Just because this doesn’t magically solve the housing crisis, doesn’t mean it’s not a good start. We have to stop looking at magical solutions that will solve all our problems in one shot. We have to start somewhere.
> because this doesn’t magically solve the housing crisis
It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.)
> You'll probably need to bail out recent homebuyers, who will be permanently underwater
If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house we're supposed to give massive government support to correct the buyer's mistake?
Yeah, pretty sure a government won’t bail me out if I invested in a stock so much that it would crush me if the stock went down. If buying a house is an investment and not for living, then it should be treated like it is.
Homeowners shouldn't be either. Locals should have less of a say in zoning decisions since they've demonstrated they won't act in their community's interest.
Also, making the public hold the bag in a bubble is perhaps the most sinister form of theft imaginable.
Short term thinking dominates economics these days. Managing the current downturn is most important, when people ask about longterm implications do a bunch of hand wavy stuff about it being temporary and then kick the can to the next guys who do the same thing.
You are assuming that there was any good way of dealing with a year where nobody went to work because of a global pandemic.
The economic pain of inflation was far preferable to the economic pain of active economic destruction, as short-term disruption to business would have resulted in long-term destruction of real value. It was far less painful long-term to print money and have the economy on pause for a year, with bills still getting paid, than it would have been to have the economy collapse over that year.
If it weren't for those mitigations, we'd all still be sitting around a tire fire, trading bottle caps for ammunition.
people call buying a house to live in an investment but that's because they don't know the technical term is a "hedge"
so you know: most localities do treat the house you live in very differently from a tax perspective than they do any additional properties you might have, because everyone is born short housing, until they own 1 place to live.
so yes, the proposed bailouts up thread would be for people who bought a house because they didn't want to be short housing; a hedge, not an investment.
also if the house has hedges then your hedges are a hedge. I'll see myself out
Buying a house is more than an "investment" though: It's achieving the American dream. And while this dream might have been a farce, it's like everything else in that you hear it enough combined with not understanding the economics and policies underlying home ownership and the lie is reality.
And let's not even get to your point about hedges. I don't know many people that can define it let alone consider housing as a hedge.
If the house price goes down you don't lose the house. You just end up paying more for it than you could have if the price was lower when you bought it. You are just keeping your promise to pay your mortgage. This whole "unrealized gains need to be compensated" thing is insane. Responsible policymakers would ignore such greedy, self-centered, anti-community sentiments.
Basically everyone considers housing as a hedge - homes are expected to grow steadily in value or at the very least not depreciate.
This is not a good policy goal, but the fact is that the wealth of the American middle class is mostly stored in property, and tanking property values would be a disaster for a broad swath of society which otherwise only has long-term retirement accounts to rely on.
They will vote to protect their interests, no matter how badly it screws their kids or contributes to homelessness.
Buying a house is investment.
Living in a house you own is consumption.
These are two distinct things that are coupled through life choices. It's a real pity that tax regulations are different just because you make individual life choices.
> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
Isn't that missing the forest for the trees? There's an all-out class war between the haves and the have-nots. If it controls supply like a cartel, and if it pursues rent-seeking like a cartel, then maybe the real estate moguls and speculators that treat everything like an investment instrument should be held accountable and liable.
How is it fair to compare buying a house to buying a TV? One costs 500$ and the other costs 500k plus ongoing costs like repairs and taxes. Not saying you’re wrong, just that the comparison isn’t apt
Because if you're buying a house for a house, then it (mostly, generally¹) doesn't matter that the housing market has moved downwards and you'll be underwater until you pay down a bit on the house. You still have a house! So long as you can afford the mortgage — something you should have already planned for given you bought the house — you can still afford it. You might have remorse at having paid +$100k right before the market moved, but that's what the parent is saying: that's buyer's remorse, that is speculating on the price, when instead, you should be saying "am I willing (and financially able) to trade $400k for a home to live in?"
(¹I don't want to get too much into the sidetrack that is "but if you're underwater you could lose your home" — yes… that's possible. The example here is a 20% fall in prices — which would be astounding to those of us wanting a home, the thing of dreams — but you put 20% in the down payment, so a single mortgage payment & you're no longer underwater. In reality, the price drop (in rent, but let's work with what we got) was 3.7%. (Don't get me wrong, I'd take that too, as a renter.))
What if your company transfers you to another place, and you need to move, and you can't pay off the remainder of principal on the home with the (now lower) proceeds you get from the sale? Or even if you can, but you don't have enough for a down payment on a house in the new area?
Even regardless of that, I don't love the idea that a change in housing policy could make people feel trapped in their current home, unable to move. Granted, current housing policy (e.g. California Prop 13) has that effect on some people already. And I bet it sucks. Now, I'm not sure the government should be bailing out people who can continue to pay their (now underwater) mortgage but would just like the option to sell it and move. But I think this requires a bit more thought than just wielding that axe and letting things fall where the are. I mean, hopefully we're not advocating for more of the DOGE method.
The median isn't even 20%, it is a bit less than that. Median first-time home buyers put only 9% down. Even the median repeat buyer, who just sold a house and had probably been paying mortgage payments for a while, only put 23% down.
I think you're neglecting to account for a big risk. If the house retains or increases in value, the bank can just take the house to recoup what you owe them of you can no longer pay the mortgage due to ill health, accidents, etc. What do you think happens if the houses value drops a lot and you can no longer pay what you owe? You don't just lose the house, you're in a much, much deeper hole. How property values go substantially changes the risk calculus of owning a home with a mortgage.
> You don't just lose the house, you're in a much, much deeper hole.
Oof, I was about to question if this is correct or not, but it turns out that this is indeed true in most US states: if you default on your mortgage, and the bank can't resell your house for at least as much principal as you have left to pay, you still owe the difference, and they can get a court to garnish your wages, put a lien on any future home you may buy, get your accounts frozen.
Didn't realize this was a thing... I live in a non-recourse state (California) where the bank only gets the property on default and can't pursue you further.
As someone that's bought their first house in the last few years, it's hard not to take offense.
A car or a TV are much smaller investments relative to a house. Over a decade of savings is tied up in my home. If the ass drops out of the market, myself, and others like me, who have broken into the market without assistance at the peak of housing prices will be virtually permanently financially set back. And to call buying a house around this time a mistake is crazy. I would be as much a speculator if I continued to rent and pay someone else's mortgage, hoping that prices dropped so I could get a good deal. It's a home and this attitude of treating homes as investments or mere purchases is why we're in this mess in the first place.
>It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house we're supposed to give massive government support to correct the buyer's mistake?
The difference is order of magnitude as proportion of net worth and the necessity of the purchase.
Some loans require PMI if your outstanding balance is larger than the current value. PMI is very expensive and, unlike a TV or car, you might be forced to give up your house because it devalued too far and you can no longer afford mortgage and PMI.
I'm not saying we shouldn't make housing affordable, but it's worth considering the impact for everyone.
Correct - though the dirty secret is some percentage of the economy is run on rolling loans against house equity, and prices stagnating or dropping would slow that down.
Easy: make it illegal to require PMI in that case. Some loans will require PMI at signing (IIRC, often this will be when you put down less than 20%; you're required to carry PMI until you've paid off enough to get your principal below 80% of the purchase price), but we can certainly make clauses unenforceable that require it later under whatever conditions.
If the government passed subsidy laws or building requirements that caused your loss, then you might expect compensation. Did you disagree with bailing out small businesses shuttered during COVID and their furloughed employees? Same principle.
You never know what your house or apartment or condo is worth, even to you. Maybe you can afford $400k barely, but you'll be hugely squeezed. Or maybe you'd get a bigger place if prices had dropped for your family size.
You hope conditions won't change. You can look at the current market trends to try to value it. But things will change in the next few years probably. You can guess, but you'll never "know with pretty good accuracy". The economy can go down, interest rates can change, major employers can come and go, there can be an earthquake or cancerous ground discovered there.
These are my feelings too, but in the interests of compassion, I would suggest a return of some proportion of equity to (human, non-LLC, non-corporate, primary resident) buyers in cash, up to bank failure. Hopefully they can then buy another house at the presumably much lower prevailing market rate. Someone has to lose, let it be in order of "he who should have known what he was doing in making this catastrophe possible."
I mean, there are a few things here. Like if the bank want the house sold on the loan because the house value goes down even though the person with the loan is willing to continue servicing it - then that seems like an own goal for the bank.
There are a variety of circumstances that can be dreamt up for either side of the equation. And I have no compassion for lenders either.
As you say, maybe the mortgage/loan should be seen as a partnership of some degree between the parties so that the lender is less likely to take advantage.
But ultimately "he who should have known" is the person asking for money to buy XYZ thing. A person should be responsible for their actions.
> But ultimately "he who should have known" is the person asking for money to buy XYZ thing. A person should be responsible for their actions.
I agree with this in principle, but the real world is messy, and many (most? all?) people end up having to make decisions in their lives where they maybe should know, but don't know everything they should. Perfect information is rarely a thing, and even if you have it, you need a certain level of education to exploit it that we can't expect anywhere near everyone to have.
I don't give even the smallest shit for lenders. I care about people. I care about people having housing security, food security, and a little extra so they don't have to live paycheck to paycheck. No, I don't think we should just be printing money and firing it off in a t-shirt cannon at people for the hell of it. But I think we need to be compassionate, and understand that a huge, unexpected change in housing policy that tanked their home value is not something they "should have known" might happen.
I feel like many of us here forget (or were, oof, too young for) the 2007/08 financial crisis. We bailed out a lot of banks, and left a lot of regular folks holding the bag. I don't want to see that happen ever again. And yes, I get that housing policy changes that create lots of new housing is different. But the outcome could be very similar.
If we go to a place where homes cost $400k then we're all buying at $400k, regardless of whether people understand speculation or markets. Once you allow enough people with deep pockets to do speculation or price arbitrage... then we're all paying it.
It's not that we shouldn't desire cheaper homes, but we should realize that people who paid $400k are largely not speculators. They bought what the market was willing to offer.
But, the convention in the US is that people see their houses as a form of savings. Realistically, we should account for that.
Also, if continuing the building ends up requiring some policy change (supported by changing laws and regulations)… it seems reasonable to protect normal people, doing normal things, from massive financial chaos that is explicitly caused by the government changing policies on them. At least for people actually using the houses as intended, that is, living in them.
It doesn't really matter why; what matters is that they do see things that way.
And I agree with you, it's a bad convention, and it causes tons of problems, and it's the result of recent decades of bad mortgage/housing/zoning policy. But we can't just wipe it away and pretend it was never there, and let the chips fall where they may. That's just heartless, and, well -- you talk about making society poorer -- that will make society much, much poorer, nearly overnight.
Because policies they cause huge financial harm to normal people become unpopular, and don’t spread as a result. And also because it is bad for society if we modify the rules in ways that makes it harder to plan ahead.
> Are angry homeowners overthrowing governments and blocking homebuilding?
No, they're already in the government, have been for decades, and they're the ones responsible for anti-development policy.
> For example, re Texas, 9 out of 10 say housing prices are too high
Cute punchy polls like that make for nice sound bits, but don't tell the whole story. I'm sure if you followed that up with, "If the government were to enact new housing development property that would reduce the value of your home by 20% over the next 10 years, would you support it?", I guarantee you that 9 out of 10 (homeowners) would absolutely not.
> Are angry homeowners overthrowing governments and blocking homebuilding?
Yes. Go to city council meetings when new housing developments are being proposed. See the throngs of people that'll show up demanding that new development doesn't get built. See the angry people shouting about how allowing ADUs will just destroy their way of life.
The amount of vitrol I saw about the Plano Tomorrow plan against past mayor LaRosiliere was astounding, people fighting tooth and nail to prevent denser housing from being approved. So many people saying things like the "wrong kind of people" would be moving in and allowing more density would make the city unsafe.
> But, the convention in the US is that people see their houses as a form of savings.
And that is a big part of the problem. You cannot have it both ways, if housing is an investment, it will eventually lead to poorer outcomes for anybody that needs a house and does not inherit one.
And it's not like the actual value has decreased. You still own the same house. It's the same size, location, build quality... That's the value of the house to you. If you're not currently buying a house, the price of a house should be irrelevant to you.
But the price you were strong armed into paying is more than the value of that stuff, and you only begrudgingly accepted the price that included a large speculative component, because you saw that the government has been guaranteeing that the speculative component only goes up.
Well those people vote. Home ownership rate is 65%. Home owners I believe are more likely to vote than renters. So yeah your proposition is not feasible
Whether a house is worth $400k or $300k is, sometimes, a choice the government makes.
It isn't always, but sometimes it is. Through regulations, through monetary policy, through other policies.
Now if the government decides that you, you personally, standardUser, are going to lose $100k, I don't think the government should bail you out. It's called "moral hazard". You lost $100k. Deal with it.
If the government decides that I, me personally, am going to lost $100k, I would say that I am old and I vote in every single election, and despite my failing memory, I will remember that lost $100k until the day I die and no politician who voted for that will ever get my vote again. I will remember who did that to me.
I think it always is, frankly. The price of pretty much every single house in the US[0] is a function of decades of government housing policy. And I don't think it's particularly fair to say, "oopsie, our housing policy since before you were born was kinda bad, we're going to fix it right now, but it's going to put you underwater on your mortgage... sorry, but you'll have to just deal with it".
[0] Sure, maybe this isn't the case for an off-the-grid cabin out in the woods, far from any town, but that describes a teeny tiny portion of the housing stock.
I agree in principle that we shouldn't be bailing people out for the consequences of making purchases with their eyes open, but if something like this happened, a lot of people would be mad. And I get it.
The problem in this eventuality is mobility: if you buy a house for $400k, live there for, say, 5 years and the resale value of your house is at $300k, that's going to be a big problem if you have (or just want) to move. If you sell at $300k, you'll have about $50k left over (after repaying the bank) for a down payment on your new house, which means you can only afford a $250k house, which may well not meet your needs.
If someone is planning to live in that house long enough such that when they do want to sell it, they can move to a new place that meets their needs, at a price they can still afford, sure, great. We shouldn't be bailing those people out.
> You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
That's absurd. Aside from people who buy too much house ('00s, anyone?) and regret it later, people pay the price they have to pay for the amount of space and location they believe they need. Most people -- very understandably -- don't know the dynamics of the housing market to the point that they'd be able to predict that their resale value might go down by 25% at some point in the future, because, historically, that's just not what home prices do. (And don't parrot the "past performance is no guarantee of the future" crap... yes, true, so what. Most people unfortunately can't plan their lives around that.)
These people aren't speculators... speculators are buying to flip, or to hold and resell, as investment properties. These are just regular folks who need a place to live and have -- regardless of prudence or correctness -- bought into the idea that owning their home is the next life stage, a proof of success and well-being. Calling people like that speculators shows a severe lack of understanding and empathy.
> It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house...
A car or a TV costs nowhere near as much as a house. Losing a car or a TV is not going to make someone homeless. Housing is a basic need, and housing security is essential in a healthy society. (Granted, in many places in the US, losing your car can lead to financial ruin as well, sadly, considering how crucial a car can be to many people for basic things like getting to work.)
> Losing a car or a TV is not going to make someone homeless.
Your house losing 100k$ in value isn't going to make you homeless either (quite the opposite actually). If you buy a house and it depreciates, so what?
Not to mention if everyone's house depreciates, your new house is cheaper to buy. You lose _nothing_, except imaginary dollar values.
> Calling people like that speculators shows a severe lack of understanding and empathy.
I don't know what you call preventing young people from buying, or even renting, at affordable prices so 'people like that' don't have a possibility of losing some money, but you sure as fuck don't call it empathy either.
> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision...we shouldn't be bailing out speeculators
When the speculators vote, yes, you need to bail out the speculators.
> It's called buyer's remorse
It's called building consensus. At the end of the day, if it costs making homeowners whole to gain their buy in to solve the housing crisis, that's money well spent.
I'm not saying what I'm proposing is fair or even palatable. But it's functional. If solving the housing crisis is more important than aesthetics, it's a good move.
I agree there are political considerations, but we are talking about a scenario where the only damage done is that the buyer must continue to live in the home they purchased at the price they purchased it for, and where the recipient of government benefits is a household capable of purchasing a house, presumably at the height of the market. Is a tax dollar better spent placating grumpy homeowners who already have a place to live they can afford, or by more directly building more housing and infrastructure?
> we are talking about a scenario where the only damage done is that the buyer must continue to live in the home they purchased at the price they purchased it for
In non-recourse states, you'd expect to see defaults as people leave the keys in the mail to reduce their housing costs by moving next door at the reduced price or rent. More broadly, people don't like seeing their wealth go down.
> Is a tax dollar better spent placating grumpy homeowners
If it gets you the reform, yes. The point is you don't get housing reform with grumpy homeowners barring a massive shift in voting patterns.
Also, let's keep scope in mind. You only need to bail anyout out if you reduce home prices. If you hold them constant in nominal terms, that shouldn't generate pushback. (If you hold them constant in real terms, people can continue feeling wealthier.)
> If it gets you the reform, yes. The point is you don't get housing reform with grumpy homeowners barring a massive shift in voting patterns.
I think this is a really good insight. The reason for long-lived NIMBY policies is because NIMBYs[0] vote and lobby more than everyone else does. I have, do, and will continue to vote for pro-housing policies, but there are a lot of people -- probably still in the majority -- who will not vote for anything or anyone that will reduce the value of their homes.
What matters is outcomes. If paying off the NIMBYs gets you a good future housing policy, then we should do it.
[0] I know "NIMBY" is generally a pejorative, and I agree with that for the most part, but I will admit that many NIMBYs are operating and voting quite logically, for their own interest, even if it hurts others, and hurts society collectively.
> In non-recourse states, you'd expect to see defaults as people leave the keys in the mail to reduce their housing costs by moving next door at the reduced price or rent. More broadly, people don't like seeing their wealth go down.
At the trade-off of never being able to get a mortgage again, unless that's the bailout these homeowners get. Almost everyone will either sit tight or rent/sell at a loss. That being said, you will lose out on the public and private support of everyone who bought a house since roughly 2020. It doesn't matter if you've got a 3% rate if you're not getting your down payment out of the house.
The plan that makes the most sense to me is to keep housing prices constant/barely increasing while letting 3% inflation and gradual lowering of interest rates do its thing. Eventually the houses won't seem that expensive and those who locked in at high rates and high prices have an offramp through refinancing.
> At the trade-off of never being able to get a mortgage again
That's not the effect of abandoning a mortgage (or using the leverage provided by that option to secure lender approval for a short sale) in a non-recourse state.
(Source: been there, done that, have a new mortgage since.)
The costs and hassle of moving kept me in an underwater house that I mathematically should have walked on; eventually it wasn’t underwater and the mortgage was paid the entire time because I couldn’t be arsed to move.
The potential credit hit wasn’t even a consideration.
It’s a valid point of view. That said, for most homeowners it is as simple as: My house is multiples More expensive than my next expensive asset. Loosing all the equity in my home will affect my lifestyle and financial future negatively, a lot. I will therefore continue to vote against whatever brings home values down.
There really isn’t an easy and elegant way out where you neither pay off the haves nor pitch the have nots majority against the haves.
Yup, and that's why it's so hard to get housing policy changed. To make it harder, I'd wager that homeowners, proportionately, lobby and vote more than renters do.
You only win here if you placate the homeowners, and a surefire way to do that is by making them whole when you whack 20% off their home's resale value. Maybe there are better ways, but I'm having trouble thinking of them.
The scenario to address is people who are forced to move (via e.g. layoffs, company relocations, industry collapse, etc) who are also suddenly saddled with a mortgage far higher than they can realistically payback while still moving on to whatever opportunity necessitated the move in the first place.
The first order consequence of treating housing as an investment vehicle is high prices, sure, but the second order consequence is that you dramatically increase the stakes when individual people buy any house whatsoever.
I would much rather give checks to every homeowner whose home value falls than to force even a single laid-off autoworker or whatever into bankruptcy (good luck buying a home after that) if they elect to move somewhere else for a new job and can't sell their house for enough to pay off their mortgage. If the consequence of a government policy to build more housing is that more people become homeless, then its failing.
We (government) does debt forgiveness all the time. For very practical reasons. Can't some of the cheddar be redirected from the 0.1% to the rest of us?
A $400k home is probably a starter home. Owners are probably a young couple (millennials). They probably want to have kids.
Forgiving 100k of their debt means they (and their kids) will have a fair chance at success. Earning more money. Saving more. Paying more taxes (over their life times).
But the buyer probably didn't think it was actually worth $400k intrinsically. They were bullied into paying $400k because (1) they need a house no matter what and (2) at least the government guarantees that there will be a bigger sucker down the line who will pay $500k.
It's the government's fault that this bigger-fool game even exists, because the buck always stops there. They might want to consider compensating people for the misery they caused.
