As a lifelong Californian I’ve seen homelessness expand from “expected” places like skid row into suburbs in (north) Orange County.
I’ve long felt that California was a harbinger for the rest of the nation and if they wanted they could choose to avoid the policy mistakes (e.g. SFH zoning, nimby-ism, prop 13, etc).
I’m not convinced that they have because the truth is the current status quo materially benefits a coalition of interest groups including current homeowners and property developers.
If we want to tackle this we need a national coordinated strategy. A piece meal approach at the city level is just playing whack a mole.
Some states (montana Minnisota although the later is less likely to succeed imo) have started doing this at a state wide level, I think Cali has a particularly uphill battle since the housing situation is already bad and the headwind that we really will never be able to change: prop-13. (I think all the other things that are preventing new housing CEQA, SFZ poor public infrastructure can all be changed if we do it right but I don't see prop-13 ever changing even if we get these taken care of)
The malign thing about prop 13 is is basically means that for muni's property tax doesn't cover required services. It also distorts prices driving them higher.
They invested a lot of money which is good and all of the programs they put it into seem like they will help, but I think their zoning reforms wern't strong enough to truely increase supply enough
There's some of that for sure, but real estate is a good inflation hedge. So if you print like we have been and new supply doesn't jack up, then here we are.
That's just a natural economic thing; not a political system at play, other than a byproduct of massive printing which has been out of control for some time.
I mean, we had interest rates jack up (for the US in modern times at least lol) and prices didn't drop as much as they should (and many that lost in bidding wars in the frothy market went to the sidelines)
When the Fed goes the other way because they have no real choice, prices are going even higher.
Real estate prices is propped up with credit. Credit can be created at ever increasing numbers until there is a collapse in the credit markets or the monetary system. When loans become unpayable, defaults occur. If credit markets collapse, then housing prices go down.
Real estate has value & a premium associated with the credit markets & revenue generated by the property (e.g. rentals).
> Real estate has value & a premium associated with the credit markets & revenue generated by the property (e.g. rentals).
Yes for commercial - usually cap rate based which is related to return and risk, replacement cost valuation, or revenue multiplier.
With regard to residential - prices are going to go up when fed goes the other way. They have NOT been propped up with credit or favorable interest rates. Those factors have gotten worse but prices have held strong.
They have been propped up because supply is still low and new construction is expensive. Those things aren't likely to change anytime soon. Not to mention US RE is still a good place to park foreign cash in relative terms and is a good inflation hedge.
Rents will go up. Home prices will go up.
Commercial hasn't fallen out yet though. Office space should be converted to multi family residential or mixed use.
Commercial collapse is likely though which I think you are referring to.
But to the article at hand - could be a way to monetize a sharp drop in revenue due to WFH and the hike in interest rates - convert to affordable housing and offset any investment to cities (ie taxpayers) to address the homeless and affordability crisis.
> They have NOT been propped up with credit or favorable interest rates.
We really can't tell yet. Since interest rates have gone up, lots of people don't want to move (to upgrade or downgrade) because you can't just transfer your current loan to another house. That has led to very tight inventory problems, which makes the market even crazier.
We can tell that despite less favorable lending, there are still multiple bids on homes in many top markets.
If the lock in is a large factor, then inventory will shoot up as rates come back down. But then so will home prices as monthly payments come down and those dejected from losing bids before re-enter the market.
Is the market going to be flooded with new housing? No. Is the market going to be flooded with people downgrading and moving into rentals? Prob not. For every old couple downgrading there's a younger couple needing to upgrade for more space due to WFH and/or kids or a first time homebuyer ready on the wing. Or an investment group ready to buy and rent.
So basically - if rates go higher - many people are further locked in. Enjoy the favorable loan and inflation protection in RE. Inventory stays low.
If rates go lower - more buyers. Maybe some upgrade/downgrade inventory.
But there will be no magical new housing starts. Construction costs (labor/materials) unlikely to drop meaningfully.
Home prices remain stable in most places and going up with inflation and time.
And when the Fed reverses course - prices will jump.
I don't see how prices drop as some might hope (first time homebuyers) in the near future.
> We can tell that despite less favorable lending, there are still multiple bids on homes in many top markets.
But supply and sales are still down, because inventory is really tight. Less supply can affect prices just like less demand can.
> Is the market going to be flooded with people downgrading and moving into rentals? Prob not. For every old couple downgrading there's a younger couple needing to upgrade for more space due to WFH and/or kids or a first time homebuyer ready on the wing.
But that's just it. Those old people aren't downgrading because it doesn't make sense for them to downgrade. They would only be paying more for less, so why bother? That younger couple that needs to upgrade for more space is even more screwed in this kind of market.
> But there will be no magical new housing starts. Construction costs (labor/materials) unlikely to drop meaningfully.
