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The housing crisis in America. Is it time for Congress to step in? (1 Viewer)

The problem arose because of government.

Anything the government touches increases the cost, lowers the quality and makes it harder to find.
Can you explain this further?  We have a housing crisis in this country because we aren't building enough housing in the affordability ranges of a large swath of the country.  What is the government's role in that equation?  Our federal government is responsible for a mere 1 million residencies (approximately).  I don't have stats on the states and more local governments.

 
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Can you explain this further?  We have a housing crisis in this country because we aren't building enough housing in the affordability ranges of a large swath of the country.  What is the government's role in that equation?
The government's contribution to the housing crisis has come mainly in the form of land-use and zoning regulations.

(There are non-governmental issues at the moment as well, like the high cost of labor and construction materials.)

 
I would rather support/subsidize middle class housing efforts than provide the homeless with housing.

 
The government's contribution to the housing crisis has come mainly in the form of land-use and zoning regulations.

(There are non-governmental issues at the moment as well, like the high cost of labor and construction materials.)
Definitely see these factors.  The comment I was replying to seemed as if there was a larger role than this.  That's why I asked the question.  This is definitely something that local municipalities have an impact on.  When people say "the government" they aren't usually talking about local governments.

 
I would rather support/subsidize middle class housing efforts than provide the homeless with housing.
In a rather large number of incidents these two groups are the same.  In this country it takes one doctor bill or a lost job for a couple months etc to render a person homeless.

 
Boy this one is tough and I wish I had idea one on how to fix it but I don't.   I know from my chair I don't understand the market.  I see lots of 300K homes being built.  I make a good living and a 300K home is insane to me.  I seriously don't know who buys these places.

But.....that's not the real issue.  I agree there needs to be more done to help those that need it find a safe and reasonably affordable roof over their heads.  However as some have mentioned, governmental intervention many times makes things worse, not better.  I'm at a loss.  

 
In a rather large number of incidents these two groups are the same.  In this country it takes one doctor bill or a lost job for a couple months etc to render a person homeless.


That is fine, but my own eyes have now seen more than once how housing the homeless does nothing but enable them.... because that isnt a housing issue, it is a drug issue.

 
That is fine, but my own eyes have now seen more than once how housing the homeless does nothing but enable them.... because that isnt a housing issue, it is a drug issue.
I get the anecdotes....I can give lists too, but in the other direction.  It's probably more productive if we look at the studies rather than our personal observations especially in situations like this where it's not "either/or"

 
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I get the anecdotes....I can give lists too, but in the other direction.  It's probably more productive if we look at the studies rather than our personal observations especially in situations like this where it's not "either/or"


Im at the point where I no longer automatically concede my personal experiences in this life to idealism.

 
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Im at the point where I no longer automatically concede my personal experiences in this life to idealism.
:confused:

I don't know why anyone would.  I certainly didn't ask you to.  Point here is that we're talking about a national issue.  Our personal anecdotes are rather useless when talking about that sort of scope.  It's much more wise for us to look at what the national studies/research are saying.  

For example, you say you see a bunch of homelessness BECAUSE OF drug use.  How do you know that drug use caused the homelessness and not the other way around?  This isn't some sort of gotcha question.  There are tons of people who turn to drugs after they become homeless as a method of coping.  

 
:confused:

I don't know why anyone would.  I certainly didn't ask you to.  Point here is that we're talking about a national issue.  Our personal anecdotes are rather useless when talking about that sort of scope.  It's much more wise for us to look at what the national studies/research are saying.  

For example, you say you see a bunch of homelessness BECAUSE OF drug use.  How do you know that drug use caused the homelessness and not the other way around?  This isn't some sort of gotcha question.  There are tons of people who turn to drugs after they become homeless as a method of coping.  


Are entire cities' policies and results over the last decade now my personal anecdote?

I imagine "studies/research" was the justification for all of those disasterous projects.  Can you bring those out and identify for us how those idealistic outcomes compared to the actual outcomes?  Why didn't providing drug users free needles improve anything?  Why did providing them housing not do anything?  Why, in fact, did it get worse?

