
Washington Can’t Solve a Housing Crisis That Doesn’t Exist - curtis
https://www.motherjones.com/kevin-drum/2019/07/washington-cant-solve-a-housing-crisis-that-doesnt-exist/
======
pessimizer
Why in the world would you only show rent as a percentage of median household
income from 2006, the peak of the housing bubble? That's actually the crisis;
everybody's rent went up during a financial bubble, the bubble popped,
everybody's rent stayed the same.

And why would you measure median rents against median household incomes anyway
instead of against median individual incomes? The median household can grow
and shrink depending on housing cost pressure. Maybe the median household is
1.8 median incomes now rather than 1.2, but this statistic wouldn't pick that
up.

These statistics seem carefully crafted to paint a particular picture, not
selected to paint the most complete picture. And then I notice the author and
the venue, and wonder why I wasted time on this comment.

~~~
ianai
At lest he’s not talking about child actors this time.

------
lifeisstillgood
In the UK we too have actually more housing stock than households. This amazed
me - but it is the age old problem of aggregating national statistics to look
at regional problems.

The problem is the houses are not in places people want to live anymore. The
jobs aren't there. The communities aren't there.

So yes there is a housing crisis where the jobs are _or_ there is a lack of
jobs and community crisis where the houses are.

Once way or another it's a problem

~~~
MrAlex94
I’d say the UK (especially London) has a housing pricing crisis more than
anything. And I hate how development in London is fracturing communities. If
anyone is onterested:

You can concrete over the entire length and breadth of the UK and house prices
would still rise: ([http://uk.businessinsider.com/societe-generales-albert-
edwar...](http://uk.businessinsider.com/societe-generales-albert-edwards-on-
the-uk-housing-market-2016-4))

Why building more homes will not solve Britain’s housing crisis:
([https://www.theguardian.com/commentisfree/2018/jan/27/buildi...](https://www.theguardian.com/commentisfree/2018/jan/27/building-
homes-britain-housing-crisis))

Why solving the UK housing crisis requires more than new
homes:([https://www.ft.com/content/f3143c7e-c56b-11e7-a1d2-6786f39ef...](https://www.ft.com/content/f3143c7e-c56b-11e7-a1d2-6786f39ef675))

There is no housing crisis. It would be easier if there
were:([https://www.spectator.co.uk/2018/02/there-is-no-housing-
cris...](https://www.spectator.co.uk/2018/02/there-is-no-housing-crisis-it-
would-be-easier-if-there-were))

~~~
lifeisstillgood
So I read those (non firewalled) parts that I could and they seem to have
different underlying causes - the problem is rampant speculation using dirty
foreign money, the problem is loose monetary policy making borrowing too
cheap. I think "too much demand" has poor explanatory power and "reduce demand
by adding speculation tax for rich people" strikes me as really really hard to
implement without poor consequences.

The recent Econtalk podcast suggests poor regulation is creating unaffordable
supply (ie in manhattan the size of dwellings is fixed (as an anti-slum
landlord measure) but it means luxury (is big) apartments are the only
profitable ones to build - whereas many people would trade square footage for
being near central park.

I find that more likely to be a rich seam to mine - the regulation around UK
house building is obtuse and abused for years.

I mean even on road parking plays a part - I can rent square footage on the
road outside a Mayfair property for orders of magnitude cheaper than square
footage in the property- that has knock on effects we don't really consider. A
holistic view on the drivers of price would be the best first step.

I am not sure i have seen it yet

~~~
lifeisstillgood
So Ian Mulheirn (via spectator link) seems well respected (
[https://medium.com/@ian.mulheirn/two-housing-
crisis-87a843a9...](https://medium.com/@ian.mulheirn/two-housing-
crisis-87a843a9d09b))

Ok - you have to read to the end and then restart to grok it but I kind of get
it now - well worth a read and does encompass most of my obvious objections -
basically two crises - housing is less affordable on the demand side because
inequality, and housing is less affordable on the supply side because
financial investor reasons

------
tlb
This shows median rents and income moving roughly together, and claims that
therefore rents haven't gotten more expensive. But people choose places to
live that are affordable for them, say around 40% of income. When rents rise,
people move to smaller and crappier places they can afford.

So rents could rise 10x per square foot, and when the dust settled people
would end up paying about 40% of their income for a place 1/10th the size.

The rent crisis manifests in people living in small, crappy places far from
their work, not in any of the statistics presented here.

~~~
1123581321
That assumes that houses and apartments get worse the further away/cheaper
they get from dense city centers. That’s evidently not true—just drive around
suburbs/spoke cities for a couple hours!

