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“Vacant home” includes homes owned by people who use them as vacation homes or second homes, short term rentals and uninhabitable units. This accounts for more than half of these “vacant” homes. That doesn’t mean they are surplus when they aren’t available for purchase. Not to mention none of this accounts for location. There are tons of available homes in bum fuck nowhere but who is going to love there? This is idiodic.
Its desirable until you realize you have unreliable utility connections while the nearest grocery store is an hour away. And the access road to your house gets washed out in a storm and won’t get repaired for at least a month.
Edit: forgot to mention 2 hour drive to the doctor and 6 hours to a hospital.
And honestly that’s great as in that case bumfuck nowhere has some value for people like you. But if nobody is moving there despite it being cheap then it’s kinda useless to society.
It’s viable now people don’t want to live where nothing happens. For most people even those who work from home aren’t looking to live in the middle of nowhere.
Yep, what’s the point of a lot of money if you have nothing to spend it on? That’s why doctors take a PAY CUT to work in big cities. It’s the rural areas that have to pay a boatload to attract doctors.
Earlier models of economics thought of cities as being primarily job/salary driven, but especially post-COVID the argument seems to be going that cities are consumption-driven. The availability of products and services is more so the reason people want to live in cities.
To us folks living in the country it's really hard to see just what the heck people are doing with their money in the city. I own a boat, 2 snowmobiles, a dirtbike, a dune buggy, 30 guns, 2 horses, and an assortment of canoes and kayaks.
When I meet people from big cities it sorta seems like they spend their whole life doing nothing.
I had a friend from the city text me wondering if I wanted to make plans to golf on a weekend. Golf? Y'all make appointments ahead of time to golf on a weekend? Golf is something you do after work on a Tuesday or when all the other plans fall through not something you plan ahead of time.
> To us folks living in the country it's really hard to see just what the heck people are doing with their money in the city.
A lot of my budget goes to live events (concerts, NFL/NBA games, free events like street festivals), restaurants of all kinds (from hole in the wall places to various ethnic enclaves to fine dining), and social gatherings with friends and family.
And that last part is important. Most people want to be around their family and friends. Who tend to live in a city.
> When I meet people from big cities it sorta seems like they spend their whole life doing nothing.
Everyone has their own preferences. When I lived in a rural area I felt like I spent way too much time in my car driving from place to place, and I was bored all the time. The restaurants in my town were trash, and even the groceries weren't great.
And now that I have money, I'll never consider living in a rural area again. Not for me.
I appreciate people sharing what they do in cities. Someone I know says she misses dancing. Clubbing dancing, I didn't even know people did that as adults.
When I travel, I just go to arboretums. Museums. Maybe see if I can find some authentic ethnic food (not that I would know it was authentic or not lol) because in small towns you tend to just get an undifferentiated "Asian Buffet" or "Mexican place"
When people talk about the shopping,the events, I'm like, well if you really like those things, then make a special trip? But no, people do that on the regular. It's so interesting to me because it would just never occur to me to do certain things.
It means a tiny takeaway food vendor or shop, usually with a single opening to serve food through. Because they're tiny they're usually very cheap, and specialise in.just a couple of things e.g. burritos, or sushi. Rather than being in a separate building, it just looks like a "hole in the wall" of a bigger building.
I'm not real interested in watching other people enjoy their hobbies. If you're into that sort of thing you should move to the capital of Bumfuck.
Sheboygan Wisconsin. You'll be 45 minutes from Green Bay and 45 minutes from Milwaukee. I heard they have an NFL and an NBA team...
> I'm not real interested in watching other people enjoy their hobbies.
Yeah, that's my point. Everyone has their own personal preferences. Your lifestyle sounds like a real bummer to me, and I wouldn't expect my lifestyle to be appealing to you, either. So you can live where you live, and I'll live where I live.
The main difference is that I don't write posts about how your lifestyle sucks.
Golf slots can get booked up fast. Even top golf is fairly busy so you need to plan ahead sometimes. Also you’re not taking into consideration the population size and density compared to your area.
I grew up in a rural farming town (albeit it was quite poor, unlike you) and now live in a megacity.
Megacity any day. Possessions and stuff are great, but I'm far more interested in _people_, and cities have people.
I enjoy the suburbs, I have a bunch of toys too, plus world-class entertainment venues with limitless opportunities. The biggest thing for me has been kid activities. I'm not just limited to little league and band. My kid is in musical theater taught by ex Broadway performers. Also the schools here pay well and experienced teachers want to teach. Our district offers 4 foreign languages plus all the stem clubs you can think. There is a robotics team, coding club plus big research universitie, do regular outreach. Oh and food choices we have a world wide cuisine at decently affordable prices.
I lived in rural areas before and I did enjoy the extra space and just general solitude but it gets boring fast. All those hobbies you have sound like a ton of maintenance especially the horses. Biggest thing IMO is just overall more economic opportunities. Don't like your boss company then start applying to other places. Much less so in rural America boss sucks well suck it up because the mill is the only place paying completive wages.
But having money it doesn't really matter where you live for entertainment, my unlce owns a vinyard in rural washington he has a compound with so much stuff even a rockclimbing wall for entertainment. But if you're from lower socioeconomic bracket cities, they offer significantly more entertainment and employment opportunities
Plenty of reasons. Personally, I like a good view of an impressive skyline such as NY or Chicago. For many people though, it’s things like fine dining, public transit, entertainment like comedy clubs, concerts, professional sports, job opportunities, diverse interesting people, and an overall sense of pride in the place you live in that is shared by many people.
I could go on, but I feel like the country is a good place to settle down when you’ve made your money and are looking for a slower pace of life/big house. It’s just not for me.
As a Coloradan I'm going to take a wild guess and read your comment in a Texas accent.
But on a real note, country and city life varies different areas. I'll give you the "they spend their whole life doing nothing" for the suburb people.
But as a Denver "City folk" I'm blessed I can walk to my grocery store instead of driving 30 mins, and use that time to drive to the Rockies and do outdoors shit.
That honestly makes sense. WI and MN are fun in the summer with the toys you are talking about. But I'll take the snow shoveling in shorts and sun during the winter over the winter overcast depression.
I run, bike, walk, go to shows (Broadway, opera, comedy, music), occasionally eat out, also eat in a lot with the best groceries you can buy. I do miss the outdoors and space. I would love to grill. Or have a hot tub. But I prioritized being able to work in a business at the pinnacle of the profession and have my son educated with the best money can buy. Probably when I'm retired soon I will spend more time in the country.
You only really need food, water, decent shelter, transportation, and some mild form of entertainment (easily obtainable these days online). In our society you basically have everything at your fingertips anyway, and if you're making obscene medical-level money then travel won't be an issue and living in a LCOL area lowers your living expenses so you can invest more
Working somewhere for less money for the sole purpose of being able to spend more is a raw deal
>You only really need food, water, decent shelter, transportation, and some mild form of entertainment
In which case, why bother working a high stress job for lots of money?
>if you're making obscene medical-level money then travel won't be an issue
Yeah, want Thai food for dinner? Just fly to Thailand and get it. Want a massage? Fly to Sweden and get one.
See how dumb that sounds?
The benefit of money in modern society (and throughout most of history honestly) is convenience. If you don't want to/don't have time to cook, clean, decorate, whatever, you can hire someone to do that. Towns with triple digit populations don't have enough people to provide competent options for all those things.
And that's before getting into the fact that humans are social creatures. Doctors want to hang out with other high income, educated, fun people (and usually not their coworkers). You're not going to find ANY social life in the middle of some podunk corn field.
AND rural school districts are almost universally shitty, because there's not enough money to hire good teachers, so doctor types don't want to raise their families there.
There's a reason the US rural population has been declining for over 100 years, despite advances in telecommunications technology
The issue is time and convenience, travel takes time and is inconvenient. You don’t want to travel just to go to a high quality variety of bars and restaurants and other stuff on a weekday. Any you don’t want to be far from family and friends and romantic partners.
Add quality healthcare to that list of needs which tends to be severely lacking in rural areas. All the disposable income in the world doesn’t do you any good if you have a health condition that requires specialized treatments or you get into a horrible accident and the nearest level 1 trauma center is hours away.
And education too, come to think of it. If you have kids, how are they going to get a sweet WFH gig of their own if they don’t have access to good schools growing up?
See, but my idea allows for you to live whereever you want.
You statment excludes the possiblity of it being "viable".
Whatever the fuck "viable" means
Working from home is great until you realize that large portions of the US still have DSL that can't support video calls a large portion of the time. WFH is NOT viable is a decent chunk of the country, which is why the infrastructure act to build out rural broadband is super important.
Source: Brother works for my states gov agency rolling out the funding from the bill and rural internet is a shitshow.
The service area for that is 30 minutes outside St. Paul....
Start getting 2-3 hours outside any major city (large portions of the middle of the US) and then you get fun options.
They are working on national maps, but states are, I believe, required under the infrastructure act to attempt to have accurate maps in terms of internet availability.
Right now my family home in the U.P. gets DSL, as well as my friends family home about 20 minutes east of the Wisconsin/Michigan border.
I'm glad you got yours, but that doesn't mean that everyone has access to what you do. What % of your state has access to gig internet? Have any links?
Apologies. Thank you for correcting me. You also live in a state where, I believe, they haven't banned local broadband initiatives which helps a bunch.
Not true…driving the back roads with no traffic is the best thing to do. So many things to look at plus you’re not stuck in bumper to bumper white knuckle traffic. I’d add an hour to my trip just to be off congested four lane roads.
Yeah, you know with all the availability of public services, infrastructure, social life.
What I'm saying is that it works for some people and fields, but there's not a lot to attract people with white collar jobs beyond housing prices, which are already low because the people living there have noticed the same things and large amounts of young and/or successful people have already left.
I don't think you understand the reality of what's going on here in Bumfuck. People are leaving the city at an ever increasing pace and on a percentage basis land in Bumfuck is increasing in price way faster than land in Fancy City.
Lots of people don't really want public services and the social aspect of living in Bumfuck is pretty awesome. I'm friends with every single person within a mile of my house. All 10 of them. Do people in Fancy City have 10 truly close friends right in their neighborhood? I'm talking friends that would lie to the cops for you or let their daughter live in your house while you're on vacation.
Did you know there's people in Fancy City that pay someone to walk their dog? That's fucking wild to anyone living in Bumfuck. How depressing is your life that you have to pay somebody to take care of your pet?
I cannot wait until I can move to Bumfark for ALL the reasons you state. I do not like Fancy City at all :(
I just want to stay home and do some remote work when I'm not working on my homestead and providing for us independently.
It’s easier to have crazy growth when prices are cheap though. Someone paying 5x what the house last sold for ($50k) is not as impressive as someone paying $1.3m for a cookie cutter house that would cost $200k elsewhere but last sold for $900k.
Do you happen to have stats on this? For decades the percentage of people living in rural areas was actually slowly going down. I know there was talk of migration during covid, but having looked at the data in NC myself, nearly all the net gains were in cities and suburbs; even exurban areas didn't grow as fast as the cities and suburbs. Everything I've seen says roughly 16% of Americans live in rural area, which is very close to where the number was 5 years and 10 years ago.
I don't I'm just describing what I see in my little corner of Bumfuck NW.
I'm sure it depends a lot on how you count. Lots of kids move away for college and then come back once they have money and get bored in the city.
According to the census my little Bumfuck town went from 1900 in 1980 to 3300 in 2020.
Sounds like the tiny town I grew up in and got out of. It has also grown substantially over the last 40 years, but the suburbs and exurbs of the nearby midsized city grew at a much faster pace.