Exactly how wrong was the last round of "studies"?

 
Are entire cities' policies and results over the last decade now my personal anecdote?
You're all over the place :shrug:   This is what I responded to:

That is fine, but my own eyes have now seen more than once how housing the homeless does nothing but enable them.... because that isnt a housing issue, it is a drug issue.


--------------------

To the rest of the rant...I have absolutely ZERO idea what you're talking about.  I don't know what projects you're talking about, so no, I can't tell you why the failed (or if they even failed).  

I imagine "studies/research" was the justification for all of those disasterous projects.  Can you bring those out and identify for us how those idealistic outcomes compared to the actual outcomes?  Why didn't providing drug users free needles improve anything?  Why did providing them housing not do anything?  Why, in fact, did it get worse?

Exactly how wrong was the last round of "studies"?


I don't even know what "idealistic outcomes" means....an outcome is an outcome.  I also have no idea what "last round of studies" means either....this is an ongoing thing that's a national issue.  Again, for every bad outcome you've observed,  I can likely give you a good one.  This is a completely fruitless exercise at this point. :shrug:  

 
That is fine, but my own eyes have now seen more than once how housing the homeless does nothing but enable them.... because that isnt a housing issue, it is a drug issue.
How about this.....for the bold, what did you use as your support to present this as a statement of fact for our national problem?

 
How about this.....for the bold, what did you use as your support to present this as a statement of fact for our national problem?


Common sense.  As evidenced by the results of the last decade.... hands down a more reliable source than "studies".

Until I see an objective review of claims from these studies versus actual results, I find the idealism useless.  In fact at this point it has proven dangerous and costly.

 
Common sense.  As evidenced by the results of the last decade.... hands down a more reliable source than "studies".

Until I see an objective review of claims from these studies versus actual results, I find the idealism useless.  In fact at this point it has proven dangerous and costly.
ok...thanks

 
Boy this one is tough and I wish I had idea one on how to fix it but I don't.   I know from my chair I don't understand the market.  I see lots of 300K homes being built.  I make a good living and a 300K home is insane to me.  I seriously don't know who buys these places.

But.....that's not the real issue.  I agree there needs to be more done to help those that need it find a safe and reasonably affordable roof over their heads.  However as some have mentioned, governmental intervention many times makes things worse, not better.  I'm at a loss.  
A 300k home also sounds insane to me. Are they building a trailer park?

 
In a rather large number of incidents these two groups are the same.  In this country it takes one doctor bill or a lost job for a couple months etc to render a person homeless.
The people on street corners causing trouble and pushing people on the subway rails arent just unlucky down on their lucksters. 

 
The people on street corners causing trouble and pushing people on the subway rails arent just unlucky down on their lucksters. 
By that time, no.  Nor was that my assertion.  A great many of them started that way.  I'll also throw out there that the "people on the street corners causing trouble" are a small fraction of the actual homeless people in this country.  I feel rather confident predicting that people in this thread have people they know or run across in their daily lives that are homeless and they have no clue they are homeless.  The face of "homelessness" in this country is MAJORLY skewed unfortunately.  

 
I was in downtown Atlanta recently. The homeless crisis I see there around the Walgreens and Five Points Marta station has been there for decades. These people are largely mentally ill and or on drugs and alcohol. No amount of affordable housing ghettos will fix that.
Actually, a multitude of studies demonstrate the opposite

 
A 300k home also sounds insane to me. Are they building a trailer park?
About Two miles from my home in AZ a contractor purchased a parcel of unimproved desert.  He plans to build 60 homes starting home is 1400sf and price before upgrades is $385;000.  My daughter purchased a home in Tucson and we helped as did her in-laws with a cash gift, I think this is how young families are getting into these homes, help from parents or grandparents 

 
Common sense.  As evidenced by the results of the last decade.... hands down a more reliable source than "studies".