~~~
nerdponx
Anecdotally:

1\. Moving out of the city center under these conditions doesn't mean moving
out of the city, it means moving into a low-rise apartment among urban sprawl
that's underserved by transit and good quality food sources.

2\. A long commute is a significant quality of life decrease.

~~~
1123581321
This should be a reply to the post I replied to, which said, “people living in
small, crappy places far from their work.”

~~~
nerdponx
No, it's evidence contrary to your implication that being forced to move out
of a city center isn't a bad thing.

~~~
1123581321
I didn’t say it was or wasn’t. I only commented on the assumption that it had
a link to the size and quality of housing stock relative to the price.

------
jedharris
The current top three comments all seem to be generalizing from personal
experience, and the experience seems to come from high-rent areas. (Given the
HN demographic, probably the Bay Area.)

This is not a constructive response to an article based on aggregate national
statistics. If the article seems wrong to you, at least ask about statistics
that might refute it. For bonus points, find those statistics yourself.

Personally I live in a very high rent area (Berkeley), all the houses anywhere
near me cost more than $1 Million, but I believe the statistics. To quickly
check you can look at rents and house prices in Fresno CA, Mobile AL, Duluth
MI, St. Louis MO, Austin TX, etc. etc. The internet has a wonderful set of
resources to help us get out of our bubble.

If you want to argue that rents in the Bay Area should be more like those in
St Louis, fine! That is a policy question we can work on, but it will be a
long slog to get where you want to go.

~~~
threezero
Well, the author disingenuously picked starting points for his charts that
just happened to coincide with major economic events like 9/11 and the housing
bubble in order to advance his flawed argument. When he picks charts with
starting points of 1960, 2001, and 2006, he does so to fit his argument.

------
apo
The real crisis is that policymakers in Washington are hellbent on pursuing
two diametrically opposite housing/real estate goals:

1\. House prices will increase to generate appreciation (through 5:1 or more
leverage) that households can tap into to finance consumption. Mortgage rates
will be kept as low as possible through programs like QEX and abandonment of
QT. Tax code will be kept in a state that allows at least the more extravagant
spenders to claim a mortgage deduction on income taxes, stimulating home
buying.

2\. House prices will be kept low so that new families can afford to buy a
house. Zoning, highway construction subsidies, and suburbanization tax
giveaways will keep the dream of a standalone house alive as long as possible,
unsustainable economics be damned.

It should be obvious, but house prices that routinely outstrip consumer
inflation are incompatible with affordability.

~~~
DoreenMichele
_Can 't have it both ways._

We can't have it both ways because we've zoned/policied "starter homes" out of
existence. That part can be reversed. It doesn't have to remain true.

------
rayiner
The New York Times reveals its myopia. One of the biggest demographic trends
in the country is migration away from high cost states to low cost states:
[https://amp.businessinsider.com/images/5a57cab528eecc1d008b4...](https://amp.businessinsider.com/images/5a57cab528eecc1d008b4616-750-563.png).
Out of the fastest growing metro areas in the country, most are places where
rents remain very reasonable:
[https://www.forbes.com/sites/samanthasharf/2018/02/28/full-l...](https://www.forbes.com/sites/samanthasharf/2018/02/28/full-
list-americas-fastest-growing-cities-2018).

If you rank the metro areas by population, the median American lives in
Richmond, VA or Louisville, KY. These places don’t have a housing crisis. High
rents are a self-inflicted problem affecting a handful of metro areas with a
minority of the population.

~~~
maxsilver
> the median American lives in Richmond, VA or Louisville, KY. These places
> don’t have a housing crisis.

Why do you say that? Most small-to-medium US cities have a major housing
crisis too, these places just have _wildly different causes_ for their housing
crisis than say, San Francisco, and therefore have wildly different metrics by
which to evaluate the state of that crisis.

> High rents are a self-inflicted problem affecting a handful of metro areas
> with a minority of the population.

No, this is not true. High rents are affecting almost every metro in the US.
You just won't see them if you "average" figures, because these metros don't
earn average dollars. You can't average two crises into nothing.

