senses Badger doesn't want to step on anyone's toes and hence avoids naming generations for this reason.
Yes, your Millennial readers understand that The New York Times' readership is predominantly Boomers who tend to squawk like a plucked chicken whenever their collectively largesse is mentioned. Nevertheless, please do not be so circumspect as a journalist.
A spade is a spade, a Boomer is a Boomer, a dog is a dog.
@Sándor Well, I'm a Boomer, rented most of my adult life and currently rent. I am all for policies that help renters. As pointed out by another commenter, landlords pass on the property taxes to renters, and in that sense, renters subsidize homeowners due to the higher property tax rate on apartment buildings. The only squawking I'm doing is about facing the prospect of finding someplace affordable to rent on very modest retirement income/SSI in a location that is walkable and has decent health care. More and more even small cities are becoming unaffordable for folks like me. (And before you go down that road, I have saved and saved, have way more in IRAs than most of my generation, have a PhD, worked in white collar jobs). If you don't like millennials being lumped together, don't lump all Boomers together either.
10
National Rent Control.
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Then we’ll have a shortage of housing everywhere, not just in SF and NYC.
2
There seems to be a lot of people who think the world owes them for some reason. Yes, housing is expensive. You get what you pay for. Most of that rent increase is from increased taxes that just got passed along to you as part of your share in the building.
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Get rid of the mortgage interest deduction that artificially raises the price of all real estate. The mortgage interest deduction is not fair to renters either.
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@Karl Hanson most filers are unable to utilize mortgage interest deduction because they don't have enough deductions to itemize. for the majority it has already been eliminated
1
@Brian Another reason to get rid of it, as it mostly goes to the rich. However, since it also mostly goes to blue state residents, Democrats will fight eliminating it.
No one has a “right” to live in a home at taxpayers expense. The Dems though are in a competition to see who can give away the most. Free housing for those who don’t want to pay their share of housing expenses. Free health care for those who don’t look after their own health. Free college for those who don’t like to study. Everyone now has rights. Nobody has responsibility for anything. I myself wouldn’t want to live with free loaders. Who would?
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@Edward
come to Rockland, Orange and Sullivan counties in southern NY. There are many thousands living off the taxpayer's dime. (And they're not immigrants.)
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@Edward That mortgage interest deduction is you freeloading off non-homeowning taxpayers.
3
Don't worry, they will just come and camp on your lawn - I would rather these folks get some form of housing, because they are not going away. Just imagine what this country would be like with NO low income housing. There is already a shortfall. I am not saying it needs to be a palace, but the alternative is people in tents, which can be found up and down the west coast and probably where you are in Hawaii
2
This is a bit odd, as trump has allowed more housing vouchers in his short term than obama did in 8 years
2
“I want free housing
I want free college education
I don’t want to pay off my debts
I want....”
Let’s start with primary education and healthcare, please
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Funny how politicians always notice things at election time.
10
As one who has lived in cities big (New York City), small (Cincinnati) and between (Dallas), my experience has taught me this: the solution isn’t necessarily to build more and more and more. There must be a limit to the number of properties a single person, or company for that matter, can own. The shortage of affordable housing would be a thing of the past, if only investors, landlords and flippers were forced out of the practice of hoarding properties that could benefit more people.
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@Danielle and AirBnB "sharers"
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@Danielle Thanks for understanding that capitalism is to blame.
1
If there is a voting bloc to be found, politicians will try and buy it. Now it’s renters? Whatever happened to just WE THE PEOPLE? Is it possible to make a place already tattered to shreds of special self interests any more fragmented? Some seem to be working hard to find out and insure that it can be.
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@John Doe 35% of the population isn't a special interest. It's 1 in 3 Americans. It's a rare policy issue that has everyone with the same interest.
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@John Doe If every renter in America voted Democrat in 2020 it mainly would just serve to raise the number of blue-state Dem votes - a pointless exercise because it makes no difference in the Electoral College, and probably not much in the composition of Congress, whether the Dems' margin in California or NY is 10,000 or 10 million.
Dems need to start worrying less about problems that affect coastal cities and start worrying more about problems that affect Trump and the GOP's core constituents.
1
@John Doe I guess you would need to ask your self what special interest group you fall into - gun owner? business owner?, consumer of public education, etc.
The answer to a lack of housing is to build more housing! But zoning, property taxes, building regulations and NIMBY attitudes all combine to make affordable housing nearly impossible to build! And few of the comments are in favor of changing those impediments! Why not permit new building of high density apartments near highways and public transit. Lower property taxes for that new building. Permit less than current square footage! And lastly, if rents are to be subsidized let there be some means testing, and then provide cash to those who qualify. The current systems of rent control/stabilization tied to a specific unit means some lucky person gets a cheap apartment virtually forever allowing him a second summer home in the Catskills or a vacation overseas while more needy folks can't find a vacancy anywhere!
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@Louisa Gray You have hit the proverbial nail on the head!
2
@Donna Gray Oh that would be so East Coast! Out here in the West Coast, it is all NIMBY all the time. But your comments on rent control are true - I have a friend who has lived for decades in a rent control building his grand parents occupied in the 1920's - 2br 1bath on the UES.
He is fortunate, never moving and has been perpetually unemployed because there is no reason to work - he can pay his rent out of savings. It is demotivating
3
Excellent article! My one-bedroom apartment in a mid-sized college town (650,000) is around $400. Americans think they're paying market rates, and they are. Market rates under conditions of extreme scarcity! Address the scarcity issues, and the market rates are wonderful. (The same could be said of American medicine. The American Medical Association caps the number of medical students so that the US actually has to import doctors from developing countries! Can you imagine? Artificial scarcity is every in the US, squeezing consumers to drive profits.)
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@Robert include low density zoning in the scarcity equation
1
@Robert Among the many definitions of capitalism is this one : "a machine to turn scarcity (for the poor) into abundance (for the rich)".
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Hello, this has been a problem for decades. Ask any single baby boomer and they'll tell you exactly how hard it is now and was when they were younger, to afford a decent place to live. For years I've joked about having to save cardboard boxes so I'll have a place to live when I retire and can't afford anything. Now that I'm 60, can't find a job, can't save money, won't have anything left when I can "retire" I think I'll start a go fund me for cardboard boxes.
Ironic that the generation that was supposed to have a better life than its parents has, for all intents and purposes, not. I am referring to anyone born in and after the 1950s. We lost out on the job market, the defined pension era, and being able to count on a good economy. But hey, we can always live in a moldy, wet, decrepit cardboard box.
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@hen3ry And started careers in time for the disastrous Reagan administration. The disaster of supply side trickle down, union busting, de-regulation, and poor governance we still have not addressed and sadly will not correct in my lifetime.
"Please Sir, may I have a trickle?"
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@caljn You are absolutely correct!
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@hen3ry I could not agree with you more!
6
Luxury rental or condo building is a problem thruout the world, not just here. Developers, and cities, make much more profit, and revenue, on such buildings, so they rubberstamp permits without considering how this changes the demographics of the city. I don't know how any city will ultimately survive if the lower wage earners, and some middle class professionals, are driven away. Nobody is going to commute 2 hours for a $15 or $20 dollar an hour job. I understand that subsidized housing isn't popular in good neighborhoods. It's disliked in middle class black neighborhoods too because it does, sometimes, increases crime, and definitely blight. Many condo boards disallow renting units for the same reason. If they do allow, renters go thru background checks. It's how owners try to prevent scofflaws from non-payment of rent, and/or trashing their properties.
Hate to say this, but even if everyone is subsidized enough to find decent housing, many areas will still be unavailable for the above reasons. Can we blame long time residents from wanting to maintain a low crime, and clean, neighborhood?
8
It's time the individual and corporate tax systems were combined.
Individuals should get deductions for all their expenses, such as rent, health insurance, food, utilities, etc. They should be taxed on their profits, just like corporations.
6
"All the jobs" are NOT in big cities. There are thousands of employers in boring ol' flyover country who can't find enough employees. The "all the jobs are in big cities" myth is the excuse perpetuated by millennials and others who want to justify their personal CHOICE to live in "cool" trendy cities - hopefully with taxpayers subsidizing that choice.
And there is a real political peril here for Democrats. the majority of voters are homeowners. For most of us, our home is not only our biggest asset, the quality of our community is the most important aspect of our lives.
Higher density reduces quality of life for most homeowners. It reduces property values. It increases crime. It increases traffic. It increases lines everywhere from the grocery store to the post office. It reduces community cohesion.
We moved out of an urban area to a low density suburb / small town for a reason. There is no issue that would make me - and many others - vote for a Republican faster than a threat of a high density "affordable housing" apartment complex going up in my neighborhood.
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@A F
That's weird. I live in an extremely densely populated place and I can't walk a block without bumping into someone I know. It's the walking to small local services and community events that stitches our community together. If we drove everywhere in an isolated automobile, we would never have the types of interactions that make a community strong.
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@A F Please show some supporting evidence that higher density housing causes more crime. Correlation is not causation. There are many suburban developments that have high crime rates, and many high density urban setting with low crime rates. The notion that high density reduces community cohesion, with the unspoken assumption that low density settings promote said cohesion, is quite ridiculous. How many suburban dwellers have a clue who their neighbor is?
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@Djt
Really? Never?
Because I have those interactions every day at my kids schools, at activities, at soccer games, at the grocery store, at church... and on and on.
I grew up in a small town. I live in a small town now. Between that I lived in cities and I HATED the isolation of it.
To each his own. And frankly, it is fine if urbanites want to self righteously preen about how much they love city live. I worked in NYC for years; I know how much New Yorkers think NYC is the center of the universe.
But when urbanites add to their contempt for small towns and suburbs policies that would force us to both subsidize their urban lifestyles and compromise the quality of our small towns and suburbs, nothing gets my fight instinct up more.
3
There is plenty of cheap housing in rust belt cities like Cleveland and Detroit, but your typical Millennial wants to live in a 2000 sq. ft. home in the middle of Manhattan or San Francisco on a barista's salary.
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@Bob the median household income in Detroit it $26k. Detroit has a poverty rate of 35% and a has one of the highest violent crime rates in the country.
Of course millennials don't want to live there! Nobody does!
The median household income in the Bay Area is $96k and, while housing is expensive, the career opportunities available (for educated millennials) are unlike anything you'll find in the rust belt.
They're going where the economic action is. That's a respectable decision.
(And no, they aren't living in 2000 sq. ft. apartments. They're living in apartments that are, on average, under 800 sq. ft.)
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@Bob - so only millionaires and billionaires are allowed to live in San Francisco? I'm from San Francisco and this is not the way the city used to be. But thanks for your privileged perspective, Bob.
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@Bob
Those cities have high levels of unemployment and poor quality jobs. The people moving there live on disability and Social Security and accept a lower quality of life. A typical Millennial wants to gain employment experience.
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As usual, most of the proposed solutions would make the problem worse. Giving tax credits to renters would just increase how much landlords can charge. Giving downpayment assistance to people with poor credit would start a new housing bubble, or compound the one that's already started. Requiring developers to provide low income units in new apartment buildings just means fewer new buildings will be built.
Rents are high because the supply of rentals is limited and the economy is booming. Cities and states need to streamline the approval processes for new apartment buildings, and stop making them less profitable by loading them down with unnecessary requirements.
4
Uh, message to candidates: I rent and I am listening to what suggestions you have to offer. I vote in every election.
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Rents are tied to wealth inequality. Current tax laws favor real estate investment. When corporate groups and wealthy owners buy up housing stock (a la gentrification) they drive up prices and reduce stock. Price controls won't work, but perhaps limiting concentration of ownership, restricting foreign ownership, reducing tax advantages would help. The single biggest help would be living wages, affordable education and healthcare so people don't spend 40% of their income on housing.
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If you do not increase supply, they still pay 40 per cent, of a higher number. Limiting people that can invest in adding supply is not going to benefit anybody. If they come from Venus, we should be happy they invest in real estate.
2nd part of my coment (see abve for 1st part)
Thank you NYT for this article. Almost a life-death issue
I have read that investors these days are turning to rentals. The primary housing market is flat/down. companies are “securitizing” multiple dwelling rentals. I have first-hand information on this.
Apartment rentals in the Sacramento area have been stable for over 35 years (raises based on the cost of living increases). As everyone knows, San Francisco-and Bay Area housing in going up the roof. SF workers are commuting to surrounding areas ---the rentals in Sacramento starting in 2014 started increasing in double digits (county-wide) – totaling 30 – 50%+ in less than 2 yrs.
Sacramento area is a working class city—many salaries area $3,000 – to $5,000 – those over $7,000 are the minority—professionals such as engineers, nurses.
Many retirees with 20+ yrs work history have $2,500 to $3,000 retirement. To pay a rent of $1,500 is a hardship for many—including myself.
For personal reasons I wanted to rent---Of course, I could have never imagine a $1,200 rent—my rent 2011 – 2014 was $680—2017 was $1,100. I know of several seniors “seriously” affected.
In Spain, France, Germany such an increase is “illegal.” Ie, from my perspective, these investors are…….
Any renter who reads this please write to the presidential candidate you think most appropriate.
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1st part - continuation further down
Thank you NYT for this article. Almost a life-death issue for me now- affecting my whole life.
They say history repeats itself. In the 1700’s when Spain was getting the spoils of the colonies diminished (the/or main?—source of income of the moneyed classes), there was a lot of real estate speculation.
I am wondering whether in a given place and time when the main source of income of investors is being crashed , do they turn to whatever source to keep their rents coming up? Does someone know the best economic history book out there?
I have read that investors these days are turning to rentals. The primary single unit housing market is flat/down. companies are “securitizing” multiple unit rentals. I have first-hand information on this.
I am a senior with a delicate health - who after 2 B's - 33 years of full time work--with very good work performance. A frugal life----with an active life of 6 am to 10 pm over 15 years --school and work--I cannot take care of my health because of the rental situation here.
Sorry--but to me "This is the American Nightmare" -
2nd announcement - Contact/work/vote for The Presidential candidate that offers the best solution for you on this issue.
A life or death theme--actually homeless people have shorter lives!!!!!
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The links you shared on Warren’s Housing plan and Booker’s story are amazing. This is an important topic and central to who we were as Americans.
4
An easy solution to the housing “crisis”: roommates.
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@QED Do you think people aren't doing that already? You can rent a room for $1,500/mo in SF. That's sharing a kitchen and bathroom with other people, and sleeping in a room in someone else's house for $18k/yr.
I'm afraid there are no easy solutions to this one. :/
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@QED - right. Families with children are supposed to live with roommates? Spoken from your luxury single flat high in the clouds in Manhattan no doubt. Let them eat cake.
7
One of the primary drivers of McMansions is the home interest deduction, which has higher returns for more expensive houses (go figure in the land dedicated to subsidizing the rich). This distorts everything about the housing market, from what is being built, to inflated mortgages (terms, conditions, lengths of loans, etc). A free market solution to housing costs would be to get rid of this deduction, which is really a subsidy for the high end home market and financial services sector
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@Steve G The 2017 tax bill has already done that in some markets, by increasing the standard deduction an amount that is often higher than a mortgage interest deduction and by enacting the SALT cap.
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The tax code already has limits for deductible interest on big mortgages. Really wealthy people are not reaping big benefits on home mortgage interest deduction. They pay cash. The big winners are those people we read about in NY Times in NYC and SF that make $300k and claim to be middle class.
1
The real fundamental problem is too many people straining the available resources.
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@left coast geek, you're spot on and isn't it funny how no politicians even mention this. Overpopulation will be this country's downfall.
