The rent is too damn high - how do we fix this?

At the end of the day we need to build more housing. Unfortunately building is quite a bit more expensive these days. This is mostly due to labor & material costs. Also though, there is just a lot to it.

The answers aren’t popular, smaller homes, less customization, mass condos and public housing.

Most importantly, we need to increase productivity. We’ve seen massive productivity increases in almost every industry over the past 60 years. I can do things in a few minutes now that would have taken days in 1960.

A framer today can frame just about as much today as they could in 1960. Almost no other industry has seen this stagnation.

Modular housing that is built off site, shipped and assembled on site likely has to be a big component. Different building techniques and materials will be needed as well.

You can grouse about wealthy folks buying things up. It’s real, but not a crushing problem. Not like productivity.
 
farce said:
Limit the ability of “corporate” landlords to buy all the homes in the “starter home” price range. They just turn them into rentals which reduces the owner-occupied ratio in those neighborhoods.
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This is the biggest issue. Companies buy up all the stock of anything in the starter home range and lock a whole subset of the population into being forever-renters. It’s so gross.
 
In my opinion, bring back new public housing should be part of the solution. Rents are adders starting with the cheapest option. If you can get a bare bones 2bedroom public housing apartment for $600/mo in a so-so neighborhood, you'll be willing to pay a little more ($750/mo) for a nicer unit in a so-so neighborhood and a little more ($900/mo) for a nicer unit in a good neighborhood and a little more ($1,200/mo) for a "luxury" unit in the area and maybe $1,500 to rent a 2bedroom house in the same area.

The price of the cheapest options dictates pricing for everything else - assuming there is ample availability of the cheapest price point.
 
Most investors will try to capitalize the rental income to carry the debt. As interest rates increased so did rents. Public housing/health insurance and an MBI of rent/utilities for folks will change the world. When the "Greedheads" try to milk the rental market they historically overbuilt and created a glut. Without some sort of incentive development will continue to build more 3 car garage houses than 1 bedroom apartments.
 
farce said:
Limit the ability of “corporate” landlords to buy all the homes in the “starter home” price range. They just turn them into rentals which reduces the owner-occupied ratio in those neighborhoods.
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I don't disagree in theory but how do you do this? Seems everyone is looking to get into the rental business. Even me. I'm just not plugged into the banks as some others are to identify foreclosures before they hit the open market.
 
Callatoroy said:
I don't disagree in theory but how do you do this? Seems everyone is looking to get into the rental business. Even me. I'm just not plugged into the banks as some others are to identify foreclosures before they hit the open market.
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Or related ,the ARBNB business
 
heelfan108 said:
In my opinion, bring back new public housing should be part of the solution. Rents are adders starting with the cheapest option. If you can get a bare bones 2bedroom public housing apartment for $600/mo in a so-so neighborhood, you'll be willing to pay a little more ($750/mo) for a nicer unit in a so-so neighborhood and a little more ($900/mo) for a nicer unit in a good neighborhood and a little more ($1,200/mo) for a "luxury" unit in the area and maybe $1,500 to rent a 2bedroom house in the same area.

The price of the cheapest options dictates pricing for everything else - assuming there is ample availability of the cheapest price point.
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A good private/public partnership is part of the answer Landlords don't get rich-but a steady income. Renters get a decent place to stay A company owning 300 units-not so much
 
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A house down the road was built 5 years ago for $800,000

Those people sold it 2.5 years ago for $1.4 million

The new buyers just listed it for $2.2 million

That's beyond asinine. And yeah the bubble needs to burst. 30%
Yes some people would be hurt but more people are hurt by never being able to enter the market in the first place
 
aGDevil2k said:
A house down the road was built 5 years ago for $800,000

Those people sold it 2.5 years ago for $1.4 million

The new buyers just listed it for $2.2 million

That's beyond asinine. And yeah the bubble needs to burst. 30%
Yes some people would be hurt but more people are hurt by never being able to enter the market in the first place
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The bubble won't burst as long as supply is constricted and there are people with the money to pay these prices. There isn't a "market solution" to this problem. We are living with the market result. Intervention will be required to get things back in balance. That intervention will probably have to include zoning changes (not allowing zoning requiring single family homes....you can build multi-family anywhere in a jurisdiction,) more public transportation infrastructure with an accompanying reduction in parking requirements (I understand new constructions costs are $50K per parking space required in urban areas.)

There will also likely be some limits on home ownership by corporations, but you have to walk a tight rope to avoid hurting "mom and pop" landlords with legislation designed to curb private equity/hedge fund ownership of thousands of single family homes. Legislation has been floated to limit corporate entities to owning 100 homes with significant tax penalties ($20K per home per year) for exceeding the limit. Nebraska's legislature has offered legislation to limit (limit, not prohibit) out of state ownership of individual homes.

Cleveland has passed a new ordinance requiring local representation for out of area landlords. This was designed to address unresponsive landlords who rented out homes in slum like condition and never addressed tenant issues with the property. It also addresses blight where vacant homes sit decaying in neighborhoods but the ownership is a web of LLC's that makes addressing the actual homeowner difficult and expensive. Their ordinance is basically that if you own a home in Cuyahoga County but live outside the county, you have to have a local agent (lawyer, realtor, management company) who is responsible for addressing issues with the condition of the property. There has to be someone local who can be visited by enforcement officials and held accountable.

There is no silver bullet to fix the problem, but sprawl vs lack of density, incentivizing owner occupancy in entry level homes, and avoiding pushing lower income housing away from public transportation seem to be issues to address. Most of the time when a light rail line is added, expensive rental units are immediately developed pushing lower income people further out which requires them to spend limited their resources on cars they wouldn't need if they were closer to quality public transportation.

Urban planning is important, but the rural legislators in this state are more interested in requiring the cities to build more highways which will promote sprawl rather than allowing them to build infrastructure to encourage density.
 
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