Until I see an objective review of claims from these studies versus actual results, I find the idealism useless.  In fact at this point it has proven dangerous and costly.
You should review studies and statistics to see if your limited life experience matches overall trends.

https://www.turnto23.com/news/homeless/breaking-down-the-cost-of-homelessness

The US Department of Housing and Urban Development estimates that it costs about $40,000 a year for a homeless person to live on the streets.
https://www.hoover.org/research/only-san-francisco-61000-tents-and-350000-public-toilets

San Francisco estimates about 8,000 homeless living in the city. The $852 million budget works out to about $106,500 per homeless individual....During the pandemic, San Francisco distributed 262 tents across six locations..The annual budget for these tents is $16.1 million, which comes out to about $61,000 per tent per year. This includes meals, bathroom facilities, and security...Before you say “replace the interim director” and “vote out the supervisors,” you should also know about the 24 “pit stops” that have been installed within San Francisco. These are self-contained, semi-permanent public restrooms across the city. The average annual operating budget for each is about $350,000 per year, which includes maintenance, security, and supplies (you know, toilet paper).
https://abcnews.go.com/Politics/wireStory/la-spending-837000-house-single-homeless-person-83072411

Most of the units are studios or one-bedroom apartments. The audit found 14% of the units build exceeded $700,000 each, and one project in pre-development is estimated to cost almost $837,000 per unit.


Keep in mind that homelessness is an industry similar to our prisons.  While it seems like a huge amount of money is spent, the homeless are only receiving a small fraction of the benefits of that spending.  Many tax paying citizens are employed by the homeless industry.  Some grow quite wealthy from it.  Just like all the homeless services and non-profits, government construction is also full of fraud, waste, and abuse.  Prevailing wage laws drive up the cost of inefficient labor.  I walk by government projects every day and in these brief snapshots, I have never seen over 50% of the workers on site actively working at the same time.  (Usually, it's like 0-25%).  When you consider that most of the government's "homeless money" is not actually going to homeless people, it makes the spending seem more reasonable.

In regards to what percent of homeless people are actively addicted to drugs or alcohol, I'd guess around 50-66%.  A lot of the older ones that I talk to are no longer addicted but they have settled into and gotten somewhat comfortable in their homeless routine. 

 
My personal experience is that I purchased a second home in the west valley area of AZ 4 years ago for 300k, I get letters/ phone calls from investors on a monthly basis wanting to buy my home.  My neighbor put his home up for sale and it got into a bidding war with an investor paying 700k cash no inspection.  


The more I hear things like this the more I think the problem is going to take care of itself.

Generally when you're buying long term rentals you want your monthly rent to be, at minimum, 1% of the total purchase price.  So a house bought for $700k would need to rent for $7k/mo to make sense.  Now I know they are raising rents, but there is no way they're getting anywhere close to $7k/mo in west valley AZ.  It's a losing proposition that will bite them as soon as the appreciation levels off.

Now if they're doing short term rentals that's another story, but if they're buying random homes in residential neighborhood then they're likely going to run into regulation issues eventually which could cut off their income stream and tank the value of a lot of these homes.  Even AZ which was previously the most STR friendly state in the country (they literally had a state law that it was illegal for any municipality to ban short term rentals) is now working on a bill that will result in the banning of a huge slew of STRs.

 
The more I hear things like this the more I think the problem is going to take care of itself.

Generally when you're buying long term rentals you want your monthly rent to be, at minimum, 1% of the total purchase price.  So a house bought for $700k would need to rent for $7k/mo to make sense.  Now I know they are raising rents, but there is no way they're getting anywhere close to $7k/mo in west valley AZ.  It's a losing proposition that will bite them as soon as the appreciation levels off.