4
Combine all the Democrat candidates new campaign promises and we might as well just have a law that provides each person in the US shall have the same income as every other person. Equality is us.
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@Porter Giles Oh yeah, the ol' slippery slope. That'll teach em. "Provide for the basic public welfare and the next thing you know you're living under authoritarian communism and everyone is dying of starvation."
In reality, if we went back to the marginal income tax rates of the booming 1950s we could afford everything they are offering and have plenty left over for more.
*Every* other first world country has universal health care (as just one example). All of them. Many have free or highly subsidized higher education.
This isn't about equality of wages. It's about providing a minimum level of well being for our citizens.
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@Porter Giles Oh yeah, the ol' slippery slope. That'll teach em. "Provide for the basic public welfare and the next thing you know you're living under authoritarian communism and everyone is dying of starvation."
In reality, if we went back to the marginal income tax rates of the booming 1950s we could afford everything they are offering and have plenty left over for more.
*Every* other first world country has universal health care (as just one example). All of them. Many have free or highly subsidized higher education.
This isn't about equality of wages. It's about providing a minimum level of well being for our citizens.
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@Austin Williams
Excellent comment! People forget what actually caused prosperity in the past. See, for example, the likes of Amazon paying $0 in taxes: that is missing money that would otherwise go to increase public well-being.
The 2020 Democratic candidates seem to propose tax credits for everything, instead of addressing the root problems of skyrocketing rewards for corporate executives and plutocrats, and less and less of everything for everyone else.
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@The Poet McTeagle Burnie and Warren are pretty good about going after the plutocrats.
I haven't seen much of that from the other candidates.
4
How is housing a fundamental right? It is not in the Bill of Rights or the Constitution.
This is a free market based economy where most housing is owned by the people, not the Govt.
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@Tony - so who cares about all of the families and seniors and veterans who can't afford skyrocketing rents. Let them live on park benches and eat cake for dinner.
7
young couples do not have the resources for a 20 p/c or more down on a $200,000 plus home, which is now your average cost and about 2000 sq/ft home..or do they have the funds for property taxes, homeowners insurance, and neighborhood association fees..the wealthy investors know this..so in our town, apartments are going up faster than residential homes,,storage facilities right next to the apartments,,, the wealthy investors , (and they aren't just from america, they are from around the world) know that in the future many Americans will never own their own home,,,they will live with thier parents, they will live in trailers,or they will live in the wealthy owners apartments , till they die...the wealthy investors will have income for themselves and their families for years to come
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How about a tax credit for people who don't have children. We're the ones actually saving the climate.
35
Exactly. There needs to be way more tax credits. Parents get a child tax credit, so others should get a no-child tax credit.
Isn’t it discriminatory otherwise?
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@Anthony I am with you on that point!
5
@Anthony LOL, all of those kids are the ones paying for your retirement...
4
Just about every jampacked city in every industrialized nation on the planet has been experiencing a lack of affordable housing for the past 20 years, minimum. Use birth control, people. So too, reductions in immigration are inevitable,
A story in yesterday's NYT outlined unrest, crowed cities, lack of resources (including water) and increasing lack of quality of life in Australia due to immigration.
The trenchant question seems to be how much longer can so many humans keep their heads in the sand, and why do they want to?
18
who's going to pay for those tax credits? certainly not the slum lords who profit off young families.
4
America is largely empty, that's what a recent NYT front page article just recently published. There's no innate right for people to live in some of the most expensive and crowded cities in the world like NYC, SF and Boston. If you can't afford it, live somewhere else cheaper. It's simple as that.
The idea that taxpayers in Iowa should subsidize your rent in an overpriced coastal city is absurd.
20
New York subsidizes your state. Surely you know that.
13
@Jonathan - tell me again where the teachers and bus drivers and sanitation workers for cities like NY and Boston and SF are supposed to live? I'll wait.
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@Jonathan Great! People want to live where the jobs are and, incidentally, where great cultural institutions exist.
5
But for all who are complaining there is no consideration for renters Will YOU Turn Out And Vote in the upcoming presidential election?
8
Crippling Debt is the opiate of the masses.
6
Booker wants to give renters a tax credit? Smart. Now, just think what that will do to the rental market. I'll bet a few multi family buildings that rents go up and up.
The government should not be in the housing market. There's a long record of how they have warped market pricing.
14
@Mike M. I agree. A tax credit for renters may just push rental prices up. Very similar to how guaranteed student loans have pushed tuition prices up.
Tax credits could just make it so the landlords get high rents from their renters AND a little extra from the tax payers.
Other than making it easier/cheaper for builders to build new housing, I don't see anyway out of this. The demand for housing isn't going down. Best we can do is increase the supply.
3
Stop one form of subsidizations before starting new ones. Look at all of the subsidies that encourage home purchase. Tax deductibility (finally scaled back in the last Congress), mortgage interest, deferral of gains on home sales, the tax rate on home sale gains to name a few. Level the field between owning and renting. More renters equal less bank loans and less real estate speculation (it is not just the bankers). While we are at it, fix the income tax laws so that real estate developers have to pay their fair share. But let's let the states regulate renters not the feds.
2
So the Democrats believe that housing is a right. A right that taxpayers and homeowners struggling to pay for their own homes will not have to pick up the tab for?
Enough already. Every dollar the government spends is subsidies just increases the ultimate cost of the product. If the government subsidizes rents then rents will increase.
As we have seen with Trumps tax reform reducing the deduction for SALT has caused home prices to flatten in many communities with high taxes. If the politicians truly cared about costs they would take government money off the table.
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So depressing that Trump is clearly ahead of the Democrats on this one
5
@PeteM1965
"So the Democrats believe that housing is a right."
Yes. Yes, it is. That's just basic human decency.
"A right that taxpayers and homeowners struggling to pay for their own homes will not have to pick up the tab for?"
No, that's not a good way to go about it. I think that will just exacerbate the problem. The democrats proposing tax credits for renters are nuts. (I also think tax breaks for buying a home is nuts. The tax payers in no way owe you anything for your decision to purchase your property.)
The only sensible answer I can see is to greatly increase the supply of new affordable homes. We should be making it easier for builders to build new affordable homes.
"If the politicians truly cared about costs they would take government money off the table."
Or they could direct it towards new housing suppliers. That could work too. But I totally agree they shouldn't be giving tax credits (which, in the end, if effectively just giving more money to the landlords).
@Austin Williams
Austin go a ahead and pay for people live in high cost markets since it's their right.
1
So long as Democrats keep voting to limit development (or Democratic lawyers weaponize CEQA to sue and block development indefinitely in the Courts) housing stock will be limited and rents will increase (Exhibit A: San Francisco). However in the Bay Area, the only thing that people like to complain more than the high cost of housing is...traffic congestion. So until there some form of massive public transit improvement, don't expect more housing and don't expect rental price inflation to ease.
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@Hero's Journey
There’s a lot more to it than your simple minded post. I grew up in Santa Cruz but have lived in SF for two decades. Tech and millennials, bad planning, gentrifications and Chinese investors to name a few off the top of my bald head have upended housing in the Bay Area.
We need solutions, someone has to begin the conversation. I applaud anyone taking this topic to heart.
6
The cause of this problem is uncomplicated: easy monetary policy has pushed up housing and asset prices. Go to the St Louis Fed website and plot total US debt, total US GDP, and any housing market index. The stock market and housing markets have exploded upward along with the massive debt (public, corporate, household), even as GDP has grown modestly and real wages for the middle and lower classes have stagnated.
Low interest rates and quantitative easing have generated a huge pool of asset-seeking money in the hands of the wealthy (low marginal propensity to consume, high marginal propensity to save / invest). Asset prices (especially housing and stocks) are where modern inflation has manifested itself (economic policies have disproportionately aided the wealthy).
Though this problem is simple (asset inflation), solutions are not easily had. Interest and capital gains rates need to go up. But this is unpalatable given how meager current GDP growth is. Maybe there’s a method to have different interest rates for different assets. Or maybe we just need huge huge taxes on high incomes, capital gains, and on income earned from multiple rental properties. Simultaneously provide tax credit incentives for truly productive economic activity (green energy, transport infrastructure, etc).
Our economy has been distorted to produce money and services principally for the already wealthy. We need less inequality, but now that we have so much of it, correcting will be very painful.
9
@JR That's a bingo, and to any doubters that was the explicit intent of QE. Maybe the slow QT is the answer... but I think we're seeing that already...
In order to increase the number and affordability of apartments and condos, Zoning laws need updating.
For example, many urban zoning laws require X number of parking spaces for each unit. This results in significant increases in costs for land and construction. Many millenials and elderly don't own a car so why drive up costs for builders and buyers by requiring it.
8
@A P
Not good advise. Some renters or owners have 2 cars, and don't expect them to find street parking. It's true that urban transportation is lagging behind - NYC is better than Chicago as far as commuting times and buses running on schedule - but big buildings require sufficient parking space, and please, some green space, too. Shoving in too many buildings, too close together, will create other social problems, and worsen the environment, too.
4
@A P I agree. It would also be great to see more pedestrian-only zones in the US. I've seen them around Europe and they are really cool. The housing density can be much higher in pedestrian-only zones (no need for parking), and the quality of life in those areas is improved (less road noise, less stress when walking around, etc).
3
NYC Manhattan and downtown Brooklyn landscape has changed in 10 years much more than in the last 50. The skyscraper are rising at an alarming rate but likely has no positive affect on NYC residents who could never afford it. They are not rising for the benefit if the city.
11
Is there anyone or anything that Elizabeth Warren wouldn’t cultivate to get votes?
Why must everything be made into blocs? A large percentage of renters are people moving around due to work (I did it for several years on short term assignments), people just starting out and not yet ready or able to buy a home and people simply not able to buy a home.
If you make the commitment to buy a home (and not just as an investment), you are committed to establishing roots and therefore more susceptible to casting a vote. What’s the big deal?
Why can’t we concentrate on the important issues rather than who is affected by the issues?
14
@Thomas Francis Ryan Thomas, you evidently don't live in the US right now. Otherwise, I think you'd see that millions of renters do have just as much commitment to their communities as the owners of the units or single-family houses in which they live. And it's a slap in the face to refer to those who can't buy as "people simply not able" to buy. Wow.
Renters do vote! They send their kids to local schools. They drive on local roads, and would prefer to not deal with potholes, just like owners. They use local parks and libraries. And they want their home bases to be as nice and comfortable and safe as possible. Even if they cannot buy. Even if they are locked out of the possibility. Even though they are paying those property taxes through the rents charged by the landlords.
Your last line? It's a hoot. The "important issues" are, of course, those issues that affect people. You gotta know you can't unlink one from the other.
14
Dear Berkeley Bee
Housing is a very important issue not only in the US but globally. This is so readily apparent especially if one sees this first hand living in a developing country.
My objection here is to politicians taking the demographics to identify “new voting blocs”, then formulating campaign platforms on which promises will be made to garner votes. People in the US are renters for a myriad of reasons including as you rightly point out the financial inability to buy a home of their own. I just hate to see politicians taking an important issue like this and trying to see how many votes can be gained rather than tackling the issue head-on regardless of who makes up the voting bloc and which party they may represent.
2
As the story mentions, any tax credit will soon or eventually end up in landlords' pockets. Subsidizing the owners of economic rents, assets that create income for the owner requiring no additional investment or improvement with cost of maintenance a fraction of income over time is always bad policy. The income does not driving hiring, spending and doesn't multiply though a series of purchases the way the purchases of goods and services. It's important to understand that our systems of income tax are unlike those in Europe where you can often "sign a postcard" the end of tax year since the proper tax is calculated and correctly paid automatically. That's only possible if things like donations to charities and religious
groups don't avoid taxation since all income tax in the US essentially subsidizes these groups. There is a difference between NCOs (501c3) entities and churches and we all therefore contribute to these groups because we pay more tax. Athough deference to religion means that non-believers fund religions indirectly. A honest original construction sychophant (yes, you 5 men included) would consider this a clear violation of the religious establishment prohibition. Yet 3 justices attending Federalist Society meetings together appears to be firm grounds for recusal on nearly any matter before the court.
5
Ms Badger, this is true reporting. Excellent work.
On the article topic, this is disproportionately impacting the middle class. The good news is that is a very well educated politically active group.
5
@elle
This is "disproportionately impacting the middle class"?
You need to get out of Brooklyn for a day. The vast majority of middle class Americans OWN their homes, and they would be harmed, both financially and in terms of quality of life, by high density development in their communities.
Sorry, but the world is not Millennial Brooklyn.
2
@elle
Elle, I'm a homeowner in Brooklyn and a small Landlord and I have to say while I agree that rents is too high for renters, small time landlords are not the problem. Our property taxes increase each year, and this is not to mention repairs, administrative costs, legal, water/sewer costs we pay to provide housing.
The problem is the lack of supply not "greedy" landlords. Maybe the big developers might be guilty, but they have incentive tax credits and accounting practices that take advantage of loopholes.
Landlords and homeowners cannot bear the burden of increased taxes or a drop in home values.
@ AF I’m from Brooklyn, and I resent your suggestion that the world does not in fact revolve around Brooklyn. Everyone knows it is the cultural heart of America.
2
The best approach is discourage corporations moving into densely populated areas. For example, why do we need HQ2 of Amazon in densely populated area just out side Washington, DC. The rents and house prices goes up. The local governments stop subsidizing the corporations to attract them. Instead they should increase taxes on corporations so that they move away from crowded areas, thus reducing the density of the population in cities.
7
As an affordable housing advocate in an area where more then half the residents struggle to pay for housing and is among the least affordable housing markets in the nation, I can tell you the problem is not a lack of solutions to the housing crisis but a willful lack of interest by our political leadership in actually solving the crisis.
We often forget that those struggling to pay for housing are also struggling to pay for healthcare, food, transportation, senior and childcare, education, clothing and all the other essentials of modern life.
In the last election virtually no one even spoke about the housing crisis - not Republicans or Democrats. In one form or another our elected officials are in the pocket of developers, property owners, the rich, and the powerful.
Those who are wealthy enough to afford safe and decent housing often believe their tax dollars that go to affordable housing are benefiting others at their expense, while ignoring their own exploitation of workers by paying less then the cost of living.
22
Every new development I see in my town are clustered town houses. The Demand is for nice housing below $500k because young buyers can not afford to pay more.
5
@Deirdre I'm not exactly going to cry myself to sleep because "young buyers" can only afford a half-mil house. That is not a crisis! I could afford a $120,000 house at best, but houses at that price point are in the sticks, and my job is in the city. Not relishing four hours a day commuting (not to mention $200 to $400 a month just to park once I get to my office), I live in the same city as my job, and the only way I can pay my exorbitant rent is to not own a car and struggle through life on foot. I'm sick of everything in my life being a tradeoff.
8
Ownership of rentals by large private equity firms and other institutional investors is one of the primary causes of high rents. After the 2008 collapse of housing prices, Wall Street swooped in to purchase large numbers of rental units at bargain prices. Leading the pack was Blackstone who is now the largest landlord of single-family rentals. One-fourth of single-family rentals are owned by institutional investors.
The company owned by Jared Kushner's family is engaged in large scale rental unit investments
To make matters worse, in 2013 the financial industry began selling bonds backed by the future rent checks of single-family homes. The days of landlords who live in the same city as their tenants and do not answer to shareholders is disappearing.
In 2020, I hope renters turn out in force to elect candidates who will reverse this trend of shifting money from renters to wealthy investors.