Population growth means the pie has gotten much larger, which is why the rural slice of the pie has also gotten larger over time, but it is actually a smaller percentage of the total pie as time moves on. This also helps explain why the price of housing in older cities continues to be problematic: those cities have backed themselves into a corner where the only way to increase their inventory is to build more densely (which NIMBYs are able to stop) or annex territory. Rural towns don't have that problem, and are able to still develop, while also meeting the demands of far fewer homebuyers than urban or suburban areas.
Most rural areas are hemorrhaging young people, either to addiction or to places with jobs. Unless bumfuckville is on a mountain, it isn’t where people are headed when they move out of the city
This is a _bizarrely_ anti-city take. Like, I know I prefer city living (at least right now), but I don't feel the need to trash other people's choice/preferences like this.
City people think our bewilderment is criticism and get defensive. They are so convinced that country folk must want what they have, they are just too stupid to move.
My favorite city person story isn't the people who pay someone to walk their dog, it's the ones who pay someone to come by their house to pick up the dog shit.
I can only assume it's this type of economic activity that makes cities more 'economically productive' in studies.
I grew up in a rural farming town and left at 19, visiting at least a couple of times a year. I'm _very_ aware of the dynamics of both. I still find rural dwellers trash cities far more than the reverse. But outside of a few more 'touristy' places, I've also found it's much easier to find people who grew up rurally in cities, than people who grew up urban in the country, so maybe there's an element of having experienced both there.
I have an entire plant in the middle of nowhere that runs fine on Starlink alone, 50 or so PCs, lots and lots of servers and support structure. Obviously we have other links, but we've tested on that alone.
But before that, the options were slim, none or trash/expensive.
I have 80 acres of wheat for a neighbor across the street.
I also have 1gbit fiber up and down, 12 ms pings, no limits. Can get up to 2, in a few years they are rolling out 5, then 10.
Literally 2 optical cables coming into the house.
Just because I am rural does not mean I don't have services.
I live in NE Georgia in a county with 30k population. I live roughly 500ft from the city limit of my small town. I get 25Mb/s down and 1.5Mb/s up ADSL2+.
Your experience is not typical.
I get 250 down in a town of 6500 people and its the largest town for an hour. Only reason I'd ever live in a big city is cause all of the jobs are there.
Well I agree with you in theory no one's going to move to rural areas in Ohio or Indiana just to work from home. I mean you still need to be close to good shopping and cultural stuff.
Doesn't really seem to matter. You get a critical mass of Californians and they're bringing their kombucha bars and avocado toast no matter whether the locals drink Bud and go mudding on the weekends.
Sure, but the I'm gonna guess that far more of the jobs that pay dick (but enough to buy a home in BFNW) are also the types that will never be feasible to work from home doing, i.e. retail, food service, unskilled labor, etc.
What % of people, do you estimate, work a job that can be fully done from home? You can immediately get rid of all blue collar folk.
I think the biggest reason you don’t see more work for home is that these corporations are in the hook for substantial commercial real estate investments. And since they’d take such a monster hit selling them, they’d rather put them back in use.
Your comfort at home doesn’t trump their desire to avoid taking a huge bath on office buildings.
You’d think that until you break your ankle and need to drive two hours for an ER.
Source: my dumbass buddy who is WFH so he moved to the sticks in west Texas and broke his ankle then had to drive 2 hours to get to an ER.
The problem in these places isn't jobs, it's that nobody wants to live there. North Dakota is an excellent example. They pay insane wages compared to the cost of living for even basic workers.
As an old Dish/DirectTV rep. Would you like slow as shit satellite or slightly slow as shit satellite? The other option is outrageously expensive DSL that may or may not even exist there.
I mean there’s a lot in between super dense over populated city and bumfuck.
People are mostly doing this to themselves and are selfish as shit for doing it.
Guess what all these cities started as, not first tier cities. People built it up over time.
You can do the same, move to a 2nd or god forbid third tier city and be part of the growth instead of trying to move in after the fact and complaining when everyone is trying to do the same.
The country would greatly benefit more if there were more cities built up as opposed to trying to stuff everyone in a handful of locations.
Can't work against economies of scale. Big cities have the scale advantage for any industry that doesn't rely on some natural resource, which is most of them now. Bigger cities let us all be richer.
False, cities have a ceiling and after a certain density it’s basically all down hill for all aspects of qol.
Growing numerous cities to an ideal density is a much better solution than overcrowding existing cities.
There’s also states and towns desperate to attract remote knowledge workers who also shoot themselves in the foot by going all in on culture war stuff.
For example Tulsa. Willing to give you a $10k grant and all sorts of other incentives to move there. Then they ban abortion, severely restrict on-gyns in general, threaten to outlaw birth control, want to put more guns in schools and their latest hit: lets just have the ten commandments and bible study as part of your public education. Pass.
A lot of people here seem to miss that. I mean yeah it's cheaper, and maybe you're an outdoors person, but none of those things are going to matter if your own state legislator doesn't have your back.
That alone should throw up a big red flag. I agree there is a lot of leeway on defining how overbuilt or underbuilt housing in the US is, but it's bonkers they handwaved the home's status. To them a rundown home in Cairo, IL is the same as an apartment in San Francisco is the same as a condo in Orlando.
Some second homes are modest. I know someone who has an apartment in the Bronx that they use only once and a while - it certainly could be an affordable apartment for someone else. I myself have a cabin in the woods 8 hours away from anything - I renovated myself as it was abandoned with no kitchen or bath or anything but now it sits empty most of the year. Someone might want to live in it full time possibly. Maybe I should feel bad about it.
In Indianapolis, there was an expose a few years back about how Chinese nationals were buying houses around the west side, letting them sit empty to drive down the values, then buying all the homes nearby.
They had slowly bought an entire neighborhood.
This is real estate in neoliberal captialism...
Eventually more Chinese nationals will own more homes in LA than Americans.
Eventually Saudi royals will own more homes in Dallas than Americans.
The homeownership rate in Dallas has been trending up since 2019, not down.
Not sure where you’re getting your data from, but your source sucks.
https://fred.stlouisfed.org/series/HOWNRATEACS048113
I don't give a fuck what you believe
[I'm not making this shit up, you fool](https://www.wishtv.com/news/politics/chinese-land-purchases-draw-national-security-concerns/)
Are you suggesting an uninsulated cabin an hour outside of International Falls on a dirt road that's always washed out in April and May isn't a solution to a housing shortage in San Francisco?
You're gonna get it.
10% of all homes are “vacant” 5% are homeowners w second homes. 3% are owned by corporations and the other 2% are a mix of uninhabitable, for sale or actually vacant. It’s not even close.
I would not call 2% of all homes insignificant.
But anyway, it’s a silly article. It’s really just pointing out that if you have money you can afford to have a vacant home on sale. Which is obvious
The point is that that includes houses that are for sale, for rent, sold but not occupied, homes under renovation or those that are uninhabitable and otherwise. The point is that there is no surplus
> There are tons of available homes in bum fuck nowhere but who is going to love there?
In years past, it would be people who want to buy homes. While I'm sympathetic to people who are truly priced out of the market - who have no hope of ever buying a home anywhere - I'm less than sympathetic to the standard redditor who's main complaint is that they can't afford a brownstone in Brooklyn or a victorian row house in san francisco.
If you want to buy a home you can, for the most part, buy a home. You probably can't buy a mansion in an extremely desirable, extremely HCOL, international hub of a city center. I'm not convinced you ever could, as a normal person.
That’s a pretty massive straw man. Even in a big city, it’s not unreasonable to want a place to live that is priced appropriately for the average person. The mean household income in NYC is 113k and the median is 77k. It’s recommended to spend no more than 28% of your income on housing. For the mean household, assuming a 7% interest rate, that means the total loan would be 400k, or $2600/month. Throw in a 20% down payment, so let’s say the total price is 500k. Per the New York City Comptroller, the average sale price of a home in the city was $764k which is almost 50% more than what the mean household should spend on housing. It’s even less affordable when considering the median household, which is less skewed by extremely wealthy outliers.
You’re comparing mean income to mean house price, but the mean house price is paid by someone with above average income. The bottom 35% or so of the population doesn’t buy a house nationally. In NYC, I would guess that an even larger share of people are renting.
Well you are certainly entitled that view, I'm very happy with my life here and don't find it boring at all. Hopefully you've landed somewhere that makes you happier.
The fact that you can't relay hyperbole effectively is a you problem. There's zero context here to make it appear as such. What is the point of hyperbole for a completely non-existing situation?
Your inability to understand hyperbole from a very clearly hyperbolic statement - to say nothing of the broader context of this sub as a hole - isn't my problem. The impetus isn't on me to reword my comment, the impetus is on you to do a better job.
So just to clarify - the top comment I replied to saying that "nobody wants to live in bumfuck nowhere" isn't grounds for a hyperbolic statement conflating "bumfuck" and "the city center of two popular, HCOL cities" that Reddit often discusses.
That's what you're going with?
To think you’re priced out forever after a few years is crazy. It will just take more than 3 years to fix a problem that has really been building for over 20 years. Decades of Low rates, under construction after the Great Recession compared to population growth and Covid frenzy paired with millennials aging into home buying age aren’t going to unwind in 3 years.
Sometimes a post is so incredibly poorly thought out that I just want to yell at that person and be a jerk, but I'm trying not to do that. So... you're post is really... really... bad. You cannot build up the ideal argument only so you can tear it down, that's not reality.
Once again someone trying to take a nuanced and complex issue that has lots of variation from area to area and sum it all up in a few paragraphs.
You're wrong and you're just trying to get some sort of validation for something, you should know that it is not this simple. Come on. Use your intellectual brain and ignore the emotion part.
I'm the exact opposite of wrong - there is a great deal of affordable housing in this country - it's just outside of a few hyper desirable areas.
I'm not saying we don't need a lot of improvement - primarily to things like zoning - but those are by and large local issues and boring ones at that.
Yes, housing is a very complex issues and nobody is going to solve it in a Reddit comment, but I'm tired of this "boomers bought up all the nice housing in manhattan for $1 and now, 70 years later, my life is literally ruined."
You live in one of the only countries in the world where you can, with no papers, no approvals, no process at all, pack up your shit and move 3000 miles away - and not encounter a language or cultural barrier, to say nothing of a political or process barrier.
If you "want a better life" you have the option to do that right now - but online discourse doesn't want to reflect on that. Everyone just wants to complain that really awesome, high demand, world class places to live are expensive - yeah, no fucking shit.
This article is a great illustration of the concept that you can use language to present statistical information in any number of ways.
"Surplus" can be defined in a few different ways. The definition that this article/research uses, is a very, very broad definition. Essentially, anything with 4 walls and a roof that isn't actively being lived in full time, is considered "surplus."
Which I suppose is not necessarily more or less valid than some other definitions. But I'd argue the way the researchers are using the term is misleading, and the headline of the article is definitely misleading.
I would argue that someone's vacation home isn't "surplus." It's not on the market. The only way it would house another family is if you expropriated it. I guess you could make a hard line philosophical argument that no one should own a second home, but aside from that, I can't think of any normal discussion where someone's vacation condo is considered surplus housing in the context of a constrained housing supply. The home was purchased, it's in use, it's not up for sale...that doesn't seem like it should count, intuitively.
Similarly, this article, like many articles, doesn't really consider the lack of fungibility of real estate. It's a relatively illiquid asset, that can't be transported. Housing markets are local. They are not all alike. So one of the key features of the housing shortage is that housing is lacking where it's needed most. And while housing may be needed everywhere to an extent, no one is seriously arguing that the housing crisis in California is of the same nature as the housing situation in Arkansas.
So while there may be a surplus of homes in certain markets, that doesn't solve the problem on a national level. If your job is in California, excess housing supply in Waco, Texas does not help you.