Now if they're doing short term rentals that's another story, but if they're buying random homes in residential neighborhood then they're likely going to run into regulation issues eventually which could cut off their income stream and tank the value of a lot of these homes.  Even AZ which was previously the most STR friendly state in the country (they literally had a state law that it was illegal for any municipality to ban short term rentals) is now working on a bill that will result in the banning of a huge slew of STRs.
I am curious to see how this plays out over the next decade.  There are various factors at play like limited new construction, low birth rates, increased immigration and increased investment ownership. In most cases, land is what has value.  Many properties with existing homes would be more valuable if they were vacant lots.  In San Diego, properties that look like slums on 1/10 acre are going for 1 million.  I don't know what to expect in the future but it is certainly a good time to be a skilled trades person who knows how to manage money and projects.

 
The more I hear things like this the more I think the problem is going to take care of itself.

Generally when you're buying long term rentals you want your monthly rent to be, at minimum, 1% of the total purchase price.  So a house bought for $700k would need to rent for $7k/mo to make sense.  Now I know they are raising rents, but there is no way they're getting anywhere close to $7k/mo in west valley AZ.  It's a losing proposition that will bite them as soon as the appreciation levels off.

Now if they're doing short term rentals that's another story, but if they're buying random homes in residential neighborhood then they're likely going to run into regulation issues eventually which could cut off their income stream and tank the value of a lot of these homes.  Even AZ which was previously the most STR friendly state in the country (they literally had a state law that it was illegal for any municipality to ban short term rentals) is now working on a bill that will result in the banning of a huge slew of STRs.
Good post.  Short term rentals in my area prime time Dec-Apr with all expenses covered utilities, etc $3500 tp $4000, rest of the year they go Air B & B route.  Investors are playing the appreciation game, homes went up about 32 percent the last year in the west valley area.

 
He's a great follow, @Maurile Tremblay

And a good example too of how it's tricky to judge people on a few really bad moments. Lots of people, me included, think of him for the cheap shots. While those are real and still there. He also does a ton of good and informative things like this. 
Yes. Ryan Leaf is another guy who, despite seeming like a jerk during his NFL career, has impressed me lately by having thoughtful, interesting things to say (one of several examples).

 
Joe Bryant said:
He's a great follow, @Maurile Tremblay

And a good example too of how it's tricky to judge people on a few really bad moments. Lots of people, me included, think of him for the cheap shots. While those are real and still there. He also does a ton of good and informative things like this. 
I've read most of that thread and almost every single thing he brings up is supported in the research and data.  The symptoms we are seeing today are almost all traceable back to a few problems.  Poverty, opportunity, lack of affordable housing, unemployment, illness/disability are all very common in the people I've ever worked with in the various states I've lived in.  

 
Alex P Keaton said:
Actually, a multitude of studies demonstrate the opposite
Study all you want to. I have lived in Atlanta for 25 years. These people need mental health care and addiction treatments. Many of them prefer the homeless lifestyle. Your studies do not pass the eye test or basic reality.

 
Study all you want to. I have lived in Atlanta for 25 years. These people need mental health care and addiction treatments. Many of them prefer the homeless lifestyle. Your studies do not pass the eye test or basic reality.
Yep.  And they won’t get mental health care or addiction treatment on the streets.  Wanna guess where they can and do get it?

 
Yep.  And they won’t get mental health care or addiction treatment on the streets.  Wanna guess where they can and do get it?
The point is they don’t want the help. Help usually comes with rules and expectations. They want to be left alone and live the homeless lifestyle. They will take anything that’s free but if it means conforming to societal norms they aren’t interested. In many cases it is mental illness and drug addiction driving their lives.Those are the facts on the ground. Downtown Atlanta has always had a big homeless population. They sleep on the streets and in the parks and for many that’s what they want. Many have criminal records too. The only jobs they can get do not provide enough to make a difference. So they give up on life and live on the streets where they don’t have to conform and can be free. Free from the slave life most of us lead in our jobs.

 
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Joe Bryant said:
He said, "This is going to get worse as mortgage rates spike."