Yes, but that isn't really the point right now. There are still plenty of ongoing projects in my neighborhood that were started before rates shot up. That is significant amounts of new supply, but it is balanced by much fewer second hand homes on the market.
> And when the Fed reverses course - prices will jump.
The economy is whacked by inflation right now, you better believe that the Fed has gotten religion in considering housing costs as part of their inflation measure. So...as long as housing costs keep rising, interest rates are going to stay high anyways. Given how many people are now asset heavy, with speculation and everything, don't count out some kind of political solution to get out of the hole.
> I don't see how prices drop as some might hope (first time homebuyers) in the near future.
I agree, but that doesn't mean the market is stable.
> The economy is whacked by inflation right now, you better believe that the Fed has gotten religion in considering housing costs as part of their inflation measure. So...as long as housing costs keep rising, interest rates are going to stay high anyways
The Fed is completely incompetent. "Inflation is transitory" over and over. And interest rates cannot stay high. At 32T in debt and rates, we'll eventually have to pay 1.6T in just interest annually. In the last quarter of 2022, we paid $213B in interest alone.
The longer interest rates are this high, the more pain on the entire world, as there are ~20T in USD denominated debt in addition to the 32T in US debt. And about 190T in unfunded liabilities in the US! Already insolvent. The only solution is to print.
The US and the world cannot sustain higher interest rates as the world reserve currency and the high debt load. But the Fed has to do something to at least appear like they are in control and competent. And to tame inflation to avoid civil unrest and political backlash. Most people have seen inflation outpace their wage growth.
I bring this up because the ones in charge are the ones with assets. And those with assets don't really care about inflation.
That's a large part of my thesis. And I'll be holding tangible assets like real estate when the printer goes back in overdrive because there is no other choice.
> That's a large part of my thesis. And I'll be holding tangible assets like real estate when the printer goes back in overdrive because there is no other choice.
You and everyone else, which is part of the run up on real estate prices right now. There is no such thing as a sure bet, especially when almost everyone is taking the same bet.
Don't know where you get "everyone else". I'm not talking about primaries and those with primaries aren't just "holding"... they need a place to live. Most people do not have real estate investments.
Investors are not in RE as a pure buy and hold. Maybe a few foreign entities parking cash in the US. But outside of that, no they don't. They live in them. Or they rent them for a profit or near break even. Rents have/can/will go up even more.
There aren't many properties that were purchased at elevated levels that have no economic prospect to them and could thus flood the market like you insinuate - ie an airbnb bought for 800k that now can't service the debt because short term revenue dropped and long term local rental revenue is too low. Even then, those that bought aren't looking to take a major hit and didn't buy with lax lending like 08, so the prices are what they are. You need foreclosures and short sales to make meaningful drops nationwide.
My properties cash flowed before the pandemic. During. And after. I honestly don't care about values, I'll buy more if they plummet but values have never been a bet in my plan. I care about cash flow and risk in an economic downturn but I'll take the inflation hedge too. You make money when you buy. There are still places you can buy now and make money. I look at a lot of things but always at replacement cost and cash flow.
The thesis is that there is no escaping the debt load. About the only sure bet IS that the money printer will return in overdrive. There is NO choice. And I don't care if it's this year or next year, but it will return soon.
You need assets before and when that happens. Not cash on the sidelines waiting for a dip that probably won't happen.
Whatever asset though - IMO, it should be cash flowing and be able to weather an uncertain economic and financial climate.
You seem to think Fed is going to fight inflation and bring down housing prices and save everything and also create this buy opportunity in various assets. Perhaps they keep hiking and we finally get a commercial RE crash and the Fed member's banks and associates can have a feast. Sure. I'm surprised that didn't occur a long time ago. But we're not talking about commercial RE.
How does the US escape the debt load and maintain these interest rates and higher and get to 2% target inflation?
Every solution involves printing. And how do you print a shit ton and keep inflation at 2%? You can't. You have to inflate something.
Best to have that something than cash or a non inflation hedging asset.
Even without the politics/nimbyism I am trying to imaging a realistic scenario where housing prices go down and stay down in California, but I just can't.
It seems that the price of housing is directly related to how much people can afford to pay, meaning that increases in wages won't remediate housing cost increases, but contribute to them directly and indirectly.
Japan. For an island with limited space they treat their real estate market very differently. The land itself has value, but structures depreciate to zero.
Housing prices in Japan have been going up for years. They had the implosion after the superbubble in the 1990s (prices got so ridiculous, that the land beneath the emperor's palace was worth more than all the land in California)
But other than this extreme, the trend has very definitely been up and to the right, year after year after year. Even as the population declines.
Wages have gone up significantly recently: when wages go up - house prices (and the price of everything else) go up. Raising wages doesn't magic up more houses.