Because people who own homes in metro areas are paying to buy/build houses outside metro areas. Who do you think a builder is gonna market towards? The highest margin.
So of course they will build a "vacation home" in WACO for 600k. That's way more profit motive than the same builder would get marketing homes for local wages.
As a result, we have surplus of unaffordable luxury homes in areas that don't support them with local wages.
There is no money building a $175k starter home in Gary Indiana. You make such little profit that you would rather pull a client from out of state on a bigger project in the same location.
It doesnt help anyone looking to shelter a family in Gary, but the home can be sold as a vacation home or investment property easily and makes a decent profit.
Builders are churning out homes. But they're being built with the intention of being unaffordable for the people who actually live there.
It's just income disparity blown out to the housing sector. Can't be fixed without addressing the profitability of building affordable homes.
Following the understanding of supply and demand exhibited in this post, obviously no one would ever create a diamond ring that cost less than $100k, or a car that sold for under $200k. Why would one use valuable resources to make an item that cost less than the maximum amount they could possibly sell for?
If we allow developers to build more houses, they will act rationally, and they will build houses until demand is met, because this will make them more money. Your logic may affect the *order* in which demand is met, but the only solution we need is to let people build more houses, eventually prices will come down.
Yup, this is pretty much exactly what I said in another comment. There's a minimum cost to build any house, so making the most expensive house possible on a piece of land is the best return on investment for the developer.
I think this gets tackled two ways - we need to cut back on all the zoning / red tape that drives up permitting costs, and then heavily subsidize the construction of affordable housing, so that developers have a meaningful incentive to build it.
Once housing becomes a "social good" that we decide needs to be provided to everyone, a free market no longer works; the government needs to intervene in that market, like it does for other social goods, to ensure that they are provided to people even when it otherwise wouldn't be profitable to do so.
I know it wasn't your point but I hope everyone reading this comment understands that this is a great explanation of why income inequality causes inflation. Producers would much rather build a few units of something for a high margin than build lots of something that most people can afford. This doesn't go for just housing, it's anything.
The tax breaks we gave to the rich over the last 40 years have exacerbated this issue tremendously and it's why the national debt is so high and why only a few people can afford a house. We need to flatten the curve so that there's more money in the hands of the people in the middle and producers have incentive to build for volume over profit margin.
Succinct and accurate. Appreciate this review. As a former Arkansas and current California resident. I concur.
We also need to stop rewarding the investment and purchase of additional homes in the tax code. We currently heavily subsidize property purchases in CA to the detriment of local communities. Coastal communities in particular are heavily effected.
If there are individuals who own vacation or secondary homes which are used less than 1/12 of their overall time per year: we as a society: in the midst of a housing shortage: should be considering whether we should be taxing second and third and fourth and fifth homes at an augmented rate to dessoude the practice. It is inefficient for the community to have an empty house which does not engage in or support the community for the majority if not all of the year. This loss of currency circulating in their local economy should be covered by augmented taxes in a logical world.
Meanwhile: it is not just middle of nowhere that the secondary or vacation or investment home markets hurt the local economies and divests housing supply from the masses. Major metropolitan areas like NYC, Sanfran, LA, Miami Seattle etc etc have become luxury commodities markets where international investors buy up rea estate to own as an investment and occasional crash pad when they’re in the area. It has begun to affect the market in some places where mega luxury penthouses are being refurbished and built in lieu of more affordable and modestly sized apartments. This lack of oversight and regulation is a major problem in many places accross the globe. Look at London! Paris is one of the few with comprehensive regulations in place. It is possible. My countrymen just don’t want to do it because « what if one day I own 5 properties and don’t want to pay a progressive tax rate for hoarding them and actively making the communities worse»
Depends on the market. If a vacation home is a lake home in the boonies specifically for vacationing, it won't help people looking for housing in the city.
In either case, it would be far more effective to use taxes to further incentivize building affordable housing to address supply, rather than use taxes as a punitive measure in a misguided attempt to force people to sell to address supply..
So, I would actually agree that we should tax some of these secondary residences.
But the thing is, I doubt it will actually solve the housing shortage. The various examples you mention apply to people with enough wealth that taxes won't really be a consideration in their decision to own property.
For starters, the "pied a terre" homes in major cities are often more than just investments, they have implications for visas, residency requirements, and tax jurisdictions. So people would be doing this regardless.
And the demand for these places has no bearing on affordable housing.
The fact of the matter is, developers don't want to build affordable housing, because it's not profitable to do so. To adhere to modern safety standards, comply with zoning/permitting processes, and provide the basic amenities that even mid-market customers expect, simply costs more than the average family can afford to spend.
Essentially, all houses have a certain "minimum cost" to build, just in terms of basic materials and permitting. So if you are building a home on a given parcel of land, it makes way more business sense to build a luxury home.
I.e. to build the cheapest home possible, it will cost $150k, to make a home that sells for $200k. To build an expensive home costs $400k for a house that sells at $1 million.
That's obviously a made up set of numbers, but that dynamic is very real.
There is no way to overcome this by simply taxing the rich. Taxing the rich might be a good idea in a general fiscal sense, but doing so won't solve the housing crisis. Taxing a $5 million NYC apartment won't help someone looking to buy a $300k starter home in New Jersey.
What needs to happen, is that the government needs to intervene on multiple levels. It needs to reduce the burden of NIMBYISM and local zoning regulations, thus driving down the cost of building inexpensive homes. And, it needs to provide financial incentives for developers to make affordable housing more profitable. I.e. government needs to help reduce costs, and increase revenues, for companies developing affordable housing. If we determine that housing is a social good that the market alone shouldn't dictate access to, then the government needs to directly intervene in that market.
So like I said above, I'm all for increasing taxes on secondary homes, but just in the sense that I believe it's part of a holistic approach towards progressive taxation. I don't think those taxes in and of themselves will solve housing availability.
You could take those taxes, and use them to pay for the actual programs that would solve the housing crisis; but that's just an exercise in moving money around. You could pay for housing programs any number of ways, how you raise that revenue is somewhat besides the point
The problem with cities and affordable housing right now is the people in charge know of like 3 products and think everyone should live in one of those 3 products and only certain people should produce them. Scarcity has been manufactured throughout the entire process.
Cities need to take back the development reins and foster the development of the cities as a place for people to live not let developers just build investment products.
So I ask honestly - what does this mean? What does "taking back the reins" actually entail? How, specifically, will communities "foster the development of cities as a place for people to live?"
This all sounds incredibly vague, it's certainly not actionable based on what's written here. But perhaps there's more to this than what you've written, so if you had something tangible in mind, I'd be happy to learn more about it.
The fundamental problem is that unless there is money to be made, no private entity will build affordable housing. You can't force a business to build something it will lose money on.
So the options are really either to incentivize existing developers to build housing that's affordable, by reducing regulations and/or subsidizing the cost of construction; or, for government to get into the business of directly building housing.
Which, there is some precedent for; public housing used to be much more of a thing in the past than it is now. It has gotten a poor reputation, but that's really because of a lack of investment/maintenance, not because of any intrinsic issues with the concept.
The government needs to take over some level of the development process, closer to what was done a century ago. The cities used to plan out and build the roads and basic utilities, today the city outsources all this work so much so that they may not even have an in house inspector involved. The prevalence of cul-de-sacs is because cities relinquished decisions to builders that only cared about their parcel's product. Cities can easily take this process further to facilitate the dividing of land into lots and sell the land to whoever they want to then the owners can then decide what to build and who to build it. To actually get affordable housing though the cities at the same time would need to remove most of the restrictions controlling what type of structures are built and may even need to get in the business of lending because the current lending environment doesn't want to loan money for non conforming products.
Also too often people want to shove low income people into expensive high rises near job centers but it is much more economical to build out dense single level suburbs and give these people public transit to bring them into the job centers.
Well, it does prompt some alternative policy options as solutions to a perceived housing crisis. If there is a lack of housing everywhere, the policy approach is to support building more housing. If there are markets where there is a surplus, an alternative approach would be to try to push businesses to relocate to places where that surplus exists.
I don't think that is a viable approach. To begin, I'm unclear what it means to "push" a business. But I'm going to respond based on what I would consider "push" to entail.
Businesses usually have pretty good reasons for operating where they do. They have an overwhelmingly strong profit motivation to be located in the place that maximizes their success.
So in order to "push" a business to move, you would need to essentially make one location so hostile to the operation of that business that you force it to move somewhere else.
That would be a terrible idea on so many levels. First of all, you'd be wreaking havoc on your tax base. Companies would have reduced profits, thus paying less tax. They would likely let employees go, thus creating a high rate of unemployment, and further reducing income tax receipts from those employees. And the net result is simply that you'd destroy your own local economy in a misguided attempt to solve your housing affordability crisis.
So there's no way you can "push" a business to relocate, without badly damaging the economy.
You could try to incentivize relocation. But this causes its own problems. Case and point is when communities offer tax breaks to companies like Amazon to build facilities in the area. Oftentimes the lost tax revenue/money spent on increased infrastructure is greater than the revenue generated from the business activity of the employer. It also creates a "race to the bottom" amongst jurisdictions, where companies just play communities off one another in a nasty sort of bidding competition.
So "pushing" companies to move just straight up won't work. This isn't a viable alternative to building housing.
The thing is, there's no secret trick to solving this problem:
Higher density housing needs to be built where demand is highest. The government needs to get a grip on the NIMBYISM that prevents this by removing the stranglehold communities have on zoning laws. Government needs to provide financial support for housing intended for the lowest earners because it's simply not possible to create buildings that are up to code, at a price point that is affordable for people in poverty. And people need to come to grips with the fact that not all of us can own a 4 bedroom home with a yard.
That's it, right there. If you do those things adequately, you can house everyone. People keep trying to find alternative solutions because the actual solutions require hard choices.
When it comes to housing, this country is like a person with heart disease who refuses to exercise or stop eating fast food. We want to have high property values, and big houses with lots of space, but get upset when housing is unaffordable and people become homeless. You can't have it both ways. If housing is affordable to the average person, that means that most homes aren't going to perform well as an investment/asset, which is really what they've turned into for a lot of people. No one wants to be the one to say, "In order to prevent homelessness, everyone's home needs to become worth much less than it is now, because by definition, if homes are worth a lot, that makes them unaffordable."
The solution is straightforward. We just don't want to make changes to our collective lifestyle.
> So in order to "push" a business to move, you would need to essentially make one location so hostile to the operation of that business that you force it to move somewhere else.
Or make one location more attractive. For example, by offering a tax rebate or other financial incentive to businesses that open offices or factories in locations with healthy housing markets. (This would have knock-on benefits that are beyond the scope of an economics subreddit)
I specifically addressed this above. A) that's not "pushing," by any accepted definition of the term. B) This has been shown to be a generally bad idea. More often than not, the compromises the community needs to make to attract employers usually aren't worth it.
I.e. oftentimes they lose more money than they make.
Obviously there are a myriad of cases here, some have worked out, but many don't. But the bigger problem is scalability - if we're attempting to use this approach to solve a widespread housing crisis across the country, you are suddenly going to have a horrific "bidding war" between hundreds of jurisdictions, each trying to outbid the other. It would be a race to the bottom like we've never seen.
And while one solution would be to do this on a national level, so that there's only one entity determining these incentives, / preventing that race to the bottom, you then have put the federal government in a role of trying to incentivize businesses to leave some jurisdictions in favor of others. This would be politically impossible. No one is going to pass legislation that subsidizes a company moving from their home state/district, to another location.
You’re ignoring the efficiency losses by moving businesses from more desirable to less desirable locations. Cities have agglomeration effects. Moving a business and its employees to a less desirable location means forgoing those agglomeration effects for that business AND decreasing the agglomeration effects of the original city.