Raising interest rates seems like the best corrective action, aside from incentivizing new construction and discouraging investment ownership.  The low interest rates significantly contributed to the problem as they made real estate an attractive investment at a time when savings accounts returned nothing.  The article that he quoted said, "Rising mortgage rates are having a counterintuitive effect on the housing market. Home shoppers are actually sprung into action in an attempt to buy a home before mortgage rates rise any higher," Wolf tells Fortune. "Some home shoppers are nervous that if they don’t buy today, they may never be able to given affordability."

So long as rates continue to rise, the buying will settle down.  Too many people are spending too much on rent and living paycheck to paycheck.  They need to move back in with family, claim government benefits or go homeless.  That should help slow down housing appreciation.

Suh said, "Access to one of the primary wealth creation engines in the US (real estate) is harder than ever.  [It] is a problem that I’m seeing a lot of creative people try to solve for. Primarily by allowing anyone to participate in the asset class without owning a home or having millions of dollars. More on this next week."

Stayed tuned for your opportunity to invest in whatever scheme he is promoting...

https://fortune.com/2022/03/23/housing-market-interest-rate-economic-shock/

 
Not to oversimplify things, but IMO it's basic economics - supply/demand.  Of course, institutional investors make it hard for young families but if the supply was there, things would level off. 

Demand is high, supply is not.  We can talk a lot about why, but bottom line: we need to increase supply.

IMO the best way to do that is to incentivize builders to build more high occupancy properties - condos. Give people an opportunity to purchase a 1 bedroom apartment for $100k or whatever.  Much easier to get your foot in the door that way.  Not everyone wants or needs a 3k sf, 1/4 acre house.

The problem I see in NIMBY. No one wants to deal with increased traffic, loads in schools, or *ahem* poor people moving next door.  So, they enact zoning ordinances like minimum lot sizes, etc...and who can blame them?  Existing homeowner properties are sky-rocketing, why would they want to upset the apple cart?

 
Joe Bryant said:
With all due respect to Mr. Suh he makes the case that higher interest rates makes it more expensive for hard working people to get in the door. I would say that low interest rates are the biggest problem contributing to inflating home values. He goes on to say that the people who bought long ago during the 2008 bust were already rich and are now really rich. I disagree. Many people who had average incomes scrimped and saved to buy a house. They were not all Blackrock.

I do take issue with how the corporations get bailed out with our money. Then they take advantage of ultra low interest rates and bottomed out prices to Hoover up all the affordable housing. I’m pointing at you BlackRock and you privately owned Unfederal reserve. 

Part of any solution should be to never bail out corporate America ever. Let them go bust like millions of Americans have and do daily. But our uni-party government never allows that. They socialize corporate losses when said companies lose and are free market capitalists when they win. This doesn’t work out very well for the majority of citizens.

Mr Suh also fails to mention the impact of immigration. We have over forty million immigrants in this country according to census data. I know the link misses a decimal point. The total is 46.2 million not 462. https://cis.org/Camarota/Immigrant-Population-Hits-Record-462-Million-November-2021

In summary, I feel many things contribute to housing inflation. Number one money printing and bail outs paper over problems instead of solving them. Number two offshoring all of our manufacturing to cheap labor and flooding the country with immigrants is hollowing out opportunities to earn a salary that keeps up with all the cheap money tsunamis we are subjected to from the privately owned federal reserve. Mr Suh seems to be wanting to treat the outcomes of bad policies. Instead let’s stop the problem at its root.

 
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The point is they don’t want the help. Help usually comes with rules and expectations. They want to be left alone and live the homeless lifestyle. They will take anything that’s free but if it means conforming to societal norms they aren’t interested. In many cases it is mental illness and drug addiction driving their lives.Those are the facts on the ground. Downtown Atlanta has always had a big homeless population. They sleep on the streets and in the parks and for many that’s what they want. Many have criminal records too. The only jobs they can get do not provide enough to make a difference. So they give up on life and live on the streets where they don’t have to conform and can be free. Free from the slave life most of us lead in our jobs.
Do you work closely with homeless people, or people who have mental illness and addiction issues?