While at the end of the day I don’t think people should be bailed out, I don’t agree that everyone who over paid is a speculator. Many people are just wanting to own their own home. The market has been crazy for the last 5 years. Many people are just buying to own not to flip it for a huge profit. So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.
For the person who ownes multiple houses and buys simply to rent and flip a profit well I have very little sympathy for them. They are the true speculators.
> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money
That's not how mortgages work (in the US, anyway). If the value drops, nothing happens, you still have the same house and same mortgage.
I've been underwater twice, in the same house, as prices go up and down over the years. As long as you still like the house and want to continue living there (I did), being underwater doesn't mean anything.
That's the catch, though. What if you wanted to move? That would have sucked. What if you had to move? That could have been disastrous to you. What if you had lost your job, and defaulted on the loan. Apparently most states in the US are non-recourse, so how would you feel when your next job's wages are garnished, or there's a lien on the next home you buy?
When you have to put an "If" in front of "being underwater doesn't mean anything", then that means sometimes it really does mean something.
Where do those ifs stop? What if you went blind in an accident? Some things are just disasters, you can't count that for optimising the majority of the system. Of course you can have support for poor people but that will obviously not match the 400k house lifestyle.
> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.
I feel a little sorry for them but they are not missing the money total of "the whole house". They can sell the house, have a shitty $100k debt, a tale of woe, and hopefully a better idea of how to go about spending money they didn't have.
I feel there are too many people who "borrow as much as they can for the best house they can get" rather than being sensible about their money and using a mortgage as a hedge against paying rent and future rent raises. Some of them make it, some of them don't.
we’re talking about wiping out most of the stored wealth of roughly a quarter of all homeowners here. and they cannot take that home with them when a new job opportunity comes up or worse get fired/sick.
> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.
I don’t understand this point. If you’re paying the mortgage, the bank dgaf. Is there some sort of margin call a bank can claim on a house that is worth less than it was when it was purchased?
Don’t you just pay the mortgage you agreed to pay the bank?
> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase.
I think it's pretty normal for rational purchasers to consider the resale value of something that they purchase, and hand-waving that away doesn't make for a very serious argument.
In the case of housing, it is generally very not normal for resale to be less than purchase price. Sure, there are exceptions to that: market downturns happen, and sometimes regional issues (like the one big employer leaving town) can cause that. But in general, no, it's normal for the resale value of a home to be higher than when you purchased it.
Very rarely does the value of a purchase increase over time. Literally the only examples I can come up with are things that are very old and rare, or a house.
Viewing a home as some kind of investment vehicle is everything wrong with the housing market today. It’s so wrong it makes my head spin.
> Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis.
That would be an incredible commitment, and not something which has happened. This burst of new rental property is already subsiding, with an expectation that rents will again raise next year. Moreso, it would be hard to get private organizations to commit to building such a massive glut of property knowing that they are tanking the market that would pay back their investment.
That is why this doesn't magically solve the housing crisis.
> It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.)
That is only if you believe that more capacity does not induce more demand, which really isn't true as long as the city remains popular for jobs/climate/nature/etc.... People not moving to Denver because the rent is too high will decide to move to Denver if rents decrease (and the demand they add will cause rents to increase, wash/rinse/repeat until an equilibrium is reached). You also have cases where a city becomes even more attractive because of growing density alone (NYC, Hong Kong, Tokyo).
This argument always comes up when discussing a specific place.
"Everyone would move to ________ because it is the best place in the spiral arm of the Milky Way", where ________ is Boulder, Bend, Austin, Portland, San Francisco, Santa Barbara, Hawai'i, Santa Fe, etc.... etc....
It cannot be true for all of them. So they all need to build and people will figure out where they actually want to live.
Bozeman, Montana, a small city of 50K people, is seeing falling rents because they built a lot of housing:
If everyone could live where they wanted to live, then ya, why wouldn't everyone want to live in the best cities?
If you have fixed demand, then you can definitely "build" your way out of a housing crisis. Bozeman, for example, doesn't have many jobs, so you can't really live there if you don't bring your own money. A big city like Seattle or Denver... they have lots of jobs, so they will grow at least to the point that all those jobs have people working them...but then a city like that attracts even more jobs (the way cities work since they concentrate talent, which attracts more businesses looking for that talent), more people, it could grow from a million people to 10 or 20 million easily.
> And it's very much the kind of small place where "everyone wants to live there".
MT is a bad place if you need to work for a living: high housing prices, jobs don't pay very well if you can find them at all. My mom moved to Helena in the late 90s and found that out first hand. If WFH took off as expected, then you definitely could make a good life in Bozeman or Missoula or Butte, but alas, the opposite happened and we regressed greatly.
The population of Bozeman is still growing, albeit more slowly. It's not like people left. They just built a lot of housing, vacancy rates increased and prices dropped.
Same thing happened in Austin, Texas, which is a much bigger city with lots of jobs.
The underlying story is that building enough housing is a good way to fix a shortage of housing, which is what causes high prices.
> If everyone could live where they wanted to live, then ya, why wouldn't everyone want to live in the best cities?
Best is different for different people. Some people it means close to beaches, for other it means cultural institutions, for others it means lots of tech companies, for others it means wide open spaces.
Land is eventually limited, but there is tons of variety available of what people like.
> If everyone could live where they wanted to live, then ya, why wouldn't everyone want to live in the best cities?
I moved from midtown Manhattan to western Wyoming. People have diverse preferences. (Even if we assume uniform preferences, densifying the population into a few cities so we can reclaim our wildlands sounds like a dream.)
The point is everyone in Jackson doesn't want to live in Manhattan and vice versa. There are multiple equilibria. Same for Denver, Seattle, San Francisco and Los Angeles.
Really? It's very small, isolated and while there is a ton of outdoor stuff, I don't think there's much else. There are tons of people who enjoy the urban amenities in places like NYC or San Francisco who would have fun for about a week and then be desperate to go somewhere with more going on.
Just as there are plenty of people from outdoor towns who would enjoy hanging out in NYC for a week but then miss mountain biking or something.
I couldn't stand the rain in Seattle. You'd have to pay me to live there. Some people apparently like it or at least don't mind it much, though!
Jackson is a resort town, like Vail, Aspen, Sun City, Park City, etc...you are usually really rich if you live there, or doing service jobs for the very rich. Obviously, you can't just move there and expect to somehow survive.
If I had a few billion dollars lying around why not? I'm a big fan of anything on the snake river, having been a toddler in the city where it meets the Columbia. But I need to work for a living, so it will be a big city with a thriving economy for me, I don't have the option of liesuring about in a resort town.
Even if you can observe this induced demand locally in a city or two, the net supply is going up.
Globally, demand isn't even fixed. It's proportional to the population size, which we would expect to shrink.
The only way this could work in the opposite direction is that you build enough that it becomes feasible for everyone to live in a few supercities where demand keeps growing due to network effects, and the supply outside of the supercities is useless.
Housing stock definitely goes up in those cities that have the demand. Other cities drain out as a consequence and housing is razed in the cities that are no longer popular, like Buffalo and Detroit.
Do we really want that? Of course, housing has to be maintained and has a lifespan (the Japanese are good at rebuilding housing stock after 20-30 years), and so it can simply die off in the places that are no longer popular, but it seems like a waste of infrastructure investments that then have to be re-done in the new hot places.
Induced demand can only function if there's a scarcity to begin with, and it's premised on increased supply increasing affordability (that's the mechanism by which it works), but these axiomatic derivations don't matter because we have case studies (in MN, in TX, and now CO, a story we're literally commenting on). Empirical observations win.
> Induced demand can only function if there's a scarcity to begin with, and it's premised on increased supply increasing affordability (that's the mechanism by which it works)
I don't think that's how the theory is supposed to work. It's more along the lines of, if you build more housing in a place then more people live there and then the higher population density can sustain more shops and jobs, and then people want to live near shops and jobs so the local demand increases.
There are two reasons the theory doesn't actually mean that you can't solve the problem with more housing.
The first is, the effect isn't infinite. As the reductio, if the entire New York Metro area had the population density of Manhattan, it would house 450M people, which is more than the entire US population. So you can build more housing than you have people to move into it even if that would literally cause the entire national population to move to the same place, and of course building that much housing in one place wouldn't cause literally everyone to move there anyway, so the amount you need in practice is far less than that.
And the second is, it's a local effect that comes from net migration. If you build more housing in Denver and that causes people to want to move from Austin to Denver, even if you don't build enough to overcome that in Denver itself, you'd still be lowering housing costs in Austin. And if you're simultaneously building new housing everywhere then there is no net migration and therefore no induced demand anywhere.
This Colorado story includes construction already slowing so why should we be convinced this is the start of a downward trend toward affordability vs a corrective blip after the Covid-era remote work migration trend?
Affordability and desirability are always going to be in constant tension, and any given change - including construction - can tip things more one way than the other. The long-term affordability trends are poor even in states like Texas - is that purely because of construction? No, it also has to do with policies like trying to poach established businesses from other states and importing wealth and high salaried individuals. But it shows that development is no panacea and that even in areas with more open land to build more new construction on there are still powerful trends in the US towards sprawl, low-to-medium density, and rising cost of living. Without explicit intervention like subsidies or direct government construction development will slow - focusing on higher-ROI units for the same spend vs pure unit count - as developers worry more about not being able to command the per-unit price they want if they were to aim for quantity.
> Induced demand can only function if there's a scarcity to begin with
I don't believe this is true, assuming scarcity = shortage. Ad absurdum, if Denver overbuilt such that one could pick up a parcel for a song, you'd see opportunistic demand where there previously was none.
There's places all over where land, and sometimes land with buildings gets very inexpensive because there's not much demand.
Here's a listing for a parcel for $9000, that's been listed for over a year[1]. Denver seems like a nicer place than Detroit, IMHO, but it's possible for there to be more supply than demand.
I suspect at 5% annual growth in units, you would be able to reach the point where there's not enough demand for builders to recover costs. It might take a few years, depending on just how much unmet demand there is.
But there’s an obvious limit somewhere, Denver with 5 billion units might still see demand, perhaps even ten billion (need that second house of course!) but once Denver has 20 billion dwelling units demand will have leveled off, no matter how much more supply is added.
That's why you have to allow large-scale building everywhere. Then the market will find its own level.
The inverse of this situation is that everyone lives somewhere they consider unpleasant because the rent is affordable there.
The megacities you mention are enormously economically productive per capita. All sorts of efficiencies pop up when a huge number of people live near one another.
> The megacities you mention are enormously economically productive per capita. All sorts of efficiencies pop up when a huge number of people live near one another.
It isn't a bad thing. NYC and Hong Kong are nice cities, they should exist. But don't expect housing prices to fall because you add more density if demand isn't fixed, the opposite often happens instead (people want to live in megacities even though housing costs are high). And that isn't really a bad thing, like gentrifying a blighted neighborhood will drive up housing prices as well.
> only if you believe that more capacity does not induce more demand
No, it doesn't. What you're describing is elasticity. It's a well-studed concept, and means that a 5% increase in supply will probably reduce prices by less than 4.8%.
(An interesting side effect of a government committing to a zero real-price increase housing strategy is it eliminates whole categories of speculative demand. I wouldn't count on this for policy effects. But it's another feather in the cap for pro-housing policy.)
Giving significantly more people a way to live a lifestyle they seek, while holding the cost of housing flat -- if thats the worst case outcome, that seems totally fine, and arguably a better solution than trying to crash the cost of housing.
I would imagine for most people, this is what "solving the housing crisis" means
You keep building until supply meets demand, regardless of what that demand is or where it comes from.
We don't have an infinite number of people available to move into housing. There are only a certain number of people who will want to move into a particular region, and that number will stop growing at some point.
Granted, you don't want to build too much and end up with a ghost town. There's a balance to be maintained, and I think housing should be affordable, not a race-to-the-bottom cheap as possible.
A 5% increase in supply annually indefinitely would crash the housing market there, induced demand be damned. To put it in perspective, a metro area growing at 2% is killing it, the highest growth rate is Austin at 3%. Denver only grows at less than 1%.
Cheaper homes may induce demand, they won't induce a 5% growth rate.
> A 5% increase in supply annually indefinitely would crash the housing market there
Only if population is held constant.
Housing supply is inelastic, but housing demand is somewhat elastic. As seen in Denver, an increase in housing supply would decrease prices. But those lower prices will increase demand from people that want to live in Denver but previously couldn’t afford it.
I think you missed my point. It won’t increase it to 5% because that’s basically an unheard of population level increase for a big city/metro. It’s like 5x your average fast growing big city. You may induce some demand, it will be nowhere near that much.
How much demand do you think CAN be induced? Colorado has 2.6M housing units for ~6M people. If Denver builds 20k units a year for the next 5 years, that would represent the entire state growing by 4% (230k people) off the back of one city alone. I guess that's not terribly unreasonable - if Denver was the only city in the country.
Except, it's not. Where would all of these extra people come from?
More to the point, Denver is already quite expensive. Where are you going to find another 230k people capable of paying even higher rents than folks do today?
Are there people who have been avoiding Denver because the rent is too high? I think of Denver as somewhere you go if you're sick of the cost of living on the coast.
> I think of Denver as somewhere you go if you're sick of the cost of living on the coast.
Denver hasn't been that place for more than a few decades. Heck, the whole rocky mountain region has never ever been a place for cheap housing. Western housing prices are high historically for reasons related to desirability. They never were as cheap as the midwest or deep south.
> It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.)
"Committing to doing this every year" is VERY different than doing it in one particular year. Yes, that would solve it. But of course, 2022 was part of a very unusual cycle including a lot of migration and you should note the last line in the article:
> Meanwhile, the pipeline of new apartment buildings is drying up. The number of properties under construction is down by roughly one-third from the peak in 2023, the report found. That likely means fewer units coming available in the months ahead, potentially giving landlords room to start raising rents again.
Why would we consider bailing out entities that are financially solvent? These homeowners may have an underwater investment, but they (presumably) can still pay the mortgage to get it paid off
1. House prices have risen consistently for the past ~50 years. This is an anomaly (various theories why, my favourite is because women entered the workforce so the income per household increased and we spend as much as we can afford on housing). If/when house prices stop rising consistently then buying doesn't look much better than renting from a financial perspective.
2. Existing laws tend to favour the landlord over the tenant. In countries where this is not true (e.g. most of Europe) and the tenant is favoured, then renting is not so precarious and has lots of advantages.
I lived in rented accomodation in Berlin and it's a completely different experience from renting in the Anglosphere (UK or Australia for me, I don't know about the USA).
For single family homes square footage alone has a fairly modest impact on housing prices.
Land, driveway, number and quality of fixtures, electrical hookups, cabinets, countertops, doors, clearing land, water, sewage, etc can be nearly identical costs for a 1,000 sf or a 3,000sf home. Many things like wall insulation and heating demand increase sub linearly with square footage.
Which is why home builders so heavily favor large homes by historic standards. This is slightly less true of high rises, but making the building wider doesn’t require more elevators, internal hallways, etc.
A 1000 sqft, 3BR, 1 Bath, basic kitchen unit will be cheaper than a 3000 sqft 4BR, 2.5 Bath, fancy kitchen unit. Builders (and most everyone else involved in real estate) make a lot more money on the latter than the former, though.
Cheaper sure, but a large fraction of the difference is that extra 1.5 bathroom and fancy kitchen. Plus all the other little difference like more larger and nicer windows.
I’m not sure I get your point. If the utility of a home is largely a function of size, but the cost is largely a function of location and amenities then there’s little benefit to specifically building smaller homes rather than less expensive homes.
No one is seeking to build smaller; they're seeking to build less expensive.
Building smaller (specifically reducing square footage, baths, and kitchen amenities [which are a mix of size and non-size elements], and using less land [going up, sharing walls/roofs, eliminating private outdoor space, etc.]) is the mechanism by which the goal of less expensive can be met.
It’s actually quite hard to definitively quantify if renting or owning is better in a given area/scenario.
Obviously the case near me where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting, but there’s more to it than just that.
Maintenance is huge and real and people just seem to ignore it on the “own” side, but 5-10% of the value of the house a year in maintenance isn’t unheard of.
> where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting
I think those figures point towards buying being favored, especially if the mortgage payment is PITI, but even if it's principal and interest only, I think buying is likely to be better in the long-term if the spread is that small.
Maintenance is not going to run 5% of the purchase price on average, except in the most extreme low-cost housing situations. A house that sold for ~$500K (as would be implied by a $2600 mortgage payment) is not going to cost $500K in maintenance over the next 20 years (as 5% would imply) and certainly not over the next 10 (as 10% would).
You may have an individual year that's over 10%, but that's a cashflow issue not an overall cost issue.
The advantage of renting is the flexibility, lack of commitment to a specific house or area, and the lack of need for a large upfront sum (in this example, renting might need $6K upfront [$2K of which is the first month's rent], while buying might need traditionally $100K to avoid PMI or ~$20K on an FHA first-time buyer mortgage and associated transaction costs).
The $10K roof is noticeable precisely because it's an outlier that pulls the average up towards the 1-2% per year range for all but the least expensive houses.
If houses really consumed 5-10% of the purchase price on average per year, people wouldn't worry or talk so much about roof replacements; they'd be just other drops in the bucket.
> 5-10% of the value of the house a year in maintenance isn’t unheard of
That's actually pretty much unheard-of (unless you specifically bought a very cheap fixer-upper with the intent of remodeling).
I've owned current house for over 25 years and I have not spent 10% of its value in maintenance even if I add up everything over the 25+ years! Let alone every year!
It is instructive to look at how we got expensive housing in the first place. Expensive housing comes from a surplus of people. How did we get all those people? By building more housing and having people breed there.
New housing is only a temporary salve and perpetuates a vicious cycle. The people who move into these new units will have more babies, because they have new habitat. These babies will grow up and eventually drive up housing prices. Even before then, people will move or emigrate into cheap housing and fill it up. Housing then becomes expensive again, only with more people filling up the earth: polluting the air, straining water supplies, clogging roads, uglifying neighborhoods with massive buildings, overrunning parks and trails.
Thankfully, expensive housing, in part, has reduced American baby making to 1.6 per woman, a sustainable rate. Unfortunately, because humans are living longer, the US population still continues to rise. The U.S. Census Bureau currently projects that the resident U.S. population will peak at nearly 370 million around the year 2080, before it gradually declines to about 366 million by 2100. If immortality is invented before 2080, the population may never go down, ever.
Meanwhile, the latest estimates put the current U.S. population (as of mid‑2025) at approximately 342 million. The population has increased roughly 4.5x since 1900. From building new housing.
that's unlikely. the pipeline of new units will be slowing, it's just that a bunch of projects that got spun up at the peak are finally delivering, but new starts have been down so we're probably approaching the bottom of a trough
It's really encouraging to see these kinds of success stories. I really hope people who are concerned about affordability start to view things from more of a "yes and" point of view. We can work on reducing the barriers to building more housing of any kind while also advocating for more social housing development.
> We can work on reducing the barriers to building more housing of any kind while also advocating for more social housing development
One of the NIMBY lobby's greatest wins was putting these options on the ends of a policy spectrum.
They're not. They're complementary. If it's cheaper to build, it's cheaper to build social housing. And if you have a vibrant construction sector, you can build more public housing faster.
Sorry, yeah, IZO/IHO --- rules requiring some margin of AMI affordable units in new developments (which makes new development harder to pencil out, while giving warm fuzzies to locals who want to genuflect to affordability while still fencing out new neighbors).
Probably the best thing you could do in terms of social housing construction would be to have the government put up some capital to buy land and build new housing on that land, then immediately sell it and use the proceeds to do it again and again with exponential growth because it's actually profitable.
But that's also what construction companies would be doing regardless except for the subsidy, at which point you might be better off doing something like exempting construction companies from property taxes for two years if they at least double the number of housing units on their land in that time.
Not saying it's not noteworthy, but Austin rents have also been trending down lately.
I just recently heard the term "accidental landlord", which is someone who can't (or won't) sell at a price low enough to actually get rid of their house, so they rent it out. I know that's a factor in Austin; I wonder if it's part of the story in Denver?
In a proper market economy there are many accidents in everyone’s career as they adapt to changing market conditions. Only in a planned economy do some market segments face no surprises.
With rents escalating notably from 2022, getting back to 2019 rates would provide substantial relief for numerous families, assuming that's the objective.
Anecdotally, Denver home prices appear to be down compared to a few years ago as well. The ~850sqft unit next to mine sold for $700k 2-3 years ago and I’m certain it’d go in the low 600s now.
The "fuck you got mine" attitude so many homeowners have and deliberate supply restriction to increase property values makes it a smart investment on paper, at the cost of screwing everyone else coming after you.
How is getting your own money back, many years later, without appreciation "equity working in [your] favor"?
Without the appreciation (and leverage multiplying that), buying housing would be nowhere near as good an investment. (As it stands today, it's phenomenal, of course.)
