Economy The Western housing crisis

[Deleted member 592570]

+ jobs.,,?

Yeah.

 

[Jack V Savage]

Not that you're comparing the two on this front, but immigrants and foreign investors really shouldn't be looked at in the same way at all on this issue. (Again, you aren't necessarily doing that but some are). Immigrants live in the community (be it owning or more often renting if they're relatively new additions to our society). They shop at the businesses, work, pay taxes and have at least a degree of interest in what the quality of life in a particular area is. (The amount they're invested of course depends on how transient they are--the longer one is likely to stay, the more they care about what life is like in that particular place). Foreign investment companies care about the bottom line. If they can push prices up by consuming the supply, that's generally good enough for them. They pay some taxes to be fair, but that's the extent of their contribution to that area. I suppose it doesn't even need to be "foreign" money either, really any investment group has this effect.

But yes, an infusion of supply in areas that need it is part of the solution. I agree. It's just not the entire solution.

I don't think the taxes are a contribution because someone else would pay them. Foreign investment is a contribution to the community if it leads to construction. But again, people aren't buying properties to make them unaffordable. It's only profitable as an investment if there's a buyer. And building more reduces the value of the investment. So increasing supply reduces foreign investment anyway. Anyway, I'm just saying that people want to prevent construction because they think it reduces the value of their asset (somewhat mistakenly--denser construction makes individual housing units cheaper but land more expensive) and because they want to control who lives near them, but then they blame immigrants or foreign investors for the predictable consequence of that kind of gov't control. So I think the scapegoating is harmful. Another one along those lines is leftists talking about vacancies (as if the gov't could just seize all vacant places and give them to someone).

 

[mkess101]

I don't think the taxes are a contribution because someone else would pay them. Foreign investment is a contribution to the community if it leads to construction. But again, people aren't buying properties to make them unaffordable. It's only profitable as an investment if there's a buyer. And building more reduces the value of the investment. So increasing supply reduces foreign investment anyway. Anyway, I'm just saying that people want to prevent construction because they think it reduces the value of their asset (somewhat mistakenly--denser construction makes individual housing units cheaper but land more expensive) and because they want to control who lives near them, but then they blame immigrants or foreign investors for the predictable consequence of that kind of gov't control. So I think the scapegoating is harmful. Another one along those lines is leftists talking about vacancies (as if the gov't could just seize all vacant places and give them to someone).

Taxes in terms of what immigrants pay? I mean, to a degree but that's only if you'd see a similar influx of people to that area sans those immigrants. (Which in some areas you would, in others probably not). And no, they aren't buying properties to make them "unaffordable". They want them to sit at the very apex of what people are willing to pay (as with any investment).

Scapegoating isn't helpful I'd agree, but would I suppose need to see some actual targeted data on the influence foreign investment has in a specific market before commenting because otherwise it's just conjecture.

I don't think we really disagree much here (big picture)...but it's a complicated problem that can't be addressed from one angle and that also has to be adapted to specific geographic areas because they all can have their own unique challenges.

 

[Fluffernutter]

Sounds like we do agree then since I said the tax should only apply to foreign nationals owning property and not living in it aka not participating in the economy.

Gotcha.

Yup. Looks like we do agree

 

[Fluffernutter]

He said "...despite not living or working in the country...."

My reading comprehension sucks this morning

 

[djacobox372]

Just open the borders that will fix it! You get what you vote for.

Can you imagine how much more expensive housing would be in the US if not for the massive exploitation of illegal migrant labor?

Nobody born in the US is willing to swing a hammer anymore.

 

[AtomicPanther]

Are these the same people who don't want to work for a living? I could easily go buy a new house right now. Of course, around here the amish are buying everything.

 

[Damien Karras]

Don’t let foreign billionaires buy property in your country and turn it into rentals.

This. Also add the Airbnb'ification of housing and the flipping industry also added to inflating house prices.

It's true that we are not producing enough new construction, and especially not enough low income housing. It's just not profitable enough unless the government does something to incentivize it.

 

[BIKES!]

Can you imagine how much more expensive housing would be in the US if not for the massive exploitation of illegal migrant labor?

Nobody born in the US is willing to swing a hammer anymore.

The Dem Reich starting with Obama is worried about this fake equity shit in the C suite and not in actual jobs like agriculture, oil rigs, coal mining, trade, mechanics, construction etc... Need real leadership not race baiting woke globalists.

