Inflation has hit 40 year highs in the U.S. and rents have been climbing along with other things like gas and food. Families and individuals are struggling with inflation in the cost of living and that isn't just gas and food but the roof over their head with some cities seeing 20% or more growth in average rent costs since the beginning of last year.
Some cities like New Orleans have over 50% of their residents currently renting.
As those rents go up and more affordable housing fails to come into the market to meet that need there is going to be a serious problem brewing.
If solutions aren't available then it is certain that the homeless population around the country will dramatically increase as the high cost of living pushes more people into poverty. For many there already isn't much wiggle room in the budget for what they are able to afford and some might be looking to opt out of certain purchases right now because of the high inflation and prices they have been seeing.
Some say inflation isn't related to money printing and that inflation will go away when the supply chain issues normalize or when conflict with Russia settles down. Don't worry about money printing, inflation is only transitory they've said. Well, maybe yearly inflation numbers will go down but that isn't the only sort of inflation people deal with.
What about the loss in purchasing power?
What about the fact that someone without a university degree and an average salary only a few decades ago would be able to afford a home comfortably, but today even with families where 2 individuals are university educated and working full time it is still a struggle for families to afford many real estate areas. It isn't as simple as cut out the avocado toast or the daily coffee, that isn't standing in the way of whether or not people can afford a home. Wages as far as median household income are not keeping up with what we see in home values. Having a good job or a degree doesn't mean you will be able to afford a home.
60% of tech workers in California have said they cannot afford to own a home despite making a lot more in salary than the majority of Americans. Price hikes in house markets are pushing people out of cities in multiple regions it isn't just in California.
With technology available today to build highly affordable homes within hours if not days, and a large portion of empty land left available to build those homes on, there is no excuse for this failure in the real estate market. If it weren't for all of that cheap money flowing around then who knows how many might still seek to purchase multiple properties by taking out loans, helping to further fuel this insane rise in the cost of housing that we've seen over the decades. Maybe if it were more expensive to do so then we might only see more end users taking on that loan because they are doing it to get their forever home, not just another side investment.
With a market drowning in bureaucracy maybe that too plays a critical role. If it weren't so difficult for building projects to be approved and carried out etc then perhaps we might also see more progress on that front as well. Tiny homes are highly restricted, living in cars or camper vans is restricted etc, meanwhile these could be some solutions that people voluntary seek but aren't allowed to.
Or, maybe some sellers might start reassessing who they sell their homes to because of the issue at hand, and some online have already shared stories about that, but it isn't enough to change the tide. And many might not care who they sell to because they just want to sell.
Even for those who do own their home it isn't like they aren't seeing things get more expensive either. That might mean paying more in interest payments if the debt on their home isn't paid off yet, or seeing property taxes rise and costing more each year.
Multiple state programs have been thought up to help this issue, including building X amount of "affordable homes" to address the need or funding that initiative with billions etc. However, how do they make sure the homes go to those people who specifically need them so that they don't end up on the street or struggling with bouncing from costly rental place to rental place? There is no guarantee this will happen. What happens if all of those new affordable ones as well go to those who don't need them but just want to flip them and in-turn make things more expensive in town? How do we make sure homes go to those who need a home?
While central actors have bastardized and deteriorated the purchasing power and cost of living over the years in numerous ways for us, these are the questions we are left struggling to answer which is how to ensure the market availability of suitable shelter to meet one of the most basic human needs.
pics:
pixabay
not financial advice
Sources:
https://mises.org/wire/how-government-regulations-make-housing-unaffordable
https://abcnews.go.com/US/wireStory/decade-inflation-high-expected-february-83357991
https://www.cnbc.com/2021/09/14/america-is-short-more-than-5-million-homes-study-says.html
https://fortune.com/2014/07/08/millennials-home-ownership-renting/
https://www.cnbc.com/2021/10/19/this-could-be-the-worst-market-for-a-first-time-homebuyer-experts-say.html
https://www.cnn.com/2021/03/23/opinions/millennials-almost-impossible-to-afford-home-olson/index.html
https://www.cnbc.com/2021/11/10/home-prices-are-now-rising-much-faster-than-incomes-studies-show.html
Zoning is one of the main reasons that the price of homes and the rent in an area is restrictive. When entire neighborhoods restrict the size of a home that can be built, it pushes prices upward. The control of property through zoning is one of the main controls that government uses to keep its tax basis high. If property values can be driven upward, then property taxes will fund larger government projects. The goal of government is not affordable housing, the goal is to push the poor into other locations.
More developments tend to bring down the cost of housing, but most new development is so expensive due to building codes, permits, licenses and inspections that if you can afford to develop it is likely you would target higher end consumers for a better profit ratio.
Posted Using LeoFinance Beta
Nice to read your words! i think if people sit and wait for someone to solve this for them then they will be waiting forever, and end up having to accept UBI and a terrible home with many strings attached..
I think people in places like rural Portugal are the only solution.. to get out, meet people, get help and build a home yourself,, just how you want it to be, and also self sufficient for power, water and all the basic things we need.
Its plainly apparent that they do not care about us, or protecting people from great suffering.. Just look at the cost of heating a home and how many poor vulnerable people are getting ill and dying from the cold.. It is sickening to witness this whilst at the same time they spend untold billions and even trillions on war, weapons and ridiculous projects that will never see the light of day.
The powers that be want us living in fear and feel that everything is a crisis. Yes, inflation has caused havoc on the housing industry. However if folks would stop living above their means, that would solve much of the problem. If you cannot pay for it in full, you do not need it. We may need to go back to the days when many people live in one house under one roof.
no the living above the means doesn't even begin to touch on the failure of wages to keep up with inflation, the reason working class families cannot afford a home isn't because of their daily habits in buying mcdonalds and the math proves that