The restrictions on supply are generally economical. Every day, building gets more expensive; labor and parts both cost more. That is going to cause the average home to cost more, even older ones, as you always have the option to get a new build at current rates or an older one for slightly cheaper.
The problem isn't home ownership, it's zoning regulations being done locally so that areas full of owner-occupied single-family homes are the only ones eligible to vote on whether higher density housing can be built there, in combination with the "got mine" attitude that causes them to vote in the way that constrains supply.
It's good for people to be able to own their homes. They should be able to own their homes instead of paying a large fraction of their paycheck to landlords as rent or banks as mortgage payments. But that requires housing costs to get lower rather than higher, which in turn requires some kind of state- or national-level policy to prevent local homeowners from sustaining the opposite.
Why is it wrong to want to have equity in the place you live? "Ownership" could be a house, it could be a townhome, it could be flat. But in the US, "owning" an apartment is very rare, while real estate investors buy up all the valuable land in the urban cores of cities and rent it.
If you want equity in real estate nobody is stopping you. The problem is when people get this idea that we need to discourage investors from building very greatly desired rental housing.
This is the big problem with treating your home as an investment. People who just want a place to live near where they work now have to play this game too. And it's not cheap game.
That was what rentals were supposed to be. And then there was also such a thing as a "starter home". From what I see in Omaha, it's the developers that got greedy — figuring they could get more dosh turning a higher-end home than a starter home on the same lot.
Of course it's greed. The question is how ethical the greed is in a given situation. If it's luxury software, no problem. If it contributes to a housing affordability issue, not so much.
The point is it's difficult and expensive to build in America. The core competency of construction in most cities is knowing how to grease the community boards', planners', affordable-housing advocates' and permitting offices' palms.
My problem is that the wealthy get wealthier while the middle class gets subjugated to permanent renter class.
Go ahead, develop! And sell equity in the property. I've wondered if I would support my city requiring a certain percentage of dense urban lots be flats for sale vs. rental.
Yes and: As you know, encouraging home ownership is policy. Meant to reduce elderly poverty. It worked, plus all sorts of adverse effects that now hitting hard.
I'd rather we had pensions, universal healthcare, and maybe ponies.
Not wrong at all. Previously owner-occupied single family homes will continue to be bulldozed and replaced with 8 story wooden boxes, owned by national corporate landlords of course.
>> single family homes will continue to be bulldozed and replaced with 8 story wooden boxes, owned by national corporate landlords of course
> Source? Why of course?
Maybe I'm talking past someone, but the concept that was being described is self-evident. So, I'll just say this isn't a controversial take, from an urban planning standpoint. It's been demonstrated for hundreds of years (albeit, slightly different wealth sources).
The pattern of smaller, high density housing, is the most efficient way to build profit in a population center. As density increases, central hubs appear. Land (specifically residential land) skyrockets in value as it's most scarce, within and immediate^1 and surrounding areas. 1 family paying rent on the land is less efficient than 1xN. The investment necessary to risk and realize those N returns are out of the reach of any entity other than a conglomerate. Singular elite investors generally do not engage in that risk, although there have been historic outliers. Cities also find it more expedient to eminent domain aging single family homes, more than taking on the corporate owned high density housing, further entrenching their relative durability. Despite the highly variable timelines, American cities have followed the common pattern of density housing owned by corporations replacing single family homes, in population centers, for a very long time.
^1 For some value of immediate, based on available mass transit and other environmental factors
> the concept that was being described is self-evident. So, I'll just say this isn't a controversial take, from an urban planning standpoint. It's been demonstrated for hundreds of years
National corporate landlords haven't been buying up anything for hundreds of years.
How is this measured? I've seen similar articles for Melbourne, where the average per dwelling is reducing, but the quality of the average dwelling is reduced faster; less bedrooms, low quality noisy single aspect apartments.
But if you track the price of a pre-existing property it's growing just as fast.
It all just goes to show that government building, or creating some financing framework for building, very plain housing and selling for cost to keep supply ahead of demand would be an effective policy.
Doesn’t rent need to keep going up so the top-heavy segment of retirees can have a steady stream of inflation adjusted income and capital gains for their remaining years? This doesn’t seem sustainable, politically
Residential real estate is very rarely a large component of people’s retirement savings or income in the US, and equities historically outperform real estate.
Doesn't seem sustainable civilizationally, either, if the young and poor are propping up the old and rich, rather than older generations nurturing the youth.
The last paragraph should temper our enthusiasm. Allowing people to build more when there is a shortage is the best way to have markets solve problems.
—-
“ Meanwhile, the pipeline of new apartment buildings is drying up. The number of properties under construction is down by roughly one-third from the peak in 2023, the report found. That likely means fewer units coming available in the months ahead, potentially giving landlords room to start raising rents again.”
"hey guys check this out i figured out people will pay anything to avoid dying on the streets haha supply demand number go up. what about if we do food and water next"
Rents are high because landlords are greedy and are paying already inflated house prices.
Owning is expensive because banks are greedy, pumping out the created credit for mortgages, which is an imaginary number based on no actual value, because somehow banks are allowed to create money!
Here's the plot twist: you spend 30 years or even more (in Canada that has reached 70 years!) to pay the mortgage only to find out that you actually don't own the house and you're on a perpetual rent called property taxes.
And unless the root issue is resolved by banning banks' Ponzi fraudulent schemes, and implementing a policy to change housing into a depreciated asset just like Japan did, nothing will change substantially and will only change marginally to prevent people from going out rioting in the streets.
I guarantee with 100% certainty that if you were in a landlord position, you would be asking the highest rent that would keep your units occupied. You call it greed now, but landlords it’s simply business.
You negotiate the highest salary you can, right? And the lowest car purchase price? And go to the cheaper of the two gas stations? Why is okay for you to be discerning but not a landlord?
They didn't say 70 year mortgages, they said 70 years to pay off a mortgage, which is still a bit exaggerated (maybe), but would come from the contingent of people who got themselves into variable rate fixed payment mortgages for comically expensive properties, and that had a significant amount of interest remaining before the feds started cranking up interest rates.
If rates go up from 2% to 6+% while you're holding onto a $2m detached house, it's a bad situation to be in.
> If rates go up from 2% to 6+% while you're holding onto a $2m detached house, it's a bad situation to be in.
I find it mind boggling that banks will lend money to people that cannot sustain a 4% increase to their mortgage rate. Rates have been over 10% in the 80's!
Well, as far as I understand, in Canada we do have relatively conservative lending practices, such that you do need to be able to pass an income stress test of some amount, you're only able to lock in terms of 5-10 years instead of a fixed 30yr, and if you qualify for and choose a 5% down payment you'll have to fork out for CMHC mortgage insurance, so from a lending perspective it's more stable. That said, it's crazier to me that people will take on that liability rather than the fact that lenders will lend it.
As soon as someone hits what they think is a high salary, they'll borrow as much as possible, not thinking they'll ever lose that job or interest rates will increase. This changed a bit in the last 5 years, hopefully for the long-term, so places like Toronto are seeing 90%+ decreases YoY in certain realty segments.
Canadians' household debt numbers are absolutely wild and millenials without wealthy parents are and will continue to experience an increasingly tenuous financial future.
As an example, there's an older guy down the street from me who's long since paid his house off. For property tax assessment purposes, his house is worth $40k CAD, while the land is worth $1.6m CAD. It's just a standard plot in what used to recently be one of the poorest neighborhoods in the country
I understand the frustration, but it’s probably unfair to single out landlords specifically. Greed isn’t unique to landlords: it’s a universal human trait. We’re all greedy.
History reminds us of at least one person who famously preached against greed, and humanity’s reaction was to nail him to a cross.
As someone that rents I have little sympathy for people paying property taxes annually that are less than what I have to pay in one month.
There should of course be sanity in the system. If you’re retired and can’t the afford property taxes on your home it’s not okay to squeeze you for that little bit of money.
Of course. And rents should be lower. House prices should be lower. But I don’t care for the cries of people who think they are wronged by property taxes. Most of those home owners are benefiting from those taxes.
What I realized when I bought a house was for an owner occupier buying a house is the only way to 'invest' the money you'd otherwise spend on rent. You'd never make such a low return illiquid investment otherwise.
Denver is a boom and bust town. Every once in a while, it thrives for a decade, then busts with an exodus of people (myself included). It will rebalance and boom again.
Because that’s Denver’s history. Founded by land speculators after beating Indians in the Colorado War of 1865, only to become a gold rush town, then go bust, become a gang haven, bust again, then boom again with Carnations, then bust again, then boom again with industrials and nuclear waste, to go bust again when nuclear power was divested, then to boom again in the 90s with more gangs, bust again, then boom again in the 2010s with the green rush.
I left because I was sick of having to weather the storm of boom and busts, saw $250,000 homes become $950,000 homes (no change to the home itself) and prey upon the young people moving there to ensure they are financially burdened with Boulder Boomer retirement plans.
The Denver Metro Area has been booming for close to 20 years. It was one of the few localities that continued positive economic growth through the 2008 recession
Living in So CO, I smh at what's going on up there. The cost of living elsewhere in the state can be 1/3 to 1/2 the price. The govt and corporate employers could easily decentralize and stay in CO.
How far south are you? I lived in Colorado Springs for a few years as a ski bum and all my friends in Denver used to mock me driving back and forth, but my rent was almost $500 cheaper living in Springs.
If he was a "ski bum" I'm guessing he wasn't commuting to Denver, but to get to the mountains up there he'd have to drive the extra distance sometimes.
For me, I just saw it as disposable income. I was making good money at the time and it never really occurred to me it might not be a great deal. I just figured I had $500 more to do what I wanted.
And caveat, I wasn't going every day, A lot of the back and forth was variable depending on weather and conditions. The sad part is you can't either these days thanks to Vail. Also, gas was a LOT cheaper back then - it was hovering around $1.75 if I remember correctly so the math works a little better, but not really ideal.
just a little west of Pueblo. We're about 1/3 of the cost of living in the Denver area.
We get plenty of migrants from the Denver area and elsewhere.
Of course, the sales tax and other taxes are going up. Probably heading to a truly rural area with a nice community soon. I lived in many big cities over the years. They are toxic and unsafe. I know that because I worked in public health. If you look at the morbidity and mortality by zip code, you'll see yourself. Affordable city living has a dark side.
Not to say that city life isn't great when you're in your 20s or 30s. It is fun and jobs are everywhere. But I've seen enough fatal car crashes for a lifetime.
As I get older, this is a constant concern. I'm like OP and just want to pull the chute and move out to somewhere in Wyoming or Idaho up in the mountains and not worry. Then I think, "Bro, you're getting older, you have a heart attack or something worse and you'll be dead by the time the ambulance gets to your place."
So I'm back to trying to find a state and city that has good access to healthcare. We're a year from being empty nesters with both kids off to college so education isn't important. But I very much have the same reasoning.
Someone should try this with medicine. Instead of subsidizing insurance (demand side), let’s spend the money to bring doctors to the USA from all over the world and have them work in free clinics (supply side).
Good luck getting the federal government to stop doing what the unio..., I mean, what the American Medical Association and representatives of the nation's medical schools ask for.
Not just residency. Fix the cost (and capacity) of the education system as a whole, especially for mid-levels. There’s no reason this country should have such a chronic NP shortage, and you don’t need MD/DOs for most of the healthcare gaps we have.
You also make rural care viable when you don’t have folks who need to pay off astronomical loans.
How are NPs not just the trend of enshittification? Most doctors already aren't very engaged in the tiny 15 minute slices of appointments, and now we're supposed to be happy that they'll be even less educated? The most straightforward way to address the doctor shortage is to make it so doctors are spending most of their time on healthcare, rather than appeasing "insurance" company bureaucrats with onerous paperwork.
What an oddly personal reaction. Did you get bored of infosec or something?
Being HN, we're talking about systems and cohorts, not individuals. I've had some great individual NPs that were more actively engaged than most doctors. PAs as well. And I've had plenty of crappy MDs just phoning it in. But none of that is really relevant to the system meeting higher demand by simply lowering its standards rather than actually being reformed.
Finding good (and available) primary care providers has always felt like going to the casino in my experience. Currently seeing an older NP who has been great. I could see a future with many more NPs. Obviously, if you know a guy or need a specialist, then do what makes sense.
There are NP mills that will take you from high school, put you through an accelerated RN and prereqs and basically have you as an independent provider in just a few years out of high school (well, 4-5), that’s ridiculous.
What a weird comment. What do you think you need an MD for, in your primary care visit, that an NP can’t do? What do you actually know about their education? What do you actually know about licensing? How much time, in a day, do you think doctors are spending on “insurance”, and what specific experience leads you to believe that?
(Because the actual answer is “near zero for literally any provider who isn’t completely independent, and almost none of them are, anymore”.)
Or was this just a way to memetically add “enshittification” to a conversation it doesn’t even slightly apply to, but you think that’s currently trendy?
You can be an NP in as few as 4-5 years out of high school with some courses. That’s to me the definition of not knowing what you don’t know. I’m a critical care paramedic who has corrected many NPs on fairly fundamental learning.
I’ve found that nurses with significant field experience do very well, but there are plenty of courses who will “zero to hero” you fresh out of high school.
Meanwhile, PAs go through a program near as rigorous as medical school and have to have physician supervision while NPs are not subject to oversight.
Doctors begin delivering clinical care in year 3 of med school. You're doing a sleight of hand with this "out of high school" thing; doctors are also educated "out of high school", the difference between the two roles is 1-2 years before clinical practice, and NPs tend to practice supervised for longer periods of time than doctors.
And, obviously, NPs cover a smaller range of conditions than doctors.
There's accelerated pre-med too! My point is: it's all "out of high school". High school has nothing to do with any of this, but you mean to attach that term to NPs, as if they were in home ec last week. No, that's not at all how it works.
Sorry, this is fundamentally incorrect. To the point I can only assume you’ve made up every other thing you’ve said. Though I’m fascinated by a paramedic having opinions on someone else’s medical training.
The world would be better if we had less strident opinions on things we know we don’t know anything about.
If you want to be pedantic, then everyone has oversight through medical licensing boards, including physicians.
But if you mean "supervising physician"? Then let's see:
* Alaska - Full Practice Authority (NPs can perform the full scope of practice without a supervising or collaborating physician.
* Arizona - Full Practice Authority (NPs can perform the full scope of practice without a supervising or collaborating physician.
* Colorado - Full Practice Authority (NPs can perform the full scope of practice without a supervising or collaborating physician.
We're six states in, and half have no requirement for an NP to have any supervision from a physician.
Let's keep going though:
Connecticut, Delaware, DC, Florida, Guam, Hawaii, Idaho... zero supervision required. At this point I couldn't be bothered going through the list. This list, from the AAFP telling physicians about their responsibilities in supervising NPs state by state: https://www.aafp.org/family-physician/practice-and-career/ma...
So to put that back on you, explain my fundamental incorrectness.
And again, if you're talking about DOH oversight, then that seems a little disingenuous, as even the Chief of Medicine at a Level 1 Trauma Center practices under that insight.
I'm very well aware of the limitations of my scope of practice. That's why I operate under online and offline protocols. But hey, maybe I should have done another year or two of school so I could have a "full scope of practice without any need for a supervising physician". Not sure the ad hominem has any relevance.
Okay but what does that have to do with enshittification, as defined by Cory Doctorow, which refers to the decline in quality of online platforms and services over time, often driven by the pursuit of increased profits. This degradation is characterized by a shift in focus from user experience to maximizing revenue, typically through tactics like increased advertising, higher costs, or changes that favor business customers at the expense of users.
Or do you just like how the word has shit in the middle of it and are using it incorrectly?
> What do you think you need an MD for, in your primary care visit, that an NP can’t do?
I guess not much at this point where PCPs don't seem to do much beyond use rubrics, prescribe, and refer. Which is why I used the word enshittification - it's part of a continual gradual march down in quality/services to a captive customer base. Basically the opposite environment of innovation aiming to serve customers.
> How much time, in a day, do you think doctors are spending on “insurance”,
I'd say at least half their time, if not much more. They certainly aren't scheduling these 10-15 minute appointments back to back all day. By "insurance" I am of course including all of the extra documentation and runaround they have to do simply to satisfy the third party beancounters' demands. I'd say this even includes a good number of patient visits themselves.
Observations in my personal experience line up with this:
- Number of signs at my primary care office about their procedures for providing/processing referrals, like this is the majority of their work
- The numerous questionnaires every office makes you fill out ahead of every appointment, that they themselves never actually read
- Experience with a not-terribly-large specialist office who employed an entire full time "nurse navigator" whose job it was to help doctors prepare documentation for "prior approvals"
- The multiple times I've seen a doctor personally step in to grease the system for something way way below their pay grade, because it was the only way to provide appropriate health care
I'm sure I'm forgetting plenty too. Frankly I don't know how one could step into any moderately sized medical provider and not perceive the entrenched corporate government tentacles in every facet.
You basically can’t or it won't have the same effects because medicine doesn’t really follow the same dynamics as most other markets: the supplier (doctor) has an information asymmetry and thus makes most of the decisions, while the buyer (patient) is not usually the payer (insurance) so aren’t really incentivized to save.
> the supplier (doctor) has an information asymmetry and thus makes most of the decisions, while the buyer (patient) is not usually the payer (insurance) so aren’t really incentivized to save
Counterfactual: patients in India routinely shop around for second opinions and negotiate fees.
Completely fair point. I should have prefaced my statement with US based healthcare system is structured this way. I don't know how the dynamics are in other countries -- though I do suspect it's similar in term of information asymmetry. I imagine doctors everywhere have some pretty advanced and specialized knowledge. I don't know enough about India to know how they overcome this issue or if they do or not.
Fixing a severe shortage is actually likely to have some impact.
For instance, if there's a lot more doctors, the payer may be able to negotiate lower prices. We already have insurance mechanisms that drive patients to the providers that the insurer has negotiated with...
But then you're just shifting the cost somewhere else. The doctors aren't working for free. Someone is paying them. It's just not the patients in the case of free clinics.
In addition, doctors aren't the only cost centers in health care either. Even if they're free, which is sort of already the case or fairly inexpensive for the insured in the US, the overall cost of healthcare will still be high.
Plus if you want completely free clinics (everything from doctors to medicine, etc), then you're not talking about a market solution to the issue, which is completely fair too. No one said you have to use a free market solution for this problem.
My point is that we can't expect a free market to solve this issue. It isn't as simple as supply and demand.
Giving people insurance without actually increasing the supply of doctors or clinics increases the number of people willing and able to seek treatment. It does nothing for lowering costs of said treatment. Per basic economics, that’s shifting the demand curve (i.e., increasing demand).
With no changes to supply that leads to higher prices. So every time the government makes a new program or expands anny existing one that provides insurance coverage, costs for everyone will go up.
In contrast, my proposal for explicitly bringing in doctors and creating clinics increases supply. People who would have gone to see a doctor elsewhere may now choose to go to this new free clinic.
The demand curve itself would not change, though with the lower cost due to the supply curve shift you would have a larger overall market.
This is clearly oversimplified. There’s some second order effects where if primary care market increases, you’ll need more X-rays and CAT scans. So there could be an increase in those prices. But that’s could be solved in the same way too.
I think you’re still missing the point - it’s NOT classic supply and demand because the mechanism by which that works is prices, and in many healthcare markets including the US — the buyer isn’t the payer, and shortages lead to rationing (via wait times) rather than increased prices, so often increasing supply doesn’t change prices even as it increases aggregate costs (because there’s still excess demand and rationing).
For this argument to work you have to believe that decreasing the price of service delivery wouldn't decrease the price of health insurance. Provider costs dominate US national health expenditure, like it's not even close; it's not a full order of magnitude difference but it's close to one.
But part of the provider cost is driven by the availability of money to pay, which is part of the reason why drug costs are so much higher than in the US. For example, the doctor has no strong incentive to prescribe less costly drugs since they don't pay. The patient don't know any better and aren't the payers either. The insurance has some control over what they will pay for and how much but except for some cutting edge treatments, it is very hard for them to say no. This is part of the reason why insulin in the US is so expensive and why drug companies advertise to doctors and patients, etc.
I think in countries where the health care costs aren't as astronomically high as the US there is some form of government intervention to distort the market. And the original post is more or less arguing for a market distortion that doesn't rely on simple price signals to bring costs under control. But that is very different than what has happened in Denver's housing market.
Drug costs are also a small percentage of the national health expenditure, which is dominated by procedures delivered in hospitals and outpatient clinics. I don't accept the logic you're using for drugs, but we don't reach that question until we figure out why the single largest health expenditure in the United States has no impact on health insurance costs, which are the primary way Americans interface with the health insurance system.
If that expenditure does impact health insurance costs, then the rebuttal given above about increasing the supply of doctors not improving affordability fails.
If you google [National Health Expenditure spreadsheet], there's an annual spreadsheet that has includes an incredible amount of detail about where we spend money, broken down in a variety of different ways.