"Since President Biden took office in January 2021, the increase in prices due to inflation is over 14%, resulting in a loss in real wages of nearly 4%"
it makes sense though as this is how the middle class sees a lot of their wealth passed through death and marriage, its houses for the middle class. its just that the middle class is shrinking and so now the same houses are owned by fewer families. for everyone else there is renting and homelessness.
In SF/Bay Area there is definitely a separate issue besides just the shrinking middle class. SWEs that by all other metrics would be solidly middle class if not upper middle are having a hard time finding affordable homes there. The only people I know who've entertained ownership in the area are DINK, and I know many people in their late 20s and early 30s who have been consistently earning over 6 figures since the day they left college.
That said, I can understand arguments for protecting existing middle class homeowners. I think a huge chunk of the problem could be resolved by having policies that treat property like any other speculative investment while having some sort of exceptions for primary family homes that are actively being lived in by the owners. I'm guessing if that were the only class protected by the SF property tax laws only a small minority of the current places would remain with locked-in rates.
I think you could ban investment properties entirely and we would still have the same problems, it would barely be a blip I bet. There just isn't enough housing and there isn't likely to be anytime soon.
Tackling the issue nationally is key because a significant portion of homeless in the cities is from poverty / drug addiction in rural areas that results in folks showing up in cities desperate for help (it is estimated that 75% of SF’s homeless are from outside of the city).
It is not just a city problem. That is just where the problems end up because it is the only place with any infrastructure to handle it.
> "it is estimated that 75% of SF’s homeless are from outside of the city" --
Where are you getting that 75% number from? The latest survey I'm familiar with showed nearly exactly the opposite (71% of homeless in SF had a prior place of residence in SF). See https://sfstandard.com/2023/05/22/san-francisco-homeless-peo...
If thats the case then its really a form of additional wealth transfer from the blue states to the red states. They save money on taxes by not tackling this problem/creating it in the first place and then dump the externalities onto blue state taxpayers.
California has lots and lots of small local governments which makes it structurally harder in California than states where there aren't as many governments. The state government is trying to use RHNA allocations right now to force local governments to get in line but there's no substitute for a single governing body.
Prop 13 is a uniquely Californian problem, and yet homelessness is exploding all over the country.
The problem isn't Prop 13. The problem isn't entirely nimby-ism, either. The problem is that for a variety of structural reasons, housing costs too much, mental healthcare is not available, and there's no pathway for treating drug problems. This causes sick, addicted, or simply poor people who are living on the margins to slide into homelessness, with no way to climb back up the slide.
Well, California's housing crisis is uniquely intense by almost any measure (affordability, relative/absolute homeless population, median family wealth).
Prop 13 is a unique and meaningful contributor to a glacial housing market -- if moving homes (to an equally-expensive home!) would quadruple your property tax, you're probably not gonna sell. And slow/frozen markets result in increased prices.
Housing costs are high because it's hard to build a house. It's a dangerous task requiring a lot of logistics and coordination. There are toxic chemicals, dangerous heights, sharp objects, and requires being in unhealthy poses and breathing in fumes during the construction. Then there's the financial risks, with people not paying as promised, or withholding some pay due to work quality. At the end of the day, people are not willing to sacrifice their health as cheaply, and there isn't a new influx of cheap migrant labor, so the costs will remain high in the future.
Are those absolute numbers or per capita numbers? If the former, are there population trends which would affect the graph?
What happened between 2018 and 2023? Why is the Biden story missing?
Were there methodology changes anywhere in here? Are the methodologies the same between states? If they are the same, is it possible that funding issues affect how accurate the numbers are?
1. The silent majority of homeless people that are suffering and with the proper services could get back on their feet, but they are not actually having a day to day impact on the general population. Cutting helpful services for these people is terrible, and the longer someone goes homeless the more issue they may have getting out later. Housing prices also have more impact in creating this type of homelessness.
2. The loud minority of homeless people, often in need of serious mental help that they very well may refuse, who have a negative impact on the community - disruption in the libraries, needles on the street, etc. There are places where the prevailing sentiment is refusing to remove these people when they are disturbing important community spaces or to arrest them for crimes like openly using hard drugs and peeing in the public fountain. This sort of tolerance shouldn't be conflated with robust access to resources, but unfortunately it does seem to be by policy makers.
So yeah, many homeless people go to cities where they will have access to services, and that is more relevant to statistics. Some homeless people go to cities where they know they will more easily be able to obtain and use drugs, steal, etc. Those people are a tiny fraction of the total population, but it doesn't take many of them to start to have a noticeable impact on a local area. This is where we see the more visceral negative reaction to homelessness in west coast cities coming from.