 

[Islam Imamate]

Trying to shrink the population or prevent it from growing is one of the dumbest possible ways to address housing shortages. It should be legal to build more where there is demand for it.

Its funny, TS started a thread on a real issue that's of concern across Western democracies but most of the WR can only think in standardized talking points so they fall back to blaming immigrants

I think "foreign investors" (like immigrants) are a handy scapegoat but have a small impact on the real issue. And I look at the issue as "housing costs" rather than "house costs." Meaning, an increase in the rental supply is also good. I think it's good for the gov't to intervene and ensure that people have a place to live, but without a supply increase, such intervention cannot work (just kind of pushing the bubble down).

Well the government could help by providing market rate public housing. Problem is right wingers are against public housing because it has a reputation as being for the poorest and this is reinforced by the fact that leftists are only interested in public housing if its done as "affordable" rather than market rate.

The funny thing is progressives will point to Vienna's public housing program and fail to notice that the part of the original intention of that system was to increase municipal revenue. Market rate public housing benefits both the consumer by adding more supply but also the city as it adds one more revenue stream. Insisting that public housing be artificially below market rate tends to create more problems I think.

This. Also add the Airbnb'ification of housing and the flipping industry also added to inflating house prices.

It's true that we are not producing enough new construction, and especially not enough low income housing. It's just not profitable enough unless the government does something to incentivize it.

Part of the reason its not profitable is because of government. There's a lot of unnecessary red tape that developers have to go through to actually build something so its only worth it for them if they sell the finished product as "luxury housing"

Even worse is that a lot of local homeowners and groups representing their interests will exploit things like environmental laws or review processes to stifle new developments. Lots of Americans are sympathetic to the view that neighborhoods need to maintain their character in perpetuity even if it means sky high housing costs for the have-nots. Looking for private sector actors to blame while ignoring the way the state inflates housing costs is going to keep us in this stasis indefinitely.

 

[Jack V Savage]

Taxes in terms of what immigrants pay?

Well, anyone really, but I was talking about foreign investors. Taxes aren't really a contribution to society anyone is making.

And no, they aren't buying properties to make them "unaffordable". They want them to sit at the very apex of what people are willing to pay (as with any investment).

Sure, but investors generally want liquid markets.

I don't think we really disagree much here (big picture)...but it's a complicated problem that can't be addressed from one angle and that also has to be adapted to specific geographic areas because they all can have their own unique challenges.

Yeah, not a big difference. I just don't like the focus on those two scapegoats when I think the problem isn't really related to either, and it distracts from real solutions.

 

[mkess101]

Well, anyone really, but I was talking about foreign investors. Taxes aren't really a contribution to society anyone is making.



Sure, but investors generally want liquid markets.



Yeah, not a big difference. I just don't like the focus on those two scapegoats when I think the problem isn't really related to either, and it distracts from real solutions.

Fair. I guess I should better educate myself on the scope of foreign investments into these markets and whatever data exists that would show how it directly impacts pricing in those markets where it might be prevalent before I'd comment further. There's anecdotal stuff but it could be misleading, and for sure there are a ton of other factors that play a role.

I will say when it comes to liquid markets, the concern might be less with housing for investors than other commodities because the long term demand is far more easy to predict. Technology changes a lot of things, the demand for most investments has huge ebbs and flows. But people are always going to need somewhere to live.

 

[Jack V Savage]

Fair. I guess I should better educate myself on the scope of foreign investments into these markets and whatever data exists that would show how it directly impacts pricing in those markets where it might be prevalent before I'd comment further. There's anecdotal stuff but it could be misleading, and for sure there are a ton of other factors that play a role.

I will say when it comes to liquid markets, the concern might be less with housing for investors than other commodities because the long term demand is far more easy to predict. Technology changes a lot of things, the demand for most investments has huge ebbs and flows. But people are always going to need somewhere to live.

From what I've seen in the past, there are some markets that are materially affected, but it's not the primary factor in rising costs. I should also note that part of this is evergreen. Like, housing is a big part of everyone's budget, always, and even in markets that are not seeing it skyrocket, people could still be a bit unhappy and wish it were cheaper. But there are many markets that are in a real crisis, and that's what I've been focused on.

If we build sufficient supply, housing costs don't have to rise at all. So it's not necessarily a good investment. It becomes one if the gov't makes it one.

 

[jimjamjammer]

Its funny, TS started a thread on a real issue that's of concern across Western democracies but most of the WR can only think in standardized talking points so they fall back to blaming immigrants

Actually ln Canada's case it's actually true. The BoC even stated that in their most recent meeting. It's not the only factor, but it's a major one.