Is $1800 per month supposed to be a normal or acceptable rent? Rent should be less than $1000 a month. And even that's only 30% if you're making over $50,000 a year.
One, maybe not the only one, hands off, automatic, 100% "all-natural", do nothing solution to the "housing crisis": Hope the birth rate, i.e., on average the number of babies born per woman, stays significantly under 2.0 or even 2.1, maybe 2.2.
So, the population will shrink but with some maintenance (roof, painting of exterior siding, kitchen/bath, HVAC, windows/doors) mostly the housing supply won't.
The Internet may reduce the time and money commuting to work and/or the need to be in high density, expensive housing areas for a job.
I live in Denver, I don't believe this article is true. I just got a renewal offer where they wanted to raise my rent by 30%. I have generally negotiated this down with my landlord (Greystar), but I also am well aware and they're more blatant about the fact that they use RealPage ever since the courts gave them a pass for blatant price-fixing and collusion. Greystar and two other major REITs own nearly 60% of all rentable residential properties in the Denver metro area, so pardon my skepticism, but I call BS on the thought that rent has or will ever go down in Denver.
Shop around and see what others are offering. I believe your anecdote, and I've also seen several other anecdotes about how rents have dropped - someone said as much as $1k.
Presumably GDP growth per capita, but even then, why would that be any better than "not a cent more than inflation", or for that matter even for housing prices to decline over time (e.g. through increased automation in construction)?
Yes, of course, the cost of things decreasing (net of externalities) is good.
(Was just making the distinction between inflation and purchasing power - things can have an inflation-adjusted rise in price while still becoming cheaper with respect to purchasing power.)
The point is the modern urban economic illiteracy that pretends supply and demand don't exist in housing (except when it comes to short-term rental stock, in which case it magically reappears) is wrong. Our housing crisis is a supply-side problem.
This is only half the truth. The reality is that demand is propped up by fannie/freddie and mortgages in general. The fact that the government will buy investment property mortgages is bonkers. In reality, you should only be allowed to mortgage the raw materials and labor of a primary home, everything else is just leveraged speculation. There's also a immigration question, but should be purely solved using new supply. Finally there's a question of, should you even be allowed to own investment properties in cities. A real land reform would be huge for the country; ie. forcing landlords to sell investment properties in any area where rent exceeds $x.
It’s a supply-side problem, but with majority of people being either indifferent to the problem or against downward pressure on the housing prices (most people don’t rent). The prices have skyrocketed, and most people who bought in the last 5 years wouldn’t want their assets to depreciate, if they spent 500K+ on it.
> most people who bought in the last 5 years wouldn’t want their assets to depreciate, if they spent 500K+ on it
If they spent any amount on it. The long-run equilibrium is managing housing prices like the Fed, with a commitment to building enough to keep median real home prices flat. (I'd argue for a one-time adustment to pre-Covid levels. But that's arguably an arbitrary threshold.)
Absolutely. I only pointed to the last 5 years, because there was an insane appreciation and a lot of people went the route of “becoming house-poor, but owning their homes”. Those people, who are on the younger side, won’t ever support depreciation of their assets.
Honestly, I have no idea how a government can resolve it without a large scale intervention or centralized action a la China.
I recently denounced some Boomer for this exact comment at a Berkeley public hearing. Unsurprisingly, $71 per month at the margin is quite useful to many people.
In Colorado, that's about 5 hours of labor for minimum wage employees (ignoring taxes, but at that income taxes are low). If you're working full-time, you average 174 working hours a month so that's about 2.9% of a minimum wage earner's gross income, which is nothing to scoff at for those folks who are earning at that level. And when you consider taxes (payroll which can't be easily avoided, and whatever level of income tax they have to pay) it's probably pushing closer to one day of work to take home that $71.
It's funny how for so long people fought the basic law of supply and demand and tried to force 'affordable housing' to be built exclusively, while the prices of homes skyrocketed. I think leaders knew better, but they just didn't care because they were making money on their property. It also seems like a form of generational theft from boomers to millennials. Housing supply was always being added until boomers got theirs, then they made it overly restrictive to choke supply and drive up prices.
Howdy, fellow KC resident. They are still building apartment complexes in Lenexa, but they are all near the Public Market, so. Not exactly the cheaper side of things. South KC is growing, but mostly higher-end homes it seems.
"We found that 12.7% (95% CI = 6.3–19.3%) of current childhood asthma in the US is attributable to gas stove use. The proportion of childhood asthma that could be theoretically prevented if gas stove use was not present (e.g., state-specific PAFs) varied by state (Illinois = 21.1%; California = 20.1%; New York = 18.8%; Massachusetts = 15.4%; Pennsylvania = 13.5%). "
Indoor combustion seems like a very good thing to eliminate.
In San Francisco, the housing crisis poses a far greater and more immediate threat to children’s well-being than this issue. Lack of stable, affordable housing affects everything: education, health, safety, and long-term opportunity.
We can debate other problems, but unless we address the fundamental need for proper housing, everything else should be secondary.
Developers don't build units to lower prices. If prices go down, it's because developers overbuilt or there are other macro factors at play. I suspect it's a bit of both.
A core tenet of capitalism and neoliberalism is private property. We're rapidly approaching a point of land reform. I think private property is a mistake. Note: this is distinct to personal property. You can own your own home, maybe even a second home. Anything beyond that should be outright disallowed or taxed into oblivion.
We should simply not allow people to hoard property. It is state-sanctioned violence to deny people shelter by intentionally driving up the price of a basic need. Housing unaffordability is the number one contributor to homelessness, which I think is up 18% last year.
I realize that's a pipe dream. What can we do instead? Do what Vienna does. Austria is a social democratic country that's still capitalist in nature. Yet ~60% of the housing stock is owned by the government. It is remarkably cheap to do so.
Public-private partnerhips or simply looking to the private sector to solve these problems are nothing more than wealth transfer from the government to billionaires.
Could you please stop posting unsubstantive comments and flamebait? You've unfortunately been doing it repeatedly. It's not what this site is for, and destroys what it is for.
This is not a solution. The average rent is still $1832, which is still unaffordable for people in Denver making the median income of $54.3k if you apply the rule of thumb where rent shouldn't exceed 30% of your monthly income.
communism? was there lead in the paint they painted your walls with?
no real argument was made for communism, however a housing / renting market controlled by the government with regulations instead of letting the “free market” (((oligopoly))) run it’s course screwing over the poor and middle class while the richest of the rich pool all these profits to build bunkers and do stupid shit.
yeah, a regulated market is better. especially when and if the government regulating the market is sane. thats a requirement for laws and or institutions relying on regulation
It's a nice victory story for the YIMBYs hoping to win over the upper-/middle class trying to retain the narrative that the market will provide "affordable" housing (not what this even demonstrates, but anyway), but this isn't going to get people off the street. We need a public housing sector to appropriately meet everyone's needs. Otherwise this is just a game of justifying "who deserves housing", a discussion over which I'll never agree with the market.
Until you reach transient shelter beds, which may not be saturated in a region (in some places in Chicagoland the work is going into outreach to get people off the street and into shelter beds as much as it is in expanding the number of beds), every additional unit of housing you build frees up some unit at or below that unit on the stack of housing. The effect percolates all the way down to long-term supportive housing rooms.
I don't really understand the intuition people have for how anything else could be the case. You make new housing available, people move into it, leaving vacancies. Pretty simple.
> every additional unit of housing you build frees up some unit at or below that unit on the stack of housing. The effect percolates all the way down to long-term supportive housing rooms.
This makes intuitive sense to me, but I've really struggled to explain it in a way that makes it click for people.
Just ask: whoever moves into the new place, where did they live before? Does their previous apartment vanish into the ether?
This is an aside to your thing here, but I don't think any of us can do better than the HN commenter on the other housing thread today who said (paraphrasing) that this concern about building market-rate housing is like expressing concern that nobody builds used cars.
I don't have the impression most of my "fellow" americans even gave a damn about homelessness to begin with, so perhaps what you read as misunderstanding the market might simply be a disagreement of values—one party cares about the homeless, the other cares about salaried employees. May we all truly rot in shit.
Why is housing always about the homeless? Yes, getting people off the street is important. But there's few other topics where a solution that helps 99.8% of people is dismissed because it doesn't help 0.2% of people (I don't even agree that it doesn't help them, but I'll be charitable for the sake of making my point).
To me, poverty is basically the only thing worth talking about when it comes to politics. Nothing else is going to get me to the voting box—to me, a platform that doesn't focus on poverty reduction doesn't even understand the point of government, the economy, or trying to work together.
I suspect other folks who think this way are going to be disproportionately loud.
People in poverty have to pay for housing. Reducing the price of housing helps them, and may even help them climb out of poverty. Building more housing reduces the price of housing.
Even if the government is paying for housing for them, cheaper housing means that the government can pay for more people's housing. Building housing reduces the price of housing...
> cheaper housing means that the government can pay for more people's housing.
Which we will never do, because it depresses property values.
Look "abundance" bullshit would make sense in a continuum of housing policy. But by itself we're just doubling-down on reinforcing homelessness as an american institution.
Right now in cities homelessness is often associated with addiction or mental illness. We spend billions every year giving these people resources to get off the street, get treatment for addiction or mental illness. Right now? Many, many, many of those people have no desire to get off the streets or get clean or get treatment for their mental illness - despite the copious amounts of safety nets and other programs designed specifically to help those people.
I agree, we already have programs designed to help those who need it - focusing on the larger percentage of the population just makes sense if you're concerned about having bigger positive outcomes.
> Lowering the rent stops people from becoming homeless which is a necessary element of ending homelessness.
Sure but by this reasoning you could justify any effort as sufficient. At some point you have to make the personal judgement on what effort is enough. I don't really see any effort focusing on anything short of homelessness as worth the oxygen in the room it consumes.
The point is that jeffbee literally said "a necessary element", and you rebutted with saying that it wasn't sufficient. No one said it was sufficient, so who knows who you're even arguing against?
So you're telling me if an additional, say, 100k units came on the market in Denver in the next year, housing prices wouldn't fall dramatically such that all working people could afford housing?
Working people should be able to afford housing near where they work. So let's press the gas pedal on building. The mentally ill and drug addicted should be subject to mandatory treatment or jail until such time as their underlying condition is mitigated to the extent that they can work and afford housing. Free housing doesn't work. In fact, it exacerbates individual dysfunction. It is cruelty masquerading as kindness.
Hey, if that's the metric you're pushing for, good for you. I'm pushing for housing as a human right. I never caught the calvinist bug of "torture the non-productive until they conform and perform" method of population management.
Housing doesn't just spring up on our streets by Jesus' will, so by making people responsible for providing housing for other people, you're literally calling for "torture until they conform and perform".
Why should housing be a human right? Human rights came from seeing all people as made in the image of God, but since God is out of fashion, what justification is there? And even if you argue "image of God", human rights have hithertofore been about human interactions, not possessions or use of things. On the latter, Paul instructs thieves to stop stealing and work, so that they have something to give to the poor--it's not clear to me that a Christian position would necessarily consider housing or income to be a right of existence. [1]
If housing is a human right, then I think you need some human responsibilities, too. Like giving back to society in some way, e.g. Paul. Rights of interaction go both ways, but right to housing/basic income only go one way and that is not workable. Communism tried right to work / right to housing, and it never worked. You could say, well, the probably was command economy, but how would you guarantee work/housing without a command economy? As it is, society informs you how it values what your giving in the form of money, which you then use to buy housing. It isn't perfect, either, but it seems to work better.
But going back to human rights being derived from all people being made in God's image, the Christian view is that it is each individual's responsibility to care for the poor. Making no-poverty a human right turns it into society's responsibility, and I'm not convinced that is workable. Society doesn't exist; society is the interactions of individuals, and if you don't transform the individuals to each care for each other, it will be impossible for society to. Marxism makes the claim that society is the problem, but so far no workable solutions have emerged on how society can solve the problem. (To be fair, Christianity did not solve the problem, either, although the early church sure tried, especially with Basil et al after Constantine increased their resources)
[1] As a possible counterpoint, St. Basil said that everything you earn over subsistence belongs to the poor, but that seems a unworkable unless you, like him, are part of a rich monastic/ecclesiatical community that provides for you in exchange for individual poverty.
> Human rights came from seeing all people as made in the image of God
bruh I don't think Jesus wants to create homelessness. Maybe you should read your book and stop using it to perpetrate blatant acts of evil. I don't think you're seeing heaven if you honestly think homelessness is justified in any way. Read your fucking book.
Human rights don't depend on the compulsory labor of others. They are inherent. Housing doesn't qualify.
"torture the non-productive until the conform or perform" is possibly the most inflammatory framing of "you should not make other people pay for your housing" I've seen.
It will just go back up 3% next year to match inflation. 20k apartments and the rent only lowers 3%? What a joke. Only the real estate industry is celebrating this.
Just because this doesn’t magically solve the housing crisis, doesn’t mean it’s not a good start. We have to stop looking at magical solutions that will solve all our problems in one shot. We have to start somewhere.
> because this doesn’t magically solve the housing crisis
It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.)
[1] http://censusreporter.org/profiles/16000US0820000-denver-co/
> You'll probably need to bail out recent homebuyers, who will be permanently underwater
If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house we're supposed to give massive government support to correct the buyer's mistake?
Yeah, pretty sure a government won’t bail me out if I invested in a stock so much that it would crush me if the stock went down. If buying a house is an investment and not for living, then it should be treated like it is.
> pretty sure a government won’t bail me out if I invested in a stock
https://en.wikipedia.org/wiki/Greenspan_put
More pointedly, you're not in a position to block equity capital markets reforms in the way homeowners are in respect of housing reform.
Homeowners shouldn't be either. Locals should have less of a say in zoning decisions since they've demonstrated they won't act in their community's interest.
Also, making the public hold the bag in a bubble is perhaps the most sinister form of theft imaginable.
Yeah everyone involved in that should have been shot. That's part of what led to the situation we have today.
Short term thinking dominates economics these days. Managing the current downturn is most important, when people ask about longterm implications do a bunch of hand wavy stuff about it being temporary and then kick the can to the next guys who do the same thing.
> Short term thinking dominates economics these days.
Especially among people criticizing the response to 2008/2020.
Failing to mitigate sickness in capital markets and the economy in the short term would have inflicted far more damage in the long term.
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You are assuming that there was any good way of dealing with a year where nobody went to work because of a global pandemic.
The economic pain of inflation was far preferable to the economic pain of active economic destruction, as short-term disruption to business would have resulted in long-term destruction of real value. It was far less painful long-term to print money and have the economy on pause for a year, with bills still getting paid, than it would have been to have the economy collapse over that year.
If it weren't for those mitigations, we'd all still be sitting around a tire fire, trading bottle caps for ammunition.
We're just going to have to agree to disagree here.
It isn't, though. Housing is a basic human need; investing in the stock market is not.
people call buying a house to live in an investment but that's because they don't know the technical term is a "hedge"
so you know: most localities do treat the house you live in very differently from a tax perspective than they do any additional properties you might have, because everyone is born short housing, until they own 1 place to live.
so yes, the proposed bailouts up thread would be for people who bought a house because they didn't want to be short housing; a hedge, not an investment.
also if the house has hedges then your hedges are a hedge. I'll see myself out
Buying a house is more than an "investment" though: It's achieving the American dream. And while this dream might have been a farce, it's like everything else in that you hear it enough combined with not understanding the economics and policies underlying home ownership and the lie is reality.
And let's not even get to your point about hedges. I don't know many people that can define it let alone consider housing as a hedge.
If the house price goes down you don't lose the house. You just end up paying more for it than you could have if the price was lower when you bought it. You are just keeping your promise to pay your mortgage. This whole "unrealized gains need to be compensated" thing is insane. Responsible policymakers would ignore such greedy, self-centered, anti-community sentiments.
Basically everyone considers housing as a hedge - homes are expected to grow steadily in value or at the very least not depreciate.
This is not a good policy goal, but the fact is that the wealth of the American middle class is mostly stored in property, and tanking property values would be a disaster for a broad swath of society which otherwise only has long-term retirement accounts to rely on.
They will vote to protect their interests, no matter how badly it screws their kids or contributes to homelessness.
Buying a house is investment. Living in a house you own is consumption.
These are two distinct things that are coupled through life choices. It's a real pity that tax regulations are different just because you make individual life choices.
Many people have places to live without owning a house. Me for example!
Ah a counter example to a probablistic argument. Whodathunkit
> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
Isn't that missing the forest for the trees? There's an all-out class war between the haves and the have-nots. If it controls supply like a cartel, and if it pursues rent-seeking like a cartel, then maybe the real estate moguls and speculators that treat everything like an investment instrument should be held accountable and liable.
How is it fair to compare buying a house to buying a TV? One costs 500$ and the other costs 500k plus ongoing costs like repairs and taxes. Not saying you’re wrong, just that the comparison isn’t apt
Because if you're buying a house for a house, then it (mostly, generally¹) doesn't matter that the housing market has moved downwards and you'll be underwater until you pay down a bit on the house. You still have a house! So long as you can afford the mortgage — something you should have already planned for given you bought the house — you can still afford it. You might have remorse at having paid +$100k right before the market moved, but that's what the parent is saying: that's buyer's remorse, that is speculating on the price, when instead, you should be saying "am I willing (and financially able) to trade $400k for a home to live in?"
(¹I don't want to get too much into the sidetrack that is "but if you're underwater you could lose your home" — yes… that's possible. The example here is a 20% fall in prices — which would be astounding to those of us wanting a home, the thing of dreams — but you put 20% in the down payment, so a single mortgage payment & you're no longer underwater. In reality, the price drop (in rent, but let's work with what we got) was 3.7%. (Don't get me wrong, I'd take that too, as a renter.))
What if your company transfers you to another place, and you need to move, and you can't pay off the remainder of principal on the home with the (now lower) proceeds you get from the sale? Or even if you can, but you don't have enough for a down payment on a house in the new area?
Even regardless of that, I don't love the idea that a change in housing policy could make people feel trapped in their current home, unable to move. Granted, current housing policy (e.g. California Prop 13) has that effect on some people already. And I bet it sucks. Now, I'm not sure the government should be bailing out people who can continue to pay their (now underwater) mortgage but would just like the option to sell it and move. But I think this requires a bit more thought than just wielding that axe and letting things fall where the are. I mean, hopefully we're not advocating for more of the DOGE method.
> but you put 20% in the down payment
The median isn't even 20%, it is a bit less than that. Median first-time home buyers put only 9% down. Even the median repeat buyer, who just sold a house and had probably been paying mortgage payments for a while, only put 23% down.
https://www.nerdwallet.com/article/mortgages/average-down-pa...
But you are right though, a 3.7% drop probably wouldn't put even most first-time home buyers underwater.
I think you're neglecting to account for a big risk. If the house retains or increases in value, the bank can just take the house to recoup what you owe them of you can no longer pay the mortgage due to ill health, accidents, etc. What do you think happens if the houses value drops a lot and you can no longer pay what you owe? You don't just lose the house, you're in a much, much deeper hole. How property values go substantially changes the risk calculus of owning a home with a mortgage.
> You don't just lose the house, you're in a much, much deeper hole.
Oof, I was about to question if this is correct or not, but it turns out that this is indeed true in most US states: if you default on your mortgage, and the bank can't resell your house for at least as much principal as you have left to pay, you still owe the difference, and they can get a court to garnish your wages, put a lien on any future home you may buy, get your accounts frozen.
Didn't realize this was a thing... I live in a non-recourse state (California) where the bank only gets the property on default and can't pursue you further.
As someone that's bought their first house in the last few years, it's hard not to take offense.
A car or a TV are much smaller investments relative to a house. Over a decade of savings is tied up in my home. If the ass drops out of the market, myself, and others like me, who have broken into the market without assistance at the peak of housing prices will be virtually permanently financially set back. And to call buying a house around this time a mistake is crazy. I would be as much a speculator if I continued to rent and pay someone else's mortgage, hoping that prices dropped so I could get a good deal. It's a home and this attitude of treating homes as investments or mere purchases is why we're in this mess in the first place.
>It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house we're supposed to give massive government support to correct the buyer's mistake?
The difference is order of magnitude as proportion of net worth and the necessity of the purchase.
Some loans require PMI if your outstanding balance is larger than the current value. PMI is very expensive and, unlike a TV or car, you might be forced to give up your house because it devalued too far and you can no longer afford mortgage and PMI.
I'm not saying we shouldn't make housing affordable, but it's worth considering the impact for everyone.
I don't think lenders have any ability to retroactively require PMI; certainly no mortgage I've ever signed permitted this.
Correct - though the dirty secret is some percentage of the economy is run on rolling loans against house equity, and prices stagnating or dropping would slow that down.
Isn't that something regulation (of mortgages) solves way better than forever banning decrease in housing costs?
how would that work?