38
@Susan Gossman You got it, sister.
1
Many can't afford to buy or rent in metro areas. We have plenty of housing in the US, it's just not where its needed most.
17
Here in Seattle, renters are at the mercy of the landlords.
I rented for 6 month term and the renewal was going to increase $200 at least depending on the length of the lease.
Companies are using algorithms to jack the rents to the max knowing that they can get it.
27
They may vote in lower numbers because they don’t feel they have a stake in the game. Maybe renters will come to the polls if they see a candidate who could make a real difference to their wallets. It is a problem that certainly ought to be addressed.
17
@Alexandra Hamilton As a long-time renter who has looked at every possible angle of this issue, I wish I could communicate fully to fellow renters that they sure do have a stake in "the game." They actually do, of course, have a hand in paying that precious property tax levied because that's one of the places the rent checks go. And as more people rent and can and only do rent, they will, I hope, come around to think in different and better ways about the situation and VOTE.
5
This is a huge issue for millennial democratic voters, many of whom live in rural areas, but it’s a constant uphill battle because of how dominated the party leadership is by baby boomers and the wealthy.
Fixing the housing shortage in urban areas will essentially involve rezoning wealthy suburbs near urban areas, but any attempts to do so face a huge backlash from wealthy donors. So most politicians won’t touch it.
Instead, there’s a lot of hostility and condescensions towards our generation for not having the resources to buy million dollar houses. Or for not moving to rural areas with no jobs...
These kinds of conflicts of interest within the party are constantly alienating millennials, and are the primary reason for low turnout. Even if “our party” wins, we know our interests won’t be represented.
47
@Brendan
What is it you expect the govt. to do for the undereducated who won't retrain or relocate - as some in each generation have to do - in order to meet the economy where it is instead of where wishful thinking wants it?
4
Over taxation,over regulation and sky-rocketing property taxes are to blame for unaffordable housing.Raising existing taxes will not solve anything.We have evolved away from the ideology that a home is a sacred necessity making it a profitable commodity raising the price beyond the grasp of young home owners were only the rich own property and pass the enormous property tax burden onto renters.
12
There's something to be said for supply and demand ... or rather, demand and supply ... there's been a noticeable increase in apartment building in this area of the country due to demand and what people are willing to pay. This increase in supply should stabilize and bring down the rent prices overtime. Of course, the big factor is that there isn't as much nimby-ism here as other parts of the country.
5
@David
fellow Portlandian, and renter, here...
I highly doubt that rental rates will go down. They may stabilize, but what happens nowadays, is that potential tenants are lured by a 'free' month deal, or an attractive 'lower' rate, but when it comes to renewal time, they're often hit with higher than normal increases.
14
@David You are absolutely right. Many big cities have housing moratoriums and that is what drives housing prices up.
4
@David
I’m a landlord that benefits from the tight housing market. A large lot across the street from me came up for sale and a neighborhood local busybody took it upon homself to use his connections to threaten any developer that wished to purchase and it and build more housing.
Instead, the neighbors have now pushed the city to spend money to buy the lot and leave it as “open space” (with an existing park literally 1 street over).
So, instead of additional housing and extra money in the city coffers to help those without housing, the city has less money, no additional housing, and a lawn they have to maintain in perpetuity (not to mention the loss in future tax revenue).
Meanwhile these same people are screaming about high rents. Lol.
This is what passes for thinking in my liberal city. I’m a liberal, but I’m aware of the existence of supply and demand. Sheesh.
6
Kenneth Stahl puts his finger on it. There is plenty of land for housing. But it means development in what are now wealthy suburbs, where current homeowners enjoy a luxury lifestyle that they don't want disrupted. It is utterly amazing that within a few minutes drive of Google and Apple there are still towns with a minimum one-acre zoning requirement for a single family home, not to mention square footage requirements, and multi-family housing is totally banned.
25
Rather than developing undeveloped land and adding to degradation of the environment and the number of cars on the roads it makes more sense to build up in cities and close to cities where there is public transportation and the environment is already made of concrete.
15
@Alexandra Hamilton - Public transportation? Surely you jest. 2 hours of low quality bus rides each way or disconnected train stations, widely spaced apart, does not constitute a “transportation system. “ Like avoiding housing needs of the majority, USA govt gives its money to billionaires, not creating a functioning transportation grid.
15
@Cloudy It's not at all "amazing" that many people want a private house and garden. It's not even mildly surprising.
6
While housing costs are part of the issue, so are taxes. Between income taxes and state and local taxes its awfully hard to save enough.
19
Bored critic—Really? I don’t think Tarumpadump or the Koch bros have problems saving or spending with their now lower taxes.
There is a problem with trying to manage this situation at a national level. Exceedingly high housing costs are largely an issue in economically thriving cities. Trying to get voters to rally behind this in large swaths of the country where housing costs are less of an issue (either because of the abundance of land or due to slower growing economies) will be impossible. In fact, it will seem out of touch and wasteful to those voters. Better to resolve these issues locally where they arise, NYC, Boston, DC, LA, SF, etc. The solutions will vary by locality. Democrats are not going to win Ohio, Michigan or Florida on the housing issue.
9
@Maya EV You are correct. The Dem candidate will win NY, NJ, MA, CA regardless. If they run on a plan that everyone, including key swing states, need to fund housing problems in "elite" cities they run the risk of losing the swing states. Healthcare is much better issue to use against the GOP.
5
@Maya EV These cities put housing moratoriums in place. That is what drives housing costs up. If they'd allow enough housing to be built to meet demand this problem simply wouldn't exist.
2
@ Tom
You make my point which is that these problems are localized based on local issues and likely have local solutions. There is not a single nation wide solution here thus this issue will ring hollow in large parts of the country. Jobs, public safety and healthcare drive voters.
1
Tax the bankers to pay for it. They caused the housing crisis, refused to rewrite mortgages and foreclosed on millions, took all our wealth, and shredded the fabric of our families and communities. It's way, way, way past time for our leaders to represent us instead of pampering the rich and powerful.
24
@Sherry The bankers were forced to loan to people they would've never loaned to had they not been forced to by law. That was a government caused problem. Most problems are government caused problems. Taxing banks just means you and I are taxed. Every time a business is taxed individuals have to pay those taxes. The leftist politicians have sold many on the false idea that people can avoid paying taxes if we tax businesses, but tax a car company and we have to pay those taxes every time a car is bought. Tax a farmer and we pay those taxes when we do our grocery shopping. Govt at all levels taxes somewhere approaching 25% of GDP. It's even worse in the UK. They tax almost 38% of GDP. It's outrageous that so much of our money winds up in government hands. Most of this, literally most of it, is spent on things that aren't legitimate functions of government.
12
@Sherry It should be noted that before government got involved in banking the banks required 50% before they'd loan money for a house. Banks did this for their protection, and it was much more stable. Then the government decided that people who couldn't save up 50% couldn't get into a house so they required that banks loan on 20%. Still a sizeable down payment and where the home owner has a significant amount of their own money in the house right off the bat. Then someone decided it wasn't fair for those who couldn't afford to save 20% and the 3.5% down payment FHA loan was born. People are more likely to walk away from such a loan. There are even 0% loans. One co-worker of mine had a principle reduction and her interest rate lowered after the fact. She doesn't understand that someone has to pay for that. Someone else paid for that principle reduction and the bank is still receiving the same percentage on the loan. The taxpayer is picking up the rest. Every dollar that someone receives without working for means someone else has to work for that dollar without receiving it.
8
With Trump's wealthy-wallet-padding tax laws penalizing homeowners in blue states, count us in with the renters - we're mad too.
31
@common sense advocate Stop voting for leftists in your home state. Blue state residents are in that boat because they vote for the very people that overtax them.
1
The government keeps on raising taxes and forcing ridiculous regulation yet are shocked when rent and everything else cost more. They are apart of the probelm, they are greedy because they want control.
9
@J Taxes are part of it. Another part of it is that the city councils in big cities put housing moratoriums in place. This restrict supply which drives prices up. Instead of removing housing moratoriums the city councils put rent controls in place which just exacerbates the problem they caused by reducing the price just increasing demand rather than allowing sufficient housing to be built. They have convinced many people that the landlords are at fault when government policy is at fault.
6
Dark money is flowing in from China and Russia, driving up home costs and there by renter costs.
Its all about the mighty dollar in the U.S.
Citizens come last. Republicans and Democrats are guilty of putting U.S. Citizens last.
17
The posts concern me most here. Usually there are disagreements. But here, everyone is admitting a scary kind of cluelessness. Probably people posting here are not in that type of the 1% who would be taxed, so millennials can have a life to look forward to, evictions throwing children’s books into the street stop, and educated people with jobs are not 3 strangers sharing a toilet. America is in serious trouble. People need to live near jobs. Boulder, Aspen, SF, Manhattan used to accommodate everyone, not just people needing cleaning services. This is what severe Income Disparity brings; chaos and revolution ultimately. Chaos is Here. Russia is delighted.
36
@Reality Wins (always)
The U.S. has doubled its population since the 1960s. The huge gains came post-1980s, mostly with both legal and illegal immigration of those at the bottom class. All those 100 million low education, low skill, low wage but high breeding immigrants had to live somewhere. They mostly flocked to cities and steadily moved into entire affordable apt. complexes and cheap houses. It then spread to suburbs, exurbs and rural areas. While a newspaper reporter, I did many stories on these infrastructure and metro "growth" issues - right next to articles I covered on homelessness of entire American families in the same cities and neighborhoods. That's the core cause, one that cannot be undone. It was clear as day this was the problem 25 years ago. And that was during the 1990s economic recovery boom times. Instead, it all got a lot worse.
8
@Reality Wins (always) The answer isn't San Francisco accommodating "everyone." California is full and we don't need one more soul. The answer is investment in former centers of industry throughout the country. For most of our history there were regional economies that had a full range of activity: manufacturing, education, service, agriculture, medicine, all supporting a local, albeit provincial, society. Constantly harping about "affordable housing" in California and New York amounts to a failure of vision. We don't need "more" anything in already crowded coastal cities; we need renewed life in the Rust Belt and Midwest. In that sense, for all his mendacity, Trump was onto something.
9
@Maggie Yet like parrots who only know a couple of phrases, progressives keep repeating "affordable housing," as if addressing a symptom and not an underlying problem were the answer. These people will raze decades-old neighborhoods, build hideous tenements, and keep packing 'em in.
4
Formerly considered middle class, we now live west of Boston in quasi-rural suburban town renting a small 2 BR apartment. Our rent is almost 50% of our combined SS income. As rents increase, I see my only option is to hope the increases to max occur after we're gone.
11
@APT. You don't have to live in Greater Boston, one of the most expensive cities in the world. If you are both on Social Security income, you can live anywhere in America.
You can be middle class somewhere else in America. But you don't have some inherent right to live in one of the most expensive area of the country. The idea that taxpayers in Iowa should subsidize your desire to live in Greater Boston is so patently entitled.
8
@Jonathan Oh come on. So people living on social security can't live where they want to live? Why not? Do you see them as second class because they have no more money. They probably helped their children to attend college, to join the football team in high school, dance class and music lessons. You are talking about the middle class older person, one of the largest groups in America. Maybe they want to be closer to their children and thus live where they do. How can you and others be so trite about a perilous problem in our country that will only continue to grow now that college and food and shelter have continued to become more and more out of reach for a majority of Americans. I guess you don't associate with us.
6
@Jonathan
Thank you.
There are jobs in "flyover country." There are wonderful places to live there. There is affordable housing there.
Heck, even in New England, as soon as you get away from the immediate Boston or NYC metro areas, housing is very affordable. Our house in upper Fairfield County was not more expensive than a comparable house in my Midwestern hometown, and the schools are great. Houses in the nice suburbs around Hartford are also no more expensive than housing in many other parts of the country.
I am so tired of entitled New Yorkers, Bostonians, and Californians demanding that everyone else in America subsidize their trendy urban lifestyle and calling their inability to afford their rent a "crisis."
2
Democrats don't want to pass up the opportunity to go after another group hated by the left -- landlords. They're all in on big bad bullies who take all the little guys' money.
9
Let me get this straight.
If you are irresponsible and rent a house for more than you can afford, then you get a handout from other taxpayers. If you are responsible you get nothing.
Great policy Kamala
24
@Mike
The government passes the buck. They raise taxes and demand union job, which increases the cost of constructing in dense cities. If they lowered taxes, rezoned and decreased regulation more developers would be able to build affordable housing with tax subsidies
6
@Mike I'd like to point out that homeowners get a handout from non-homeowners. Homeowners deduct a portion of their property taxes and can write off improvements, etc. Renters pay sky high rents and get very little in return off their state income taxes. Here in NJ, I pay quite a bit more monthly for my rental than my neighbors pay for their mortgage/property taxes combined. And the real joke here is, I can't afford to downsize to a condo because it would cost more than I'm paying for an older house. People aren't renting houses that they can barely afford because they choose to; that happens to be what's available. Your comment shows a complete lack of knowledge about the current housing market.
43
@MD If your landlord has a mortgage (or even if he or she does not, but wants a rate of return similar to a mortgage lender, which is not that high), he or she also needs to pay a mortgage, and also needs to pay property taxes. I own a small home that I rent out, and it is hard to make any money after paying basic carrying costs (property taxes especially, and insurance, plus maintenance). The rent I charge is basically my out-of-pocket expenses plus $100 per month. From my tenant's perspective, the rent is high … from my perspective, it is hardly worth the effort of finding tenants, dealing with tenant and property issues, etc. I would be more than happy to have my tenant get assistance from the government so long as it does not result in my taxes going up, because if my taxes go up I will need to charge more in rent. We are all connected in this problem, at least among noncorporate landlords and tenants.
6
There is plenty of housing available in rural towns. Government and monetary policies that favored smart growth and pushed the population into already dense urban area are a huge part of the problem.
Adding more dense housing to already crowded urban areas is a mistake. By all means let people homestead in areas of town that are not currently populated. But government and monetary policies also must find a way to bring jobs and people back to rural U.S. The demise of rural U.S. so urban areas could become overpopulated is a big reason for Trump's election.
16
Agree, but people need to let go of their city identities. Boston is full of low wage, low skill workers who simply refuse to leave the area for someplace more affordable because their identities are tied up in being Bostonians. I'm not sure how you fix that.
8
@CL But "someplace more affordable" is affordable only if you keep your city job! I hate living in Chicago and feel absolutely no "city identity" to this horrible place. I would move to a small town in the middle of nowhere in a hot second...if there was anywhere to work! Sure, I could find a really nice place to live for $450 a month, but my wages would fall just as much or more because my fantastic high-tech job is not in or anywhere near that small town. Even $450 a month is difficult to swing when you make minimum wage cleaning the Slurpee machine at the local 7-11.
5
@Charlie. "Smart growth" is a strategy to help people in a metropolitan area have better access, less traffic congetion. It might, for example, encourage jobs or housing near transit stops. Smart growth policies may favor a central city over its suburbs, but it has nothing to do with why jobs are not being created in rural areas. Why jobs are congregating in big cities is a good question - is it because execs/business owners want to live in fancy big city suburbs? Is it because there is a concentration of talent? To say that people are being pushed out of rural areas by smart growth policies in metro areas is just silly.
Formerly considered middle class, we now live west of Boston in quasi-rural suburban town renting a small 2 BR apartment. Our rent is almost 50% of our combined SS income. As rents increase, I see my only option is to hope the increases to max occur after we're gone.