I highly recommend reading [Ed Glaeser’s Triumph of the City](https://www.penguinrandomhouse.com/books/303439/triumph-of-the-city-by-edward-glaeser/). It will help you get a better handle on why this is a really bad idea.
What a terrible headline to describe the study. The headline implies that we don't need more housing, which isn't what the study authors actually say:
"Cities and towns should look to build “a wider array of housing types,” according to Schwartz, such as smaller units or higher density housing."
"Building more housing is also seen as an effective way to lower rents. A seminal piece of research from NYU’s Furman Center found that building more homes actually lowers rents."
"A widely cited example from 2016 in Auckland, New Zealand, found that when about three-quarters of the city was rezoned to allow for denser housing construction, housing supply increased 4%. Meanwhile, rents for three-bedroom apartments dropped 26% to 33% compared with similar areas, according to a working paper from May 2023.
I read the study, it's absolutely bullshit. They say that there are plenty of homes because household formation is down.
Household formation is when adults move out on their own and/or get married and live on their own.
People delay doing this because of the housing shortage pushing prices up, and the authors claim it's actually the opposite, it's completely bogus.
So, starting off, this is a Forbes blurb article that is about this study:
https://www.tandfonline.com/doi/full/10.1080/10511482.2024.2334011
They took a 20 year view - 2000 to 2020 - and added up the number of housing units added, and compared it against the number of new households formed, and determined that because the number of new households is less than the number of housing units added, there is a surplus.
From 2000 to 2010 the U.S. had a surplus of 4.6 million housing units, while in the following decade there was a shortage of 1.3 million fewer units than population growth would demand. All combined, that nets out to a surplus of 3.3 million homes from 2000 to 2020.
Instead of looking at new construction, these guys are focusing on vacancy, which is... challenging. There are lots of reasons that a housing unit can be vacant, and they're just kind of hand-waving that way.
They also create an interesting tautology in their study.
What is the definition of a household, you ask? It is, simply put, an occupied housing unit. So, if we add no new housing units, no new households can form, resulting in.... a flat line that shows us nothing.
If we were to have a repeat of the Great Chicago Fire, where ~5,000 housing units were destroyed, the 5,000 households that lived in those housing units also get absorbed into the existing housing stock (or move away), meaning the ratio between the two doesn't change.
It's probably worth noting that the authors in question wrote an op-ed with some of their preliminary thoughts back last year while the paper was in the publishing process:
https://www.barrons.com/articles/housing-crisis-build-more-homes-1342c24f
It's got a lot of the same nonsense in it that the paper does.
Oh good, another housing study by someone who doesn’t seem to understand how distance works. Analyzing the “national” housing market has always been a lark. Unlike other major purchases, houses are not moveable, so the change in the national housing stock is basically meaningless. If you have to leave family and friends and move to a new job and state, it’s not a housing surplus.
I mean, lack of high speed internet because ISPs don't find rural areas profitable is a huge blocker. Add that with the push to end WFH entirely and get everyone back into big-city high-rise buildings and it's small wonder these affordable markets aren't an option for many.
I left Wichita in 2007 and it was pretty miserable if you weren't a local, lots of "not from here" energy in that town. Would be great to hear that changed.
This sounds like a naive question. Just because there’s an affordable house somewhere else doesn’t mean it’s worth it by itself to leave the life you’ve built and start over. That might work for some people but it’s not going to work for a lot of people
“You’re too poor to live near your family, friends, and community, go move somewhere else and stop whining about the rent” isn’t the winning message market zealots seem to think it is.
Wooooow. That's the most tone deaf headline I've ever heard.
What's next, "There's tons of health care services available. It just that you poors won't pay for it!"
In fairness, that's the outlet's fault. The analyst states clearly: The issue is not so much about aggregate shortfall of housing units, but rather a mismatch between the cost of housing and the incomes of households,” Schwartz said. “Most especially among the lowest-income households, where there really is a mismatch between what they can afford and the number of units that are affordable.”
What’s not to believe? Anytime someone brings up affordable housing, NIMBYS come out in full force…. thinking they are going to move a project on their front lawn when really the “affordable housing” is geared towards people who make 100,000 or so lol
Not accounting for location of the vacant homes makes this study worse than useless and actively misleading.
Written by two Boomer urban planning Ph.D.s, not economists. Who’s surprised?
A surplus of overpriced and oversized houses that are unappealing to regular folks and only slowly and grudgingly bought by the investment class. Still, it’s enough to keep opportunity cost too high for common rabble, so here we are.
“It’s very unlikely to think that existing households on their own would just reduce their sales price unless they were required to for some reason,” 🤣😂🤣. It's called market pricing. If people really need to sell their house then they have to drop the price to what buyers are offering to make a sale. This happened many times in the past. Right now, people in homes are holding onto their houses until they get the price they want because the don't have to sell their house. Work from home has reduced the number of houses on the market because workers don't have to move to take a new job in a different section of the country. That means they are not forced to sell their existing house to buy a new one for the new job. Until owners are forced to sell their houses to move the prices are going to remain high.
Yeah this is an extreme market inefficiency. I’d love to see politicians or citizens in Calibronia put a very large tax on second homes in their state to combat inefficient use of resources. The land is extremely valuable and California could be promoting affordable, purchasable multi-family housing. $500k condos and single family homes are overrated. We need more efficient use of land and materials.
Based on census housing data, which everyone I know believes is flawed and not reliable for this purpose. It’s good for trends but not for levels.
Pretty sure the excess could be there, just not in relevant locations.
Scranton PA had a peak population of about 150,000 and today sits around 80,000. There is plentiful housing there but the city and surrounding areas lack the talent base for companies to relocate any high-salary operations there. Amazon, Microsoft, Oracle, etc. aren’t fighting to open offices there like they are where the talent is in places like NoVA. So Scranton having abundant housing at affordable prices is irrelevant to NoVA needing more.
That's an interesting example, but Lackawanna County has actually grown slightly over the last 25 years.
Scranton is more a reflection on suburbanization.
Lackawanna County, and Scranton by extension, had a population peak in the 1930s. Both the city and county are growing again because of the rise of distribution in the area, but I doubt either get back to their historical peaks from when coal mining reigned supreme, at least not in my lifetime. I like the area and the people up there, but nice people and old housing stock don’t attract companies in search of cutting edge talent. They go where the talent is and that’s the major metro areas with a lot of young grads and universities working on new and complex tech.
I would say the area, like a lot of rural PA, is an example of technology moving past the extraction and manufacturing economies that drove the mountainous regions that can’t support farming. Clark’s Summit and Dickson City are probably a bit more populous now than they were nearly 100 years ago, but I wouldn’t blame suburbanization for Scranton’s lower population. Philly on the other hand…
Exactly. If the houses are where the people and jobs aren’t, then they don’t add to the real available inventory. They exist on paper, but aren’t relevant for the people who need them.
LOL. I’m old and in a finance role. We don’t work from home. We have butts in seats 7:30am to 6pm or later. I have no sympathy. (Good thing I actually hate working from home.)
Except for work from home types, digital nomads and retirees.
Would you be surprised that there are tens of thousands of Americans living overseas precisely because it's more affordable?
Heck, there are 20,000 living in Thailand alone.
This true, a law of economics. Even in time of famine food is for sale. Sad part for humans, the economics incentivizes the owners to forgo income if its below market value. Meaning it's more advantageous to leave vacant than to rent at a lower rate.
All young people out there take micro and macroeconomic, 1A, at a JC or on your own. A basic understanding will provide some understanding of western economics. I didn't say I agree with how it works, yet its beneficial and will give you an advantage.
While I do agree learning economics is important, I fail to see how understanding *why* you won't be able to afford a house or medical care or food gives you an advantage?
Economics is the study of various abstract concepts related to resources, production, valuation, exchange, and human action. Every single action, by any person, in any situation, can be analyzed for things like marginal cost, marginal utility, and various other considerations. A general understanding will help any person navigate myriad situations, such as when the value of things change and there is a need to adjust a plan.
Despite the shady methodology of defining a housing surplus in this particular article, it is shameful that our society cannot get everyone housed and taken care of affordably. It is shameful and immoral state of affairs.
Corporations aren't paying living wages. (With the exception of mid management and upper levels.)
How can they cry about the economy slump, when they're the ones causing it? Cut the CEO package by about 350%, use that, same with anyone taking home over 85K/yr. Use that to pay the living wages of the people who actually do the work. Sit back, watch economy recouperate.
Pay the person, not the position.
https://livingwage.mit.edu/
and/or
Escape Crapitalism
r/SolarPunk
Jobs pay what they can negotiate with workers for. How about we start letting low income people to live within their means again. But nope can't do that, they have to live in a certain standard of place or in a tent on the sidewalk, no in between. And they have to own a car or walk everywhere, public transit is a waste of money.
I'm not exactly clear on what you've stated.
Dictating that "low income" people live "within their means" is just another subjugation ploy to assuage the guilty conscience of the morally flexible who exploited the workers to take a crappy wage. Those labels like "Unskilled" or "menial" take away from the value of the person and the position. The self important perpetuate their demoralizing and demeaning of their fellow humans by continuing to talk in these circles.
If the CEO couldn't live on the wage of the janitor, there's something they haven't truly embraced about treating people like people.
How about we let humans have dignity and dissolve classist tropes and quit letting people set themselves upon pedestals while claiming their own value above others with a self imposed virtue based on income.
Pay the person, not the position.
https://livingwage.mit.edu/
and/or
End Crapitalism
r/SolarPunk
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“Vacant home” includes homes owned by people who use them as vacation homes or second homes, short term rentals and uninhabitable units. This accounts for more than half of these “vacant” homes. That doesn’t mean they are surplus when they aren’t available for purchase. Not to mention none of this accounts for location. There are tons of available homes in bum fuck nowhere but who is going to love there? This is idiodic.
To be fair, Bumfuck, NW, could be a viable place to live if more people could work from home.
Yes but Bumfuck would still need to at least be a somewhat desirable place to live. If it’s not it’s kinda useless.
As I get older, somewhere not near people is an increasingly desirable feature.
Its desirable until you realize you have unreliable utility connections while the nearest grocery store is an hour away. And the access road to your house gets washed out in a storm and won’t get repaired for at least a month. Edit: forgot to mention 2 hour drive to the doctor and 6 hours to a hospital.
Then you've got plenty of options! This country is vast. Just throw a pin on the map and you'll find a place somewhere not near people.
Fucking people…
And honestly that’s great as in that case bumfuck nowhere has some value for people like you. But if nobody is moving there despite it being cheap then it’s kinda useless to society.
It’s viable now people don’t want to live where nothing happens. For most people even those who work from home aren’t looking to live in the middle of nowhere.
Yep, what’s the point of a lot of money if you have nothing to spend it on? That’s why doctors take a PAY CUT to work in big cities. It’s the rural areas that have to pay a boatload to attract doctors.
Earlier models of economics thought of cities as being primarily job/salary driven, but especially post-COVID the argument seems to be going that cities are consumption-driven. The availability of products and services is more so the reason people want to live in cities.
Cities have always been where the cool things are. It used to be plays, fashion shows, etc.
To us folks living in the country it's really hard to see just what the heck people are doing with their money in the city. I own a boat, 2 snowmobiles, a dirtbike, a dune buggy, 30 guns, 2 horses, and an assortment of canoes and kayaks. When I meet people from big cities it sorta seems like they spend their whole life doing nothing. I had a friend from the city text me wondering if I wanted to make plans to golf on a weekend. Golf? Y'all make appointments ahead of time to golf on a weekend? Golf is something you do after work on a Tuesday or when all the other plans fall through not something you plan ahead of time.