Easy: make it illegal to require PMI in that case. Some loans will require PMI at signing (IIRC, often this will be when you put down less than 20%; you're required to carry PMI until you've paid off enough to get your principal below 80% of the purchase price), but we can certainly make clauses unenforceable that require it later under whatever conditions.
If the government passed subsidy laws or building requirements that caused your loss, then you might expect compensation. Did you disagree with bailing out small businesses shuttered during COVID and their furloughed employees? Same principle.
Small businesses being bailed out was presumably because of liquidity issues.
Being underwater does not cause a liquidity issue.
You never know what your house or apartment or condo is worth, even to you. Maybe you can afford $400k barely, but you'll be hugely squeezed. Or maybe you'd get a bigger place if prices had dropped for your family size.
You hope conditions won't change. You can look at the current market trends to try to value it. But things will change in the next few years probably. You can guess, but you'll never "know with pretty good accuracy". The economy can go down, interest rates can change, major employers can come and go, there can be an earthquake or cancerous ground discovered there.
This is the rat race. You are competing with all the other humans around you in the same playspace of reality.
A mortgage is a loan that gives you money you don't have (yet). If you are spending money you don't have, do it wisely or suffer the consequences.
I think no special treatment. Everyone else in the same space has the same rules/uncertainty as every argument you offered.
These are my feelings too, but in the interests of compassion, I would suggest a return of some proportion of equity to (human, non-LLC, non-corporate, primary resident) buyers in cash, up to bank failure. Hopefully they can then buy another house at the presumably much lower prevailing market rate. Someone has to lose, let it be in order of "he who should have known what he was doing in making this catastrophe possible."
I mean, there are a few things here. Like if the bank want the house sold on the loan because the house value goes down even though the person with the loan is willing to continue servicing it - then that seems like an own goal for the bank.
There are a variety of circumstances that can be dreamt up for either side of the equation. And I have no compassion for lenders either.
As you say, maybe the mortgage/loan should be seen as a partnership of some degree between the parties so that the lender is less likely to take advantage.
But ultimately "he who should have known" is the person asking for money to buy XYZ thing. A person should be responsible for their actions.
> But ultimately "he who should have known" is the person asking for money to buy XYZ thing. A person should be responsible for their actions.
I agree with this in principle, but the real world is messy, and many (most? all?) people end up having to make decisions in their lives where they maybe should know, but don't know everything they should. Perfect information is rarely a thing, and even if you have it, you need a certain level of education to exploit it that we can't expect anywhere near everyone to have.
I don't give even the smallest shit for lenders. I care about people. I care about people having housing security, food security, and a little extra so they don't have to live paycheck to paycheck. No, I don't think we should just be printing money and firing it off in a t-shirt cannon at people for the hell of it. But I think we need to be compassionate, and understand that a huge, unexpected change in housing policy that tanked their home value is not something they "should have known" might happen.
I feel like many of us here forget (or were, oof, too young for) the 2007/08 financial crisis. We bailed out a lot of banks, and left a lot of regular folks holding the bag. I don't want to see that happen ever again. And yes, I get that housing policy changes that create lots of new housing is different. But the outcome could be very similar.
Take out an insurance policy then, not my problem
If we go to a place where homes cost $400k then we're all buying at $400k, regardless of whether people understand speculation or markets. Once you allow enough people with deep pockets to do speculation or price arbitrage... then we're all paying it.
It's not that we shouldn't desire cheaper homes, but we should realize that people who paid $400k are largely not speculators. They bought what the market was willing to offer.
But, the convention in the US is that people see their houses as a form of savings. Realistically, we should account for that.
Also, if continuing the building ends up requiring some policy change (supported by changing laws and regulations)… it seems reasonable to protect normal people, doing normal things, from massive financial chaos that is explicitly caused by the government changing policies on them. At least for people actually using the houses as intended, that is, living in them.
>But, the convention in the US is that people see their houses as a form of savings. Realistically, we should account for that.
Why? If it makes society as a whole much poorer.
The convention is fairly recent and the cause of enormous problems.
It doesn't really matter why; what matters is that they do see things that way.
And I agree with you, it's a bad convention, and it causes tons of problems, and it's the result of recent decades of bad mortgage/housing/zoning policy. But we can't just wipe it away and pretend it was never there, and let the chips fall where they may. That's just heartless, and, well -- you talk about making society poorer -- that will make society much, much poorer, nearly overnight.
Because policies they cause huge financial harm to normal people become unpopular, and don’t spread as a result. And also because it is bad for society if we modify the rules in ways that makes it harder to plan ahead.
Realistically basically no one is aware of the details of zoning policy or the mechanics.
Are there pitchforks in Denver or Austin? Are angry homeowners overthrowing governments and blocking homebuilding?
People seem to complain that housing costs too much. The straightforward bet is that lower prices would be popular.
For example, re Texas, 9 out of 10 say housing prices are too high: https://www.texastribune.org/2024/08/08/texas-housing-afford...
> Are angry homeowners overthrowing governments and blocking homebuilding?
No, they're already in the government, have been for decades, and they're the ones responsible for anti-development policy.
> For example, re Texas, 9 out of 10 say housing prices are too high
Cute punchy polls like that make for nice sound bits, but don't tell the whole story. I'm sure if you followed that up with, "If the government were to enact new housing development property that would reduce the value of your home by 20% over the next 10 years, would you support it?", I guarantee you that 9 out of 10 (homeowners) would absolutely not.
> Are angry homeowners overthrowing governments and blocking homebuilding?
Yes. Go to city council meetings when new housing developments are being proposed. See the throngs of people that'll show up demanding that new development doesn't get built. See the angry people shouting about how allowing ADUs will just destroy their way of life.
The amount of vitrol I saw about the Plano Tomorrow plan against past mayor LaRosiliere was astounding, people fighting tooth and nail to prevent denser housing from being approved. So many people saying things like the "wrong kind of people" would be moving in and allowing more density would make the city unsafe.
https://www.wfaa.com/article/news/local/plano-repeals-compre...
> But, the convention in the US is that people see their houses as a form of savings.
And that is a big part of the problem. You cannot have it both ways, if housing is an investment, it will eventually lead to poorer outcomes for anybody that needs a house and does not inherit one.
I agree. I didn’t argue for not-building in order to keep prices high.
And it's not like the actual value has decreased. You still own the same house. It's the same size, location, build quality... That's the value of the house to you. If you're not currently buying a house, the price of a house should be irrelevant to you.
But the price you were strong armed into paying is more than the value of that stuff, and you only begrudgingly accepted the price that included a large speculative component, because you saw that the government has been guaranteeing that the speculative component only goes up.
Well those people vote. Home ownership rate is 65%. Home owners I believe are more likely to vote than renters. So yeah your proposition is not feasible
Whether a house is worth $400k or $300k is, sometimes, a choice the government makes.
It isn't always, but sometimes it is. Through regulations, through monetary policy, through other policies.
Now if the government decides that you, you personally, standardUser, are going to lose $100k, I don't think the government should bail you out. It's called "moral hazard". You lost $100k. Deal with it.
If the government decides that I, me personally, am going to lost $100k, I would say that I am old and I vote in every single election, and despite my failing memory, I will remember that lost $100k until the day I die and no politician who voted for that will ever get my vote again. I will remember who did that to me.
> It isn't always, but sometimes it is.
I think it always is, frankly. The price of pretty much every single house in the US[0] is a function of decades of government housing policy. And I don't think it's particularly fair to say, "oopsie, our housing policy since before you were born was kinda bad, we're going to fix it right now, but it's going to put you underwater on your mortgage... sorry, but you'll have to just deal with it".
[0] Sure, maybe this isn't the case for an off-the-grid cabin out in the woods, far from any town, but that describes a teeny tiny portion of the housing stock.
I agree in principle that we shouldn't be bailing people out for the consequences of making purchases with their eyes open, but if something like this happened, a lot of people would be mad. And I get it.
The problem in this eventuality is mobility: if you buy a house for $400k, live there for, say, 5 years and the resale value of your house is at $300k, that's going to be a big problem if you have (or just want) to move. If you sell at $300k, you'll have about $50k left over (after repaying the bank) for a down payment on your new house, which means you can only afford a $250k house, which may well not meet your needs.
If someone is planning to live in that house long enough such that when they do want to sell it, they can move to a new place that meets their needs, at a price they can still afford, sure, great. We shouldn't be bailing those people out.
> You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
That's absurd. Aside from people who buy too much house ('00s, anyone?) and regret it later, people pay the price they have to pay for the amount of space and location they believe they need. Most people -- very understandably -- don't know the dynamics of the housing market to the point that they'd be able to predict that their resale value might go down by 25% at some point in the future, because, historically, that's just not what home prices do. (And don't parrot the "past performance is no guarantee of the future" crap... yes, true, so what. Most people unfortunately can't plan their lives around that.)
These people aren't speculators... speculators are buying to flip, or to hold and resell, as investment properties. These are just regular folks who need a place to live and have -- regardless of prudence or correctness -- bought into the idea that owning their home is the next life stage, a proof of success and well-being. Calling people like that speculators shows a severe lack of understanding and empathy.
> It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house...
A car or a TV costs nowhere near as much as a house. Losing a car or a TV is not going to make someone homeless. Housing is a basic need, and housing security is essential in a healthy society. (Granted, in many places in the US, losing your car can lead to financial ruin as well, sadly, considering how crucial a car can be to many people for basic things like getting to work.)
> Losing a car or a TV is not going to make someone homeless.
Your house losing 100k$ in value isn't going to make you homeless either (quite the opposite actually). If you buy a house and it depreciates, so what?
Not to mention if everyone's house depreciates, your new house is cheaper to buy. You lose _nothing_, except imaginary dollar values.
> Calling people like that speculators shows a severe lack of understanding and empathy.
I don't know what you call preventing young people from buying, or even renting, at affordable prices so 'people like that' don't have a possibility of losing some money, but you sure as fuck don't call it empathy either.
You lost the ability to even sell your house at all until you've paid at least $100k+interest on the mortgage. You are stuck in that house for good.
> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision...we shouldn't be bailing out speeculators
When the speculators vote, yes, you need to bail out the speculators.
> It's called buyer's remorse
It's called building consensus. At the end of the day, if it costs making homeowners whole to gain their buy in to solve the housing crisis, that's money well spent.
I'm not saying what I'm proposing is fair or even palatable. But it's functional. If solving the housing crisis is more important than aesthetics, it's a good move.
I agree there are political considerations, but we are talking about a scenario where the only damage done is that the buyer must continue to live in the home they purchased at the price they purchased it for, and where the recipient of government benefits is a household capable of purchasing a house, presumably at the height of the market. Is a tax dollar better spent placating grumpy homeowners who already have a place to live they can afford, or by more directly building more housing and infrastructure?
> we are talking about a scenario where the only damage done is that the buyer must continue to live in the home they purchased at the price they purchased it for
In non-recourse states, you'd expect to see defaults as people leave the keys in the mail to reduce their housing costs by moving next door at the reduced price or rent. More broadly, people don't like seeing their wealth go down.
> Is a tax dollar better spent placating grumpy homeowners
If it gets you the reform, yes. The point is you don't get housing reform with grumpy homeowners barring a massive shift in voting patterns.
Also, let's keep scope in mind. You only need to bail anyout out if you reduce home prices. If you hold them constant in nominal terms, that shouldn't generate pushback. (If you hold them constant in real terms, people can continue feeling wealthier.)
> If it gets you the reform, yes. The point is you don't get housing reform with grumpy homeowners barring a massive shift in voting patterns.
I think this is a really good insight. The reason for long-lived NIMBY policies is because NIMBYs[0] vote and lobby more than everyone else does. I have, do, and will continue to vote for pro-housing policies, but there are a lot of people -- probably still in the majority -- who will not vote for anything or anyone that will reduce the value of their homes.
What matters is outcomes. If paying off the NIMBYs gets you a good future housing policy, then we should do it.
[0] I know "NIMBY" is generally a pejorative, and I agree with that for the most part, but I will admit that many NIMBYs are operating and voting quite logically, for their own interest, even if it hurts others, and hurts society collectively.
> In non-recourse states, you'd expect to see defaults as people leave the keys in the mail to reduce their housing costs by moving next door at the reduced price or rent. More broadly, people don't like seeing their wealth go down.
At the trade-off of never being able to get a mortgage again, unless that's the bailout these homeowners get. Almost everyone will either sit tight or rent/sell at a loss. That being said, you will lose out on the public and private support of everyone who bought a house since roughly 2020. It doesn't matter if you've got a 3% rate if you're not getting your down payment out of the house.
The plan that makes the most sense to me is to keep housing prices constant/barely increasing while letting 3% inflation and gradual lowering of interest rates do its thing. Eventually the houses won't seem that expensive and those who locked in at high rates and high prices have an offramp through refinancing.
> At the trade-off of never being able to get a mortgage again
That's not the effect of abandoning a mortgage (or using the leverage provided by that option to secure lender approval for a short sale) in a non-recourse state.
(Source: been there, done that, have a new mortgage since.)
The costs and hassle of moving kept me in an underwater house that I mathematically should have walked on; eventually it wasn’t underwater and the mortgage was paid the entire time because I couldn’t be arsed to move.
The potential credit hit wasn’t even a consideration.
Catering to grumpy home owners somehow didn't produce a reform either.
It’s a valid point of view. That said, for most homeowners it is as simple as: My house is multiples More expensive than my next expensive asset. Loosing all the equity in my home will affect my lifestyle and financial future negatively, a lot. I will therefore continue to vote against whatever brings home values down.
There really isn’t an easy and elegant way out where you neither pay off the haves nor pitch the have nots majority against the haves.
> nor pitch the have nots majority against the haves
There are almost twice as many owner-occupied homes ("haves") as not ("have nots").
https://fred.stlouisfed.org/series/RHORUSQ156N
Yup, and that's why it's so hard to get housing policy changed. To make it harder, I'd wager that homeowners, proportionately, lobby and vote more than renters do.
You only win here if you placate the homeowners, and a surefire way to do that is by making them whole when you whack 20% off their home's resale value. Maybe there are better ways, but I'm having trouble thinking of them.
The scenario to address is people who are forced to move (via e.g. layoffs, company relocations, industry collapse, etc) who are also suddenly saddled with a mortgage far higher than they can realistically payback while still moving on to whatever opportunity necessitated the move in the first place.
The first order consequence of treating housing as an investment vehicle is high prices, sure, but the second order consequence is that you dramatically increase the stakes when individual people buy any house whatsoever.
I would much rather give checks to every homeowner whose home value falls than to force even a single laid-off autoworker or whatever into bankruptcy (good luck buying a home after that) if they elect to move somewhere else for a new job and can't sell their house for enough to pay off their mortgage. If the consequence of a government policy to build more housing is that more people become homeless, then its failing.
We (government) does debt forgiveness all the time. For very practical reasons. Can't some of the cheddar be redirected from the 0.1% to the rest of us?
A $400k home is probably a starter home. Owners are probably a young couple (millennials). They probably want to have kids.
Forgiving 100k of their debt means they (and their kids) will have a fair chance at success. Earning more money. Saving more. Paying more taxes (over their life times).
But the buyer probably didn't think it was actually worth $400k intrinsically. They were bullied into paying $400k because (1) they need a house no matter what and (2) at least the government guarantees that there will be a bigger sucker down the line who will pay $500k.
It's the government's fault that this bigger-fool game even exists, because the buck always stops there. They might want to consider compensating people for the misery they caused.
House owners are just going to vote for harsher impediments to building.
While at the end of the day I don’t think people should be bailed out, I don’t agree that everyone who over paid is a speculator. Many people are just wanting to own their own home. The market has been crazy for the last 5 years. Many people are just buying to own not to flip it for a huge profit. So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.
For the person who ownes multiple houses and buys simply to rent and flip a profit well I have very little sympathy for them. They are the true speculators.
> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money
That's not how mortgages work (in the US, anyway). If the value drops, nothing happens, you still have the same house and same mortgage.
I've been underwater twice, in the same house, as prices go up and down over the years. As long as you still like the house and want to continue living there (I did), being underwater doesn't mean anything.
That's the catch, though. What if you wanted to move? That would have sucked. What if you had to move? That could have been disastrous to you. What if you had lost your job, and defaulted on the loan. Apparently most states in the US are non-recourse, so how would you feel when your next job's wages are garnished, or there's a lien on the next home you buy?
When you have to put an "If" in front of "being underwater doesn't mean anything", then that means sometimes it really does mean something.
Where do those ifs stop? What if you went blind in an accident? Some things are just disasters, you can't count that for optimising the majority of the system. Of course you can have support for poor people but that will obviously not match the 400k house lifestyle.
> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.
I feel a little sorry for them but they are not missing the money total of "the whole house". They can sell the house, have a shitty $100k debt, a tale of woe, and hopefully a better idea of how to go about spending money they didn't have.
I feel there are too many people who "borrow as much as they can for the best house they can get" rather than being sensible about their money and using a mortgage as a hedge against paying rent and future rent raises. Some of them make it, some of them don't.
we’re talking about wiping out most of the stored wealth of roughly a quarter of all homeowners here. and they cannot take that home with them when a new job opportunity comes up or worse get fired/sick.
this sounds more like a suicide pact than a plan.
> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.
I don’t understand this point. If you’re paying the mortgage, the bank dgaf. Is there some sort of margin call a bank can claim on a house that is worth less than it was when it was purchased?
Don’t you just pay the mortgage you agreed to pay the bank?
> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase.
I think it's pretty normal for rational purchasers to consider the resale value of something that they purchase, and hand-waving that away doesn't make for a very serious argument.
I think it's pretty normal for resale to be less than purchase price. Considering it is important!
Making any guarantees as to the future worth of these items is craziness.
In the case of housing, it is generally very not normal for resale to be less than purchase price. Sure, there are exceptions to that: market downturns happen, and sometimes regional issues (like the one big employer leaving town) can cause that. But in general, no, it's normal for the resale value of a home to be higher than when you purchased it.
That's dumb. But that's the reality we live in.
Very rarely does the value of a purchase increase over time. Literally the only examples I can come up with are things that are very old and rare, or a house.
Viewing a home as some kind of investment vehicle is everything wrong with the housing market today. It’s so wrong it makes my head spin.
> Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis.
That would be an incredible commitment, and not something which has happened. This burst of new rental property is already subsiding, with an expectation that rents will again raise next year. Moreso, it would be hard to get private organizations to commit to building such a massive glut of property knowing that they are tanking the market that would pay back their investment.
That is why this doesn't magically solve the housing crisis.
> It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.)
That is only if you believe that more capacity does not induce more demand, which really isn't true as long as the city remains popular for jobs/climate/nature/etc.... People not moving to Denver because the rent is too high will decide to move to Denver if rents decrease (and the demand they add will cause rents to increase, wash/rinse/repeat until an equilibrium is reached). You also have cases where a city becomes even more attractive because of growing density alone (NYC, Hong Kong, Tokyo).
This argument always comes up when discussing a specific place.
"Everyone would move to ________ because it is the best place in the spiral arm of the Milky Way", where ________ is Boulder, Bend, Austin, Portland, San Francisco, Santa Barbara, Hawai'i, Santa Fe, etc.... etc....
It cannot be true for all of them. So they all need to build and people will figure out where they actually want to live.
Bozeman, Montana, a small city of 50K people, is seeing falling rents because they built a lot of housing:
https://montanafreepress.org/2025/06/23/has-bozemans-rental-...
And it's very much the kind of small place where "everyone wants to live there".
If everyone could live where they wanted to live, then ya, why wouldn't everyone want to live in the best cities?
If you have fixed demand, then you can definitely "build" your way out of a housing crisis. Bozeman, for example, doesn't have many jobs, so you can't really live there if you don't bring your own money. A big city like Seattle or Denver... they have lots of jobs, so they will grow at least to the point that all those jobs have people working them...but then a city like that attracts even more jobs (the way cities work since they concentrate talent, which attracts more businesses looking for that talent), more people, it could grow from a million people to 10 or 20 million easily.
> And it's very much the kind of small place where "everyone wants to live there".
MT is a bad place if you need to work for a living: high housing prices, jobs don't pay very well if you can find them at all. My mom moved to Helena in the late 90s and found that out first hand. If WFH took off as expected, then you definitely could make a good life in Bozeman or Missoula or Butte, but alas, the opposite happened and we regressed greatly.
The population of Bozeman is still growing, albeit more slowly. It's not like people left. They just built a lot of housing, vacancy rates increased and prices dropped.
Same thing happened in Austin, Texas, which is a much bigger city with lots of jobs.
The underlying story is that building enough housing is a good way to fix a shortage of housing, which is what causes high prices.
> If everyone could live where they wanted to live, then ya, why wouldn't everyone want to live in the best cities?