3
We need to address affordable housing generally, in the public interest. "Home ownership" is largely a barely disquised indirect taxpayer subsidy of the financial industry. Outside areas of the country with rapidly rising long-term real estate values, that's all it is.
5
My partner and I make over $200,000 a year together, before taxes of course. With our student loan repayments it is very difficult to save for the down payment necessary to buy something in this overpriced city. It’s not as simple as being able to move somewhere else. The careers we are in are only possible because we are in New York. When I look at condo prices in New York I’m amazed at how high maintenance costs are and sometimes are as high as rent for a second apartment.
Buying in the city just isn’t an option for us. Renting makes the most sense and is the most affordable, especially in a city where a decent apartment costs $1 million.
6
@N
You can move to the outer boroughs and surburbs, jersey etc
Thats what many people do and have done. It may not be your top choice but you have options with 200k. My spouse and i purchased for 800k two family and rent out my garden unit to subsidize the mortgage. Not the best area but near the subway. Sometimes you have to make sacrifices.
11
@N
Why wouldn't you buy in one of the outer boros like Brooklyn or Queens or Bronx ? In these boros, houses (yes smaller ones) are much cheaper and a 3 bedroom can be gotten for seven or eight hundred thousand with a train ride to Manhattan. Why does everyone have to be in Manhattan ? Why are we so elitist ? Of course it's moreconvenuent for work and entertainment in the City but rents and (to buy) houses so much more reasonable in the outer boros. Why does everyone have be in the best areas ?
10
Brooklyn IS the best area, but you definitely can not get a 3BR small house for $800K.
2
We just found out that developers don't pay any taxes; shouldn't renters get the same advantages?
12
@Sherry It's worse because when tax increment financing is involved, they may also get a guaranteed developers fee behind the scenes so if they walk away from the development they still make money.
3
@Sherry
Howze about religious organizations pay local property and business taxes? Why should all those often $million properties be tax exempt? Consider how many there are in every town and city. That's a lot of annual lost municipal revenue.
4
I've always believed the MIRD for primary and second homes was an unfair handout to the real estate industry at the expense of renters. I hope this issue resonates with less fortunate voters
5
The piece that's missing in this article (which otherwise covers all the bases--so thanks for that) is that current rental markets are even tighter thanks to airbnb and its ilk. Urban apartments in proximity to mass transit are booting renters in favor of catering to the tourist trade at far higher profits.
39
Add so that equity firms buying up housing for rental purposes, reducing the stock for ownership, then maintaining the properties poorly, and artificially inflating rents through dishonest reporting on sites like Zillow until entire neighborhoods are suddenly too costly for long-term residents. Similar tactics have been employed in manufactured home communities, with a large increases in rents and fees. This isn't just some big city problem, this is in every state, in both urban and not so urban areas. There are always those who are happy to profit off the disadvantaged and without a care to the long-term damage being done in the process.
10
Thank you for higjlighting the Air BnB, VRBO impact that has changed building where I rent into a quasi multi-unit hotel. I am enduring regular rent increases rather than add hours to a commute. Not sure I can survive next rent bump as wages have not moved forward in years.
15
Where I live now, NYC, you can't get a habitable 1-bed for under $3000/month. I make a decent 6-figure income and half of it goes to rent. The rest is eaten up by federal, state and city taxes. Sure, there is a lot of new construction, but it is all high end. 1 beds in these buildings start at $4500/month and go up from there. It's insane.
32
@Rob -- So move.
An hour and a half from Penn Station, you can find new one bedroom apartments for under $2K a month, and walk to the train station. Pay lower taxes as a non-city resident.
The notion that you HAVE to live in NYC is what's insane. There are lots of other places to live.
5
@Rob
I rent in South Brooklyn for $1300 a mmontha decent 2 bedroom... does everyone have to live in tony Manhattan ?
3
@Rob
Then move. Not our problem. Living in Manhattan - ro NYC in general - is a lifestyle choice. New Yorkers need to get over themselves.
1
Rich people (and those that think they are rich) don't want company. And since they have purchased all the available land, they kinda have the upper hand and unless the government takes direct action to destroy the choke hold (and the follow up attempts to restore the choke hold), it will not ever get any better.
The great recession was a double payday - companies got to back up their cash trucks to the treasury and hauled away nearly a trillion dollars because they made bad bets, and then used that money to enslave the people who were not able to buy a house due to the terrible economy caused by companies making bad bets and needing a government bailout.
20
The housing crash was great. An opportunity to buy houses at a reasonable price.
Hope all the renters living a wretched life get chance for another one.
2
Smart move. Likely to attract city dwellers who haven't voted much before.
4
Damm straight I am mad. Rents are astronomical in areas where there is work and are high where there is little employment.
In NYC there were rent regulations which were dismantled to the benefit of the real estate industry and the wealthy. What happened was that they built high-income housing for investors. Once one could live in a neighborhood for a lifetime and develop relationships with neighbors, local merchants, and public service providers, now, forget about it. I read this week about the strengthening of NYC rent regulations but nothing about Upstate NY where I am at the mercy of every small time operator's whim.
Keep your money, I do not need a tax credit what I need are rental regulations and more affordable housing accomplished both nationally and locally.
Least I forget I we need to have national health insurance and strong Social Security.
25
Home ownership isn't as important to Americans as it had once been. The American dream changed for many people after mid2000's recession that cost so many Americans their jobs and homes.
10
@Independent American Why do you assume it's no longer important to Americans? Just because home ownership is more diffcult now than in previous generations and harder to acheive doesn't mean it's not important to people. Some people lost ground during the recession and haven't made it up....doesn't mean they don't aspire to.
2
These politicians just want to be Robin Hood, and as more and more things become "rights": medical insurance, housing, college education. Warren and Booker are attempting to bribe voters, using different words.
Pretty soon we are going to hear about "transportation inequality", so that everyone is entitled to a car, and "recreation inequality", where the government pays for your vacation and play things.
Maybe the real issue is "discipline inequality", where some people are disciplined enough to stay in school, avoid having babies until they are ready, stay away from drugs, and others are not.
8
@G, clearly you didn't read the article. I don't recall reading anything about giving apartments to pregnant drug addicts who didn't finish high school.
15
@G You really think shelter isn't a right? the United Nations charter on International Rights would tell you that having adequate shelter has been considered a right for a long time. Do we really want to be the country that doesn't believe her people deserve to have a safe and secure place to live with dignity?
5
Er, all they have to do is end the mortgage interest tax deduction. Then, at least, we wouldn't be so obviously oversubsidizing the wealthy.
5
@Paul
That hit on existing homeowners would do nothing to provide more affordable housing to the middle and lower middle incomers.
1
My husband and I own our home, but we rented for a long time when we were starting out in the 90s. We felt lucky to find a house that we could afford to buy, even though it was less than 900 square feet in size and 45 minutes drive from work. "We can get a bigger house when we are in better shape financially," we thought.
Well, we are still in that house, with a teenager and several pets (and, at one point, my elderly mother). Since our town became trendy, prices have skyrocketed - but not, of course, our salaries. We could not afford our little house if we were buying it today, let along a bigger one. Downtown they have just renovated some old factory buildings into million-dollar condos. I don't see much around that anyone with an "average" salary could either rent or buy, and nobody seems interested in building anything for us, either. So, why is having a decent place to live becoming a luxury?
53
@Kristen Rigney
"So, why is having a decent place to live becoming a luxury?"
Somewhere along the line housing went from necessary infrastructure to protect people from the elements to being financial asset used for profit. Capitalism at its finest.
8
Because the American standard of living is slowly sliding down the tubes.
2
Most suburban garden apartment complexes (and many urban projects) were built by the early 70's, with generous government subsides and direct loans to builders, when HUD (under Nixon) ended the policy. The few built since then have been mostly high end rentals if not condos. That's why in many places high rents make it cheaper to buy (if qualified & willing to make that commitment) but extremely difficult to save for a downpayment.
Also, the current policy of shifting from low cost housing to Section 8 vouchers has flooded this market with additional demand without any incentive to builders to meet that demand.
Despite all the attention we give to high end real estate, it is still a market that grows from the bottom. Without a healthy entry level, sooner or later, the top will tumble. How many empty McMansions and unused ultra luxury apartments will it take for us to learn this housing market fundamental?
This will require true leadership from the top.
17
A difficult problem. Perhaps a combination of renter's tax credit and tax credit for landlords who do not raise rents more than the cost of living over a designated period of time might help.
7
@don healy - Renters’ credits are measly and useless if you cannot afford to get an apt in the first place! Good luck.
1
Good and about time. Not everyone wants to own a home. More and more people are spending on services and travel (experiences), opting to be a long term renter and investing in the market.
4
@HS -- sounds as if those are spending their money on services and traveling for the experience should have enough income to pay the rent.
5
@Don Juan
I think he's referring to trend not affordability. Like I can afford my rent and invest in the market - if I was to buy this house I couldn't- because of reasons pointed out. Don't be in a box
2
@ DonJuan Sounds too much like you want people to be responsible. No one has time for that any more! That’s the failed economics of yesteryear, and we know better now
1
There should be incentives to allow for telecommuting. This would help small towns which have seen devestation from a decreasing tax base as well as incentivizing them to invest in high speed internet. Knowledge workers would have affordable housing without passing divisive legislation. I would also predict the two parties becoming more ideologically aligned as more city dwelling democrats move into rural republican and affordable communities.
11
There is a housing shortage. Rents will go down when landlords have more competition. Non-profit housing development would be a great start. As a landlord, I keep my rent low and my tenants happy.
9
The Refundable Tax Credit will do nothing to help people like myself, as it most likely would just be eaten up by Landlords raising the rents to absorb any potentially complicated drawn out difficult to get relief I might qualify for.
14
Check out the 2018 deck code, which mandates decks to be stronger than houses. Check out the 2015 energy code, which is great, especially if you in the insulation business. Every year, thousands of rules are promulgated which drive up costs. Some one has to pay for it all, and it goes into the rent.
16
Local solutions and subsidies of rents are unlikely to address the issue since the pricing and zoning decision makers are property owners. What needs to happen is a channeling of money into new construction and a refusal to provide cheap money for housing price spirals in tight markets.
The federal government should calculate affordability figures for all states and metropolitan areas. If the state or metro area is "unaffordable", then mortgages on existing residential real estate should become ineligible for purchase by Fannie Mae or Freddie Mac. These same assets held by FDIC-insured institutions would get reclassified into a higher risk category for capital adequacy calculations. Financing of new residential housing (and the transportation etc. to make it work) would become more plentiful and relatively cheaper.
We keep hearing about the desirability of immigration, about how big cities are the place to live now for economic networking, about how climate change is going to force people to move to safer places (including Latin Americans fleeing ever hotter environments. Environmental groups acknowledge and encourage all of this, but then they construe almost any new housing constructing as a crime against nature.
We need to accommodate population shifts, population growth and upgraded transportation. We are not planning for any of this. We keep helping housing incumbents flip their holdings are ever higher prices instead.
6
@Fred Steele The desirability of immigration? accomodate population shifts, growth?
Dear Fred, not everyone agrees the sun will rise in the east, let alone any of the topics you mention. I for one, a life long border resident am ambivalent at best about most immigration. Nobody plans for things they can't agree on and I certainly don't agree with most of what you are stating as fait accompli.
3
Right to Housing a fundamental right? I beg to differ. Work hard, save your money for a down payment, and most importantly, buy where you can afford. Don't consider NYC or SF. Those cities are beyond reach. But pretty much elsewhere you have a chance. You just have to make sacrifices to come up with the down payment. Many of us did just that. And bought far less than what we think we are entitled to own.
The other day it was tuition reimbursement. Now it is putting people who cannot afford, into expensive real estate market.
Hey Democrats: how about something main-stream? Or we will end up with Trump again.
17
@Don Juan
Shelter is a basic human need. There's a difference between shelter or housing (to which human beings do indeed have a natural right) and home ownership (which is what your comment pertains to, and with which I broadly agree about saving up and settling into less expensive markets).
7
@Don Juan
Less expensive markets have become out of reach as well. I'm in Charlotte- 20 years ago I bought a house for $112,000. Today that house is $350,000 with need of $50,000 in critical repairs. For a college grad, with student loans, that home is out of reach. It's not in a trendy neighborhood.
And it's very hard to save for a downpayment. I rent now; my rent is $1250 a month, low for my area. It's a one bedroom so a roommate is not feasible (I could rent a 2 bedroom for $1650, but run the risk of not being able to find a roommate).
It wasn't that hard for ta kid out of college in 1998 who rented a $500 a month apartment (1 bedrooms) to save up $3300. Then my house payment was around $750 a month. But for my coworker, who makes about what I did back then, he'd now need to save up $10,000 while paying over double the rent, and somehow have cash to fix the electric, plumbing, foundation and roof and cover a $1600 a month mortgage.
The math on housing really is hard right now, and in many cities that are more affordable with growing employment options, there simply are not "cheap" apartments. You can't just rent a gross old place and save because they've been torn down or renovated.
36
@Don Juan
The GOP just cut the deduction for real estate taxes, quite significantly. That's hardly a sop to homeowners.
6
To reinvent government! Booby traps distinguish the higher ends of (HENRY'S) imaginations to run the gambit of education and loans that come due after college has gained it's better part of valor. My life long ambitions were to finish high school, and work as a blue collar person, wondering if some day I couls become financially independent, does this seem too far fetched, not really!
1
Sounds like Dems found another group they can pander to with gov't handouts and new taxes.
9
@James--At least that group needs political pandering because they require government solutions to exist. Who does the GOP pander to other than wealthy donors and well-financed business lobbies?
13
@John Kominitsky
Meh, Dems should let developers build new high-rises to increase the supply of housing instead of pandering and rent control.
2
The FHA offers mortgages for 3.5% down payment. Fannie Mae also offers a 3% down payment mortgage.
There are also 0% down payment options for various professions: teachers, firefighters, police officers, nurses and medical doctors. Veterans also get 0% down payment mortgages through the VA.
Many cities run their own income based housing sales, where the sale price is artificially kept under market.
The USDA offers 0% down payment farm loans for people in the country side.
Basically almost anyone with a pulse could get a mortgage. Sorry, but if you can't hack it with this much government help, you have no one but YOURSELF to blame!
8
@Gabe -- part of the problem is that too many of those complaining about high housing costs only want to live in the most expensive areas of the country. They might have a pulse, but don't have the income to qualify for an $800,000 mortgage on a 1 bedroom apartment. And they aren't willing to spend 2 hours each way commuting to an area where they could afford a home.
4
@Gabe
They have those products because home prices are out if reach- there will be an endgame - boomers are dying
55k per year in Boston (or really anywhere in MA) and you will have roommates. It’s really not that much money.
9
@Mike
Democrats are just reaching for ways to turn a very strong Trump economy into a string of grievances. They want everyone to think this economy is just awful.
2
@Mike - Eastern Massachusetts. In the Springfield area with a little digging and some frugality one can live well on 55k a year. In this area, if you are patient, you can find a house or rental that is reasonable. It may not be fancy or have great curb appeal, but it can be safe.
"In reality, the Democratic coalition also includes many homeowners who don’t want new rental housing nearby
— or who benefit from the tight housing supply that has driven up the value of their homes."
Or they are landlords themselves. Almost no other way to make money other than owning property and then soaking
renters with crummy jobs forever. Slavery did not end in the South by itself because the slave owners couldn't think of any other way to prosper with out slaves.
I have no idea how to fix this national disease. I am voting for Elizabeth Warren though if I get the chance.