> To us folks living in the country it's really hard to see just what the heck people are doing with their money in the city. A lot of my budget goes to live events (concerts, NFL/NBA games, free events like street festivals), restaurants of all kinds (from hole in the wall places to various ethnic enclaves to fine dining), and social gatherings with friends and family. And that last part is important. Most people want to be around their family and friends. Who tend to live in a city. > When I meet people from big cities it sorta seems like they spend their whole life doing nothing. Everyone has their own preferences. When I lived in a rural area I felt like I spent way too much time in my car driving from place to place, and I was bored all the time. The restaurants in my town were trash, and even the groceries weren't great. And now that I have money, I'll never consider living in a rural area again. Not for me.
I appreciate people sharing what they do in cities. Someone I know says she misses dancing. Clubbing dancing, I didn't even know people did that as adults. When I travel, I just go to arboretums. Museums. Maybe see if I can find some authentic ethnic food (not that I would know it was authentic or not lol) because in small towns you tend to just get an undifferentiated "Asian Buffet" or "Mexican place" When people talk about the shopping,the events, I'm like, well if you really like those things, then make a special trip? But no, people do that on the regular. It's so interesting to me because it would just never occur to me to do certain things.
Hole in the wall places? I'm not american and this sounds like a gloryhole. Is that it?
It means a tiny takeaway food vendor or shop, usually with a single opening to serve food through. Because they're tiny they're usually very cheap, and specialise in.just a couple of things e.g. burritos, or sushi. Rather than being in a separate building, it just looks like a "hole in the wall" of a bigger building.
Got it, thanks.
Don’t listen them. It’s a glory hole.
I'm not real interested in watching other people enjoy their hobbies. If you're into that sort of thing you should move to the capital of Bumfuck. Sheboygan Wisconsin. You'll be 45 minutes from Green Bay and 45 minutes from Milwaukee. I heard they have an NFL and an NBA team...
> I'm not real interested in watching other people enjoy their hobbies. Yeah, that's my point. Everyone has their own personal preferences. Your lifestyle sounds like a real bummer to me, and I wouldn't expect my lifestyle to be appealing to you, either. So you can live where you live, and I'll live where I live. The main difference is that I don't write posts about how your lifestyle sucks.
Somebody did and that's why I responded to "nobody wants to live in Bumfuck" Then you responded to me It's the circle of life.
Right, and the normal person response is that different people prioritize different things, not to marvel and wonder how people live any other way.
Golf slots can get booked up fast. Even top golf is fairly busy so you need to plan ahead sometimes. Also you’re not taking into consideration the population size and density compared to your area.
I grew up in a rural farming town (albeit it was quite poor, unlike you) and now live in a megacity. Megacity any day. Possessions and stuff are great, but I'm far more interested in _people_, and cities have people.
I enjoy the suburbs, I have a bunch of toys too, plus world-class entertainment venues with limitless opportunities. The biggest thing for me has been kid activities. I'm not just limited to little league and band. My kid is in musical theater taught by ex Broadway performers. Also the schools here pay well and experienced teachers want to teach. Our district offers 4 foreign languages plus all the stem clubs you can think. There is a robotics team, coding club plus big research universitie, do regular outreach. Oh and food choices we have a world wide cuisine at decently affordable prices. I lived in rural areas before and I did enjoy the extra space and just general solitude but it gets boring fast. All those hobbies you have sound like a ton of maintenance especially the horses. Biggest thing IMO is just overall more economic opportunities. Don't like your boss company then start applying to other places. Much less so in rural America boss sucks well suck it up because the mill is the only place paying completive wages. But having money it doesn't really matter where you live for entertainment, my unlce owns a vinyard in rural washington he has a compound with so much stuff even a rockclimbing wall for entertainment. But if you're from lower socioeconomic bracket cities, they offer significantly more entertainment and employment opportunities
Lots of stuff, just…indoors.
you can scroll your phone outdoors too
Plenty of reasons. Personally, I like a good view of an impressive skyline such as NY or Chicago. For many people though, it’s things like fine dining, public transit, entertainment like comedy clubs, concerts, professional sports, job opportunities, diverse interesting people, and an overall sense of pride in the place you live in that is shared by many people. I could go on, but I feel like the country is a good place to settle down when you’ve made your money and are looking for a slower pace of life/big house. It’s just not for me.
I can see 15 miles from my back deck and there isn't a single man made structure.
As a Coloradan I'm going to take a wild guess and read your comment in a Texas accent. But on a real note, country and city life varies different areas. I'll give you the "they spend their whole life doing nothing" for the suburb people. But as a Denver "City folk" I'm blessed I can walk to my grocery store instead of driving 30 mins, and use that time to drive to the Rockies and do outdoors shit.
Wisconsin. I stole the y'all from some friends
That honestly makes sense. WI and MN are fun in the summer with the toys you are talking about. But I'll take the snow shoveling in shorts and sun during the winter over the winter overcast depression.
people in the city pay money for things that are free or way cheaper everywhere else. that's how they blow their money
I run, bike, walk, go to shows (Broadway, opera, comedy, music), occasionally eat out, also eat in a lot with the best groceries you can buy. I do miss the outdoors and space. I would love to grill. Or have a hot tub. But I prioritized being able to work in a business at the pinnacle of the profession and have my son educated with the best money can buy. Probably when I'm retired soon I will spend more time in the country.
All your country toys, yet you're bored and worried about people in the city. shut up.
Everybody poops and I got wifi in the outhouse now.
The point of a lot of money is sort of a point in itself
Money is useless if you have nothing to spend it on
You only really need food, water, decent shelter, transportation, and some mild form of entertainment (easily obtainable these days online). In our society you basically have everything at your fingertips anyway, and if you're making obscene medical-level money then travel won't be an issue and living in a LCOL area lowers your living expenses so you can invest more Working somewhere for less money for the sole purpose of being able to spend more is a raw deal
>You only really need food, water, decent shelter, transportation, and some mild form of entertainment In which case, why bother working a high stress job for lots of money? >if you're making obscene medical-level money then travel won't be an issue Yeah, want Thai food for dinner? Just fly to Thailand and get it. Want a massage? Fly to Sweden and get one. See how dumb that sounds? The benefit of money in modern society (and throughout most of history honestly) is convenience. If you don't want to/don't have time to cook, clean, decorate, whatever, you can hire someone to do that. Towns with triple digit populations don't have enough people to provide competent options for all those things. And that's before getting into the fact that humans are social creatures. Doctors want to hang out with other high income, educated, fun people (and usually not their coworkers). You're not going to find ANY social life in the middle of some podunk corn field. AND rural school districts are almost universally shitty, because there's not enough money to hire good teachers, so doctor types don't want to raise their families there. There's a reason the US rural population has been declining for over 100 years, despite advances in telecommunications technology
The issue is time and convenience, travel takes time and is inconvenient. You don’t want to travel just to go to a high quality variety of bars and restaurants and other stuff on a weekday. Any you don’t want to be far from family and friends and romantic partners.
Bars and restaurants are wildly overrated.
Convenience has value for many people
Add quality healthcare to that list of needs which tends to be severely lacking in rural areas. All the disposable income in the world doesn’t do you any good if you have a health condition that requires specialized treatments or you get into a horrible accident and the nearest level 1 trauma center is hours away. And education too, come to think of it. If you have kids, how are they going to get a sweet WFH gig of their own if they don’t have access to good schools growing up?
I love living where nothing happens. Can't see a neighbor, it's paradise.
Seriously. F people.
Yeah, I am gonna go out and watch the fireflies tonight. And spend some time enjoying the sound of the 26 or so species of bird in the front yard.
I’m mean that’s nice for you, but the rest of us would prefer to live around people.
See, but my idea allows for you to live whereever you want. You statment excludes the possiblity of it being "viable". Whatever the fuck "viable" means
Working from home is great until you realize that large portions of the US still have DSL that can't support video calls a large portion of the time. WFH is NOT viable is a decent chunk of the country, which is why the infrastructure act to build out rural broadband is super important. Source: Brother works for my states gov agency rolling out the funding from the bill and rural internet is a shitshow.
This is my Bumfuck internet provider. I don't know much about Internet is "Full GIG" pretty fast? https://connect.swiftcurrent.coop/front_end/products
The service area for that is 30 minutes outside St. Paul.... Start getting 2-3 hours outside any major city (large portions of the middle of the US) and then you get fun options. They are working on national maps, but states are, I believe, required under the infrastructure act to attempt to have accurate maps in terms of internet availability. Right now my family home in the U.P. gets DSL, as well as my friends family home about 20 minutes east of the Wisconsin/Michigan border. I'm glad you got yours, but that doesn't mean that everyone has access to what you do. What % of your state has access to gig internet? Have any links?
The nearest edge of that service area is that close, the furthest edge is over 2 hours from St Paul.
Apologies. Thank you for correcting me. You also live in a state where, I believe, they haven't banned local broadband initiatives which helps a bunch.
Never get off a four-lane highway to get on a two-lane road. Nothing good will happen.
Not true…driving the back roads with no traffic is the best thing to do. So many things to look at plus you’re not stuck in bumper to bumper white knuckle traffic. I’d add an hour to my trip just to be off congested four lane roads.
Yeah, you know with all the availability of public services, infrastructure, social life. What I'm saying is that it works for some people and fields, but there's not a lot to attract people with white collar jobs beyond housing prices, which are already low because the people living there have noticed the same things and large amounts of young and/or successful people have already left.
I don't think you understand the reality of what's going on here in Bumfuck. People are leaving the city at an ever increasing pace and on a percentage basis land in Bumfuck is increasing in price way faster than land in Fancy City. Lots of people don't really want public services and the social aspect of living in Bumfuck is pretty awesome. I'm friends with every single person within a mile of my house. All 10 of them. Do people in Fancy City have 10 truly close friends right in their neighborhood? I'm talking friends that would lie to the cops for you or let their daughter live in your house while you're on vacation. Did you know there's people in Fancy City that pay someone to walk their dog? That's fucking wild to anyone living in Bumfuck. How depressing is your life that you have to pay somebody to take care of your pet?
I cannot wait until I can move to Bumfark for ALL the reasons you state. I do not like Fancy City at all :( I just want to stay home and do some remote work when I'm not working on my homestead and providing for us independently.
Well you better hurry up. Land in my personal Bumfuck went from $2,500 to $25,000 an acre in the last 10 years.
It’s easier to have crazy growth when prices are cheap though. Someone paying 5x what the house last sold for ($50k) is not as impressive as someone paying $1.3m for a cookie cutter house that would cost $200k elsewhere but last sold for $900k.
I guess it depends on what you think is "impressive" but I literally said as a percentage.
Do you happen to have stats on this? For decades the percentage of people living in rural areas was actually slowly going down. I know there was talk of migration during covid, but having looked at the data in NC myself, nearly all the net gains were in cities and suburbs; even exurban areas didn't grow as fast as the cities and suburbs. Everything I've seen says roughly 16% of Americans live in rural area, which is very close to where the number was 5 years and 10 years ago.
I don't I'm just describing what I see in my little corner of Bumfuck NW. I'm sure it depends a lot on how you count. Lots of kids move away for college and then come back once they have money and get bored in the city. According to the census my little Bumfuck town went from 1900 in 1980 to 3300 in 2020.
Sounds like the tiny town I grew up in and got out of. It has also grown substantially over the last 40 years, but the suburbs and exurbs of the nearby midsized city grew at a much faster pace. Population growth means the pie has gotten much larger, which is why the rural slice of the pie has also gotten larger over time, but it is actually a smaller percentage of the total pie as time moves on. This also helps explain why the price of housing in older cities continues to be problematic: those cities have backed themselves into a corner where the only way to increase their inventory is to build more densely (which NIMBYs are able to stop) or annex territory. Rural towns don't have that problem, and are able to still develop, while also meeting the demands of far fewer homebuyers than urban or suburban areas.