Though I'm sure there are people from other areas of the country amplifying this problem for their own political agenda rather than care for the community or the homeless, it's definitely a real feeling amongst residents in certain areas of SF too, and it doesn't come out of nowhere.
The vast majority of homeless are people "couch surfing" or "crashing with a friend for a bit." The guy on the corner screaming and smoking meth is NOT a representative homeless person - it's a second issue that doesn't really have a word. Vagrant maybe - either way it's not really separate in "the discourse."
Some small % of the people sleeping in their car to save up a security deposit will turn into that guy, but those people are in that position from housing costs. This is a housing cost issue, with an end result that's a public mental health/safety consequence.
You can arrest the guy (and I think you should, hot take for HN) for jerking off, but that won't solve the problem. The problem is that there's no fucking housing and it's illegal to build more. The vacant unit numbers you see thrown around are totally made up - they count houses in places like the Catskills and Kansas etc, not housing in SF/NY/Miami
Arresting that guy will help solve the vagrant problem. It won't solve the homelessness problem, and that's definitely a hugely important point. Most people who become the vagrant type of homeless have serious underlying mental illness or got seriously deep into drugs though, and they're in a state where they are not going to voluntarily accept help. A guy down on his luck is unlikely to turn into this disruptive stereotype even if he does unfortunately end up on the street longer term, while there are vagrants who came from wealthy families and are on the street entirely by "choice" (which I put in quotes because they are seriously ill).
I heard a talk recently from a couple social workers that run programs for addressing homelessness in New York. There are 100 or so homeless people that are well known to services in NYC because they have repeatedly refused offers for help, and these people have stayed on the streets for years while an entire homeless populations' worth of people has been successfully helped back onto their feet (of course with a never-ending flow that keeps the overall population at high numbers). Occasionally one of the vagrants ends up in the news for attacking someone, but short of that they will be left on the streets, which is really a lose/lose.
> a never-ending flow that keeps the overall population at high numbers
I think of high housing prices as a "homelessness producing machine" that can generate more people without homes faster than the government or non-profits can help people out.
Lower housing prices mean lower flows, which makes it easier to get a handle on things, like the Texas article discusses.
Right, that group of 100 is a burden on society and are likely not able to consent to their current situation, to treatment, or to basically anything besides eventually getting run over. I'm sorry if it's mean, but we have a duty to the millions that walk through their shit, needles, and piss every day.
The group we should have more compassion for is the working class who's fucked by our housing policy. Those Boomers retiring with big housing payouts are living on the suffering of the single mother staying at her friends house, of the guy living in an RV so he can afford insulin, etc.
Almost two decades ago I started dating this Chinese girl who had relatively recently come over from mainland, yet in the space of 5 years after arriving managed to leave an abusive home situation, find work as a medical interpreter ( and thereby secure her own work visa to stay in this country) and save up a down payment for a modest house.
She told me at the time, which I thought was some sort of amusing misunderstanding about language, that I was "homeless boy" - because I lived in an _apartment_. And thus that she needed to help me get into a house (hint hint) so that I could stop being homeless and be a "man."
I had never heard the word homeless used this way before, but as the years went by I began to understand that it was not a mistake at all but a very particular attitude about what constitutes being settled down and stable in one's life and that I, despite whatever other qualities I had that appealed to her, was unacceptably immature and reckless in this department.
Much later on I discovered that for various reasons, there's a certain generation of Chinese immigrants that as a cohort correspond roughly to our late gen Xers/early millenials, who broadly seem to share this point of view.
> The guy on the corner screaming and smoking meth is NOT a representative homeless person - it's a second issue that doesn't really have a word.
In general, those are mentally ill people who aren't getting proper treatment. They don't have family members willing or able to support them, so they slip through the cracks in our social systems.
To me, it's cruel to treat these people like criminals, so I fundamentally disagree that they should be arrested.
Not true, at least in California. The state-run facilities are completely full, and they turn people away even when there's serious mental health issues.
Noah's article has many broad generalizations that don't hold water.
For example, Missippi's has a low cost of living and quality of life (cheaper for people to house mentally ill family members) [0]. California involuntarily imports homeless people from other states, which would lead to other states having less homeless and California having more.
Poor mental healthcare could mean that people that need better quality care leave for states with good quality care.
It's odd how much people resist the notion that "fewer people can afford a good as it becomes more expensive" with housing. It's like the Twilight Zone of economics where supply and demand no longer apply.
It's hard data but his rhetorical device of saying homelessness is 100% related to housing is hardly interesting. How practical is it to write off 20-30% of a cause?
There are houses everywhere that are below market rates. They may not be glamorous but they are homes.
No doubt we have problems. The accessibility, safety, and energy efficiency gains are a positive.
I found the article intellectually lazy and I must be in a real foul mood to even be commenting.