Best is different for different people. Some people it means close to beaches, for other it means cultural institutions, for others it means lots of tech companies, for others it means wide open spaces.
Land is eventually limited, but there is tons of variety available of what people like.
> If everyone could live where they wanted to live, then ya, why wouldn't everyone want to live in the best cities?
I moved from midtown Manhattan to western Wyoming. People have diverse preferences. (Even if we assume uniform preferences, densifying the population into a few cities so we can reclaim our wildlands sounds like a dream.)
> I moved from midtown Manhattan to western Wyoming.
If I could afford to live in Jackson, I would love to someday. But alas, Jackson real estate makes Seattle look cheap.
The point is everyone in Jackson doesn't want to live in Manhattan and vice versa. There are multiple equilibria. Same for Denver, Seattle, San Francisco and Los Angeles.
Really? It's very small, isolated and while there is a ton of outdoor stuff, I don't think there's much else. There are tons of people who enjoy the urban amenities in places like NYC or San Francisco who would have fun for about a week and then be desperate to go somewhere with more going on.
Just as there are plenty of people from outdoor towns who would enjoy hanging out in NYC for a week but then miss mountain biking or something.
I couldn't stand the rain in Seattle. You'd have to pay me to live there. Some people apparently like it or at least don't mind it much, though!
Jackson is a resort town, like Vail, Aspen, Sun City, Park City, etc...you are usually really rich if you live there, or doing service jobs for the very rich. Obviously, you can't just move there and expect to somehow survive.
My point was: would you actually want to live there? I'm sure it's fun to visit, but spend most of the year there?
If I had a few billion dollars lying around why not? I'm a big fan of anything on the snake river, having been a toddler in the city where it meets the Columbia. But I need to work for a living, so it will be a big city with a thriving economy for me, I don't have the option of liesuring about in a resort town.
Even if you can observe this induced demand locally in a city or two, the net supply is going up.
Globally, demand isn't even fixed. It's proportional to the population size, which we would expect to shrink.
The only way this could work in the opposite direction is that you build enough that it becomes feasible for everyone to live in a few supercities where demand keeps growing due to network effects, and the supply outside of the supercities is useless.
Housing stock definitely goes up in those cities that have the demand. Other cities drain out as a consequence and housing is razed in the cities that are no longer popular, like Buffalo and Detroit.
Do we really want that? Of course, housing has to be maintained and has a lifespan (the Japanese are good at rebuilding housing stock after 20-30 years), and so it can simply die off in the places that are no longer popular, but it seems like a waste of infrastructure investments that then have to be re-done in the new hot places.
Induced demand can only function if there's a scarcity to begin with, and it's premised on increased supply increasing affordability (that's the mechanism by which it works), but these axiomatic derivations don't matter because we have case studies (in MN, in TX, and now CO, a story we're literally commenting on). Empirical observations win.
> Induced demand can only function if there's a scarcity to begin with, and it's premised on increased supply increasing affordability (that's the mechanism by which it works)
I don't think that's how the theory is supposed to work. It's more along the lines of, if you build more housing in a place then more people live there and then the higher population density can sustain more shops and jobs, and then people want to live near shops and jobs so the local demand increases.
There are two reasons the theory doesn't actually mean that you can't solve the problem with more housing.
The first is, the effect isn't infinite. As the reductio, if the entire New York Metro area had the population density of Manhattan, it would house 450M people, which is more than the entire US population. So you can build more housing than you have people to move into it even if that would literally cause the entire national population to move to the same place, and of course building that much housing in one place wouldn't cause literally everyone to move there anyway, so the amount you need in practice is far less than that.
And the second is, it's a local effect that comes from net migration. If you build more housing in Denver and that causes people to want to move from Austin to Denver, even if you don't build enough to overcome that in Denver itself, you'd still be lowering housing costs in Austin. And if you're simultaneously building new housing everywhere then there is no net migration and therefore no induced demand anywhere.
A longer r/AskEconomics thread on this:
https://www.reddit.com/r/AskEconomics/comments/y3ywl2/why_wo...
This Colorado story includes construction already slowing so why should we be convinced this is the start of a downward trend toward affordability vs a corrective blip after the Covid-era remote work migration trend?
Affordability and desirability are always going to be in constant tension, and any given change - including construction - can tip things more one way than the other. The long-term affordability trends are poor even in states like Texas - is that purely because of construction? No, it also has to do with policies like trying to poach established businesses from other states and importing wealth and high salaried individuals. But it shows that development is no panacea and that even in areas with more open land to build more new construction on there are still powerful trends in the US towards sprawl, low-to-medium density, and rising cost of living. Without explicit intervention like subsidies or direct government construction development will slow - focusing on higher-ROI units for the same spend vs pure unit count - as developers worry more about not being able to command the per-unit price they want if they were to aim for quantity.
> Induced demand can only function if there's a scarcity to begin with
I don't believe this is true, assuming scarcity = shortage. Ad absurdum, if Denver overbuilt such that one could pick up a parcel for a song, you'd see opportunistic demand where there previously was none.
There's places all over where land, and sometimes land with buildings gets very inexpensive because there's not much demand.
Here's a listing for a parcel for $9000, that's been listed for over a year[1]. Denver seems like a nicer place than Detroit, IMHO, but it's possible for there to be more supply than demand.
I suspect at 5% annual growth in units, you would be able to reach the point where there's not enough demand for builders to recover costs. It might take a few years, depending on just how much unmet demand there is.
[1] https://www.redfin.com/MI/Detroit/1752-W-Canfield-St-48208/h...
In some places where well and septic costs say $25k to install, you can get land with working well and septic for $25k or less; the land is free.
But there’s an obvious limit somewhere, Denver with 5 billion units might still see demand, perhaps even ten billion (need that second house of course!) but once Denver has 20 billion dwelling units demand will have leveled off, no matter how much more supply is added.
That's why you have to allow large-scale building everywhere. Then the market will find its own level.
The inverse of this situation is that everyone lives somewhere they consider unpleasant because the rent is affordable there.
The megacities you mention are enormously economically productive per capita. All sorts of efficiencies pop up when a huge number of people live near one another.
> The megacities you mention are enormously economically productive per capita. All sorts of efficiencies pop up when a huge number of people live near one another.
It isn't a bad thing. NYC and Hong Kong are nice cities, they should exist. But don't expect housing prices to fall because you add more density if demand isn't fixed, the opposite often happens instead (people want to live in megacities even though housing costs are high). And that isn't really a bad thing, like gentrifying a blighted neighborhood will drive up housing prices as well.
> only if you believe that more capacity does not induce more demand
No, it doesn't. What you're describing is elasticity. It's a well-studed concept, and means that a 5% increase in supply will probably reduce prices by less than 4.8%.
(An interesting side effect of a government committing to a zero real-price increase housing strategy is it eliminates whole categories of speculative demand. I wouldn't count on this for policy effects. But it's another feather in the cap for pro-housing policy.)
Giving significantly more people a way to live a lifestyle they seek, while holding the cost of housing flat -- if thats the worst case outcome, that seems totally fine, and arguably a better solution than trying to crash the cost of housing.
I would imagine for most people, this is what "solving the housing crisis" means
You keep building until supply meets demand, regardless of what that demand is or where it comes from.
We don't have an infinite number of people available to move into housing. There are only a certain number of people who will want to move into a particular region, and that number will stop growing at some point.
Granted, you don't want to build too much and end up with a ghost town. There's a balance to be maintained, and I think housing should be affordable, not a race-to-the-bottom cheap as possible.
Except that all the folks that left Austin to move to Denver makes the houses prices in Austin drop.
Now the folks in Denver who hadn't considered Austin due to high rates can move there and reduce the costs in Denver again.
A 5% increase in supply annually indefinitely would crash the housing market there, induced demand be damned. To put it in perspective, a metro area growing at 2% is killing it, the highest growth rate is Austin at 3%. Denver only grows at less than 1%.
Cheaper homes may induce demand, they won't induce a 5% growth rate.
> A 5% increase in supply annually indefinitely would crash the housing market there
Only if population is held constant.
Housing supply is inelastic, but housing demand is somewhat elastic. As seen in Denver, an increase in housing supply would decrease prices. But those lower prices will increase demand from people that want to live in Denver but previously couldn’t afford it.
I think you missed my point. It won’t increase it to 5% because that’s basically an unheard of population level increase for a big city/metro. It’s like 5x your average fast growing big city. You may induce some demand, it will be nowhere near that much.
How much demand do you think CAN be induced? Colorado has 2.6M housing units for ~6M people. If Denver builds 20k units a year for the next 5 years, that would represent the entire state growing by 4% (230k people) off the back of one city alone. I guess that's not terribly unreasonable - if Denver was the only city in the country.
Except, it's not. Where would all of these extra people come from?
More to the point, Denver is already quite expensive. Where are you going to find another 230k people capable of paying even higher rents than folks do today?
Are there people who have been avoiding Denver because the rent is too high? I think of Denver as somewhere you go if you're sick of the cost of living on the coast.
> I think of Denver as somewhere you go if you're sick of the cost of living on the coast.
Denver hasn't been that place for more than a few decades. Heck, the whole rocky mountain region has never ever been a place for cheap housing. Western housing prices are high historically for reasons related to desirability. They never were as cheap as the midwest or deep south.
Median price per sq ft in Denver is $377 according to Google. That's still on the order of half the cost in Seattle of SF.
Ya, but also still way above average ($220/sqf). If you ever moved to Denver or anywhere our west for cheap housing, you didn’t do your homework.
You could definitely do better if that's the only criteria.
Better to have good problems than to have bad problems.
Is you idea that people will be renting multiple units just for the fun of it? In large enough numbers to be impactful?
> It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.)
"Committing to doing this every year" is VERY different than doing it in one particular year. Yes, that would solve it. But of course, 2022 was part of a very unusual cycle including a lot of migration and you should note the last line in the article:
> Meanwhile, the pipeline of new apartment buildings is drying up. The number of properties under construction is down by roughly one-third from the peak in 2023, the report found. That likely means fewer units coming available in the months ahead, potentially giving landlords room to start raising rents again.
Why would we consider bailing out entities that are financially solvent? These homeowners may have an underwater investment, but they (presumably) can still pay the mortgage to get it paid off
I think Denver home prices have decreased by 4% since the peak in 2022.
I don't think anybody is going to be permanently underwater. Home prices changing should be a second order effect of building more apartments.
And what happens if all that new stock isn't needed?
Detroit?
Nope. Smaller more affordable homes would be a better solution. Most people who rent cant afford to buy, but rent is a worse deal long term.
This is only true for two reasons:
1. House prices have risen consistently for the past ~50 years. This is an anomaly (various theories why, my favourite is because women entered the workforce so the income per household increased and we spend as much as we can afford on housing). If/when house prices stop rising consistently then buying doesn't look much better than renting from a financial perspective.
2. Existing laws tend to favour the landlord over the tenant. In countries where this is not true (e.g. most of Europe) and the tenant is favoured, then renting is not so precarious and has lots of advantages.
I lived in rented accomodation in Berlin and it's a completely different experience from renting in the Anglosphere (UK or Australia for me, I don't know about the USA).
For single family homes square footage alone has a fairly modest impact on housing prices.
Land, driveway, number and quality of fixtures, electrical hookups, cabinets, countertops, doors, clearing land, water, sewage, etc can be nearly identical costs for a 1,000 sf or a 3,000sf home. Many things like wall insulation and heating demand increase sub linearly with square footage.
Which is why home builders so heavily favor large homes by historic standards. This is slightly less true of high rises, but making the building wider doesn’t require more elevators, internal hallways, etc.
A 1000 sqft, 3BR, 1 Bath, basic kitchen unit will be cheaper than a 3000 sqft 4BR, 2.5 Bath, fancy kitchen unit. Builders (and most everyone else involved in real estate) make a lot more money on the latter than the former, though.
Cheaper sure, but a large fraction of the difference is that extra 1.5 bathroom and fancy kitchen. Plus all the other little difference like more larger and nicer windows.
Exactly; those are the things that are needed to turn "smaller more affordable homes would be a better solution" into reality.
I’m not sure I get your point. If the utility of a home is largely a function of size, but the cost is largely a function of location and amenities then there’s little benefit to specifically building smaller homes rather than less expensive homes.
No one is seeking to build smaller; they're seeking to build less expensive.
Building smaller (specifically reducing square footage, baths, and kitchen amenities [which are a mix of size and non-size elements], and using less land [going up, sharing walls/roofs, eliminating private outdoor space, etc.]) is the mechanism by which the goal of less expensive can be met.
It’s actually quite hard to definitively quantify if renting or owning is better in a given area/scenario.
Obviously the case near me where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting, but there’s more to it than just that.
Maintenance is huge and real and people just seem to ignore it on the “own” side, but 5-10% of the value of the house a year in maintenance isn’t unheard of.
> where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting
I think those figures point towards buying being favored, especially if the mortgage payment is PITI, but even if it's principal and interest only, I think buying is likely to be better in the long-term if the spread is that small.
Maintenance is not going to run 5% of the purchase price on average, except in the most extreme low-cost housing situations. A house that sold for ~$500K (as would be implied by a $2600 mortgage payment) is not going to cost $500K in maintenance over the next 20 years (as 5% would imply) and certainly not over the next 10 (as 10% would).
You may have an individual year that's over 10%, but that's a cashflow issue not an overall cost issue.
The advantage of renting is the flexibility, lack of commitment to a specific house or area, and the lack of need for a large upfront sum (in this example, renting might need $6K upfront [$2K of which is the first month's rent], while buying might need traditionally $100K to avoid PMI or ~$20K on an FHA first-time buyer mortgage and associated transaction costs).
> but 5-10% of the value of the house a year in maintenance isn’t unheard of.
I assure you I am not paying ~$30k in maintenance on my ~$400k house every year... that would be comical
Add it up and work it out; factor out the land if you must (e.g., pretend it’s a landlord business and you’re renting to yourself).
Maintenance items add up, and some only happen every 20-30 years, it can hit hard. A new roof every 30 years at $10k is already noticeable.
The $10K roof is noticeable precisely because it's an outlier that pulls the average up towards the 1-2% per year range for all but the least expensive houses.
If houses really consumed 5-10% of the purchase price on average per year, people wouldn't worry or talk so much about roof replacements; they'd be just other drops in the bucket.
> A new roof every 30 years at $10k is already noticeable
That'd be $333/year averaged out, two orders of magnitude away from 30K/year example of OP.
> 5-10% of the value of the house a year in maintenance isn’t unheard of
That's actually pretty much unheard-of (unless you specifically bought a very cheap fixer-upper with the intent of remodeling).
I've owned current house for over 25 years and I have not spent 10% of its value in maintenance even if I add up everything over the 25+ years! Let alone every year!
Also, a lot of the loan payments go towards your own equity, whereas all of the rent goes to someone else's.
It is instructive to look at how we got expensive housing in the first place. Expensive housing comes from a surplus of people. How did we get all those people? By building more housing and having people breed there.
New housing is only a temporary salve and perpetuates a vicious cycle. The people who move into these new units will have more babies, because they have new habitat. These babies will grow up and eventually drive up housing prices. Even before then, people will move or emigrate into cheap housing and fill it up. Housing then becomes expensive again, only with more people filling up the earth: polluting the air, straining water supplies, clogging roads, uglifying neighborhoods with massive buildings, overrunning parks and trails.
Thankfully, expensive housing, in part, has reduced American baby making to 1.6 per woman, a sustainable rate. Unfortunately, because humans are living longer, the US population still continues to rise. The U.S. Census Bureau currently projects that the resident U.S. population will peak at nearly 370 million around the year 2080, before it gradually declines to about 366 million by 2100. If immortality is invented before 2080, the population may never go down, ever.
Meanwhile, the latest estimates put the current U.S. population (as of mid‑2025) at approximately 342 million. The population has increased roughly 4.5x since 1900. From building new housing.
Even if the rents were merely unchanged, 20k new units means 20k new families that can move to Denver without displacing anybody.
Lets keep the trend going. Lets get them back to 2019 levels! It would be a real feat if they can keep the cost going down instead of up.
that's unlikely. the pipeline of new units will be slowing, it's just that a bunch of projects that got spun up at the peak are finally delivering, but new starts have been down so we're probably approaching the bottom of a trough
So this is at best a temporary fix not a long term solution
New starts are down across the board because interest rates are up, making construction harder to finance.
It's really encouraging to see these kinds of success stories. I really hope people who are concerned about affordability start to view things from more of a "yes and" point of view. We can work on reducing the barriers to building more housing of any kind while also advocating for more social housing development.
> We can work on reducing the barriers to building more housing of any kind while also advocating for more social housing development
One of the NIMBY lobby's greatest wins was putting these options on the ends of a policy spectrum.
They're not. They're complementary. If it's cheaper to build, it's cheaper to build social housing. And if you have a vibrant construction sector, you can build more public housing faster.
They're not always complementary. For instance, IZOs are a social housing intervention, and work against the goal of increasing supply.
> IZOs
This [1]?
[1] https://dhcd.dc.gov/service/inclusionary-zoning-iz-affordabl...
Sorry, yeah, IZO/IHO --- rules requiring some margin of AMI affordable units in new developments (which makes new development harder to pencil out, while giving warm fuzzies to locals who want to genuflect to affordability while still fencing out new neighbors).
Probably the best thing you could do in terms of social housing construction would be to have the government put up some capital to buy land and build new housing on that land, then immediately sell it and use the proceeds to do it again and again with exponential growth because it's actually profitable.
But that's also what construction companies would be doing regardless except for the subsidy, at which point you might be better off doing something like exempting construction companies from property taxes for two years if they at least double the number of housing units on their land in that time.
Could also just exempt the value of the buildings from taxation
Not saying it's not noteworthy, but Austin rents have also been trending down lately.
I just recently heard the term "accidental landlord", which is someone who can't (or won't) sell at a price low enough to actually get rid of their house, so they rent it out. I know that's a factor in Austin; I wonder if it's part of the story in Denver?
In a proper market economy there are many accidents in everyone’s career as they adapt to changing market conditions. Only in a planned economy do some market segments face no surprises.
With rents escalating notably from 2022, getting back to 2019 rates would provide substantial relief for numerous families, assuming that's the objective.
>back to 2022 prices
If we could be so lucky - out median rent it FIFTY PERCENT up over 2022 prices.
As a side note, if anyone here is in Denver and wants to grab a coffee or cowork sometime, hit me up.
Is it wrong of me to be sad that it's rent and not home prices?
> wrong of me to be sad that it's rent and not home prices?
Rents are higher frequency than home prices. Ceteris paribus, prices follow yields.
Denver home values peaked in May of 2022 and have yet to recover:
https://fred.stlouisfed.org/series/DNXRSA
Anecdotally, Denver home prices appear to be down compared to a few years ago as well. The ~850sqft unit next to mine sold for $700k 2-3 years ago and I’m certain it’d go in the low 600s now.
home prices are falling in a lot of places. :shrug: denver could always be next
Yes, it is in fact quite wrong and one of the biggest obstacles in American society is fetishization of homeownership.
You may object to it, but a home has been the smartest investment I've ever made.
The "fuck you got mine" attitude so many homeowners have and deliberate supply restriction to increase property values makes it a smart investment on paper, at the cost of screwing everyone else coming after you.
Due to the massive influx of wealth caused by the pandemic. Median adult wealth is made from real estate, not stocks or a golden job.
https://www.pewresearch.org/2023/12/04/the-assets-households...
In fact, I feel everyone should own and anyone with two properties should be taxed heavily.
I'm not sure why it has to be that way. Build more houses.
The problem is “where”.
Building them in random lots in Florida or upstate New York is exactly what builders were doing in the runup to the financial crisis.
Building them in already-dense places is always tricky because of NIMBYism
then it wouldn't be "smartest investment"
I moved from an expensive real estate market to a less expensive one. That has nothing to do with appreciation — just equity.
Further, when I downsize — even in the same real estate market — that too is equity working in my favor independent of appreciation.
How is getting your own money back, many years later, without appreciation "equity working in [your] favor"?
Without the appreciation (and leverage multiplying that), buying housing would be nowhere near as good an investment. (As it stands today, it's phenomenal, of course.)
The restrictions on supply are generally economical. Every day, building gets more expensive; labor and parts both cost more. That is going to cause the average home to cost more, even older ones, as you always have the option to get a new build at current rates or an older one for slightly cheaper.
The problem isn't home ownership, it's zoning regulations being done locally so that areas full of owner-occupied single-family homes are the only ones eligible to vote on whether higher density housing can be built there, in combination with the "got mine" attitude that causes them to vote in the way that constrains supply.
It's good for people to be able to own their homes. They should be able to own their homes instead of paying a large fraction of their paycheck to landlords as rent or banks as mortgage payments. But that requires housing costs to get lower rather than higher, which in turn requires some kind of state- or national-level policy to prevent local homeowners from sustaining the opposite.
