Comment by ChrisMarshallNY
4 days ago
> the middle class quality of life has gone up.
As long as you don't try to buy a house.
I see kids, right out of college, making more than I ever made, at the peak of my career, unable to afford a house.
4 days ago
> the middle class quality of life has gone up.
As long as you don't try to buy a house.
I see kids, right out of college, making more than I ever made, at the peak of my career, unable to afford a house.
Yes this is a big problem but a large part of this is the total elimination of starter homes from the market. I.e. they would be able to afford the types of homes that earlier generations started in, but those homes simply don't exist anymore.
It's kind of a quality of life degradation, but it's a bit more complex than just "an attainable item is no longer attainable." It has never been normal to buy a 2600 sqft, 4 bedroom home at the start of a career.
It's not that starter homes were eliminated or were torn down, it's that construction stopped in cities. The downzonings of prior generations, combined with the limited ability to expand by car travel, finally hit its limit and the urban planning apparatus was in complete capture of people who didn't want the built environment to change.
Would be nice if true, but not really.
The reason construction slowed down so much is that developers fear another 2008. We have just barely gotten back onto a historically normal-ish pace of construction: https://fred.stlouisfed.org/series/HOUST
And this talk of "just build build build," while not wrong per se, overlooks the fact that of course prices will come down, which then discourages construction. The system is self-equilibrating. 2008 reset the equilibrium point very low for 15 years, and now the nature of the costs of construction (labor and land) means it is not advantageous for anyone to build starter homes, and it's hardly advantageous to build homes at all.
Restrictive zoning is a problem and would be a very tidy explanation of all the woes of residential in the US, but there really isn't much evidence for it mattering that much in the grand scheme of things.
The single most important factor in home prices is local income levels. This gets baked into both land prices and labor costs, which then makes it very difficult to profitably build much, and completely unprofitable to build entry level homes.
The K-shaped economy is itself causing housing unaffordability. https://www.nber.org/papers/w33576
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That's true.
From what I can see, those houses are being brought up by corporations, and turned into rentals.
Rental-only society is definitely possible (see Manhattan and Tokyo), but is a very different model from the traditional American suburban dream.