> his rhetorical device of saying homelessness is 100% related to housing
It's right there at the very beginning of the article: "Even if drugs, mental illness, etc. do exacerbate homelessness to some extent"
No one is saying it's not a complex problem with many things going on, but a lot of people refuse to acknowledge that the price of housing is a primary driver of homelessness.
The vast majority of homelessness is caused by unaffordable housing in the area, or temporary money flow problems. This is a different population than the visible, chronic homeless. Sweeping them up into one group seems counterproductive. The mom who just lost her job and is getting evicted from her apartment just needs money or a more affordable living situation. The guy yelling a trees on the street, needs mental health treatment. When people complain about the homeless, it is mostly about the chronic homeless even though they are a much smaller population.
I don't think this is super true, I think people become the random guy yelling at trees rather than some guy who works at the Duane Reade because homelessness causes you to go insane
I'm no expert on homelessness, but I've spent a number of years assembling and distributing care packages for the homeless population in my area (not in California). I started doing this after seeing the body of a person who had died on the sidewalk from hypothermia one winter.
I've learned a whole lot of things from talking with these people over the years.
My first observation is that about half of them are homeless because they have serious mental or emotional problems that prevent them from functioning in society.
About half have serious drug or alcohol problems. There is an enormous overlap between this group and the mentally/emotionally ill group.
A smaller percentage are young people who have, basically, dropped out of "the rat race". They have chosen that life.
And the smallest percentage are people who suffered a serious blow in their life and were unable to recover. Most often, this was a serious illness of some sort. Sometimes it was the death of a loved one, a terrible divorce, that sort of thing.
I have developed a kind of "sixth sense" for telling if someone is homeless or not (you very often can't tell just by a casual look). I remember making my rounds one evening and spotting a 30something guy, clean, clean clothes, etc. But my sense told me he was homeless.
I approached him and offered a care package. He was exceptionally grateful. He told me that he'd been homeless for about a week, as a result of a horrific divorces in which he lost everything, followed by losing his job because he couldn't function as a result of his marital trouble.
I knew, and told him, that if he stayed on the street for very long, he would become trapped, and become one of the grizzled people yelling at trees sooner or later.
One of the things that makes this issue so hard is that there isn't just one cause of homelessness. It's a complicated problem. But one thing is very clear to me -- as a society, we are failing these people. The US is the wealthiest and most powerful nation in the history of the planet. That we allow people to live like this is criminally negligent and inhumane.
And, another thing I learned because I've seen it first-hand, is that no matter how comfortable, established, or well-off you are -- it's possible for you to become homeless far faster than you would ever think.
So I think your observations can be broadly true and also that if you caught the people who are chronically homeless as they were falling out of being homed they would seem way less insane and their problems would be far more tractable
When you can't afford your place anymore; you live in your car and join a cheap gym with showers or sleep on the sofa of friends and family. Most people don't remain homeless, and aid spent for this group of homeless are super effective at getting them out of homelessness faster. The person that is driven to yelling at trees caused the stress of being homeless with no other underlying conditions, is the ultra-rare.
The people you see shouting on the street are usually suffering from schizophrenia, which has a base rate of 1% in the general population but exceeds 20% among the homelessness. Untreated schizophrenia will lead someone to homelessness, almost inevitably.
Yes, homelessness absolutely causes people to go insane. I'm not sure why you're being downvoted.
But some people end up homeless because their mental health issues weren't treated (or weren't treated well) while they were still housed and functional. It can only take a few bad episodes to lose your job, and the next job, and then your home, and then you're screaming at the pigeons at 2pm in SOMA.
That's certainly true. When I was homeless (nearly 40 years ago, and thankfully only for seven months or so), I absolutely self-medicated to deal with the hopelessness, isolation and fear I felt not having any place to go.
Interestingly (and yes, I know I'm an outlier), about nine months after getting off the streets, it was not wanting that again that got me to stop self-medicating (cocaine) when I found myself getting ready to spend my rent money on drugs, and haven't touched cocaine since.
Sadly, many folks are unable to get off that particular hamster wheel without lots of help.
All that said, as others have pointed out, those with mental health and substance abuse issues are a tiny minority of the homeless population. In fact, a majority of Americans are just one unexpected $600 emergency from becoming homeless themselves.
> All that said, as others have pointed out, those with mental health and substance abuse issues are a tiny minority of the homeless population. In fact, a majority of Americans are just one unexpected $600 emergency from becoming homeless themselves.
They are a tiny amount of the homeless population but not a tiny amount of the chronic homeless population. That is an important distinction: people who are homeless for a couple of weeks vs. people who are homeless for years. The sad case occurs when temporary homelessness converts into chronic homelessness, which often corresponds with substance abuse (i.e. someone became homeless, but rather than having that problem fixed, it just became much worse). IMHO, we should dump a lot of resources in making sure easy cases of homelessness (just need a house) don't become hard cases (need drug rehab, lots of additional social resources).
