I’m okay with blaming nepotism. I also want to point out the other problem is the vast majority of new housing builds in cities is entirely luxury condos. You can’t fix a supply and demand issue if you never address supply.
Calling that nepotism is a stretch imo. There is nothing wrong with borrowing money from your parents for a down payment just like there’s nothing wrong with your parents paying your tuition.
The problem you highlighted - luxury development - is a significantly bigger issue. And that’s less of an issue than corporate landlords.
Then there’s private rentals which I’d say is the biggest factor involving individuals (not companies)
But a 28 year old borrowing money from dad is a drop in the bucket. It feels unfair to me to place any blame on them at all
Statistically speaking first time homebuyers are buying a single family home in the metro area of a smaller city. A large part of the reason they are making said purchase is to minimize cost.
I think you mean the vast majority are single family homes. Lower density = fewer new houses = less tax revenue per unit area = US’ crumbling infrastructure cities can’t afford to fix becccause: low density
We do have supply issues, but it really isn’t “luxury” per se (ignoring that “luxury” is just a marketing term that means basically nothing).
However, there is a distinct lack of small-medium (800-1500 ft²) housing being built in most areas.
The two reasons housing is expensive:
Lack of available supply (partly worsened by people and corporations abusing the housing market for profit).
Average housing being way too large, in particular for first time home buyers. It costs money to build every square foot, to furnish it, and to maintain it.
The large portion of “increased costs” we see with housing over the last 50 years is basically just an increase in size (ignoring specific markets). Maybe 20 percent of the increase is for other reasons (one of which is the addition of 2+ car garages).
In cities, a lot of the new rental construction is “luxury” because it’s both the most profitable multi-unit housing project, and because it recovers its investment outlay decades earlier than a rental complex that intends to charge near or moderately above the average rent prices. There’s no market incentive for anyone to build affordable housing, unless the government subsidizes it, which is unsustainable and defeats the purpose of affordable housing in the first place.
They don’t have to worry about occupancy as long as there’s a housing shortage, so you’re stuck between living in decades old apartments that have questionable utilities and maintenance, or paying 2-5 times as much to live in an equivalently sized new apartment. One of the cities I lived in was entirely split between old converted buildings (that kept raising their rent) and brand new luxury apartments that would bleed you dry.
Smaller houses would help, but even Tiny Homes are fucking expensive now, with them creeping up to a couple hundred thousand for less than 800 sq ft. Basically, builders wanna build expensive houses for a larger profit margin, corporate owners want prices to rise and strategically buy and sell, and private owners want it to be an investment. With the housing market cooling, and builders slowing new construction to wait it out until demand pushes prices back where they want, we’re basically stuck in a self-regulating purgatory, where housing becoming affordable is something that all the market pressures are pushing against.
I’m okay with blaming nepotism. I also want to point out the other problem is the vast majority of new housing builds in cities is entirely luxury condos. You can’t fix a supply and demand issue if you never address supply.
Calling that nepotism is a stretch imo. There is nothing wrong with borrowing money from your parents for a down payment just like there’s nothing wrong with your parents paying your tuition.
The problem you highlighted - luxury development - is a significantly bigger issue. And that’s less of an issue than corporate landlords.
Then there’s private rentals which I’d say is the biggest factor involving individuals (not companies)
But a 28 year old borrowing money from dad is a drop in the bucket. It feels unfair to me to place any blame on them at all
It highlights the fact that own housing is not affordable for many unless you have wealthy enough parents to cover the downpayment.
I’m aware, I just don’t think it’s fair to call it nepotism
Statistically speaking first time homebuyers are buying a single family home in the metro area of a smaller city. A large part of the reason they are making said purchase is to minimize cost.
I think you mean the vast majority are single family homes. Lower density = fewer new houses = less tax revenue per unit area = US’ crumbling infrastructure cities can’t afford to fix becccause: low density
You’re okay with blaming “nepotism”? For what?
deleted by creator
We do have supply issues, but it really isn’t “luxury” per se (ignoring that “luxury” is just a marketing term that means basically nothing).
However, there is a distinct lack of small-medium (800-1500 ft²) housing being built in most areas.
The two reasons housing is expensive:
The large portion of “increased costs” we see with housing over the last 50 years is basically just an increase in size (ignoring specific markets). Maybe 20 percent of the increase is for other reasons (one of which is the addition of 2+ car garages).
In cities, a lot of the new rental construction is “luxury” because it’s both the most profitable multi-unit housing project, and because it recovers its investment outlay decades earlier than a rental complex that intends to charge near or moderately above the average rent prices. There’s no market incentive for anyone to build affordable housing, unless the government subsidizes it, which is unsustainable and defeats the purpose of affordable housing in the first place.
They don’t have to worry about occupancy as long as there’s a housing shortage, so you’re stuck between living in decades old apartments that have questionable utilities and maintenance, or paying 2-5 times as much to live in an equivalently sized new apartment. One of the cities I lived in was entirely split between old converted buildings (that kept raising their rent) and brand new luxury apartments that would bleed you dry.
Smaller houses would help, but even Tiny Homes are fucking expensive now, with them creeping up to a couple hundred thousand for less than 800 sq ft. Basically, builders wanna build expensive houses for a larger profit margin, corporate owners want prices to rise and strategically buy and sell, and private owners want it to be an investment. With the housing market cooling, and builders slowing new construction to wait it out until demand pushes prices back where they want, we’re basically stuck in a self-regulating purgatory, where housing becoming affordable is something that all the market pressures are pushing against.