10
While the economy is going great for the top 1%-top 10%, the rest of the American scene is an economic disaster.
Efforts to assist the working poor and the lower middle class, the reality is hourly pay minimums to $15 per hour are not the answer. It increases demand of basics and their prices will rise.
Just check out the rising price of food, rent and gas.
The illusion that things got better will face the reality that nothing has changed except that marginal income families will lose their right to certain government program benefits and face rising taxes.
Those with more than thy would need in 100 live times will ironically get richer and have even more wealth and assets than they need.
It is important to raise wages. This is not socialism but capitalism. How is wealth gained? Steal the peoples' land, labor, and deny them affordable rents, education, housing, medical care, and a livable retirement.
Stealing is prohibited by most moral codes and religions except when it comes to capitalism, when anything goes as long as it makes a profit.
Capitalism and Christianity are direct opposites. As Herman Cain said, "I love money." That is why I decided to withdraw my name." "Love of money is the root of all evil." says the Christian Bible. Make them compatible? Not on a Trump Tower.
In the early 1900's, the "Gospel of Wealth" justified the wealth concentration as God's will. Today, greed is valued as good without the need for God. Check their pockets for stolen goods.
11
Capitalism and Christianity are not direct opposites and are not at all incompatible, because they have absolutely nothing to do with each other. The one describes an economic system, while the other describes a way of life. Some of the greatest haters of all times have been communists and socialists (e.g., Lenin Mao, Stalin, Pol Pot) who hid their hate and anger behind high sounding slogans extolling an abstraction called "mankind" while they murdered or imprisoned millions of real individuals; and some of humanity's greatest benefactors have been fabulously wealthy capitalists. And by the way, what the bible actually says (1 Tim. 6) is ,"For the love of money is a root of all kinds of evil" -- i.e., it can be, for some, turn out to be a motivator for evil.
None of the candidates will mention the effect of mass immigration on housing shortages and rising rents. Tax credits are the ticket.
9
According to the Census Bureau, "(a)mong the country's regions the Midwestern states had the highest homeownership rate with the Western states having the lowest."
I doubt this will be a winning issue in the states the Democrats need to take back the White House. They already have California, Oregon, and Washington.
4
Yes, this is a very real problem. However, the Democrats will merely pander to renters and try "rent control" or something else that only treats the symptoms. I'm sure there is an obligatory swipe at Trump in this article, but he's not the villain here. The Federal Reserve Act of 1913 made us all debt slaves and the dollar is worth about 4% of what it was back then. That is why rent is so high for people. If we get rid of the Fed we can issue our own money debt free; gee what a concept. People would benefit all across this country by cutting out the greedy banker middleman.
1
Amazing... not a word here about Georgism and Land Value Taxation, things that would create a long term fix. Democrats have the right diagnosis, but the wrong solution.
4
in the aftermath of the GOP's boom bust housing policy under the Bush administration and at the height of foreclosures investment bankers who had profited from the fraud of CDOs were buying up foreclosed properties and turning them into rental properties.
one more example of wealth accumulation benefiting the .01 percent while 90 percent of Americans face declining real wages.
When Wall Street Is Your Landlord
With help from the federal government, institutional investors became major players in the rental market. They promised to return profits to their investors and convenience to their tenants. Investors are happy. Tenants are not.
https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
7
@teoc2
Thank you for the link to the Atlantic article "When Wall Street Is Your Landlord". The article is an excellent, detailed primer on how wealth accumulation benefiting the .01 percent currently plays out in the corporate single-family house rental business. It left me horrified and disgusted as it exposed not only how this industry has grown but, especially in the dishonest and corrupt tactics being practiced on the tenants.
2
What I could never understand was that after the crash in 2008, there was plenty of talk about bailing out home owners, many of whom had bought homes which they couldn't afford, so they wouldn't be thrown out on the street yet there was absolutely no concern about renters who hadn't gone in over the heads and either lost their jobs or whose wages went down.
It seemed like rewarding those who were financially irresponsible and, in some cases of overstating income to get mortgages, dishonest, while punishing those who tried to do things right.
12
There was a lot of talk about bailing out homeowners after the crash, but not much action. Bailouts were not mandatory, and most homeowners weren't given a break. Those former homeowners are now renting.
5
@Steve -- The federal program to bail out homeowners under water was not a smashing success. True, people bought homes they could not afford via "liar loans" but compared to these folks, many decent working homeowners lost their home of many years once they lost their job. Btw, many of these people never were able to find employment again.
7
The article mentions low voter turnout among renters. This represents a huge opportunity for Democrats to persuade more renters to register and cast a vote. I knocked on doors for Beto O'Rourke's Senate campaign last year. The campaign was very effective at registering new voters and increasing voter turnout. That's a big part of why Beto was able to make the race against Ted Cruz so close. The Polis canvassing app deployed by the Beto campaign is a very powerful tool for campaign volunteers and should be used by all Democratic candidates. Apartment complexes (included in Polis) are particularly rich targets for Democrats because you can reach lots of voters in a short time and because renters lean Democratic. You can also increase voter turnout by targeting apartment complexes near early voting locations. However, it can be difficult to gain access to apartment complexes. For that reason, Democratic campaigns should seek to recruit volunteers who live in the complex and who can contact their neighbors in the same complex. Increasing voter registration and voter turnout will be crucial to ending the Trump era. Let's get out there and make it happen!
4
Perhaps the feds could make it attractive for tech companies et al. to move to areas of the country that are left devoid of population?
The utter stupidity of these plans is astounding. Lower rents by essentially raising taxes. The fact is many cities run by democrats are so heavily taxed already that the easy answer of just raising taxes even more can only be discussed in theory not practice as a way to reduce rents. The day an apartment in NYC that rents for $2500 a month gets reduced to $1500 will never happen and cruel to try to fool renters into thinking it ever wll happen.
17
If anything these policies will only raise rents even more.
Rents will rise because folks will take on apartments they cannot afford knowing they get a tax bailout.
Ending rent controls and subsidies (not adding more) would easily be the best way to bring down rents
7
Got news for you... No one "owns" their land or home... see if you can find where it says that on your mortgage or title, or ask your banker...
6
@Lone Ranger -- you are right. The county or state own your land. Just don't pay your sky-high properties for a year or two and see what happens to your property. It is true, no one ever really owns their property because each year there is an increasing property tax bill.
6
“he and Mr. Booker also want to nudge local communities to allow more housing by changing zoning laws that block the construction of apartments or denser housing. Such laws have the effect of maintaining economic and racial segregation, and analysts on the left and right view them as a key driver of high housing costs.”
This needs to happen it’s exactly what the city I live in is doing wrong.
The ultra wealthy keep compiling wealth. They way more wealthy than they were a decade ago. They aren’t being punished by being made to give some of the money back and they won’t be worse off.
How far does the greed class they think they can take sucking recourses out of our economy before every one does something about it?
3
Time to resurrect the "The Rents Are Too Damned High" party.
9
Here in America we only look for benchmarks and solutions within the country. Many countries have come up with viable alternatives. No need to recreate a wheel, it is already there. Take subways for example, many cities around the world have viable fully functional operations, why on earth can't we have one in NY? You cannot use the excuse of population density there.
3
The refundable tax credit is an interesting idea, but wouldn't it just spark a proportionate rise in rents?
5
Building "affordable" housing only provides windfalls to those few lucky to be chosen for those below-market rents. The solution to rising prices (rents) is increased supply, which can be achieved only by relaxing or eliminating zoning and other restrictions on new construction.
9
The recent tax changes made it even more profitable for large corporations to buy up real estate and rent it out that’s why Jared Kushner and Sean Hannity are big investors. They don’t want to cure the problem they want to manage it.
9
@John--Kushner and Hannity don't manage their rentals. They exploit the opportunity. Like most wealthy investors, they hire other people to manage stuff. One cannot manage an apartment while doing power meetings at restaurants, clubs, and political venues. That is why Bernie Sanders is so credible. He wrote a best-selling book. Other people published it. Bernie's royalties made him a millionaire overnight. He also produced good revenue for his publishers. No exploitation there.
5
The problem is not so much because of the lack of housing supply. It is more problematic that there is a concentration of RE rental owners. I also believe there is much collusion in the RE markets to drive up prices.
Berlin, Germany is working to limit Landlord ownership to 3000 units. Any number of units above that cap would be bought by the city to rent at rational prices to homeless city dwellers. That limits rentier greed. Young Berliners are now suffering the results of a company that owns 100,000 rental units in Belin. American cities should consider such options along with mandating affordable new housing.
Are landlords putting young families under duress to sign 1-year leasing contracts? I believe so. I know a young family in the Southern California area that was coerced into signing a second 1-year lease after their first 1-year lease expired. They were told that the second year rent will increase by 50% if they did not agree to sign the second lease. Is this legal? Should not those terms and conditions be written in the first lease? Has another renter experienced such a rental issue?
4
@John Kominitsky
Around here more and more and more complex rules about how renters are chosen, how and when rents can be raised, how leases are renewed or changed and how an when renters can be asked to leave or evicted are prompting many independent landlords with one or just a few buildings to sell out to large holders.... It's becoming too complex and smaller operators fear being sued or stuck with non paying tenants. It's no longer worth their while and their properties are valuable enough that getting out is their best option...
1
@John Kominitsky--Do rental leases give cause for landlords to claim very low vacancy rates that ostensible drive up rental prices? Cities should look into this practice.
@John Kominitsky -- the family did not have to sign for the second rent year. They could have moved.
1
For many of the cities where people actually want to live and work, the issue is a diminishing tax base since 2008 - too many people using city-county services but not paying for them and into the system via taxes. That results in municipalities jacking up property taxes to pay for everything. That hits the homeowner and landlord. The homeowner is stuck with nothing but an appeal to the oft wasteful, corrupt tax assessor. But the landlord passes along the jacked up millage rate and inflated assessment as a rent increase. Add to that a housing shortage due to increased immigration and undereducated, underemployed American millennials ---- with banks more cautious about loans where the applicant doesn't kick in at least 15 to 20%, and we are back to the 1970s and 1980s of a nation of young renters.
6
Expecting apartment developers to be altruistic and to build genuinely affordable housing will never happen without zoning laws stipulating such. Major case in point is Hudson Yards -- miles of middle income housing could have been built here if the city said it had to be built or they would go on to the next developer's proposal. Instead Bloomberg and NYC gave away a huge portion of Manhattan to a few greedy developers to build another enclave for the 1%. Imagine rows and rows of 7 or 8 story apartments replacing the glass towers and ugly "sculpture" -- we could have housed hundreds of thousands of middle class residents, instead we allowed the prime space to be used for more office towers and break the bank restaurants.
30
@Bill Hard to see how a super prime location like Hudson Yards would ever be developed as anything other than luxury housing. You can build whatever you want on that patch of land, folks will bid the rents up to market rate pretty quickly. If you are proposing rent control laws, then Econ 101 pretty much covers that topic better than I ever could.
8
@Bill
Filling Hudson Yards with "7 or 8 story apartments" would only house a few thousand people. That housing belongs in the outer boroughs or suburbs where there is more land.
4
The reason that only higher end new housing is built is because in most places the cost is so high to build that upper income housing is the only way to make money.
The answer: either federal incentives to make moderate income housing affordable or fewer permits and regulations to build or both.
7
I have a rental property, but because they keep raising taxes - I now have to increase rent by $225/month just to cover the new taxes. Taxes account for over 50% of the rent - as I am renting below market value. I can only afford to rent it below market value because I don't have a mortgage on the property. My return is less than 2% - so not enough to cover a new roof, etc. To cover costs of maintenance, taxes, etc. I will need to raise the rent by $750/month as I don't have time to do the repairs myself anymore.
31
Hmm, pretty strange. If you have a property that only provides you with 2% profit why own it? You could get a better return on buying cd's from a number of banks. You're renting below market value because you're altruistic and want to provide housing for people who can't afford better?
The apparent result of you owning the property is that your tenants are living in a place that needs a new roof (likely among other things) and won't get it. Are your tenants happy with that?
4
@Mark -- but those who are not homeowners don't realize that, or don't want to realize it.
I suggest to anyone who belly-aches about rent being too high to simply go ahead and save and buy a home. Then they'll realize what it is like to own.
8
@Don Juan What it's like to own can be boiled down to one simple word - equity.
Another issue that needs to be raised is the absence of savings accounts for middle class and working class people who can’t afford to keep losing money in the Wall Street casino.
What happened to savings accounts that offered the miracle of compound interest or money market accounts that offered good interest rates?
Many people still haven’t recovered from the crash in 2008, when they lost jobs/homes/savings/pensions while Wall Street is doing great thanks to the Obama and Trump administrations. How are average folks expected to save money to buy a house when their savings are vulnerable?
13
@Judith
That 2008/2009 economic collapse and recovery stalled interest rates, quite naturally. It hit savers, esp. elders. Interest rates rising helps savers and elders, but it hurts those who want a mortgage or who can't break their addiction to credit card debt.
2
With interest rates being low, the cost of a mortgage is also low.
House prices crashed too. With low prices and low interest rates the last several years has been a great time to buy a house
Some people will complain about everything
Nutty article. The costs of maintaining housing have skyrocketed, so of course rents have gone up.
Not allowing landlords to increase rents to cover their increased costs is a recipe for house calamity.
Seriously, call any painting company and they'll want $2500
to paint a small one bedroom apartment. 20 years ago it cost $500. A new roof costs $25,000. A new boiler $20,000. Same goes for heating systems, brick pointing, carpentry repairs, etc. Skilled labor starts at $30/hr. It goes on and on.
If the government meddles in housing and forces landlords to keep rents low, property values will plummet, no new housing will be built, and it will be harder for people to find apartments to rent! Not to mention, all the construction trades will suffer, affecting local economies big time.
But, yes, rent control will get votes. And that's all the politicians seem to care about.
25
@Tall Tree
Rent control has already failed, however, Dems won't admit it and let developers build more units. It's supply and demand.
6
@Tall Tree Yes, and if you give big tax cuts to the wealthy and corporations, it will "trickle down" to the rest of us and we'll ALL be rich! You seem fond of right wing bedtime stories. Hope you sleep well.
4
@Tall Tree - oh please spare me. I sell real estate for a living. My own home has doubled in value since I bought it 15 years ago. Maintenance costs have not risen anywhere close to that amount. Nor do you paint or “replace boilers” every year.
2
I don't think we can leave out the massive profiteering that resulted from the Housing Crash - regardless of the causes, which are a topic for another day-- from 1%ers swooping in and buying houses to flip or rent out at "because we can" prices.
Where I live, hardly a bustling metropolis that is losing population year over year, rent increases continue apace, and well ahead of income increases.
53
Exactly this. In addition to these corporate entities that traffic in predatory housing rentals there is the “single hoarder” buying up housing stock and removing houses from the market. Lots of built in inefficiencies with lots of people with power protecting their financial interests. Change will come from the Left and it will be met with fierce opposition from Right
7
@The View From
Well, one reason is that there is always someone who can pay those rents.
What a shame the U.S. has been focused for decades on increasing the number of warm body consumers instead of stability and quality of life for all Americans. But here we are paying the price...over and over, in variant ways.
7
Actually renters were the biggest winners in the new tax law which saw the standard deduction almost double, effectively negating the tax advantage of home ownership for most people.
65
@JKF
Don't mention facts. NY Times writers hate them.
4
By winning do you mean that they will never be able to afford to buy a house?
13
@Born In The Bronx
They can afford a home just probably not where they want to live
5
I tend to think of things marginally. Not absolutes.