A lot of mental illness is simply drug/substance abuse related, which...yes, you might start going for cheap street drugs after becoming homeless, but it is also likely your parents kicked you out because you wouldn't stop doing drugs.
The vast majority of people who experience homelessness are on the streets for 1 night before getting their act together and finding a place to live. That means the people who are on chronically on the street are dealing with more issues.
I recommend checking out this channel if you want to see what its like for people on the brink, or trying to claw back from homelessness. I found it today and there's a lot of privileged folks who just don't know.
One of the themes on there, is intermediate free housing helps a tremendous amount when people are falling down.
Another big theme is landlords evicting anyone who complains or wrongs them.
Glad to see this channel promoted (am not associated with it).
What had been an entertaining hate-watch of stupid McMansions for overpriced sale is now an empathetic, disturbing examination of how Americans can abruptly fall into poverty once they're old, chronically ill, or facing domestic abuse.
Personally, I'd like to see taxes go towards cheap but secure housing, food and health care guaranteed for everyone within the US. (Barracks? Food prep like this [1]? Health care similar to Armed Forces?)
Then if you wanted to live alone and/or better, eat better food, or have spending money, that would be your incentive for a job or doing your own business, etc.
I'm kind of cribbing from MANNA (Marshall Brain, ASIN #B007HQH67U, I don't see an ISBN anywhere). But I kind of feel that the basic premise of "here's a safe place to sleep and you won't starve" is a base level we should aim toward.
Build more housing and remove regulations - but wait… developers are never going to build housing that lowers the price of housing overall. This would only help people who have all the cash to build their own single family dream house… which isn’t the people we really need to help.
The answer is building public housing where the government has no incentive to constantly extract as much as possible out of the tenants.
I don’t see anyway forward for the US other than a public housing revolution. As long as everyone’s NW is tied up in property, public housing will be the only way to get more affordable housing onto the market. Every other action will constantly push the cost of housing up or keep it flat, at best.
You do realize that developers are in the business of building housing right? There will be developers building anything legal to build at any cost level that they think will lead to returns. However in most of the US, most kinds of housing are illegal to build. Building triplexes doesn't necessarily make single family homes cheaper(and generally will not) but it does product units that may be cheaper than the current average price.
> As long as everyone’s NW is tied up in property
It's totally a myth that building new housing, specifically things like apartments lowers the value of single family homes. In some cases, building more housing might increase the value of your SFH, because there is more economic activity nearby and more potential buyers when you go to sell. Housing need not be 0 sum.
> There will be developers building anything legal to build at any cost level that they think will lead to returns.
Developers will prioritize high-margin projects. Which is why almost all new developments are "luxury developments". I cant remember hearing about a low-cost development except as begrudging token to "affordable housing" tacked onto a luxury development to meet the letter of the law.
> Have you ever considered that developers also own existing property and land?
Yes I have. I know someone well who does site selection for an affordable housing developer, a number of urban planners, and some folks who work in construction. Developers pretty universally want to be developing properties as quickly as they can. Deal flow is important.
But you know, condescend to me about something I probably know more about than you.
Yet, in any major city like Sydney - developers "want to be developing properties as quickly as they can" and yet will leave the property vacant rather than sell it. https://www.youtube.com/watch?v=lJE3B_ra3lY
Why does any solution in your mind involve capitalists getting more money?
I’m no expert on Australia so I won’t comment. But I’m the US there is demand for housing, available financing, and developers who want to do projects. The blocker here is regulatory. We simply see in the US that when cities allow more housing to be built prices stabilize and sometimes go down.
Having been homeless I know the chasm between living on the street in a tent and a suburban home is about a ten thousand decisions over the course of several years.
I would argue the life we will have is very predictable, on a 5-year timeline, based upon decisions between today and the next year. Small things, like showing up to work on time, has a compounding impact upon one's life.
The ability to afford a mortgage has a dependency of a few thousand good decisions resulting from several years of positive actions.
I've been homeless plenty and the only thing that got me out was luck and medical treatment. Years of good decisions can be undone by one accident or bad turn.
My best personal example of this is one of the first times I was trying to get sober, had gotten a chromebook and was beginning to work online. About halfway to saving money for deposit on an apartment when a cop threw my tent and backpack in the river. I was back in the bottle within a week. The life you live is very predictable, but that's one of the things you lose along with your home. I'm surprised you didn't learn that out there.
There's a major lack of empathy for people who are homeless.
The response to homelessness being more police violence is horrific, especially how they basically throw away all their belongings just so people don't have to see the poor and desperate in their neighborhoods.
People are spending the money they saved up during Covid on biggies (cars, home renovation , ...). More recently, sustained wage increases as well keep people spending (restaurants, travel, ...).