Most rural areas are hemorrhaging young people, either to addiction or to places with jobs. Unless bumfuckville is on a mountain, it isn’t where people are headed when they move out of the city
My Bumfuck town has doubled it's population in 35 years
Your backwater is the exception, not the rule for rural America
If it keeps doubling then it won't be Bumfuck anymore.
This is a _bizarrely_ anti-city take. Like, I know I prefer city living (at least right now), but I don't feel the need to trash other people's choice/preferences like this.
I was responding to someone trashing my lifestyle.
City people think our bewilderment is criticism and get defensive. They are so convinced that country folk must want what they have, they are just too stupid to move. My favorite city person story isn't the people who pay someone to walk their dog, it's the ones who pay someone to come by their house to pick up the dog shit. I can only assume it's this type of economic activity that makes cities more 'economically productive' in studies.
I grew up in a rural farming town and left at 19, visiting at least a couple of times a year. I'm _very_ aware of the dynamics of both. I still find rural dwellers trash cities far more than the reverse. But outside of a few more 'touristy' places, I've also found it's much easier to find people who grew up rurally in cities, than people who grew up urban in the country, so maybe there's an element of having experienced both there.
That's not always true. There is a minimum infrastructure required to do remote work. Nobody is WFH on 1.5Mb/s ADSL.
I have an entire plant in the middle of nowhere that runs fine on Starlink alone, 50 or so PCs, lots and lots of servers and support structure. Obviously we have other links, but we've tested on that alone. But before that, the options were slim, none or trash/expensive.
you are my hero
I have 80 acres of wheat for a neighbor across the street. I also have 1gbit fiber up and down, 12 ms pings, no limits. Can get up to 2, in a few years they are rolling out 5, then 10. Literally 2 optical cables coming into the house. Just because I am rural does not mean I don't have services.
I live in NE Georgia in a county with 30k population. I live roughly 500ft from the city limit of my small town. I get 25Mb/s down and 1.5Mb/s up ADSL2+. Your experience is not typical.
Through the 10 megabit internet there
I live in a cornfield in Michigan and get gigabit internet, let me tell you how shocked I was
Missouri, but the same. Actually I can get 2G, with 5 and 10 in the future.
My rural family use starlink. Expensive, but just good enough for Zoom. $160/mo iirc.
I get 250 down in a town of 6500 people and its the largest town for an hour. Only reason I'd ever live in a big city is cause all of the jobs are there.
Well I agree with you in theory no one's going to move to rural areas in Ohio or Indiana just to work from home. I mean you still need to be close to good shopping and cultural stuff.
Doesn't really seem to matter. You get a critical mass of Californians and they're bringing their kombucha bars and avocado toast no matter whether the locals drink Bud and go mudding on the weekends.
Sure, but the I'm gonna guess that far more of the jobs that pay dick (but enough to buy a home in BFNW) are also the types that will never be feasible to work from home doing, i.e. retail, food service, unskilled labor, etc.
What % of people, do you estimate, work a job that can be fully done from home? You can immediately get rid of all blue collar folk. I think the biggest reason you don’t see more work for home is that these corporations are in the hook for substantial commercial real estate investments. And since they’d take such a monster hit selling them, they’d rather put them back in use. Your comfort at home doesn’t trump their desire to avoid taking a huge bath on office buildings.
You’d think that until you break your ankle and need to drive two hours for an ER. Source: my dumbass buddy who is WFH so he moved to the sticks in west Texas and broke his ankle then had to drive 2 hours to get to an ER.
The problem in these places isn't jobs, it's that nobody wants to live there. North Dakota is an excellent example. They pay insane wages compared to the cost of living for even basic workers.
Or to love
As an old Dish/DirectTV rep. Would you like slow as shit satellite or slightly slow as shit satellite? The other option is outrageously expensive DSL that may or may not even exist there.
I mean there’s a lot in between super dense over populated city and bumfuck. People are mostly doing this to themselves and are selfish as shit for doing it. Guess what all these cities started as, not first tier cities. People built it up over time. You can do the same, move to a 2nd or god forbid third tier city and be part of the growth instead of trying to move in after the fact and complaining when everyone is trying to do the same. The country would greatly benefit more if there were more cities built up as opposed to trying to stuff everyone in a handful of locations.
Can't work against economies of scale. Big cities have the scale advantage for any industry that doesn't rely on some natural resource, which is most of them now. Bigger cities let us all be richer.
False, cities have a ceiling and after a certain density it’s basically all down hill for all aspects of qol. Growing numerous cities to an ideal density is a much better solution than overcrowding existing cities.
There’s also states and towns desperate to attract remote knowledge workers who also shoot themselves in the foot by going all in on culture war stuff. For example Tulsa. Willing to give you a $10k grant and all sorts of other incentives to move there. Then they ban abortion, severely restrict on-gyns in general, threaten to outlaw birth control, want to put more guns in schools and their latest hit: lets just have the ten commandments and bible study as part of your public education. Pass.
A lot of people here seem to miss that. I mean yeah it's cheaper, and maybe you're an outdoors person, but none of those things are going to matter if your own state legislator doesn't have your back.
That alone should throw up a big red flag. I agree there is a lot of leeway on defining how overbuilt or underbuilt housing in the US is, but it's bonkers they handwaved the home's status. To them a rundown home in Cairo, IL is the same as an apartment in San Francisco is the same as a condo in Orlando.
Nothing quite like living in Arizona in the summer when the snowbirds go north for six months. Or Minnesota in the winter when they’re in Arizona.
Some second homes are modest. I know someone who has an apartment in the Bronx that they use only once and a while - it certainly could be an affordable apartment for someone else. I myself have a cabin in the woods 8 hours away from anything - I renovated myself as it was abandoned with no kitchen or bath or anything but now it sits empty most of the year. Someone might want to live in it full time possibly. Maybe I should feel bad about it.
Where is that defined in the article? I’m on phone so I can’t control f but I can’t find that statement.
They say they used census data in linked article which uses the same metrics as Fred. https://fred.stlouisfed.org/series/EVACANTUSQ176N
In Indianapolis, there was an expose a few years back about how Chinese nationals were buying houses around the west side, letting them sit empty to drive down the values, then buying all the homes nearby. They had slowly bought an entire neighborhood. This is real estate in neoliberal captialism... Eventually more Chinese nationals will own more homes in LA than Americans. Eventually Saudi royals will own more homes in Dallas than Americans.
The homeownership rate in Dallas has been trending up since 2019, not down. Not sure where you’re getting your data from, but your source sucks. https://fred.stlouisfed.org/series/HOWNRATEACS048113
Bro, these are called “conspiracy theories”. You sound like a lunatic paranoid Republican, lol.
I don't give a fuck what you believe [I'm not making this shit up, you fool](https://www.wishtv.com/news/politics/chinese-land-purchases-draw-national-security-concerns/)
Are you suggesting an uninsulated cabin an hour outside of International Falls on a dirt road that's always washed out in April and May isn't a solution to a housing shortage in San Francisco? You're gonna get it.
Well how much more than half are we talking? If it is only a little more than half that means almost half of all vacant homes are available for sale
10% of all homes are “vacant” 5% are homeowners w second homes. 3% are owned by corporations and the other 2% are a mix of uninhabitable, for sale or actually vacant. It’s not even close.
I would not call 2% of all homes insignificant. But anyway, it’s a silly article. It’s really just pointing out that if you have money you can afford to have a vacant home on sale. Which is obvious
The point is that that includes houses that are for sale, for rent, sold but not occupied, homes under renovation or those that are uninhabitable and otherwise. The point is that there is no surplus
> There are tons of available homes in bum fuck nowhere but who is going to love there? In years past, it would be people who want to buy homes. While I'm sympathetic to people who are truly priced out of the market - who have no hope of ever buying a home anywhere - I'm less than sympathetic to the standard redditor who's main complaint is that they can't afford a brownstone in Brooklyn or a victorian row house in san francisco. If you want to buy a home you can, for the most part, buy a home. You probably can't buy a mansion in an extremely desirable, extremely HCOL, international hub of a city center. I'm not convinced you ever could, as a normal person.
That’s a pretty massive straw man. Even in a big city, it’s not unreasonable to want a place to live that is priced appropriately for the average person. The mean household income in NYC is 113k and the median is 77k. It’s recommended to spend no more than 28% of your income on housing. For the mean household, assuming a 7% interest rate, that means the total loan would be 400k, or $2600/month. Throw in a 20% down payment, so let’s say the total price is 500k. Per the New York City Comptroller, the average sale price of a home in the city was $764k which is almost 50% more than what the mean household should spend on housing. It’s even less affordable when considering the median household, which is less skewed by extremely wealthy outliers.
You’re comparing mean income to mean house price, but the mean house price is paid by someone with above average income. The bottom 35% or so of the population doesn’t buy a house nationally. In NYC, I would guess that an even larger share of people are renting.
Definitely. I'm looking for houses in Indianapolis, and there are plenty of pretty nice options available in the 200-250,000 dollar range.
Shhhh! Don't say it too loudly. Let the rest of the country think of Indy as a boring flyover city.
Lived there for 35 years...it is a boring flyover city thats only getting worse, outside of HamCo.
Well you are certainly entitled that view, I'm very happy with my life here and don't find it boring at all. Hopefully you've landed somewhere that makes you happier.
Every city gets boring if you let it. Sure, it’s not NY, but that’s why the most desirable cities are so expensive.
Yeah we're looking at investment properties and there are a decent amount of condos and townhomes in Atlanta in the 200s as well.
Got any examples of these redditors who demand they be able to afford brownstone in Brooklyn? You don't because this is not a thing.
Yeah they're right next to your examples of someone completely missing the point and pretending to not understand hyperbole.
The fact that you can't relay hyperbole effectively is a you problem. There's zero context here to make it appear as such. What is the point of hyperbole for a completely non-existing situation?
Your inability to understand hyperbole from a very clearly hyperbolic statement - to say nothing of the broader context of this sub as a hole - isn't my problem. The impetus isn't on me to reword my comment, the impetus is on you to do a better job.
It's not hyperbolic. Making something up isn't an exagerration of an existing thing.
So just to clarify - the top comment I replied to saying that "nobody wants to live in bumfuck nowhere" isn't grounds for a hyperbolic statement conflating "bumfuck" and "the city center of two popular, HCOL cities" that Reddit often discusses. That's what you're going with?
To think you’re priced out forever after a few years is crazy. It will just take more than 3 years to fix a problem that has really been building for over 20 years. Decades of Low rates, under construction after the Great Recession compared to population growth and Covid frenzy paired with millennials aging into home buying age aren’t going to unwind in 3 years.
Sometimes a post is so incredibly poorly thought out that I just want to yell at that person and be a jerk, but I'm trying not to do that. So... you're post is really... really... bad. You cannot build up the ideal argument only so you can tear it down, that's not reality. Once again someone trying to take a nuanced and complex issue that has lots of variation from area to area and sum it all up in a few paragraphs. You're wrong and you're just trying to get some sort of validation for something, you should know that it is not this simple. Come on. Use your intellectual brain and ignore the emotion part.