Why is it wrong to want to have equity in the place you live? "Ownership" could be a house, it could be a townhome, it could be flat. But in the US, "owning" an apartment is very rare, while real estate investors buy up all the valuable land in the urban cores of cities and rent it.
If you want equity in real estate nobody is stopping you. The problem is when people get this idea that we need to discourage investors from building very greatly desired rental housing.
This is the big problem with treating your home as an investment. People who just want a place to live near where they work now have to play this game too. And it's not cheap game.
That was what rentals were supposed to be. And then there was also such a thing as a "starter home". From what I see in Omaha, it's the developers that got greedy — figuring they could get more dosh turning a higher-end home than a starter home on the same lot.
That’s not greedy though? Are you greedy if you build more valuable software and then charge more for it?
Of course it's greed. The question is how ethical the greed is in a given situation. If it's luxury software, no problem. If it contributes to a housing affordability issue, not so much.
I'm pretty sure investors are persuaded by money and little else — if renting is profitable they'll build rentals.
> if renting is profitable they'll build rentals
The point is it's difficult and expensive to build in America. The core competency of construction in most cities is knowing how to grease the community boards', planners', affordable-housing advocates' and permitting offices' palms.
it isn’t really all that difficult, but it is difficult to build in the places that the jobs are.
There are tons economically depressed towns that would absolutely love to have an infusion of property tax revenue
My problem is that the wealthy get wealthier while the middle class gets subjugated to permanent renter class.
Go ahead, develop! And sell equity in the property. I've wondered if I would support my city requiring a certain percentage of dense urban lots be flats for sale vs. rental.
> fetishization
Yes and: As you know, encouraging home ownership is policy. Meant to reduce elderly poverty. It worked, plus all sorts of adverse effects that now hitting hard.
I'd rather we had pensions, universal healthcare, and maybe ponies.
Not wrong at all. Previously owner-occupied single family homes will continue to be bulldozed and replaced with 8 story wooden boxes, owned by national corporate landlords of course.
> single family homes will continue to be bulldozed and replaced with 8 story wooden boxes, owned by national corporate landlords of course
Source? Why of course?
>> single family homes will continue to be bulldozed and replaced with 8 story wooden boxes, owned by national corporate landlords of course
> Source? Why of course?
Maybe I'm talking past someone, but the concept that was being described is self-evident. So, I'll just say this isn't a controversial take, from an urban planning standpoint. It's been demonstrated for hundreds of years (albeit, slightly different wealth sources).
The pattern of smaller, high density housing, is the most efficient way to build profit in a population center. As density increases, central hubs appear. Land (specifically residential land) skyrockets in value as it's most scarce, within and immediate^1 and surrounding areas. 1 family paying rent on the land is less efficient than 1xN. The investment necessary to risk and realize those N returns are out of the reach of any entity other than a conglomerate. Singular elite investors generally do not engage in that risk, although there have been historic outliers. Cities also find it more expedient to eminent domain aging single family homes, more than taking on the corporate owned high density housing, further entrenching their relative durability. Despite the highly variable timelines, American cities have followed the common pattern of density housing owned by corporations replacing single family homes, in population centers, for a very long time.
^1 For some value of immediate, based on available mass transit and other environmental factors
> the concept that was being described is self-evident. So, I'll just say this isn't a controversial take, from an urban planning standpoint. It's been demonstrated for hundreds of years
National corporate landlords haven't been buying up anything for hundreds of years.
How is this measured? I've seen similar articles for Melbourne, where the average per dwelling is reducing, but the quality of the average dwelling is reduced faster; less bedrooms, low quality noisy single aspect apartments.
But if you track the price of a pre-existing property it's growing just as fast.
It all just goes to show that government building, or creating some financing framework for building, very plain housing and selling for cost to keep supply ahead of demand would be an effective policy.
Let’s interview the people living in all of these high quality new builds and see how much they’re loving or not loving their new digs.
Why?
Doesn’t rent need to keep going up so the top-heavy segment of retirees can have a steady stream of inflation adjusted income and capital gains for their remaining years? This doesn’t seem sustainable, politically
> Doesn’t rent need to keep going up so the top-heavy segment of retirees can have a steady stream of inflation adjusted income
No. Maybe 10% of retirees earn rental income [1].
> and capital gains for their remaining years?
The value of the home should be plenty to live off, whether by sale or borrowing.
[1] https://bradleyclark.com/blog/generating-retirement-income-w...
Residential real estate is very rarely a large component of people’s retirement savings or income in the US, and equities historically outperform real estate.
Well, if they own their home and have a diversified portfolio, then they should be able to weather a small hit to income.
If they rent, well, this directly helps their budget.
taxes and insurance are both much steeper than just a few years ago.
Gov. Polis has forced lifting limits on occupancy to override local restrictions. It's just getting more crowded.
Doesn't seem sustainable civilizationally, either, if the young and poor are propping up the old and rich, rather than older generations nurturing the youth.
The last paragraph should temper our enthusiasm. Allowing people to build more when there is a shortage is the best way to have markets solve problems.
—-
“ Meanwhile, the pipeline of new apartment buildings is drying up. The number of properties under construction is down by roughly one-third from the peak in 2023, the report found. That likely means fewer units coming available in the months ahead, potentially giving landlords room to start raising rents again.”
The basic laws of supply and demand work!
"hey guys check this out i figured out people will pay anything to avoid dying on the streets haha supply demand number go up. what about if we do food and water next"
I just need to subsidize demand and then prices go up, people get angry, and I just need to subsidize demand and then...
Rents are high because landlords are greedy and are paying already inflated house prices.
Owning is expensive because banks are greedy, pumping out the created credit for mortgages, which is an imaginary number based on no actual value, because somehow banks are allowed to create money!
Here's the plot twist: you spend 30 years or even more (in Canada that has reached 70 years!) to pay the mortgage only to find out that you actually don't own the house and you're on a perpetual rent called property taxes.
And unless the root issue is resolved by banning banks' Ponzi fraudulent schemes, and implementing a policy to change housing into a depreciated asset just like Japan did, nothing will change substantially and will only change marginally to prevent people from going out rioting in the streets.
I guarantee with 100% certainty that if you were in a landlord position, you would be asking the highest rent that would keep your units occupied. You call it greed now, but landlords it’s simply business. You negotiate the highest salary you can, right? And the lowest car purchase price? And go to the cheaper of the two gas stations? Why is okay for you to be discerning but not a landlord?
70 years? That's just plain false.
This website from the government of Canada here says the max term is 25 years, or 30 if it is your first property: https://www.canada.ca/en/financial-consumer-agency/services/...
Edit: ah, I missed one part. You can have longer terms if you have more than 20% cash down. TIL.
They didn't say 70 year mortgages, they said 70 years to pay off a mortgage, which is still a bit exaggerated (maybe), but would come from the contingent of people who got themselves into variable rate fixed payment mortgages for comically expensive properties, and that had a significant amount of interest remaining before the feds started cranking up interest rates.
If rates go up from 2% to 6+% while you're holding onto a $2m detached house, it's a bad situation to be in.
https://www.bankofcanada.ca/2022/11/staff-analytical-notes-2...
> If rates go up from 2% to 6+% while you're holding onto a $2m detached house, it's a bad situation to be in.
I find it mind boggling that banks will lend money to people that cannot sustain a 4% increase to their mortgage rate. Rates have been over 10% in the 80's!
Well, as far as I understand, in Canada we do have relatively conservative lending practices, such that you do need to be able to pass an income stress test of some amount, you're only able to lock in terms of 5-10 years instead of a fixed 30yr, and if you qualify for and choose a 5% down payment you'll have to fork out for CMHC mortgage insurance, so from a lending perspective it's more stable. That said, it's crazier to me that people will take on that liability rather than the fact that lenders will lend it.
As soon as someone hits what they think is a high salary, they'll borrow as much as possible, not thinking they'll ever lose that job or interest rates will increase. This changed a bit in the last 5 years, hopefully for the long-term, so places like Toronto are seeing 90%+ decreases YoY in certain realty segments.
Canadians' household debt numbers are absolutely wild and millenials without wealthy parents are and will continue to experience an increasingly tenuous financial future.
As an example, there's an older guy down the street from me who's long since paid his house off. For property tax assessment purposes, his house is worth $40k CAD, while the land is worth $1.6m CAD. It's just a standard plot in what used to recently be one of the poorest neighborhoods in the country
"Rates have been over 10% in the 80's!"
House prices relative to income were much lower back then.
[dead]
Nope, it’s true and even hit higher, this is one example of many: https://files.catbox.moe/rpp5fp.mp4
Yeah, it’s a scam, the whole thing is one giant scam, yet it’s legal and normalized and everyone is ok with it!
People refinance to take lower rates or pull equity out of the property and that resets the clock.
> Rents are high because landlords are greedy
I understand the frustration, but it’s probably unfair to single out landlords specifically. Greed isn’t unique to landlords: it’s a universal human trait. We’re all greedy.
History reminds us of at least one person who famously preached against greed, and humanity’s reaction was to nail him to a cross.
Are you telling me that places with low rents don't have greedy landlords and banks?
This article suggests rents are high because we make it difficult to build homes. Are Denver landlords less greedy than landlords in Seattle?
Prices going up is corporate greed. Prices going down is corporate generosity. Basic economics.
As someone that rents I have little sympathy for people paying property taxes annually that are less than what I have to pay in one month.
There should of course be sanity in the system. If you’re retired and can’t the afford property taxes on your home it’s not okay to squeeze you for that little bit of money.
You, as a renter, are paying the property tax.
The cost is passed on to the end-user.
Of course. And rents should be lower. House prices should be lower. But I don’t care for the cries of people who think they are wronged by property taxes. Most of those home owners are benefiting from those taxes.
You're not making any sense. Someone paid for a house, they fully expect to pay a lot less than renters do. That's the point of buying a house.
The point of buying a primary house is to be able to do what you want with it. And to know you can live there as long as you want.
Economics dictates how valuable those things are and what premium they have over renting.
What I realized when I bought a house was for an owner occupier buying a house is the only way to 'invest' the money you'd otherwise spend on rent. You'd never make such a low return illiquid investment otherwise.
Source: https://www.aamdhq.org/news/vacancy-and-rent-report----july-...
Denver is a boom and bust town. Every once in a while, it thrives for a decade, then busts with an exodus of people (myself included). It will rebalance and boom again.
Why do you say this and why did you leave? I'm curious.
Because that’s Denver’s history. Founded by land speculators after beating Indians in the Colorado War of 1865, only to become a gold rush town, then go bust, become a gang haven, bust again, then boom again with Carnations, then bust again, then boom again with industrials and nuclear waste, to go bust again when nuclear power was divested, then to boom again in the 90s with more gangs, bust again, then boom again in the 2010s with the green rush.
I left because I was sick of having to weather the storm of boom and busts, saw $250,000 homes become $950,000 homes (no change to the home itself) and prey upon the young people moving there to ensure they are financially burdened with Boulder Boomer retirement plans.
The Denver Metro Area has been booming for close to 20 years. It was one of the few localities that continued positive economic growth through the 2008 recession
Living in So CO, I smh at what's going on up there. The cost of living elsewhere in the state can be 1/3 to 1/2 the price. The govt and corporate employers could easily decentralize and stay in CO.
How far south are you? I lived in Colorado Springs for a few years as a ski bum and all my friends in Denver used to mock me driving back and forth, but my rent was almost $500 cheaper living in Springs.
You're 100% right though.
Commuting from the Springs to Denver every day, so 22-23 days a month, 60-70 miles one way...
Is that worth $500?
Quick math:
$4/gallon, 35 mpg, 120 miles a day, so $14/day in gas, plus extra maintenance, and the 3 hours a day of your life you'll never get back.
Couldn't claim with a straight face myself that the math works.
If he was a "ski bum" I'm guessing he wasn't commuting to Denver, but to get to the mountains up there he'd have to drive the extra distance sometimes.
For me, I just saw it as disposable income. I was making good money at the time and it never really occurred to me it might not be a great deal. I just figured I had $500 more to do what I wanted.
And caveat, I wasn't going every day, A lot of the back and forth was variable depending on weather and conditions. The sad part is you can't either these days thanks to Vail. Also, gas was a LOT cheaper back then - it was hovering around $1.75 if I remember correctly so the math works a little better, but not really ideal.
just a little west of Pueblo. We're about 1/3 of the cost of living in the Denver area.
We get plenty of migrants from the Denver area and elsewhere.
Of course, the sales tax and other taxes are going up. Probably heading to a truly rural area with a nice community soon. I lived in many big cities over the years. They are toxic and unsafe. I know that because I worked in public health. If you look at the morbidity and mortality by zip code, you'll see yourself. Affordable city living has a dark side.
Not to say that city life isn't great when you're in your 20s or 30s. It is fun and jobs are everywhere. But I've seen enough fatal car crashes for a lifetime.
Healthcare and schools in that part of the state are so bad that it doesn’t make sense for young families and older people.
As I get older, this is a constant concern. I'm like OP and just want to pull the chute and move out to somewhere in Wyoming or Idaho up in the mountains and not worry. Then I think, "Bro, you're getting older, you have a heart attack or something worse and you'll be dead by the time the ambulance gets to your place."
So I'm back to trying to find a state and city that has good access to healthcare. We're a year from being empty nesters with both kids off to college so education isn't important. But I very much have the same reasoning.
“just a little west of Pueblo …”
Canon City in the house.
Greybar Hotels! The Supermax... some bad hombres
Supply and demand 101 continues to work.
So funny that. Weirdly even if you build nothing but market rate housing, housing gets more affordable. :-)
Someone should try this with medicine. Instead of subsidizing insurance (demand side), let’s spend the money to bring doctors to the USA from all over the world and have them work in free clinics (supply side).
we also could just stop having the federal government limit the number of residency slots so we could have enough doctors trained in the US.
https://www.beckershospitalreview.com/quality/hospital-physi...
https://pmc.ncbi.nlm.nih.gov/articles/PMC8370355/
Good luck getting the federal government to stop doing what the unio..., I mean, what the American Medical Association and representatives of the nation's medical schools ask for.
https://web.archive.org/web/20200501175120/https://www.balti...
And by not limit you mean fund. And I agree.
Not just residency. Fix the cost (and capacity) of the education system as a whole, especially for mid-levels. There’s no reason this country should have such a chronic NP shortage, and you don’t need MD/DOs for most of the healthcare gaps we have.
You also make rural care viable when you don’t have folks who need to pay off astronomical loans.
> you don’t need MD/DOs for most of the healthcare gaps we have
Or maybe you do! It’s for your own good.
https://www.ama-assn.org/practice-management/scope-practice/...
How are NPs not just the trend of enshittification? Most doctors already aren't very engaged in the tiny 15 minute slices of appointments, and now we're supposed to be happy that they'll be even less educated? The most straightforward way to address the doctor shortage is to make it so doctors are spending most of their time on healthcare, rather than appeasing "insurance" company bureaucrats with onerous paperwork.
Nurse-Practitioners work harder to get their certification than almost anybody who comments on HN and it is not OK to talk about them this way.
What an oddly personal reaction. Did you get bored of infosec or something?
Being HN, we're talking about systems and cohorts, not individuals. I've had some great individual NPs that were more actively engaged than most doctors. PAs as well. And I've had plenty of crappy MDs just phoning it in. But none of that is really relevant to the system meeting higher demand by simply lowering its standards rather than actually being reformed.
Finding good (and available) primary care providers has always felt like going to the casino in my experience. Currently seeing an older NP who has been great. I could see a future with many more NPs. Obviously, if you know a guy or need a specialist, then do what makes sense.
There are NP mills that will take you from high school, put you through an accelerated RN and prereqs and basically have you as an independent provider in just a few years out of high school (well, 4-5), that’s ridiculous.
Is there any evidence that _8_ years of post-secondary education (plus 3-7 years of residency at poverty wages) actually improves medical outcomes?
5 years could be plenty?
NPs are supervised, as are doctors on rotation, so it's 7 years before clinical practice for a doctor.
PAs might love to hear about that, since they’ve been lobbying about supervision.
Dozens (I gave up counting) of states have absolutely no supervision for NPs: https://www.aafp.org/family-physician/practice-and-career/ma... - they have full autonomy as providers.
Good! More should.
What a weird comment. What do you think you need an MD for, in your primary care visit, that an NP can’t do? What do you actually know about their education? What do you actually know about licensing? How much time, in a day, do you think doctors are spending on “insurance”, and what specific experience leads you to believe that?
(Because the actual answer is “near zero for literally any provider who isn’t completely independent, and almost none of them are, anymore”.)
Or was this just a way to memetically add “enshittification” to a conversation it doesn’t even slightly apply to, but you think that’s currently trendy?
You can be an NP in as few as 4-5 years out of high school with some courses. That’s to me the definition of not knowing what you don’t know. I’m a critical care paramedic who has corrected many NPs on fairly fundamental learning.
I’ve found that nurses with significant field experience do very well, but there are plenty of courses who will “zero to hero” you fresh out of high school.
Meanwhile, PAs go through a program near as rigorous as medical school and have to have physician supervision while NPs are not subject to oversight.
Doctors begin delivering clinical care in year 3 of med school. You're doing a sleight of hand with this "out of high school" thing; doctors are also educated "out of high school", the difference between the two roles is 1-2 years before clinical practice, and NPs tend to practice supervised for longer periods of time than doctors.
And, obviously, NPs cover a smaller range of conditions than doctors.
No, I’m really not. You can do an accelerated RN program in 12 months - though 18 months is more common.
Many colleges offer RN to BSN courses. Some of them can be 12 months (and some less reputable places offer nine months).
Add in a one year graduate nursing degree with some electives and in some states you are now eligible to practice as an ARNP or CRNP.
I’ve personally met several NPs who are 24 years old and are practicing.
The issue is that at that point you are ignorant or often cocky about your knowledge.
Versus premed 4 year degree, med student practice in years 2 and 3 and continued hand holding through residency…? There’s just a little difference.
There's accelerated pre-med too! My point is: it's all "out of high school". High school has nothing to do with any of this, but you mean to attach that term to NPs, as if they were in home ec last week. No, that's not at all how it works.
> NPs are not subject to oversight.
Sorry, this is fundamentally incorrect. To the point I can only assume you’ve made up every other thing you’ve said. Though I’m fascinated by a paramedic having opinions on someone else’s medical training.
The world would be better if we had less strident opinions on things we know we don’t know anything about.
If you want to be pedantic, then everyone has oversight through medical licensing boards, including physicians.
But if you mean "supervising physician"? Then let's see:
* Alaska - Full Practice Authority (NPs can perform the full scope of practice without a supervising or collaborating physician.
* Arizona - Full Practice Authority (NPs can perform the full scope of practice without a supervising or collaborating physician.
* Colorado - Full Practice Authority (NPs can perform the full scope of practice without a supervising or collaborating physician.
We're six states in, and half have no requirement for an NP to have any supervision from a physician.
Let's keep going though:
Connecticut, Delaware, DC, Florida, Guam, Hawaii, Idaho... zero supervision required. At this point I couldn't be bothered going through the list. This list, from the AAFP telling physicians about their responsibilities in supervising NPs state by state: https://www.aafp.org/family-physician/practice-and-career/ma...
So to put that back on you, explain my fundamental incorrectness.
And again, if you're talking about DOH oversight, then that seems a little disingenuous, as even the Chief of Medicine at a Level 1 Trauma Center practices under that insight.
I'm very well aware of the limitations of my scope of practice. That's why I operate under online and offline protocols. But hey, maybe I should have done another year or two of school so I could have a "full scope of practice without any need for a supervising physician". Not sure the ad hominem has any relevance.
Okay but what does that have to do with enshittification, as defined by Cory Doctorow, which refers to the decline in quality of online platforms and services over time, often driven by the pursuit of increased profits. This degradation is characterized by a shift in focus from user experience to maximizing revenue, typically through tactics like increased advertising, higher costs, or changes that favor business customers at the expense of users.
Or do you just like how the word has shit in the middle of it and are using it incorrectly?
> What do you think you need an MD for, in your primary care visit, that an NP can’t do?
I guess not much at this point where PCPs don't seem to do much beyond use rubrics, prescribe, and refer. Which is why I used the word enshittification - it's part of a continual gradual march down in quality/services to a captive customer base. Basically the opposite environment of innovation aiming to serve customers.