Money really is washing out now. Wonder how long it will last.
There is some evidence that increasing minimum wage increases the prices of goods for minimum wage workers so that their rising wages don't actually give them more buying power, also we can just not make it illegal to build new housing in places where there is already housing but ymmv.
>There is some evidence that increasing minimum wage increases the prices of goods for minimum wage workers so that their rising wages don't actually give them more buying power
I've heard this before, but I've never actually seen that "evidence." Can you point me in the right direction?
I don't see how it can be true that rising wages results in no net gain if vendors aren't increasing costs disproportionally to their inputs. A simple model of product cost is labor costs + "other things" like materials, retail overhead, etc, multiplied by some profit margin. If worker wages double, only the labor costs have doubled. The non-zero "other things" have not doubled (they may increase, but you can apply this argument recursively until you get to the base case), so the ultimate price cannot have increased by the same proportion. Thus, all workers should have a net gain.
Yes, I mentioned that already. The argument applies recursively, and the total increase is always less than the wage increase as long as there is some cost somewhere in the supply chain that is not responsive to wage increase. This could be land, or raw materials cost, or fixed tariffs, or fuel costs, compute, infrastructure, doesn't matter. The whole thing is a linear function, so doubling is the max increase that can occur, and any costs that don't respond must lower the ultimate increase.
Exactly we must have a workers revolution, where the buregious is overthrown and the streets run red with the blood of capitalists. Then when we have no more of those parasitic capitalists sucking out the blood of the working man we will establish a glorious dictatorship of the proletariat wherein all will care for and love one another equally, where profit will be no more and the goods and services will flow through the streets without end for every person to be able to do whatever they want.
Then not long after the organs of the state will wither away as they will no longer be needed as tools of exploitation by those who own the means of production.
Come comrade join me in this glorious future, for this time we will have REAL communism that will REALLY work, unlike all others that came before us.
Is inflation a myth to you? The lowest-paid people have seen the highest wage increases in the past several years, do you think the grocery store and Starbucks didn't adjust accordingly to raise prices?
> The lowest-paid people have seen the highest wage increases in the past several years,
Do you have a source for this? Because CEOs, the people with enough money to own several properties for luxury and investment, have been consistently beating inflation while housing costs skyrocket.
Interesting that those look at quartiles and quintiles. The top 20% isn't necessarily "rich," the bottom of that bracket is barely able to afford homes today. The homelessness spike is not driven by the poorest getting relative wage increases faster than the middle class, which is the story presented in your sources. The homelessness spike is caused by 50 years of working class incomes growing slower than housing costs.
Inflation hits lower income brackets harder. Wages in the lower brackets are not keeping up with inflation. The continuing spike in homelessness is a direct result of wage stagnation in the lower and middle classes. The notion that lifting people out of poverty will drive inflation is farcical and perpetuates the growing rates of homelessness and poverty. Think for yourself, "idk" isn't an excuse.
If that was true why is there so much resistance to increasing the minimum wage in the US? Inflation has primarily been driven by increased commodity prices, inflated corporate profits and real estate being treated as an investment asset, wages are a pretty small chunk of that.
What a weirdly framed article. It's purports to be a discussion about spiking homelessness in "US Cities." But it's really about a discussion about spiking homelessness in one US city, i.e. New York.
The numbers in the chart show that homeless families shot up from 52,824 to 72,675. That's an increase of 19,851. But out of that number, 17,145 represents New York City. The entire rest of the country only accounts for 2,706 families.
It's mind-boggling that conversations never touch the total lack of fundamental recovery since 2008. Homelessness really picked up during the "great" recession and the only "recovery" I've seen since then has been in financial assets propped up by artificially low rates.
All of this only produced overvalued tech companies peddling products with little to no value ad, marginal if any fundamental innovation to level-up society in any meaningful way, and massively increased concentration of wealth in the hands of few.
Fundamentals seem weaker now than even back then and people are still hanging on by a thread. Things will only accelerate when this next downturn really hits. Whether child labor will be legalized this time around or if it'll take yet another cycle is really the only question left to be asked. Unfortunately, we need to directly experience abject conditions first-hand to begin caring about turning the ship around.
Hear me out: more big cities. How you do that is have fast transportation, especially free public transportation to smaller municipalities.
In california, it seems the problem is the richest coastal folks are too powerful for eminent domain to be effective. If that is correct then the answer is political, cali has a decent track record of propositions making huge changes. Perhaps sound minded californians can organize a measure to put this on the next ballot: neuter the coastal commission and fund apartment and condos in the most desirable locations so that the rich still live in scenic coastal places, just stacked in apartments instead of houses and also give cities power to demolish arbitrary houses in lieu of apartments.