We don't actually care what someone is charging or paying for rent. We care about the landlord's profit margin. We care about the percentage of income the renter is paying towards rent. Warren begins to touch on the latter. However, I feel the big problem begins with the former.
Housing developers and owners are granted way too much leeway in how they value and maintain their properties for tax purposes. I think we need to start with the federal tax code on real estate first. Change the incentives that compel landowners to develop the most expensive property for the most affluent tenant. In my opinion, none of these policies address this one central issue.
Good for candidates who are paying attention to housing. From my perspective though, it's all just water under the bridge. Just wait for Trump's tax returns. You'll understand what I mean.
19
@Andy
Nobody will build if there's no margin for profits. It's too risky and construction costs are too high.
Developers need tax breaks as an incentive to build
affordable house.
The best thing the government can do is stay as far away from housing as possible.
4
@Andy
‘We care about the percentage of income the renter is paying towards rent.’
Democrat think is hilarious.
Say a place for rent costs 1.5k/mo for mortgage , taxes maintenance and expenses; upgrades and such would be extra. Basically 18k/year overhead.
Then say we follow the Democrat way of thinking and we assign the rent based on ‘the percentage of income the renter going to pay towards rent.’
Renter A shows up, makes 15/hour, about 31k,
Renter B shows up, makes 30/hour, about 62k.
Based on the Democrat model, say they each can allocate 50% income to rent, then renter A can pay 15.5 rent/year, and B can pay 31k.
If we were to accept this as a basis for renting to some one, then renting to A would result in a near 3k loss for the landlord a year, and renting to B could actually pay for the expenses and maybe help a little for the landlord to make a living.
So who do you choose? The guy who can pay the rent? Or the guy who will lose you 3k a year?
According to Democrats you should accept either and assign the rent based on heir income.
The IRS, the mortgage lender, the bank, the water, not one of them will reduce your bill based on how much you make. But somehow Democrats think the rent should be based on just that.
Brilliant, give them a nobel on economic, just don’t give them control of the country.
4
@AutumnLeaf
I didn't say you would reduce rent based on income. We're concerned about what percentage of income the renter is paying. The scenario plays into wealth inequality more generally. We're really talking about what percentage of median income goes to median rent.
The median household income where I live is about $45,000 per year. The median rent is about $1,300 per month. That's about 35% of pre-tax income towards housing. As long as all renters, low income and high income, are paying roughly this same ratio we don't have a problem.
However, that's not what happens. All the new housing is competing for the top 20% of the market. They only want to build units charging $2,400 a month and up. That's roughly 66% of median income. They're all chasing the top third of the market.
In other words, you have a kinked supply curve. In academic jargon, you might refer to the phenomenon as a monopsony. Depends on the situation.
However, undoubtedly, you're dealing with a market failure when supply intentionally prices-out more than half of the demand curve. That's why the market requires intervention.
That's the economics of the matter.
5
The apartment building I live in is owned by a national, publically traded residential company. My rent has gone up $500 a month in four years -- a 25% increase. Meanwhile, the apartment vacancy rate in Seattle is a high 10%, which makes it hard for me to believe that my annual rent increases were driven by market demand. And these companies collude to standardize rents across regions, which means there is no competition offering lower rents that might pressure them to lower theirs. I get that these companies want to make a profit, but how much is too much? I mean, I would be okay with an annual rent increase that covers inflation as defined by the CPI plus a profit for the residential company of 3%-4%. But what I am seeing is the CPI plus 6%-7% annually. That's an insane, unacceptably high rate of return -- when is the last time you made that much off of an investment? I am convinced that the only way to rein in these increases is rent regulation.
179
@JefferyK
There are litterally thousands of other places to live than
Seattle. Why stay?
Private property owners should be able to charge what they must. Nobody is forcing you to accept a lower salary than your skills permit. Why should landlords be
forced to accept less?
5
@JefferyK -- why not move outside Seattle and commute? Wouldn't this make the most sense? Rent Regulation is NOT the answer.
3
@JefferyK
Why target just residential landlords?
Why not regulate food prices too? Restaurants and grocery stores charge too much - espcially in cities!
4
Cue the commenters talking about the “amazing” stock market.
It’s time to do rent.
3
Here’s the problem. Capitalizing on the last housing bust, hedge funds like Blackstone figured out a way to monetize housing in this country. Over the last 8-10 years they have been busy buying up whole swaths of real estate and lobbying for tax changes that eliminate incentives for ownership. They even began promoting stories that homeownership is no longer desirable and a way to build long term stability and wealth. Goal? A world of permanent renter/customers and of course extraordinary wealth accumulation for the funds and their partners. Sounds too extreme, right? But it’s not.
156
@Born In The Bronx
Left-wing economists like Richard Wolff talk about "financializing" essential commodities like housing.
The purpose of housing is to provide housing to people who need it. That's what public housing projects do. For real estate developers, like Donald Trump, the purpose of housing is profits. They can buy low-income property, evict the tenants, destroy it, built upscale housing, and rent or sell it back at an enormous profit.
The same thing happens in education, health care, transportation, and other affordable government services.
Why give all students a free college education, when there are rich parents who are willing to pay you a lot of money for it?
That's what happened to housing in Berlin. There was affordable, modest city-owned housing. The city sold it to private developers. The free market wasn't a good way to provide affordable housing. The developers tore down the affordable buildings and built new ones at twice the price. In Berlin, unlike the US, there is a tradition of protest (and socialism). The housing activists held protests, and now a proposal seems to be headed for success, to expropriate those buildings back and rent them at affordable prices.
The most promising development for low-income housing in the US is a new generation of legislators who are unapologetic socialists, and are willing to use the power of government to solve problems of the middle class.
9
Sounds like socialism to me.
These people kill me.
"healthcare is a right"
"affordable housing is a right"
Please. Stop already.
15
@ImNotaWitch
I suppose you'd rather people live and die on the street then? What type of world do you want to live in, one where we house our neighbors and ensure timely, effective medical care to people who are sick, or a world where wildly fluctuating market forces control people's access to housing, education, and healthcare?
I for one do not want to see my neighbors sick or living on the street.
118
@ImNotaWitch the I want free bullshit has to stop - at's just false narrative. What is not false narrative is the benefits from the fed that inflate housing costs while stagnant wages are at 1990 levels for most of the workforce Believe me I was a hiring manager of college grads.
In the 90s The starting salary is about the same - how much has housing risen as a percentage of salary?? How much has healthcare risen as a percentage of salary? You're better off moving the entitled obscene tax structured that benefits wall street and corporations and the inherited wealth at a disproportional level. Even the upper middle class is getting pushed down. Be careful of your beliefs... unless you are in the top 5% you will eventually be impacted in the wrong direction my friend. You must be open minded to nuance - fox watchers are not - that's why they have you played - in cult like fashion. I rent oceanview ... not all renters trash property probably the same as homeownerrs.. another false narrative. I wish I had the mortgage and tax base older homeowners have - I make more and pay more - and rent because I can't afford to buy the same house now in today's market which is a wholly different one then it was. Republican tax structure in this state tilts to the wealthy. We are becoming a 2 class system as a result. Social capitalism sustains democracy.
19
@ImNotaWitch-Sounds like you are spewing the GOP/Fox News line verbatim. Maybe if you'd think for yourself, you'd realize how truly awful you sound when you claim that healthcare and affordable housing are not things that all people should enjoy. It's not socialism. It's basic decency and humanity.
24
Renters are mad and homeowners are mad. Taxes that are local like school, town, county, are way too high for most homeowners. Of course, it has nothing to do with the Dem open borders—nation of immigrants—stance, right?
12
@aldebaran
Right, the ridiculous, obvious lie that Democrats favor wide open national borders has nothing to do with anything.
2
A renter's tax credit won't do much for the tens of millions of senior citizens living principally on Social Security. I am such; we pay no taxes.
What's your alternative for us? Offer one and you've got my vote -- whatever your politics. I don't have the luxury -- I use that word deliberately -- of surrendering to my beliefs.
20
@Austin Liberal Hate to tell you a fact that you don't want to hear but YOUR generation has done nothing to help my generation. No, Instead your generation sits upon a high horse even in old age claiming that Millennials are the problem. The problem is that you didn't care about the earth, you didn't care about preserving something for the next generation, you didn't care about equality, and you certainly didn't care about anyone but yourselves. Now you want more. Most educated millennial will tell you this: WE no longer care what YOU want. Go be in hospice for all we care. WE are done carrying you, your baggage, and your financial weight.
2
Simplistic ......
I came from a family that "did not rent" we saved and bought. It's wages ... that's the problem today. Wages.
We keep saying China does not matter. All the middle class jobs are gone -- gone to China.
I paid 50k for a tiny row home in Philadelphia back in the mid 90's -- taxes about $600. The taxes are now $6800 -- same house. They sell for $450k .. and the zoning rules only help people building condos.
20
@GT Housing prices rose by a factor of 9 even as all the middle class jobs went to China. Imagine how high they would be if all these jobs stayed in the U.S!
1
Bernie Sanders has been talking about housing for years, yet there's no mention of him in the article. Odd.
55
@Brad Did Bernie Sanders offer up a policy to actually redress housing imbalances, or did he just complain that the rent is too dang high?
This article is about candidates who are offering up solutions, not just whipping up populist outrage.
4
@POW
Bernie offers solutions, but you certainly won't find them here.
Here are three he talked about less than a week ago in Greenville NC:
1) subsidized construction of affordable housing
2) requiring developers to provide a certain amount of affordable housing in developments, often referred to as "inclusionary zoning," and
3) laws mandating rent control for working-class renters
Read about it here: https://www.greenvilleonline.com/story/news/2019/04/19/bernie-sanders-south-carolina-rally-danny-glover-dr-cornel-west-affordable-housing-greenville-sc/3520397002/
4
Booker and Warren will never make it to the presidency. This I can assure you. Booker preaches victimhood and oppression for African Americans which is laughable today. Warren is mean spirited and screeches when yelling and talking. Watch for both of them to suspend in early 2020. As for home ownership, work hard and save for your down payment. Then put in some sweat equity. It’s called the American dream and it’s still alive. Stop complaining and playing victim.
13
@Sven Gall Wow your critique of Warren is so deep...You sound like you're part of the minority - a Trump voter.
2
@Sven Gall
"As for home ownership, work hard and save for your down payment."
Don't be ridiculous. Hard working middle-class people can't even qualify for a loan on a used house trailer down by the river on the Republican mandated U. S. minimum wage of $7.25/hr.
The so-called American dream is dead for you if you are in today's middle-class or lower down on the economic ladder. They can't climb up the ladder because of the missing rungs of opportunity.
4
@Sven Gall
While I largely agree with you, it's unfortunate that folks are spending a larger portion of their take home wages on rent. That means that even after working hard and saving, home ownership is put off substantially longer than it once would have been. Same with education. More money going to student loans instead of saving up for that home down-payment. There's more than just working hard and saving here.
4
Hey Democrats! You wasted your time and energy going after the boogeyman Trump on all levels! NOW with an election coming up you are aware of PROBLEMS in the USA? LOL But just to get votes not to really help anything! What a bunch of RICH losers you all are! PS Allowing MORE waves of illegals does not help with only so much houses ,apartments to go around.It must be why USA CITIZENS are doing the tent city option on main streets in places like California!
8
These niche candidates with their niche plans are going nowhere.
Bernie Sanders knows the way to do housing is to first win the presidency on universal Medicare, tuition-free college, and a Green New Deal with a federal jobs guarantee.
Only then will he have created the political space to have the government greatly expand the housing supply, which is the only real solution.
5
@Michael - Universal Medicare, tuition-free college, federal jobs guarantee AND government housing?
Sounds like you want the government to do everything for you.
9
@Midwest Josh
Government Housing. You mean like we did after WW2 for all the vets returning home? Our gov't has done it before and should do it again if the market won't or can't keep up with increased demand.
13
Finally candidates who are taking on the biggest real issue for most Americans - affordable rent, as buying a house is not a reality for the majority of Americans. And here in the Bay Area, it is toxic, and with IPOs from companies that are going to further warp the housing market, its getting to the point where the economic underlings might just go full-on Jacobin at some point. When you see software engineers and programmers making bank on apps and devices that profit off your digital "identity," while buying up a lot of the real estate and trying to wall themselves off from undesirables (and eviscerating the arts), the new moneyed home-owning elite begins to look even more, feckless, culpable and arrogant.
Warren also has made student loans a central part of her platform. I'm behind here on both. Progressivism has come again - health care, education, a clean environment, housing and food are all basic human rights, not the left-overs after they moneyed elite (aka capitalists) are sated, which they never are.
77
@Dev
The government should allow developers to get permits overnight, not over years. They should facilitate housing construction. The answer is increasing the availabiliy of rental housing, not the other way around.
Rent control helps a few lucky folks at the expensive of everybody else. It limits the supply and ends up hurting renters far more than it helps.
If you can't find an apartment at all, rent control is no help!
9
@Dev
What we need here in the Bay Area is much, much, much more housing. We've added well over a million jobs in the past decade, and a fraction of that many homes. We desperately need massive amounts of upzoning and construction. It is outrageous that homeowners in San Francisco and elsewhere have blocked development so completely, and neighborhoods of quaint little two-story homes in a city where even young tech employees (the supposedly rich gentrifiers) can't afford to rent in many neighborhoods should give everyone pause for concern. We need lots and lots and lots of new development and housing to be built, so people don't have to drive 2+ hours each way to work around here in order to avoid paying 70% of their incomes in rent.
1
The lack of self-awareness in the article and the comments is ridiculous. The unintended consequences of Leftist policies such as rent control and strict zoning regulation seems lost on Democrats. These are the very things that feed the rising rental rates. A friend of mine became a millionaire--or very nearly--by giving up his decades long rent-controlled apartment. Was that smart policy in the interim?
And now rental housing is presented as yet another 'Right'? A 'Right' financed by extracting money from some to give to others. And the middleman will be a bureaucrat empowered by a law formulated by a politician. This will go well!
28
@M.L.Johnson Did you miss where the article spoke specifically about remove zoning laws? Zoning laws are often established by those with wealth and power - irrespective of political leanings. Skyrocketing rent costs exists in cities with and without rent control. There are much more fundamental factors at play than your anecdotal experiences allow you to see
10
@M.L.Johnson
The Dems no longer care about reality. The new "AOC Mentality" is to offer everything under the sun for free.
Who cares if we end up looking like Venezuela as long
as we keep party control?
3
@M.L.Johnson Lack of self-awareness! This from someone who clearly didn't read the article, especially the sections about the negative effects of zoning. And where did you get the idea that zoning regs and rent control are "leftist" ideas? Or is that just a word you use to describe anything you don't like? Also, please tell us more about this friend who became an almost-millionaire by giving up his rent controlled apartment...It would make fascinating reading.
7
It's just so much blah, blah, blah (like free college) until the candidates start talking about greatly reducing the mortgage interest deduction. I'll pay attention when they do so.
2
@PLombard already done by trump with the 750k cap, no?
5
The idea of a house being an investment is largely an outdated one. Sure, in the short term since the recession/depression prices have significantly increased but only because they had already fallen so much. Look at it long term with repairs, maintenance, larger utility cost, taxes, etc and the return, if any, is less than a percent. Personally I'd rather lease and stuff my 401k and other retirement accounts with the money saved. I'm looking at nearly a 20% gain just this year alone, how much has your house earned for you?