 

[Deleted member 585708]

Most US Households Can't Afford a Median-Priced Home
https://www.costar.com/article/266860380/most-us-households-cant-afford-a-median-priced-home

Spoiler: Article

The National Association of Home Builders said nearly 30% of all U.S. households, or 39 million, cannot afford a home priced over $150,000 without exceeding one-third of their total household income.

Another 25.8 million households are unable to afford more than $250,000. So combined, 64.8 million — or nearly 50% — of the 132.5 million U.S. households can only pay up to $250,000 for a home.

But the median U.S. home actually costs far more, at almost $426,000. And 70%, or more than 93 million of all households, cannot afford that amount based on their current household income, according to the trade group, indicating steady demand for apartments.

Ireland's housing crisis: Millennials, a generation sacrificed
https://www.euronews.com/2023/07/06/irelands-housing-crisis-millennials-a-generation-sacrificed

Britain is facing a mortgage crisis. There are no easy answers
https://www.cnn.com/2023/06/23/economy/uk-mortgage-crisis-banks-meeting/index.html

As Canadian housing crisis rages on, is ‘financialization’ really to blame?
https://www.thestar.com/business/op...s-on-is-financialization-really-to-blame.html

Why France is facing a 'property crisis'
https://www.thelocal.fr/20230602/why-france-is-facing-a-property-crisis

Australian Housing Crisis: The High Price We’re Paying
https://www.forbes.com/advisor/au/property/high-cost-of-australian-housing/

Good post.

Capitalism has truly fucked itself over here.

LOL @ people blaming things other than capitalism.

 

[Satsui Ryu]

Low supply and overspeculation are killing the market. Definitely gotta create more supply, but as long as homes are being used as financial instruments I do not see simply building more as being much of a help. This much level of speculation is going to cause havoc in the market regardless of what is being built. Unfortunately I do not think anything is going to be done about the matter. Way too complicated and way too much big money involved. It really makes me feel for the current generation and is the main reason why I do not jump on the bandwagon of bashing them. They are essentially screwed.

 

[Islam Imamate]

Actually ln Canada's case it's actually true. The BoC even stated that in their most recent meeting. It's not the only factor, but it's a major one.

Canada has very similar regulations in regards to housing that the US has and which inflate housing costs so honestly I remain skeptical that immigrants are the problem. Get rid of laws that prevent the building of anything other than single family detached homes and you'll see an improvement.

 

[mkess101]

From what I've seen in the past, there are some markets that are materially affected, but it's not the primary factor in rising costs. I should also note that part of this is evergreen. Like, housing is a big part of everyone's budget, always, and even in markets that are not seeing it skyrocket, people could still be a bit unhappy and wish it were cheaper. But there are many markets that are in a real crisis, and that's what I've been focused on.

If we build sufficient supply, housing costs don't have to rise at all. So it's not necessarily a good investment. It becomes one if the gov't makes it one.

But it also (case dependent) might not be a good investment for those tasked with building the additional supply then, right? Unless we're saying we want the government to actually provide that supply as opposed to just removing some of the obstacles they put in place that halts private entities from doing it.

This is very simplified way to put it but: You have an area where theoretically almost everyone who wants to live there and needs housing has it. An investment group comes in and buys up a big % of that housing and raises rents, which obviously carries over and resets the market for everyone. Maybe that drives some current occupants away that they can't afford or don't want to pay the higher amounts. Some are replaced by new tenants, maybe all are if the area is desirable. Someone that would potentially come in and build more housing might look at the situation and say "Okay, the government removed some hurdles to building here. But my commodity costs are so high right now and money is so expensive that it's a bad investment for me to build because in order to be desirable I'd need to charge lower rents than people are paying now to entice them to move." So in theory (and likely in reality, SOMETIMES), just allowing more building would lead to less demand and stabilize pricing. But in some cases it's just not going to get it done because other obstacles can exist.

 

[jimjamjammer]

Canada has very similar regulations in regards to housing that the US has and which inflate housing costs so honestly I remain skeptical that immigrants are the problem. Get rid of laws that prevent the building of anything other than single family detached homes and you'll see an improvement.

Oh most definitely. There is so much red tape. But couple low and slow building starts with record breaking immigration numbers. What other outcome could there be?

 

[Rob Battisti]

Is everyone just going to continue to ignore how many homes Blackrock purchased?