I see people complain about homelessness all the time but no one is willing to consider extreme measures, just complain about it.
And this is nothing new either. I recall a piece in the Village Voice from back in the 1980s whose title asked the question "What do homeless people want?" Which was helpfully answered in the first sentence: "Homes mostly."[0]
And another piece in the San Jose Mercury News from 2000 reporting on full-time public school teachers in San Jose living in homeless shelters because they couldn't afford the rent there.[0]
Homelessness is, at its heart, a housing affordability issue, not the "moral failings" of someone who can't afford to pay rent/mortgage.
The solution is, of course, more housing. But that would require local rezoning and likely higher density housing.
But there are powerful special interests that aren't interested in that, and are perfectly happy to see their fellow humans suffer. And more's the pity.
[0] I've repeatedly searched for online copies of these pieces, but have been unsuccessful on numerous occasions. That may be due to deficiencies in my search-fu, but there's also a lot of stuff from back then that just isn't online.
Yes, for most homeless the issue is housing affordability, but for the homeless that people complain about, the mentally ill and violent drug addicts, housing affordability is not the problem. If the "annoying" homeless were all forcibly institutionalized no one would care about the "quite" homeless which is why discussion ignores them.
>Yes, for most homeless the issue is housing affordability, but for the homeless that people complain about, the mentally ill and violent drug addicts, housing affordability is not the problem.
I don't know about you and can't speak for anyone else, but I complain the loudest about people who are homeless (especially families with young children) because of housing affordability.
Those with mental health and/or substance abuse issues are (at least in my mind) a separate issue -- one that is related to public health and not housing. And we fail those folks even worse than those who just can't afford housing.
>If the "annoying" homeless were all forcibly institutionalized no one would care about the "quite" homeless which is why discussion ignores them.
Are you really making that argument? If so, why stop with incarceration? We used to sterilize[0] those folks too. They're not really human anyway, since if they were, they wouldn't be homeless or mentally ill right? Because homelessness, addiction and mental illness are moral failings that only reflect on the individual and not on the society in which they live. In fact, why don't we just euthanize them. And why stop with the homeless? Those useless unemployed folks need to go too. And don't forget about the old and infirm. They don't add anything productive, so why should we suffer them to live at all?
Yes, I realize that you're not advocating for euthanizing Grandma, but what you are advocating isn't so far (as history has shown) from that. Or, as the old saw goes, "Don't wish for what you want. You might just get it."
You don't need to make the argument to me. I'm just pointing out why political discourse seems to ignore those "quiet" homeless as you have discovered. It's because there's minimal political will to help them.
Maybe I shouldn't have said nobody, but certainly the media and politicians wouldn't be talking about them.
>You don't need to make the argument to me. I'm just pointing out why political discourse seems to ignore those "quiet" homeless as you have discovered. It's because there's minimal political will to help them.
Thanks for this. I am going to use it in my area of California. There is a lot of people here that believe that people dont want to pay rent and its really about cost inflation due to house flipping and ect.
The Bloomberg list in this article is a joke. It lists 10k families without homes in LA and simultaneously only 381 in Miami -- those 2 numbers cannot be correct, I suspect the Miami number is completely fabricated.
I wonder if cities are getting better at counting the homeless. The big uptick in 2022 probably got them to pay more attention, hire people to canvas various parts of cities to count them. The numbers are definitely distressing. As someone in the Bay Area who has noticed a huge increase, it doesn't seem worse in 2023 than in 2022 (and Oakland is not on the list, which is odd to me).
Under capitalism, cities have no incentive to get better at counting the homeless. In fact, they are more incentivized to increase their rate of death than to calculate their rate of existence.
Modern day homelessness is a luxury problem. People prefer a society with homeless people because it gets them some private benefit, otherwise they would have fixed the problem if it was truly important to them.
Population density + cost of living (primarily influenced by housing costs).
If commodities were free, you still need housing to survive.
If housing is free, you still need commodities to survive.
This is outside of substance abuse issues, which is not often a cause of homelessness. How many people do we all know who are functioning/undiagnosed addicts? It's the cost of living that crushes the lowest income earners. The mentally ill have been left to fend for themselves, for decades.
Unfortunately i don't see it going anywhere but worse, much worse from here. While there are some who try to do something, money is so now concentrated at the top that it will keep sucking in the next set of lowest economic group that still lives in a house of some kind. It's my future, unless i die relatively quickly.
I’ve long felt that California was a harbinger for the rest of the nation and if they wanted they could choose to avoid the policy mistakes (e.g. SFH zoning, nimby-ism, prop 13, etc).
I’m not convinced that they have because the truth is the current status quo materially benefits a coalition of interest groups including current homeowners and property developers.
If we want to tackle this we need a national coordinated strategy. A piece meal approach at the city level is just playing whack a mole.