5
@Mons My house has gone up in value 20% in two years. And I got to live in it ;)
3
@My house, which I've lived in for 40 years cost $77,500. In that 40 years I've probably put $15,000 toward upkeep. I've also had a place to live for that 40 years. Today, if sold, that house would net me around $675,000. Much better than flushing that monthly payment down the toilet to some landlord for the privilege of making him richer.
11
@John Diehl: while in some respects I agree with you (and I own homes and investment properties), $77,500 invested in the S&P 500 in 1979 with dividends reinvested would be worth over $6.2 million today. You also have the benefit of a real estate market that has exploded in the 20 years since I left San Diego.
3
I want to respond in general to the disparaging words directed at renters in this comments section. I live in a rural area at the moment, and people who own homes here own them for life. The housing market is incredibly stale, so you might have a house on the market for 3 years before anyone shows serious interest. I’ve seen some situations here “to keep the house” that make me (personally) sad. People drive 2 hours into the metro area to work, and 2 hours back. In a pollution emitting vehicle! People work 3-4 jobs in a household to be able to generate enough income to stay here. Many of them believe it is worth it - they want this life. But I could never see myself committing to a life like that just to own a home. I have freedom to move if my job does. And one final gripe- home owners are often rarely that. The banks own the homes and you are still paying them.
109
@Camille G.
No, they banks don't own the homes. Look at the titles. No more than the bank owns your car if they have a lien on it.
A real distortion of semantics.
1
You will always be renting - even in your retirement years. You are not building equity and the economic stability that goes along with that. Some day you will want to retire or you will get sick and be unable to work. But, you will need to keep paying rent. In the long term, it’s not good.
5
Finally. it is encouraging to see political parties wise up a bit.
There is another group of renters who would be deemed "desirable" voters - folks who later in life choose not to own a home (with all that entails), are financially secure and generally registered voters.
We have voices, wisdom, money and we vote. And yes, we'd love to see vastly improved, better quality rental housing at reasonable prices. Not more "retirement communities", please.
Spare us the lecture on equity and assets. We are financially savvy, having retired 20+ years ago in our 40's & 50's. All the money that would go towards properly maintaining an "owned" home - well, we'll be happy to share our many travels and other benefits that being free of home ownership afford.
I have no idea how many there are like us. I am delighted tht the politicos are taking on the issue of housing. it is critically important to a helathy society.
20
@elise I surely get the frustration. But blaming others for things one can find answers for themselves is useless. Govt doesn't care, PERIOD. No one has a right to anything except life, liberty and the pursuit of happiness. Govt can, however, regulate alot better laws and rules for renters.
As a former landlord, and not for long because laws were AGAINST me, I had a squatter that tore up and stole my property, and there was NOTHING I could do about it. So it goes both ways.
People should never be forced to live in a place that is completely torn down and not livable. But do politicians step up? NO, nor will they. They tell you they will, to get your vote, but that's it, and blame someone else when they put renters on the back burner.
Folks gotta step up and do for themselves. You know that old saying, if you want some thing done and done right, do it yourself.
9
It's about time somebody addressed these issues, which are at least as much of a source of pain for Millennials as student loans. As the writer says, a tax credit is nice but killing NIMBY zoning is what's really going to end the housing shortage. Kudos to Elizabeth Warren for getting it, the way she does so many issues.
10
@Flora, that's all they will do, run on that issue to get votes, then nothing will happen
3
"A Moody’s analysis projected that the added resources, about $50 billion a year, would help build enough new housing to push rents a decade from now about 10 percent lower than they would be without Ms. Warren’s bill."
Housing costs for many are already far beyond what they can safely afford. While I'm glad some politicians are exploring ways to address this problem, waiting 10 years for tax-payer funded relief that amounts to a 10 percent lower housing costs INCREASE than would otherwise be expected without a bill does not help those who can't afford housing TODAY, many of whom are likely to be in economically weaker positions 10 years from now thanks to widespread age discrimination and explosive all-costs-of-living increases relative to stagnant or diminishing wages. Disappointingly, I haven't read yet of a viable affordable housing plan for the chronically (and growing) poor.
10
@Tom H
I like how you put it - what they can safely afford.
1
Renters should get the same access to a tax deduction like home owners do. Figure out what the avg Home Mortgage Interest Deduction is and give it to renters as a cost of housing tax deduction for renters that choose to itemize. Currently, if you rent, the government is essentially penalizing you for renting. People less well off are having to pay extra taxes to subsidize the home mortgage deduction for people wealthy enough to qualify for a home loan. That is inherently unfair.
160
@Big Steve the renter is only on a contract, they have no benefit to the property. The real problem is the people you New Yorkers vote into office. Take a GOOD look at that. They make promises, but never keep them.
2
@Big Steve Then no one would buy houses. That is literally the only reason I bought one. The deduction makes my expenses signification less than renting (like 200/m).
7
@Denise @Big Steve is not from NY. He's form Las Vegas, Nevada. How could he vote in a NY election?
4
After the recession private equity firms went deep into the rental market. The government no longer wants to encourage home ownership. Now, suddenly, they expect that young people will live in apartments and pay rent for their whole lives.
15
Someone should check what percentage of the rent goes to local property tax, and how much those property taxes increase every year.
Economic theory says that businesses with high profitability should attract new entrants. If renting apartments is not particularly profitable, then the shortage of supply is understandable.
We need to investigate what costs landlords incur, and how we could cut them. Do cities and towns tax rental property excessively because they think no one will know about it? Are the regulations for apartments more onerous, or more strictly enforced, than the regulations for single-family homes? Some regulation is necessary for safety, but a lot of regulations are promoted outside interests, whose business is supplying services to apartment building owners.
5
@Jonathan being a landlord is certainly not worth it to me. Squatters and people who destroy others property have more rights than a landlord does. Time to pull together for a solution, govt ain't it
7
Renting, while not always bad, should not be seen as long term solution. Its meant for transient people, general people in college or early in their careers or those relocating. People shouldn't be putting money into something that will always cost them. That's why we need to keep the mortgage interest deduction.
1
@Andrew
You forget that the vast number of renters are minorities, who mostly lack money and or credit to buy a home. The vast numbers of minorities and working poor are stuck renting forever. I've heard poverty is defined as what money is left over in a household after housing expenses are paid. The poor spend almost all their income on rent and have little if any money left over, even for essentials like food. In poor communities landlords profit from racist redlining done in the past. Worse, slum lords often encourage crime, by weeding out the responsible renters who ask for repairs, or anything else which costs the landlord money. Getting the poor into homes is always promised but never materializes. Even the poor which bought homes years ago, lost their homes from mortgage scams back when the housing bubble burst. We need a novel solution. Building tiny homes could help. In Spokane, a project to build tiny homes for the poor was started because a severe housing shortage has been causing rent increases and homelessness from both higher rents and a lack of available units. Maybe cities could take apartment buildings, and turn them into condos, so the poor could essentially own their own living space. The result is people would have more income, and more of an investment in both their building and community. I suppose you'd have to buy off the landlords to achieve this- otherwise they'd have to be dragged away from their cash cows kicking and screaming.
23
@Andrew Hard not to rent when you can't get a loan.. Cause even when the rent you pay Month after Month
& Year after Year is more than a mortgage payment banks Do Not Even Consider It. Renters get No Credit.
18
Some hard-working people like my father work in jobs that relocate them at least once a decade, often much more (up to 5 times one decade of my childhood). A long time ago Americans believed that our willingness to travel to find work was a strength, something Europe in particular - stuck in the Old World - did not have. Why are modern pioneers belittled and disparaged in this way?
10
The most recent polls show that Ms. Harris and Ms. Warren are currently polling far lower than Biden, Sanders and Buttigieg. Ms. Warren has now moved into the desperation zone, with increasingly bizarre promises of free stuff to try and stay relevant. Ms. Harris is not far behind, although she is trying to avoid displaying Ms. Warren’s obvious desperation.
Look for Ms. Warren to propose a nationwide rent control scheme. Regardless of the fact that she has zero probability of achieving such a goal. Any renters that fall for this scam are deluding themselves.
10
@Shiv I agree, but the indoctrinated are voting for socialism. It never works. Folks need more choices, that's true. Better paying jobs would certainly be an asset for them. But in New York and California, there are little choices for the middle to lower classes. Tent cities are an embarrassment. Feces on the streets is deplorable. But the same politicians keep getting voted in with their fake promises. They do not care about the people.
6
@Denise Foreign money from rich immigrants are driving up big city costs. Especially from China.
5
it is a common mantra that rent control will stop builders from building but to me it is obvious that it is easier to buy a building and flip it for profit or jack up the rents than it is to build a new building in the cities where new housing is needed the most.
Instead, if we imposed rent control I predict the people currently flipping properties will find their easy money spigot turned off and go back to building and developing new apartments and condos.
Rents are not rising all by themselves. The speculators are coming into the cities and buying up buildings or acquiring master leases making cosmetic changes and then jacking up the rents are high as they can to effectively evict low and moderate income people and attract tech workers
33
@Dani Weber
You are totally wrong. If the rents are not high enough and expenses are high (like real estate taxes) a developer cannot develop and a Bank will not lend because there is no money in it.
2
I'd like to know why and when renters and renting became undesirable. I've lived in my apartment happily for many years, and have no desire to ever be a homeowner. Yes, keeping up rent increases is a concern, but considering all the costs I don't incur it seems about even. Property taxes, HOA fees, plus maintenence and upkeep—and a lawn! Argh…why anybody would want a lawn is beyond me.
I vote in every election, including primaries! So we'll see if this 'renter pivoting' yields anything. Something tells me we may be hitting 'peak devopment' in many regions.
30
@Bubo I bought a home for 20 thou and sold it for 120 thou. That's why people buy homes.
8
@Liz and there you are at the source of the problem.... making housing just like the stock market.
29
@Carlos
Shame on Liz for making a profit!
3
It seems our current housing policies were based upon decades of declining Cities and expanding suburbs meant for big families.
That’s where the effects of the recession can now be felt. Jobs concentrated in Cities, student debt forcing delayed home ownership and families, climate conscious millennials looking for sustainable lifestyles.
Add to that boomers bouncing back to Cities, globalization of the real estate market with speculators and REITS driving up prices in highly desirable coastal locations.
Time to look at comprehensive policies that adequately address these new shifts of American lifestyles instead of following political sound bites that further polarize voters and neighbors.
6
Cut income taxes DRAMATICALLY and many people will be able to afford homeownership. While there are myriad practical reasons to rent vs buy -- financial issues are the primary deterrent.
2
@cmc
Homeowners already get a mortage deduction. So, enjoy your already-existing tax cut.
4
@cmc If there is not physically enough housing for everyone, you can decrease taxes all you want, how would that result in everyone getting enough housing?
5
@cmc Raise interest rates DRAMATICALLY and many people will be able to afford homeownership.
No one can afford to save a downpayment any more unless you've rich and sympathetic relatives.
4
Most people are homeowners who are also better voters??? Never have I heard that before! Most folks do not own property making “most” non- owners a bigger block of voters.
2
Renters vote more infrequently. The downward pecking order is elderly, wealthy and home owners leaving renters at the bottom.
14
@Laura Mendoza Homeownership was 64.8% country-wide in the last quarter of 2018, according to the U.S. Census Bureau (https://www.census.gov/housing/hvs/files/currenthvspress.pdf). And as the article mentions, homeowners vote more often than renters (which might to do with the fact that non-voters such as recent immigrants and felons tend to be more renters than owners, and that older people also tend to be homeowners more often), so they do have a much heavier political weight.
The bias is even more acute for local elections (where housing decisions tend, wrongly, to be made): as a politician, why would you cater for people who are much more likely to live somewhere else by the next election?
NIMBYism also plays a lot: housing is a city-wide problem, not a local one, so sometimes it makes more sense for local authorities to favor local homeowners, even if their decisions make the city worse off overall (typically restricting local housing supply).
7
@Laura Mendoza - Renters vote more infrequently - that's why we don't have as many rights as homeowners. If we could get renters out to vote in larger numbers we would see renters get more help from the government.
4
“absent policies that also try to increase supply, economists warn that any money the government gives renters will just wind up in the pockets of landlords”
That’s not just “some economists”, and we have to be clear here: if the problem is a lack of supply and/or lax monetary policy, then how would giving people more money help? Prices rise as long as landlords know they can find people who can afford the rent; if your plan is just to give people more money to bid on a constant housing stock, how could that not just increase the prices? You can’t change physics: if there are only X apartments, only X households will be able to live in them, whatever your price regulations and your subsidies.
Similarly, Warren’s plan to increase the housing stock is more sensible, but why focusing on affordable housing, rather than market-price housing? If the government starts building housing, almost by definition they can build more of it if they sell or rent them at market price, because they recoup more of their costs (if not all of them). Prices rise because there are people on the market who can outprice previous buyers: if your new supply gets them out of the existing market, prices can’t rise. If they are not here to buy for 500,000 what used to cost 200,000, you can’t sell for 500,000: prices fall for EVERYONE.
If the government wants to intervene, it needs to be on the supply side (nothing else will work), and it needs to be at market level (to get more bang for their buck).
6
I was trying to think why this would not work. It is almost like the strategic reserve for oil. The government sells that oil at market price with the intent of driving market price down. It sounds like something that could work for awhile until buyers caught on and simply held back waiting to get oil/home at lower price. The government, if managed rightly, should stay in the black, but likely current owners, as does OPEC now, get upset with a big gorilla dragging down prices. At least the gorilla would not be losing money doing it.
It is still better than a bunch of inept bureaucrats running committees on zoning changes and rent control. That is the sure direction towards total failure.
4
@Michael Blazin I think it is actually ok if the government loses money in the operation. It is way too ambitious to have a policy that costs zero money, where the government is such an efficient actor it can still do well in an industry where prices are falling. Remember that projects take years between start and finish, and that we actually intend to have prices declining in the industry.
I think it is fine too: after all the taxpayer is spending already a tremendous amount of money subsidizing housing at different levels, from public housing to housing subsidies, tax breaks to developers, and the new generation of “affordable housing” (just a different type of housing subsidies and tax breaks), not to mention that if housing was cheaper we would need to help poor people much less.
And even if taking everything into account the government loses money on the operation (which I don’t think they would), decreasing house prices would make the country a much fairer place. Which counts for something.
But again: the government needs to be efficient and consider its resources to be limited. Hence the focus on providing market-price apartments rather than intentionally depressing the price of its own goods (more accurately: the taxpayer’s goods) in so-called “affordable housing”.
@Bob Robert Just make sure that that affordable housing you build to increase the supply isn't built in a riparian or flood zone where any big storm causes not only wet basements and burnt out sump pumps, but also skyrocketing homeowner's insurance and flood damage on the first floor every two years.
2
No one ever blames the Federal Reserve for their role in propping housing prices and fueling speculation. It's about time we complained.
Next comes Congress's tax breaks for homeowners. $250k untaxed profit. Add to that, every improvement in the City, whether it be infrastructure, schools, roads, jobs, parks, policing, etc. accrue to the bottom line for home owners.
Consider also the zoning mismatch between the federal and local government. We let in a million immigrants a year, but local NIMBY policies restrict new development.
In Japan, housing policy is set by the federal government. A million new units a year are built, and a modest two-day bedroom apartment goes for $1000.
10
@Bill To be fair, a lot of people blame the Fed for that. But it is true that in all the articles that talk about interests rates, it is quite rare to have it mentioned. Properties tend to act like financial assets in constrained markets: if your monetary policy is propping up the price of financial assets (which is one of its explicit goals), it will prop up the price of properties. Which will make them less affordable.