 
IMO the best way to do that is to incentivize builders to build more high occupancy properties - condos. Give people an opportunity to purchase a 1 bedroom apartment for $100k or whatever.  Much easier to get your foot in the door that way.  Not everyone wants or needs a 3k sf, 1/4 acre house.


The problem with this is that what you're talking about is building high occupancy properties in existing neighborhoods where the infrastructure, from the roads all the way to the sewer systems, were not designed for those levels of occupancy.  I grew up in the San Fernando Valley in Los Angeles, which was built out for single family homes in the early/mid 20th century.  Then investors started buying up entire blocks, knocking down those single family houses,  and building multi story apartment buildings all over the place.  There are a few areas unaffected but you find multi family apartment buildings all over the place out there.  I know a guy who lives in North Hollywood, on a block filled with these buildings now.  He owns one of the few houses on the block.  Now, the sewer system was designed for single family homes, not multi family apartment buildings.  The city does maintenance on the sewer system periodically.  Kind of like snaking your plumbing at home.  But they don't do it often enough for the amount of sewage generated.  And, when it gets bad and people in the multi family apartment buildings flush their toilets but the sewage system can't handle it because it's stopped up, guess where the sewage backs up?  To the least pressure resistance outlet it can find, which sometimes ends up being his house/kitchen. 

The point is, you need to plan for these buildings you're talking about.  Retrofitting them in to a neighborhood that wasn't designed for them creates a lot of problems because the infrastructure of the neighborhood wasn't designed for such buildings and isn't usually upgraded, which can be hard to do 30 years down the road.

 
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Do you work closely with homeless people, or people who have mental illness and addiction issues?
Not that I need your approval but yes among many things I have worked very closely with all the above. I know that many in here need to consult with studies funded by who knows who to make their conclusions but I prefer to rely on firsthand experience if and when possible.

 
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Not that I need your approval but yes among many things I have worked very closely with all the above. I know that many in here need to consult with studies funded by who knows who to make conclusions but I prefer to rely on firsthand experience if and when possible.
Well, your experience working closely with the above doesn’t match mine.  I’ll just leave it at that — our experiences are vastly different.  Most of the homeless folks I know are desperate for help and permanent housing.  Some of them aren’t — they are too deep in addiction or mental illness to ask for help, to want help, or to stick with the actions required to stay healthy.   In my experience that’s a small portion of the homeless population.

 
Well, your experience working closely with the above doesn’t match mine.  I’ll just leave it at that — our experiences are vastly different.  Most of the homeless folks I know are desperate for help and permanent housing.  Some of them aren’t — they are too deep in addiction or mental illness to ask for help, to want help, or to stick with the actions required to stay healthy.   In my experience that’s a small portion of the homeless population.
Spend some time living among them and you will see what I see. Your experience is probably limited to a desk job.

 
Spend some time living among them and you will see what I see. Your experience is probably limited to a desk job.
Unlike the comments you’ve made, I respect and accept that we have different experiences on this topic.

That said, you have zero idea what my experience is, and you seem content to assume rather than engage.  I’ll just leave it at that.

 
Alex P Keaton said:
Actually, a multitude of studies demonstrate the opposite


Show me the demostration in real life.

Because in real life - the idealism presented in most of the studies I have seen used to promote these projects just doesn't play out.

 
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Show me the demostration in real life.

Because in real life - the idealism presented in most of the studies I have seen used to promote these projects just doesn't play out.


You continually cite your personal experiences as gospel. I understand that's human nature but do you understand the fallacy of it?

 
You continually cite your personal experiences as gospel. I understand that's human nature but do you understand the fallacy of it?


My personal experience?  I haven't experienced it.  I see it in so many of my favorite cities in the world.

The "demonstration" in Seattle in particular has been brutal and irrefutable.

I would love to see an accounting for what was promised in the "studies" versus what actually happened.  Am I asking too much - I just want a report card on expectations (idealism) versus real world results?

Show me it worked at all.

 
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