> How much time, in a day, do you think doctors are spending on “insurance”,
I'd say at least half their time, if not much more. They certainly aren't scheduling these 10-15 minute appointments back to back all day. By "insurance" I am of course including all of the extra documentation and runaround they have to do simply to satisfy the third party beancounters' demands. I'd say this even includes a good number of patient visits themselves.
https://www.astralcodexten.com/p/what-your-doctor-spends-80-...
https://siderea.dreamwidth.org/1182366.html
Observations in my personal experience line up with this:
- Number of signs at my primary care office about their procedures for providing/processing referrals, like this is the majority of their work
- The numerous questionnaires every office makes you fill out ahead of every appointment, that they themselves never actually read
- Experience with a not-terribly-large specialist office who employed an entire full time "nurse navigator" whose job it was to help doctors prepare documentation for "prior approvals"
- The multiple times I've seen a doctor personally step in to grease the system for something way way below their pay grade, because it was the only way to provide appropriate health care
I'm sure I'm forgetting plenty too. Frankly I don't know how one could step into any moderately sized medical provider and not perceive the entrenched corporate government tentacles in every facet.
You basically can’t or it won't have the same effects because medicine doesn’t really follow the same dynamics as most other markets: the supplier (doctor) has an information asymmetry and thus makes most of the decisions, while the buyer (patient) is not usually the payer (insurance) so aren’t really incentivized to save.
Kenneth Arrow famously analyzed the healthcare market and made the above insight: https://assets.aeaweb.org/asset-server/files/9442.pdf
I know he was a Nobel Laureate but not sure if this is the work that won him the Nobel.
Updated: I should qualify my statement by pointing out this is for the US healthcare system.
> the supplier (doctor) has an information asymmetry and thus makes most of the decisions, while the buyer (patient) is not usually the payer (insurance) so aren’t really incentivized to save
Counterfactual: patients in India routinely shop around for second opinions and negotiate fees.
Completely fair point. I should have prefaced my statement with US based healthcare system is structured this way. I don't know how the dynamics are in other countries -- though I do suspect it's similar in term of information asymmetry. I imagine doctors everywhere have some pretty advanced and specialized knowledge. I don't know enough about India to know how they overcome this issue or if they do or not.
Fixing a severe shortage is actually likely to have some impact.
For instance, if there's a lot more doctors, the payer may be able to negotiate lower prices. We already have insurance mechanisms that drive patients to the providers that the insurer has negotiated with...
It's even worse. This isn't a simply supply-demand curve. Supply here often increases demand (patients live more and longer; They need more care).
He said free clinics.
But then you're just shifting the cost somewhere else. The doctors aren't working for free. Someone is paying them. It's just not the patients in the case of free clinics.
In addition, doctors aren't the only cost centers in health care either. Even if they're free, which is sort of already the case or fairly inexpensive for the insured in the US, the overall cost of healthcare will still be high.
Plus if you want completely free clinics (everything from doctors to medicine, etc), then you're not talking about a market solution to the issue, which is completely fair too. No one said you have to use a free market solution for this problem.
My point is that we can't expect a free market to solve this issue. It isn't as simple as supply and demand.
> It isn't as simple as supply and demand.
It really is that simple.
Giving people insurance without actually increasing the supply of doctors or clinics increases the number of people willing and able to seek treatment. It does nothing for lowering costs of said treatment. Per basic economics, that’s shifting the demand curve (i.e., increasing demand).
With no changes to supply that leads to higher prices. So every time the government makes a new program or expands anny existing one that provides insurance coverage, costs for everyone will go up.
In contrast, my proposal for explicitly bringing in doctors and creating clinics increases supply. People who would have gone to see a doctor elsewhere may now choose to go to this new free clinic.
The demand curve itself would not change, though with the lower cost due to the supply curve shift you would have a larger overall market.
This is clearly oversimplified. There’s some second order effects where if primary care market increases, you’ll need more X-rays and CAT scans. So there could be an increase in those prices. But that’s could be solved in the same way too.
I think you’re still missing the point - it’s NOT classic supply and demand because the mechanism by which that works is prices, and in many healthcare markets including the US — the buyer isn’t the payer, and shortages lead to rationing (via wait times) rather than increased prices, so often increasing supply doesn’t change prices even as it increases aggregate costs (because there’s still excess demand and rationing).
For this argument to work you have to believe that decreasing the price of service delivery wouldn't decrease the price of health insurance. Provider costs dominate US national health expenditure, like it's not even close; it's not a full order of magnitude difference but it's close to one.
But part of the provider cost is driven by the availability of money to pay, which is part of the reason why drug costs are so much higher than in the US. For example, the doctor has no strong incentive to prescribe less costly drugs since they don't pay. The patient don't know any better and aren't the payers either. The insurance has some control over what they will pay for and how much but except for some cutting edge treatments, it is very hard for them to say no. This is part of the reason why insulin in the US is so expensive and why drug companies advertise to doctors and patients, etc.
I think in countries where the health care costs aren't as astronomically high as the US there is some form of government intervention to distort the market. And the original post is more or less arguing for a market distortion that doesn't rely on simple price signals to bring costs under control. But that is very different than what has happened in Denver's housing market.
Drug costs are also a small percentage of the national health expenditure, which is dominated by procedures delivered in hospitals and outpatient clinics. I don't accept the logic you're using for drugs, but we don't reach that question until we figure out why the single largest health expenditure in the United States has no impact on health insurance costs, which are the primary way Americans interface with the health insurance system.
If that expenditure does impact health insurance costs, then the rebuttal given above about increasing the supply of doctors not improving affordability fails.
If you google [National Health Expenditure spreadsheet], there's an annual spreadsheet that has includes an incredible amount of detail about where we spend money, broken down in a variety of different ways.
You don't even need to import foreign doctors: just increase the number of residency slots.
We already do that? I mean, minus the free clinic thing.
Is $1800 per month supposed to be a normal or acceptable rent? Rent should be less than $1000 a month. And even that's only 30% if you're making over $50,000 a year.
One, maybe not the only one, hands off, automatic, 100% "all-natural", do nothing solution to the "housing crisis": Hope the birth rate, i.e., on average the number of babies born per woman, stays significantly under 2.0 or even 2.1, maybe 2.2.
So, the population will shrink but with some maintenance (roof, painting of exterior siding, kitchen/bath, HVAC, windows/doors) mostly the housing supply won't.
The Internet may reduce the time and money commuting to work and/or the need to be in high density, expensive housing areas for a job.
A decreasing population has a lot of collateral damage economically. I'd rather lessen zoning restrictions and let the market build.
I live in Denver, I don't believe this article is true. I just got a renewal offer where they wanted to raise my rent by 30%. I have generally negotiated this down with my landlord (Greystar), but I also am well aware and they're more blatant about the fact that they use RealPage ever since the courts gave them a pass for blatant price-fixing and collusion. Greystar and two other major REITs own nearly 60% of all rentable residential properties in the Denver metro area, so pardon my skepticism, but I call BS on the thought that rent has or will ever go down in Denver.
Edit: The plural of anecdote /is/ data.
Greystar is a notoriously bad landlord and your personal anecdote does not change the data.
What you've quoted here is anecdotal evidence: https://www.merriam-webster.com/dictionary/anecdote
Crime can trend down and yet there will still be victims of crime.
Shop around and see what others are offering. I believe your anecdote, and I've also seen several other anecdotes about how rents have dropped - someone said as much as $1k.
I'm sure it's a big mix right now.
Remember, this is a good thing. Property values should not outpace inflation.
It's not terrible if property values fall somewhere between inflation and GDP growth.
Presumably GDP growth per capita, but even then, why would that be any better than "not a cent more than inflation", or for that matter even for housing prices to decline over time (e.g. through increased automation in construction)?
Yes, of course, the cost of things decreasing (net of externalities) is good.
(Was just making the distinction between inflation and purchasing power - things can have an inflation-adjusted rise in price while still becoming cheaper with respect to purchasing power.)
yeah well, the last time things were affordable the price was 1200. 71 dollars off 1850 isn't going to do anything
> 71 dollars off 1850 isn't going to do anything
The point is the modern urban economic illiteracy that pretends supply and demand don't exist in housing (except when it comes to short-term rental stock, in which case it magically reappears) is wrong. Our housing crisis is a supply-side problem.
This is only half the truth. The reality is that demand is propped up by fannie/freddie and mortgages in general. The fact that the government will buy investment property mortgages is bonkers. In reality, you should only be allowed to mortgage the raw materials and labor of a primary home, everything else is just leveraged speculation. There's also a immigration question, but should be purely solved using new supply. Finally there's a question of, should you even be allowed to own investment properties in cities. A real land reform would be huge for the country; ie. forcing landlords to sell investment properties in any area where rent exceeds $x.
It’s a supply-side problem, but with majority of people being either indifferent to the problem or against downward pressure on the housing prices (most people don’t rent). The prices have skyrocketed, and most people who bought in the last 5 years wouldn’t want their assets to depreciate, if they spent 500K+ on it.
> most people who bought in the last 5 years wouldn’t want their assets to depreciate, if they spent 500K+ on it
If they spent any amount on it. The long-run equilibrium is managing housing prices like the Fed, with a commitment to building enough to keep median real home prices flat. (I'd argue for a one-time adustment to pre-Covid levels. But that's arguably an arbitrary threshold.)
Absolutely. I only pointed to the last 5 years, because there was an insane appreciation and a lot of people went the route of “becoming house-poor, but owning their homes”. Those people, who are on the younger side, won’t ever support depreciation of their assets.
Honestly, I have no idea how a government can resolve it without a large scale intervention or centralized action a la China.
I recently denounced some Boomer for this exact comment at a Berkeley public hearing. Unsurprisingly, $71 per month at the margin is quite useful to many people.
In Colorado, that's about 5 hours of labor for minimum wage employees (ignoring taxes, but at that income taxes are low). If you're working full-time, you average 174 working hours a month so that's about 2.9% of a minimum wage earner's gross income, which is nothing to scoff at for those folks who are earning at that level. And when you consider taxes (payroll which can't be easily avoided, and whatever level of income tax they have to pay) it's probably pushing closer to one day of work to take home that $71.
back to 2022 rents! wow..yeah..., but why 2022? Feels like cherry picking the one year that makes today's numbers look okay
run it against 2000-today, or even 2020, and the story probably gets way uglier
Funny, I just got a lease renewal email today and they want another 7%. Call me skeptical.
How dare your experience differ from mine on the internet. I demand you show me proof of your rent going up, Denver man!
It's funny how for so long people fought the basic law of supply and demand and tried to force 'affordable housing' to be built exclusively, while the prices of homes skyrocketed. I think leaders knew better, but they just didn't care because they were making money on their property. It also seems like a form of generational theft from boomers to millennials. Housing supply was always being added until boomers got theirs, then they made it overly restrictive to choke supply and drive up prices.
Now do KC.
Howdy, fellow KC resident. They are still building apartment complexes in Lenexa, but they are all near the Public Market, so. Not exactly the cheaper side of things. South KC is growing, but mostly higher-end homes it seems.
Um the rent is still insanely unaffordable?
> Um the rent is still insanely unaffordable
You have to pass 1st Street to get to 5th.
Unless you go to jail.
In other news, San Francisco rents are up $223 from a year ago, with median rent rising 11% year-over-year [1].
But hey, at least we’re safe from the dangers of gas stoves. /s
[1] https://www.zillow.com/rental-manager/market-trends/san-fran...
Inhaling combustion products isn't great... not sure why you'd link those things?
https://pmc.ncbi.nlm.nih.gov/articles/PMC9819315/
"We found that 12.7% (95% CI = 6.3–19.3%) of current childhood asthma in the US is attributable to gas stove use. The proportion of childhood asthma that could be theoretically prevented if gas stove use was not present (e.g., state-specific PAFs) varied by state (Illinois = 21.1%; California = 20.1%; New York = 18.8%; Massachusetts = 15.4%; Pennsylvania = 13.5%). "
Indoor combustion seems like a very good thing to eliminate.
In San Francisco, the housing crisis poses a far greater and more immediate threat to children’s well-being than this issue. Lack of stable, affordable housing affects everything: education, health, safety, and long-term opportunity.
We can debate other problems, but unless we address the fundamental need for proper housing, everything else should be secondary.
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Developers don't build units to lower prices. If prices go down, it's because developers overbuilt or there are other macro factors at play. I suspect it's a bit of both.
A core tenet of capitalism and neoliberalism is private property. We're rapidly approaching a point of land reform. I think private property is a mistake. Note: this is distinct to personal property. You can own your own home, maybe even a second home. Anything beyond that should be outright disallowed or taxed into oblivion.
We should simply not allow people to hoard property. It is state-sanctioned violence to deny people shelter by intentionally driving up the price of a basic need. Housing unaffordability is the number one contributor to homelessness, which I think is up 18% last year.
I realize that's a pipe dream. What can we do instead? Do what Vienna does. Austria is a social democratic country that's still capitalist in nature. Yet ~60% of the housing stock is owned by the government. It is remarkably cheap to do so.
Public-private partnerhips or simply looking to the private sector to solve these problems are nothing more than wealth transfer from the government to billionaires.
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Could you please stop posting unsubstantive comments and flamebait? You've unfortunately been doing it repeatedly. It's not what this site is for, and destroys what it is for.
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful. They include:
"Don't be snarky."
"Eschew flamebait. Avoid generic tangents."
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
This is not a solution. The average rent is still $1832, which is still unaffordable for people in Denver making the median income of $54.3k if you apply the rule of thumb where rent shouldn't exceed 30% of your monthly income.
communism? was there lead in the paint they painted your walls with?
no real argument was made for communism, however a housing / renting market controlled by the government with regulations instead of letting the “free market” (((oligopoly))) run it’s course screwing over the poor and middle class while the richest of the rich pool all these profits to build bunkers and do stupid shit.
yeah, a regulated market is better. especially when and if the government regulating the market is sane. thats a requirement for laws and or institutions relying on regulation
> a housing / renting market controlled by the government with regulations instead of letting the “free market”
It's curious how the largest landowing families in New York and San Francisco are strong supporters of these anti-market policies.
> was there lead in the paint they painted your walls with?
yes unfortunately as long as my landlord gave me the LEAD PAINT notice i didnt have any other options.
It's a nice victory story for the YIMBYs hoping to win over the upper-/middle class trying to retain the narrative that the market will provide "affordable" housing (not what this even demonstrates, but anyway), but this isn't going to get people off the street. We need a public housing sector to appropriately meet everyone's needs. Otherwise this is just a game of justifying "who deserves housing", a discussion over which I'll never agree with the market.
Until you reach transient shelter beds, which may not be saturated in a region (in some places in Chicagoland the work is going into outreach to get people off the street and into shelter beds as much as it is in expanding the number of beds), every additional unit of housing you build frees up some unit at or below that unit on the stack of housing. The effect percolates all the way down to long-term supportive housing rooms.
I don't really understand the intuition people have for how anything else could be the case. You make new housing available, people move into it, leaving vacancies. Pretty simple.
> every additional unit of housing you build frees up some unit at or below that unit on the stack of housing. The effect percolates all the way down to long-term supportive housing rooms.
This makes intuitive sense to me, but I've really struggled to explain it in a way that makes it click for people.
Just ask: whoever moves into the new place, where did they live before? Does their previous apartment vanish into the ether?
This is an aside to your thing here, but I don't think any of us can do better than the HN commenter on the other housing thread today who said (paraphrasing) that this concern about building market-rate housing is like expressing concern that nobody builds used cars.
I don't have the impression most of my "fellow" americans even gave a damn about homelessness to begin with, so perhaps what you read as misunderstanding the market might simply be a disagreement of values—one party cares about the homeless, the other cares about salaried employees. May we all truly rot in shit.
0.2% of Americans are homeless.
Why is housing always about the homeless? Yes, getting people off the street is important. But there's few other topics where a solution that helps 99.8% of people is dismissed because it doesn't help 0.2% of people (I don't even agree that it doesn't help them, but I'll be charitable for the sake of making my point).
> Why is housing always about the homeless?
To me, poverty is basically the only thing worth talking about when it comes to politics. Nothing else is going to get me to the voting box—to me, a platform that doesn't focus on poverty reduction doesn't even understand the point of government, the economy, or trying to work together.
I suspect other folks who think this way are going to be disproportionately loud.
People in poverty have to pay for housing. Reducing the price of housing helps them, and may even help them climb out of poverty. Building more housing reduces the price of housing.
> People in poverty have to pay for housing.
No, they don't have to. That's a decision our society has made, and in my opinion it was a horribly evil one.
Even if the government is paying for housing for them, cheaper housing means that the government can pay for more people's housing. Building housing reduces the price of housing...
> cheaper housing means that the government can pay for more people's housing.
Which we will never do, because it depresses property values.
Look "abundance" bullshit would make sense in a continuum of housing policy. But by itself we're just doubling-down on reinforcing homelessness as an american institution.
Right now in cities homelessness is often associated with addiction or mental illness. We spend billions every year giving these people resources to get off the street, get treatment for addiction or mental illness. Right now? Many, many, many of those people have no desire to get off the streets or get clean or get treatment for their mental illness - despite the copious amounts of safety nets and other programs designed specifically to help those people.
I agree, we already have programs designed to help those who need it - focusing on the larger percentage of the population just makes sense if you're concerned about having bigger positive outcomes.
Lowering the rent stops people from becoming homeless which is a necessary element of ending homelessness.
> Lowering the rent stops people from becoming homeless which is a necessary element of ending homelessness.
Sure but by this reasoning you could justify any effort as sufficient. At some point you have to make the personal judgement on what effort is enough. I don't really see any effort focusing on anything short of homelessness as worth the oxygen in the room it consumes.
Who said anything here about "sufficient"?
Nobody; you can read this. What's your point? I realize americans don't give a shit about the homeless; you'd have to be retarded to think otherwise.
The point is that jeffbee literally said "a necessary element", and you rebutted with saying that it wasn't sufficient. No one said it was sufficient, so who knows who you're even arguing against?
So you're telling me if an additional, say, 100k units came on the market in Denver in the next year, housing prices wouldn't fall dramatically such that all working people could afford housing?
Working people should be able to afford housing near where they work. So let's press the gas pedal on building. The mentally ill and drug addicted should be subject to mandatory treatment or jail until such time as their underlying condition is mitigated to the extent that they can work and afford housing. Free housing doesn't work. In fact, it exacerbates individual dysfunction. It is cruelty masquerading as kindness.
> all working people could afford housing?
Hey, if that's the metric you're pushing for, good for you. I'm pushing for housing as a human right. I never caught the calvinist bug of "torture the non-productive until they conform and perform" method of population management.
Don't you see the huge contradiction here?
Housing doesn't just spring up on our streets by Jesus' will, so by making people responsible for providing housing for other people, you're literally calling for "torture until they conform and perform".
> housing as a human right
Why not just shelter?
Why should housing be a human right? Human rights came from seeing all people as made in the image of God, but since God is out of fashion, what justification is there? And even if you argue "image of God", human rights have hithertofore been about human interactions, not possessions or use of things. On the latter, Paul instructs thieves to stop stealing and work, so that they have something to give to the poor--it's not clear to me that a Christian position would necessarily consider housing or income to be a right of existence. [1]
If housing is a human right, then I think you need some human responsibilities, too. Like giving back to society in some way, e.g. Paul. Rights of interaction go both ways, but right to housing/basic income only go one way and that is not workable. Communism tried right to work / right to housing, and it never worked. You could say, well, the probably was command economy, but how would you guarantee work/housing without a command economy? As it is, society informs you how it values what your giving in the form of money, which you then use to buy housing. It isn't perfect, either, but it seems to work better.
But going back to human rights being derived from all people being made in God's image, the Christian view is that it is each individual's responsibility to care for the poor. Making no-poverty a human right turns it into society's responsibility, and I'm not convinced that is workable. Society doesn't exist; society is the interactions of individuals, and if you don't transform the individuals to each care for each other, it will be impossible for society to. Marxism makes the claim that society is the problem, but so far no workable solutions have emerged on how society can solve the problem. (To be fair, Christianity did not solve the problem, either, although the early church sure tried, especially with Basil et al after Constantine increased their resources)
[1] As a possible counterpoint, St. Basil said that everything you earn over subsistence belongs to the poor, but that seems a unworkable unless you, like him, are part of a rich monastic/ecclesiatical community that provides for you in exchange for individual poverty.
> Human rights came from seeing all people as made in the image of God
bruh I don't think Jesus wants to create homelessness. Maybe you should read your book and stop using it to perpetrate blatant acts of evil. I don't think you're seeing heaven if you honestly think homelessness is justified in any way. Read your fucking book.
Human rights don't depend on the compulsory labor of others. They are inherent. Housing doesn't qualify.
"torture the non-productive until the conform or perform" is possibly the most inflammatory framing of "you should not make other people pay for your housing" I've seen.
> Human rights don't depend on the compulsory labor of others.
The ones that are worth fighting for do. Otherwise what is the point except to excuse acting like an asshole?
It will just go back up 3% next year to match inflation. 20k apartments and the rent only lowers 3%? What a joke. Only the real estate industry is celebrating this.
> 20k apartments and the rent only lowers 3%?
20k is about 5% of Denver's housing stock [1]. Given the backlog of demand, you'd expect to see inelasticity at the entrance.
[1] http://censusreporter.org/profiles/16000US0820000-denver-co/