3
Even though rent control is considered a state/local matter, there were federal price controls enacted during WWII that included rent regulations. You can't just talk about new construction. Rent control is the best policy for tenants facing rent increases in existing housing, and not just in major cities, but in suburban communities, as well. As stated in the article, this is now a middle class problem, and middle class tenants often do not qualify for affordable housing with income restrictions (often called the "missing middle." Of course, affordable housing construction is necessary for low income/working class tenants, but rent control is what works best for the middle class. State legislatures have prohibited localities from enacting rent control, resulting in tenants facing unpredictable rent increases each year, especially in expensive housing markets. The candidates should be discussing this, tool. Rent control may not be feasible at the federal level, but if presidential candidates raise awareness of the issue it may filter down the state level where something can finally be done.
13
@qa If high prices are just the symptom of an underlying issue that is the lack of supply (or the fact that the supply is not used for housing), then regulating the prices down will not solve the issue. The issue will just manifest itself in other ways (most probably the impossibility to find an apartment despite being able to pay the price).
Just imagine what the situation would be in a major city if prices had been kept at the levels of 20 years ago: demand would be so much stronger, but at constant supply there would be a major shortage (in the literal sense: you could not find an apartment to rent), so people would never leave their apartment and you could just not move to the city. Not as big of a deal in war times, but hardly a solution.
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Rent control does offer predictability: you can be sure you will always have a shortage, much greater than now, of housing with little turnover.
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On one hand, property owners have -- at least for some decades now -- been able to deduct property taxes. To me, that always seemed unfair to renters whose rent went towards helping to pay the landlord's property taxes but who had no such deduction.
Now, however, with a New York City population that seems increasingly to need subsidies (birth control, anyone?), the burden of paying for those subsidies falls on property owners, particularly middle-class property owners. They, like our city agencies, are drowning in the rising costs of keeping the city and its people afloat.
I shudder to think that a recent bill proposing that New York City become a "sanctuary city" might be passed. We already are; and the costs of being even more so will fall exactly on middle-class and lower-middle class property owners.
And if the readers of The New York Times think that there's no such thing, then get into your car or an Uber and ask to be driven all around Brooklyn -- out towards Evergreen Cemetery, out along Linden Boulevard towards the Belt, over to Gravesend or beyond McDonald Avenue, along Foster towards the Terminal Market, and so on. What you will see are tidy brick houses (many with barred first-floor windows) owned precisely by lower-middle and middle-class people. Lots of them.
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Renters.....
Sometimes slum lords make life miserable as do congregate housing w Chapter 8 funds.
Woman w babies moves into subsidized housing as a renter then boyfriend freeloader joins her to make her life miserable. No cleaning or cooking and just a trashed environment with no support social services.
Yes renters need help and subsidized housing units need social workers and security guards to protect the weak.
Renters pay property tax on autos. If they are registered and insured.
They pay payroll taxes and all those little hidden taxes that add up.
Yes renters need a legislative voice. Especially in our cities.
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@nurseJacki@
Renters already have a voice, their own! Vote!
How can a discussion about the federal government's involvement in the housing market not include the mortgage interest tax credit? We systematically transfer wealth from renters to homeowners - from the poor and young to the rich and old. Entrenched interests prevent any serious discussion of repeal, but the simplest (if not the easiest) way to help renters is to cease their subsidy payments to those with $750k mortgages.
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@KM Dyer That is very true. Mortgage interest deduction used to be an advantage that everyone (pretty much) benefitted from at some point. Everyone benefits (ie is subsidized by the taxpayer) at the difficult moment when they have to pay back a mortgage (which used to not last for thirty years), giving them some nice help, so all in all a good thing.
When not “pretty much” everyone gets a mortgage, then it becomes an unfair subsidy. Because the ones that are excluded are penalized, and there is no reason to be penalized because you need to remain mobile, let alone because you are too poor to be able to become homeowner. In some cities where only the richest can now afford a mortgage, the unfairness of the subsidy is the most obvious.
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@KM Dyer So what you're saying is that nothing being proposed by the Democratic candidates is as useful to renters as what the TCJA did in lowering the mortgage interest deduction (not tax credit, they are different) from $1M to $750K? Limiting the SALT deduction also was comparatively pro-renter, since not only is it tilted towards the wealthy, but renter have much lower SALT than homeowners, not having property tax. Note that landlords will still deduct property tax on their more complicated Schedule E , so the SALT limitation is a pure win for renters vs homeowners.
The entrenched interests fought both, but the Republicans faced down the National Association of Realtors. Amazing that the Republicans could be so much more pro-renters' interest despite, as the article notes, not generally getting renters' votes.
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@KM Dyer
As I type this reply, your comment currently has 6 thumbs-ups. Which would be approximately as many votes as any candidate proposing your suggestion would get in the general election.
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I am glad that some presidential candidates are paying attention to this issue, and I think their ideas are good up to a point. But I think the only way to solve this problem is collective action. Workers need to join unions which will help lift average wages, improve working conditions and give people more disposable income to pay rent or a mortgage. Renters need to organize so that they have more clout with landlords and local housing officials. Organized workers and renters will also be able to have more meaningful input with any political leaders who sincerely care about their needs. If this organizing at the grass-roots does not happen then I worry that any political solution will meet the law of unintended consequences, and any federal money that is appropriated will be vacuumed up by landlords and builders who are already very organized.
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@Dave If the problem is the lack of supply, increasing wages will not help much. At best it will redistribute the existing stock in a fairer way, but in expensive cities where the housing problem is the most acute and even very wealthy don’t live in very big apartments, there is not much to redistribute…
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"In reality, the Democratic coalition also includes many homeowners who don’t want new rental housing nearby — or who benefit from the tight housing supply that has driven up the value of their homes."
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The Real Estate and College Debt crisis facing my generation is being framed as a failure of capital management by the candidates, as if throwing money at this problem solved it in the past.
The over-regulation of the construction industry for stick-built homes means anyone not working through a major builder has no cost effective option.
The construction industry has achieved no productivity gains in the past 50 years and uses the same techniques to comply with regs. We subsidize this inefficiency with every rent or mortgage payment.
Whether it's an ordinance against modular homes in Houston, NIMBY's in Frisco or people fighting the next 432 Park Ave, any impediment to new residential building in metros affects prices - and drive times- for the rest of us.
Subsidizing college made college crushingly unaffordable within a generation and undermined the rest of labor without raising wages. It certainly didn't raise professor pay, test scores, or labor productivity. The money wasn't tied to the efficacy of education, so we got what we paid for.
Subsidizing housing without reforming barriers to improved efficiency will merely raise the cost of housing to homeowners and pass our tax dollars to the inspectors, bankers, and other leeches who made this problem and give them an incentive to breed a thousand other impediments to new builds. No one who swings a hammer or pays a mortgage will see a penny saved or a dollar earned.
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You are correct in that federal subsidies, well meant, made it possible for colleges to raise tuition and amass and hold enormous sums.
How else could, say, New York University and Columbia to buy up so much New York City real estate and for other colleges elsewhere to build sports complexes and housing complexes that rival spas? No college student needs that many pools and bowling alleys.
Withdraw federal subsidies and colleges will be forced to give more scholarships in order to stay in business. And hold their recipients to keeping their eyes on their textbooks.
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@Richard
"The construction industry has achieved no productivity gains in the past 50 years...."
Are you kidding me? Pre-made trusses, the use of air tools in place of hammers, CAD/CAM design, pre made and hung doors and windows, and many more things come to my mind. And I'm not even in the business.
And oh, cheap immigrant labor. There are no two ways about it. Not on your point, just pointing out.
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Count me among the traditional Democrats for whom aggressive federal meddling in local zoning would be a dealbreaker. I think developers already have too much clout in zoning and other local decisions, and the mandates being proposed would give them just one more weapon to wield against homeowners. And to be sure, it would not be truly wealthy neighborhoods, much less gated communities, that would be affected. It is the older, inner-ring middle- and working-class suburbs that would be targeted for development, and the developers wouldn't be satisfied until every last square foot of open space is paved over for apartments and tax-subsidized retail and offices, many of which are unneeded and wind up vacant and begging for tenants a decade or two later.
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@Larry
"...aggressive federal meddling in local zoning..."
Simple: there would be no more "local" zoning. None of these [Democratic] candidates have proposed ANY policies, about housing or anything else, that don't start and end in Washington, D.C.
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@Larry
Meanwhile I am forced out of my apartment which I could walk to work from and now live in the fire zone which while beautiful is going to be dangerous come the fire season.
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@Larry "Get Off My Lawn"
go become republican and don't draw Medicare
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Start with one premise, real estate is still local and always has been. Add a second premise, supply and demand. Add a third premise, the population is still growing, albeit slower. Land on which to build housing in cities is finite so the price is never going to go down without a major collapse like Detroit. This is an intractable problem. The real issue is not so much the cost of housing as the failure of wages to rise to keep up with the inflation in housing costs and that is an entirely different topic.
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@tom
But it would be much easier to implement, virtually immediately, a tax credit for renters than it would be to tackle the knotty issue of wage stagnation -- and the tax credit could easily be offset by eliminating the tax cut that Dump just gave the rich.
In 1999, while working toward a better-paid profession, I worked as a secretary; annual salary of 22K and monthly rent of $425 for a 1BR in a run-down building but safe-ish area -- about 25% of my monthly take-home pay -- and I almost managed.
Now that figure is 40% -- the average secretarial salary in my area is 37K, and a 1BR in the same shabby building is 1200. Simply not doable. But a realistic tax credit every year would make it doable.
Would you want to become a roommate at age 57 because of forces beyond yr control, such as the Great Recession's having eliminated yr profession so you're not only scrambling, late in life, to find any work at all but having to cope with a major salary reduction *and* the grief/anger at having lost the profession you loved?
If you've not seen the vid of Rep. Katie Porter questioning CEO Jamie Dimon on how one of his entry-level employees should manage her $500+ monthly shortfall bc wages are too low, pls find it on YT. Biz is *not* going to start paying people as it should; the only recourse we have is for the govt to close all loopholes for the wealthy; tax them and their corps. appropriately; and provide tax credits for the struggling underpaid renter-class.
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As Yogi Berra taught us it's deja vu all over again.
What I mean is everything goes in cycles in this country. Pre WW2, there was great inequality in this country between the poor and rich. After WW2, with unions, democrats elected a modern middle class developed, the baby boomers and home ownership were widespread. America being the only capitalist power left also helped tremendously. We had no competition.
Now with global competition and despite borrowing, females going to work, our standard of living has fallen to the point where many mills. can't afford a home and the cycle begins all over again, ie change the gov't, system.
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@Paul
We're "women," not females, and our entry into the workplace isn't the problem. And the US wasn't the only capitalist power left (what do you think Japan and the European nations are?).
The problems are: a 40-year conservative assault on the American norms and values, such that CEOs now earn 300x what their employees earn (vs. 20x in the 1950s); the wealthy pay less tax than the middle class; loopholes allow for the off-shoring of wealth and profits in tax havens; and union-busting destroyed workers' ability to negotiate for decent wages. (If manufacturing were done in a US with well-paid employees, then higher-priced US-made goods would have a market here, because US citizens could afford to buy the goods they make.)
Guess what made the post-WWII years so profitable? Govt investment in its people, infrastructure, and institutions! (Everything that the Kochs et al. have destroyed in their venal quest for wealth and control.) Education via the GI Bill, low mortgages backed by the federal govt. This was a well-thought-out plan to ensure domestic stability in the face of competing ideologies (communism, socialism), and it worked.
It still works in the Scandi nations and it could work here again, but we have decades of work ahead of us to clean up the mess made by conservative money in politics and in education policy (---> has led to an under-educated electorate that can't think critically about the mass of conservative propaganda).
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@Doro Wynant
I don't think Paul is saying that women entering the workforce is "the problem"; he stated that as an example that even with the addition of a woman's salary into the traditional 2 adult household, couples still can't keep up. In the "old" days, many middle class women stayed at home and raised kids- a family could own a home on one middle class salary (plus no child care costs). If it's this tough now days for middle class, imagine how impossible it is for lower wage workers.
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@Doro Wynant . . . If I had a dime for every time some feminist's writing compared "women" to "males", I could afford to pay off my mortgage right now. Get. Over. It.
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I remember the numerous blog entries on urban forums during the low points of the last recession from so many 20 somethings about the freedom of renting. They were not going to be like previous generations tied down to fixed place, unable to sell a home. They wanted options. They wanted to move about the country. They wanted to enjoy the the best parts of a city at the best time to do it and would use their cash flow to make it happen. Older members cautioned them that historically, the people with the most real freedom owned their own homes. The sad part was many of them, with good incomes, chose to pay very high rents in so-called vibrant areas when they could have lived well below their income for awhile, assembled a down payment and bought homes at historically low prices. Maybe not in Manhattan, but definitely in much of the rest of the country. That window stayed open remarkably open for quite awhile, but is now shut.
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@Michael Blazin We aren't getting married in our early 20s like your generation. Comparing the two is foolish. I am not going to purchase a house not knowing whether I'll be living in that city five years from now. And people go where the jobs are -- we live in big cities. Few in their early 20s (because we aren't raising families!) are going to move to the suburbs or smaller towns.
It's just comparing apples to oranges. Every generation thinks they are unique and different, but I really don't think older generations understand the *legitimate* uniqueness of our generation.
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@Michael Blazin
"The sad part was many of them, with good incomes, chose to pay very high rents in so-called vibrant areas when they could have lived well below their income for awhile"
Clearly you have no idea how much it costs to rent in a city--where the jobs are--and the % of income that goes to rent. When 40% or more of your income goes to rent a small, cheap, shabby 1BR apt., there's no way to save.
I live in Balto., hardly a happenin' town, and even here the traditional formula (pay no more than 25% of your income for rent) is no longer doable; now it's 40%. ***Wages have not kept pace with rents*** -- pls stop pretending that isn't the major problem. It is. To pretend otherwise is to compound the misery of those of us who are hamstrung by this rotten situation.
Before you lecture me or others on "living below our means," you should know that I've always practiced extreme frugality: $2500 total for 3 vacations in 30 years; no cable TV, ever; a restaurant meal every other year; no Starbucks etc.; all furniture is hand-me-downs, and I don't own a DR table or curtains; I spend less on groceries than the USDA deems adequate; etc.
Add to the equation that many young people have crippling student-loan debt--bc tuition increases have far outpaced salary increases--and that's another terrible constraint.
You also whimsically misstate this as "wanted the perks of city life"--no. Many of us who hate cities nonetheless live here because the jobs are here.
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@Michael Blazin: the problem is that a millennial back in 2009-2014 -- only 5+ years ago -- may not have had a down payment to take advantage of record low housing prices. Also "record low" means different things in Detroit Michigan than it does in Chicago Illinois -- a drop of 25% in housing prices doesn't help a young person when housing goes from $800K for a starter house all the way down to $600K -- requiring $120,000 downpayment!
Even if you started saving like crazy at the start of the housing crisis....it would have taken 5 years to come anywhere close to a downpayment of 20%....by then, investors got into the mix and prices were off and zooming again.
Besides, as you correctly note: many millennials deny even today that they want to own a house. They choose to live in areas where housing is very unaffordable. They can't save much, because they are paying stratospheric rents to live in the cool hipster cities. My guess is that most would not give up the cool hipster city -- even with a good job awaiting them in icky flyover country -- because it is part of their IDENTITY now to be a cool hipster.
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