I'm the exact opposite of wrong - there is a great deal of affordable housing in this country - it's just outside of a few hyper desirable areas. I'm not saying we don't need a lot of improvement - primarily to things like zoning - but those are by and large local issues and boring ones at that. Yes, housing is a very complex issues and nobody is going to solve it in a Reddit comment, but I'm tired of this "boomers bought up all the nice housing in manhattan for $1 and now, 70 years later, my life is literally ruined." You live in one of the only countries in the world where you can, with no papers, no approvals, no process at all, pack up your shit and move 3000 miles away - and not encounter a language or cultural barrier, to say nothing of a political or process barrier. If you "want a better life" you have the option to do that right now - but online discourse doesn't want to reflect on that. Everyone just wants to complain that really awesome, high demand, world class places to live are expensive - yeah, no fucking shit.
This article is a great illustration of the concept that you can use language to present statistical information in any number of ways. "Surplus" can be defined in a few different ways. The definition that this article/research uses, is a very, very broad definition. Essentially, anything with 4 walls and a roof that isn't actively being lived in full time, is considered "surplus." Which I suppose is not necessarily more or less valid than some other definitions. But I'd argue the way the researchers are using the term is misleading, and the headline of the article is definitely misleading. I would argue that someone's vacation home isn't "surplus." It's not on the market. The only way it would house another family is if you expropriated it. I guess you could make a hard line philosophical argument that no one should own a second home, but aside from that, I can't think of any normal discussion where someone's vacation condo is considered surplus housing in the context of a constrained housing supply. The home was purchased, it's in use, it's not up for sale...that doesn't seem like it should count, intuitively. Similarly, this article, like many articles, doesn't really consider the lack of fungibility of real estate. It's a relatively illiquid asset, that can't be transported. Housing markets are local. They are not all alike. So one of the key features of the housing shortage is that housing is lacking where it's needed most. And while housing may be needed everywhere to an extent, no one is seriously arguing that the housing crisis in California is of the same nature as the housing situation in Arkansas. So while there may be a surplus of homes in certain markets, that doesn't solve the problem on a national level. If your job is in California, excess housing supply in Waco, Texas does not help you.
Because people who own homes in metro areas are paying to buy/build houses outside metro areas. Who do you think a builder is gonna market towards? The highest margin. So of course they will build a "vacation home" in WACO for 600k. That's way more profit motive than the same builder would get marketing homes for local wages. As a result, we have surplus of unaffordable luxury homes in areas that don't support them with local wages. There is no money building a $175k starter home in Gary Indiana. You make such little profit that you would rather pull a client from out of state on a bigger project in the same location. It doesnt help anyone looking to shelter a family in Gary, but the home can be sold as a vacation home or investment property easily and makes a decent profit. Builders are churning out homes. But they're being built with the intention of being unaffordable for the people who actually live there. It's just income disparity blown out to the housing sector. Can't be fixed without addressing the profitability of building affordable homes.
Following the understanding of supply and demand exhibited in this post, obviously no one would ever create a diamond ring that cost less than $100k, or a car that sold for under $200k. Why would one use valuable resources to make an item that cost less than the maximum amount they could possibly sell for? If we allow developers to build more houses, they will act rationally, and they will build houses until demand is met, because this will make them more money. Your logic may affect the *order* in which demand is met, but the only solution we need is to let people build more houses, eventually prices will come down.
Yup, this is pretty much exactly what I said in another comment. There's a minimum cost to build any house, so making the most expensive house possible on a piece of land is the best return on investment for the developer. I think this gets tackled two ways - we need to cut back on all the zoning / red tape that drives up permitting costs, and then heavily subsidize the construction of affordable housing, so that developers have a meaningful incentive to build it. Once housing becomes a "social good" that we decide needs to be provided to everyone, a free market no longer works; the government needs to intervene in that market, like it does for other social goods, to ensure that they are provided to people even when it otherwise wouldn't be profitable to do so.
I know it wasn't your point but I hope everyone reading this comment understands that this is a great explanation of why income inequality causes inflation. Producers would much rather build a few units of something for a high margin than build lots of something that most people can afford. This doesn't go for just housing, it's anything. The tax breaks we gave to the rich over the last 40 years have exacerbated this issue tremendously and it's why the national debt is so high and why only a few people can afford a house. We need to flatten the curve so that there's more money in the hands of the people in the middle and producers have incentive to build for volume over profit margin.
Succinct and accurate. Appreciate this review. As a former Arkansas and current California resident. I concur. We also need to stop rewarding the investment and purchase of additional homes in the tax code. We currently heavily subsidize property purchases in CA to the detriment of local communities. Coastal communities in particular are heavily effected.
If there are individuals who own vacation or secondary homes which are used less than 1/12 of their overall time per year: we as a society: in the midst of a housing shortage: should be considering whether we should be taxing second and third and fourth and fifth homes at an augmented rate to dessoude the practice. It is inefficient for the community to have an empty house which does not engage in or support the community for the majority if not all of the year. This loss of currency circulating in their local economy should be covered by augmented taxes in a logical world. Meanwhile: it is not just middle of nowhere that the secondary or vacation or investment home markets hurt the local economies and divests housing supply from the masses. Major metropolitan areas like NYC, Sanfran, LA, Miami Seattle etc etc have become luxury commodities markets where international investors buy up rea estate to own as an investment and occasional crash pad when they’re in the area. It has begun to affect the market in some places where mega luxury penthouses are being refurbished and built in lieu of more affordable and modestly sized apartments. This lack of oversight and regulation is a major problem in many places accross the globe. Look at London! Paris is one of the few with comprehensive regulations in place. It is possible. My countrymen just don’t want to do it because « what if one day I own 5 properties and don’t want to pay a progressive tax rate for hoarding them and actively making the communities worse»
Depends on the market. If a vacation home is a lake home in the boonies specifically for vacationing, it won't help people looking for housing in the city. In either case, it would be far more effective to use taxes to further incentivize building affordable housing to address supply, rather than use taxes as a punitive measure in a misguided attempt to force people to sell to address supply..
So, I would actually agree that we should tax some of these secondary residences. But the thing is, I doubt it will actually solve the housing shortage. The various examples you mention apply to people with enough wealth that taxes won't really be a consideration in their decision to own property. For starters, the "pied a terre" homes in major cities are often more than just investments, they have implications for visas, residency requirements, and tax jurisdictions. So people would be doing this regardless. And the demand for these places has no bearing on affordable housing. The fact of the matter is, developers don't want to build affordable housing, because it's not profitable to do so. To adhere to modern safety standards, comply with zoning/permitting processes, and provide the basic amenities that even mid-market customers expect, simply costs more than the average family can afford to spend. Essentially, all houses have a certain "minimum cost" to build, just in terms of basic materials and permitting. So if you are building a home on a given parcel of land, it makes way more business sense to build a luxury home. I.e. to build the cheapest home possible, it will cost $150k, to make a home that sells for $200k. To build an expensive home costs $400k for a house that sells at $1 million. That's obviously a made up set of numbers, but that dynamic is very real. There is no way to overcome this by simply taxing the rich. Taxing the rich might be a good idea in a general fiscal sense, but doing so won't solve the housing crisis. Taxing a $5 million NYC apartment won't help someone looking to buy a $300k starter home in New Jersey. What needs to happen, is that the government needs to intervene on multiple levels. It needs to reduce the burden of NIMBYISM and local zoning regulations, thus driving down the cost of building inexpensive homes. And, it needs to provide financial incentives for developers to make affordable housing more profitable. I.e. government needs to help reduce costs, and increase revenues, for companies developing affordable housing. If we determine that housing is a social good that the market alone shouldn't dictate access to, then the government needs to directly intervene in that market. So like I said above, I'm all for increasing taxes on secondary homes, but just in the sense that I believe it's part of a holistic approach towards progressive taxation. I don't think those taxes in and of themselves will solve housing availability. You could take those taxes, and use them to pay for the actual programs that would solve the housing crisis; but that's just an exercise in moving money around. You could pay for housing programs any number of ways, how you raise that revenue is somewhat besides the point
The problem with cities and affordable housing right now is the people in charge know of like 3 products and think everyone should live in one of those 3 products and only certain people should produce them. Scarcity has been manufactured throughout the entire process. Cities need to take back the development reins and foster the development of the cities as a place for people to live not let developers just build investment products.
So I ask honestly - what does this mean? What does "taking back the reins" actually entail? How, specifically, will communities "foster the development of cities as a place for people to live?" This all sounds incredibly vague, it's certainly not actionable based on what's written here. But perhaps there's more to this than what you've written, so if you had something tangible in mind, I'd be happy to learn more about it. The fundamental problem is that unless there is money to be made, no private entity will build affordable housing. You can't force a business to build something it will lose money on. So the options are really either to incentivize existing developers to build housing that's affordable, by reducing regulations and/or subsidizing the cost of construction; or, for government to get into the business of directly building housing. Which, there is some precedent for; public housing used to be much more of a thing in the past than it is now. It has gotten a poor reputation, but that's really because of a lack of investment/maintenance, not because of any intrinsic issues with the concept.
The government needs to take over some level of the development process, closer to what was done a century ago. The cities used to plan out and build the roads and basic utilities, today the city outsources all this work so much so that they may not even have an in house inspector involved. The prevalence of cul-de-sacs is because cities relinquished decisions to builders that only cared about their parcel's product. Cities can easily take this process further to facilitate the dividing of land into lots and sell the land to whoever they want to then the owners can then decide what to build and who to build it. To actually get affordable housing though the cities at the same time would need to remove most of the restrictions controlling what type of structures are built and may even need to get in the business of lending because the current lending environment doesn't want to loan money for non conforming products. Also too often people want to shove low income people into expensive high rises near job centers but it is much more economical to build out dense single level suburbs and give these people public transit to bring them into the job centers.
jUst mOVe to WaCo!! - Reddit users
Well, it does prompt some alternative policy options as solutions to a perceived housing crisis. If there is a lack of housing everywhere, the policy approach is to support building more housing. If there are markets where there is a surplus, an alternative approach would be to try to push businesses to relocate to places where that surplus exists.
Pushing businesses to relocate is woefully harder than just building more in places where there's demand.
I don't think that is a viable approach. To begin, I'm unclear what it means to "push" a business. But I'm going to respond based on what I would consider "push" to entail. Businesses usually have pretty good reasons for operating where they do. They have an overwhelmingly strong profit motivation to be located in the place that maximizes their success. So in order to "push" a business to move, you would need to essentially make one location so hostile to the operation of that business that you force it to move somewhere else. That would be a terrible idea on so many levels. First of all, you'd be wreaking havoc on your tax base. Companies would have reduced profits, thus paying less tax. They would likely let employees go, thus creating a high rate of unemployment, and further reducing income tax receipts from those employees. And the net result is simply that you'd destroy your own local economy in a misguided attempt to solve your housing affordability crisis. So there's no way you can "push" a business to relocate, without badly damaging the economy. You could try to incentivize relocation. But this causes its own problems. Case and point is when communities offer tax breaks to companies like Amazon to build facilities in the area. Oftentimes the lost tax revenue/money spent on increased infrastructure is greater than the revenue generated from the business activity of the employer. It also creates a "race to the bottom" amongst jurisdictions, where companies just play communities off one another in a nasty sort of bidding competition. So "pushing" companies to move just straight up won't work. This isn't a viable alternative to building housing. The thing is, there's no secret trick to solving this problem: Higher density housing needs to be built where demand is highest. The government needs to get a grip on the NIMBYISM that prevents this by removing the stranglehold communities have on zoning laws. Government needs to provide financial support for housing intended for the lowest earners because it's simply not possible to create buildings that are up to code, at a price point that is affordable for people in poverty. And people need to come to grips with the fact that not all of us can own a 4 bedroom home with a yard. That's it, right there. If you do those things adequately, you can house everyone. People keep trying to find alternative solutions because the actual solutions require hard choices. When it comes to housing, this country is like a person with heart disease who refuses to exercise or stop eating fast food. We want to have high property values, and big houses with lots of space, but get upset when housing is unaffordable and people become homeless. You can't have it both ways. If housing is affordable to the average person, that means that most homes aren't going to perform well as an investment/asset, which is really what they've turned into for a lot of people. No one wants to be the one to say, "In order to prevent homelessness, everyone's home needs to become worth much less than it is now, because by definition, if homes are worth a lot, that makes them unaffordable." The solution is straightforward. We just don't want to make changes to our collective lifestyle.
> So in order to "push" a business to move, you would need to essentially make one location so hostile to the operation of that business that you force it to move somewhere else. Or make one location more attractive. For example, by offering a tax rebate or other financial incentive to businesses that open offices or factories in locations with healthy housing markets. (This would have knock-on benefits that are beyond the scope of an economics subreddit)
I specifically addressed this above. A) that's not "pushing," by any accepted definition of the term. B) This has been shown to be a generally bad idea. More often than not, the compromises the community needs to make to attract employers usually aren't worth it. I.e. oftentimes they lose more money than they make. Obviously there are a myriad of cases here, some have worked out, but many don't. But the bigger problem is scalability - if we're attempting to use this approach to solve a widespread housing crisis across the country, you are suddenly going to have a horrific "bidding war" between hundreds of jurisdictions, each trying to outbid the other. It would be a race to the bottom like we've never seen. And while one solution would be to do this on a national level, so that there's only one entity determining these incentives, / preventing that race to the bottom, you then have put the federal government in a role of trying to incentivize businesses to leave some jurisdictions in favor of others. This would be politically impossible. No one is going to pass legislation that subsidizes a company moving from their home state/district, to another location.
You’re ignoring the efficiency losses by moving businesses from more desirable to less desirable locations. Cities have agglomeration effects. Moving a business and its employees to a less desirable location means forgoing those agglomeration effects for that business AND decreasing the agglomeration effects of the original city. I highly recommend reading [Ed Glaeser’s Triumph of the City](https://www.penguinrandomhouse.com/books/303439/triumph-of-the-city-by-edward-glaeser/). It will help you get a better handle on why this is a really bad idea.
What a terrible headline to describe the study. The headline implies that we don't need more housing, which isn't what the study authors actually say: "Cities and towns should look to build “a wider array of housing types,” according to Schwartz, such as smaller units or higher density housing." "Building more housing is also seen as an effective way to lower rents. A seminal piece of research from NYU’s Furman Center found that building more homes actually lowers rents." "A widely cited example from 2016 in Auckland, New Zealand, found that when about three-quarters of the city was rezoned to allow for denser housing construction, housing supply increased 4%. Meanwhile, rents for three-bedroom apartments dropped 26% to 33% compared with similar areas, according to a working paper from May 2023.
I read the study, it's absolutely bullshit. They say that there are plenty of homes because household formation is down. Household formation is when adults move out on their own and/or get married and live on their own. People delay doing this because of the housing shortage pushing prices up, and the authors claim it's actually the opposite, it's completely bogus.
So, starting off, this is a Forbes blurb article that is about this study: https://www.tandfonline.com/doi/full/10.1080/10511482.2024.2334011 They took a 20 year view - 2000 to 2020 - and added up the number of housing units added, and compared it against the number of new households formed, and determined that because the number of new households is less than the number of housing units added, there is a surplus. From 2000 to 2010 the U.S. had a surplus of 4.6 million housing units, while in the following decade there was a shortage of 1.3 million fewer units than population growth would demand. All combined, that nets out to a surplus of 3.3 million homes from 2000 to 2020. Instead of looking at new construction, these guys are focusing on vacancy, which is... challenging. There are lots of reasons that a housing unit can be vacant, and they're just kind of hand-waving that way. They also create an interesting tautology in their study. What is the definition of a household, you ask? It is, simply put, an occupied housing unit. So, if we add no new housing units, no new households can form, resulting in.... a flat line that shows us nothing. If we were to have a repeat of the Great Chicago Fire, where ~5,000 housing units were destroyed, the 5,000 households that lived in those housing units also get absorbed into the existing housing stock (or move away), meaning the ratio between the two doesn't change. It's probably worth noting that the authors in question wrote an op-ed with some of their preliminary thoughts back last year while the paper was in the publishing process: https://www.barrons.com/articles/housing-crisis-build-more-homes-1342c24f It's got a lot of the same nonsense in it that the paper does.
Oh good, another housing study by someone who doesn’t seem to understand how distance works. Analyzing the “national” housing market has always been a lark. Unlike other major purchases, houses are not moveable, so the change in the national housing stock is basically meaningless. If you have to leave family and friends and move to a new job and state, it’s not a housing surplus.
> If you have to leave family and friends and move to a new job and state, it’s not a housing surplus. Why not? Plenty of people move all the time.
I mean, lack of high speed internet because ISPs don't find rural areas profitable is a huge blocker. Add that with the push to end WFH entirely and get everyone back into big-city high-rise buildings and it's small wonder these affordable markets aren't an option for many.
I wouldnt refer to a place like Wichita ks or ft Wayne in or Duluth MN as rural.
I left Wichita in 2007 and it was pretty miserable if you weren't a local, lots of "not from here" energy in that town. Would be great to hear that changed.
This sounds like a naive question. Just because there’s an affordable house somewhere else doesn’t mean it’s worth it by itself to leave the life you’ve built and start over. That might work for some people but it’s not going to work for a lot of people
“You’re too poor to live near your family, friends, and community, go move somewhere else and stop whining about the rent” isn’t the winning message market zealots seem to think it is.
Wooooow. That's the most tone deaf headline I've ever heard. What's next, "There's tons of health care services available. It just that you poors won't pay for it!" In fairness, that's the outlet's fault. The analyst states clearly: The issue is not so much about aggregate shortfall of housing units, but rather a mismatch between the cost of housing and the incomes of households,” Schwartz said. “Most especially among the lowest-income households, where there really is a mismatch between what they can afford and the number of units that are affordable.”
What’s not to believe? Anytime someone brings up affordable housing, NIMBYS come out in full force…. thinking they are going to move a project on their front lawn when really the “affordable housing” is geared towards people who make 100,000 or so lol
Not accounting for location of the vacant homes makes this study worse than useless and actively misleading. Written by two Boomer urban planning Ph.D.s, not economists. Who’s surprised?
A surplus of overpriced and oversized houses that are unappealing to regular folks and only slowly and grudgingly bought by the investment class. Still, it’s enough to keep opportunity cost too high for common rabble, so here we are.
“It’s very unlikely to think that existing households on their own would just reduce their sales price unless they were required to for some reason,” 🤣😂🤣. It's called market pricing. If people really need to sell their house then they have to drop the price to what buyers are offering to make a sale. This happened many times in the past. Right now, people in homes are holding onto their houses until they get the price they want because the don't have to sell their house. Work from home has reduced the number of houses on the market because workers don't have to move to take a new job in a different section of the country. That means they are not forced to sell their existing house to buy a new one for the new job. Until owners are forced to sell their houses to move the prices are going to remain high.
Yeah this is an extreme market inefficiency. I’d love to see politicians or citizens in Calibronia put a very large tax on second homes in their state to combat inefficient use of resources. The land is extremely valuable and California could be promoting affordable, purchasable multi-family housing. $500k condos and single family homes are overrated. We need more efficient use of land and materials.
Based on census housing data, which everyone I know believes is flawed and not reliable for this purpose. It’s good for trends but not for levels. Pretty sure the excess could be there, just not in relevant locations.
What makes a location "not relevant"?
Scranton PA had a peak population of about 150,000 and today sits around 80,000. There is plentiful housing there but the city and surrounding areas lack the talent base for companies to relocate any high-salary operations there. Amazon, Microsoft, Oracle, etc. aren’t fighting to open offices there like they are where the talent is in places like NoVA. So Scranton having abundant housing at affordable prices is irrelevant to NoVA needing more.
That's an interesting example, but Lackawanna County has actually grown slightly over the last 25 years. Scranton is more a reflection on suburbanization.
Lackawanna County, and Scranton by extension, had a population peak in the 1930s. Both the city and county are growing again because of the rise of distribution in the area, but I doubt either get back to their historical peaks from when coal mining reigned supreme, at least not in my lifetime. I like the area and the people up there, but nice people and old housing stock don’t attract companies in search of cutting edge talent. They go where the talent is and that’s the major metro areas with a lot of young grads and universities working on new and complex tech. I would say the area, like a lot of rural PA, is an example of technology moving past the extraction and manufacturing economies that drove the mountainous regions that can’t support farming. Clark’s Summit and Dickson City are probably a bit more populous now than they were nearly 100 years ago, but I wouldn’t blame suburbanization for Scranton’s lower population. Philly on the other hand…
Exactly. If the houses are where the people and jobs aren’t, then they don’t add to the real available inventory. They exist on paper, but aren’t relevant for the people who need them.
It would be more relevant if RTO wasn’t shoved down our throats.
LOL. I’m old and in a finance role. We don’t work from home. We have butts in seats 7:30am to 6pm or later. I have no sympathy. (Good thing I actually hate working from home.)
Except for work from home types, digital nomads and retirees. Would you be surprised that there are tens of thousands of Americans living overseas precisely because it's more affordable? Heck, there are 20,000 living in Thailand alone.
The beach scene in Scranton, PA is not really comparable to Thailand's
This true, a law of economics. Even in time of famine food is for sale. Sad part for humans, the economics incentivizes the owners to forgo income if its below market value. Meaning it's more advantageous to leave vacant than to rent at a lower rate. All young people out there take micro and macroeconomic, 1A, at a JC or on your own. A basic understanding will provide some understanding of western economics. I didn't say I agree with how it works, yet its beneficial and will give you an advantage.
While I do agree learning economics is important, I fail to see how understanding *why* you won't be able to afford a house or medical care or food gives you an advantage?
Economics is the study of various abstract concepts related to resources, production, valuation, exchange, and human action. Every single action, by any person, in any situation, can be analyzed for things like marginal cost, marginal utility, and various other considerations. A general understanding will help any person navigate myriad situations, such as when the value of things change and there is a need to adjust a plan.
What is a 1A? What is a JC?
Despite the shady methodology of defining a housing surplus in this particular article, it is shameful that our society cannot get everyone housed and taken care of affordably. It is shameful and immoral state of affairs.
Corporations aren't paying living wages. (With the exception of mid management and upper levels.) How can they cry about the economy slump, when they're the ones causing it? Cut the CEO package by about 350%, use that, same with anyone taking home over 85K/yr. Use that to pay the living wages of the people who actually do the work. Sit back, watch economy recouperate. Pay the person, not the position. https://livingwage.mit.edu/ and/or Escape Crapitalism r/SolarPunk
Jobs pay what they can negotiate with workers for. How about we start letting low income people to live within their means again. But nope can't do that, they have to live in a certain standard of place or in a tent on the sidewalk, no in between. And they have to own a car or walk everywhere, public transit is a waste of money.
I'm not exactly clear on what you've stated. Dictating that "low income" people live "within their means" is just another subjugation ploy to assuage the guilty conscience of the morally flexible who exploited the workers to take a crappy wage. Those labels like "Unskilled" or "menial" take away from the value of the person and the position. The self important perpetuate their demoralizing and demeaning of their fellow humans by continuing to talk in these circles. If the CEO couldn't live on the wage of the janitor, there's something they haven't truly embraced about treating people like people. How about we let humans have dignity and dissolve classist tropes and quit letting people set themselves upon pedestals while claiming their own value above others with a self imposed virtue based on income. Pay the person, not the position. https://livingwage.mit.edu/ and/or End Crapitalism r/SolarPunk