(If your left lung is collapsed, and your right lung is overinflated to the
point of bursting, you have two major crises on your hands. You can't say
"well, everything is fine because _on average_ my lungs have a healthy
volume", that's accurate math, but not accurate to real life)

\---

A midwest average rental price of say $1500/month will seem cheap to folks in
Seattle -- until they learn that incomes are over 50% lower here, so to anyone
working in-market, a $1500/month rent price here is equally as
expensive/painful as a $3000/month rental would be in Seattle. That's still a
crisis, equal in pain/severity to a "superstar" city, but it won't show up in
any "US average" figures, and can easily lead people to write ridiculously
uninformed hot-takes.

~~~
rayiner
The article compares median incomes to median rents. If the median income is
tracking the median rent, it’s mathematically impossible for median rent to be
outpacing median income in a majority of places.

Your estimation of the rent and income is off. The median household income in
Louisville is $57,000. The Bay Area is $97,000, only 50% higher. But the
median 1BR in Louisville is $750, while the Bay Area is close to $3,000, four
times as much. Four times higher rent, only 50% higher income. Housing is even
worse. The median house price in Louisville is $165,000. (That’ll buy you a
2,000 square feet house.) In the Bay Area it’s $800,000, almost five times
higher.

------
yonran
According to this Vox interview with Jenny Schuetz
([https://www.vox.com/2019/5/17/18628267/jenny-schuetz-
weeds-i...](https://www.vox.com/2019/5/17/18628267/jenny-schuetz-weeds-
interview)), there are two housing crises: the superstar city crisis of
million dollar homes due to exclusionary zoning, and rising rents for low-
income households in the rest of the country. According to Kevin Erdmann, the
crisis in the rest of the country was caused by federal policies that
restricted lending to low-income households, forcing them to rent for more
than they would have paid in mortgage ([https://www.mercatus.org/tags/housing-
affordability-series](https://www.mercatus.org/tags/housing-affordability-
series) [https://www.amazon.com/Shut-Out-Shortage-Recession-
Universit...](https://www.amazon.com/Shut-Out-Shortage-Recession-
University/dp/1538122146)).

When Kevin Drum looks at national medians, he entirely misses both of these
problems.

------
AdrianB1
For everything prices per unit are decreasing in time, from cars to computers,
while housing costs the same percentage of income and that is considered a
good thing? Not in my world, there is no productivity increase reflected in
cost reductions? Are houses increasing the cost due to increases in features?

For this year or this century, housing prices are economically absurd, unless
they are seen as a "pay as much as you can afford" type of product and this
indicates a supplier market that can be fixed by drastically increasing
supply.

In a country that deregulated as USA, housing regulations are among the most
strict in the world. Is it a surprise costs are very high?

~~~
zeroonetwothree
Logically prices for everything cannot fall. If one price goes down that means
another has to go up.

~~~
neffy
Or supply increases - and then as supply goes to infinity prices go to zero.

------
moron4hire
I live in Northern Virginia, where 4 of the top 5 richest counties in the US
are located (with the 5th being just across DC into Maryland).

The problem is not so much that my income doesn't cover my rent. The problem
is that my income doesn't cover the rent for the people who fulfill the
services I need to live here.

Just as an example, we pay almost as much as our rent for daycare for our two
small children. And our daycare providers have to commute from quite a
distance to be able to afford anywhere to live. Or they still live with large,
extended families. We really like our daycare, and the folk who work there are
wonderful. I would personally feel better paying them more, but that's just
where we are, the market we are in has settled on this being the "top end" of
the childcare market.

We're not doing gangbusters, but we're also not doing bad. A few of our
friends are doing better than us and they have private nannies for their kids.
We can't do that. Most of our friends aren't doing as well as us and I almost
want to quit my job just to get their kids out of the places they can afford.
There is a big gap between "the best" daycare center and "the middle". We were
briefly in "one of the better" daycares while we were wait-listed for our
first choice and it was hell.

I don't need a place more affordable for me to live. I need a place more
affordable for my mechanic to live. For my grocer and my barber. I want to
know that the guy teaching my kid to swim is not about to fall asleep from
working three jobs.

Beyond that, I want to know that the people fixing my roads can live here, too
(hell, at this point, I'd like just anyone to fix the roads. I don't
understand how we can be so "rich" on paper and yet I need to take my car in
every 6 months for a pothole-related repair). I want the folks taking care of
the homeless to not be a missed paycheck away from being on the streets
themselves. I want my city counsel positions to be accessible to anyone other
than folks with their own private law practices.

Median rent vs. median income isn't enough. It has to be accessible for
everyone who needs to work in the local economy. And that's the problem. We
really only have rents that fit the paychecks of the richest people here.
There aren't many options for affordable housing.

------
smitty1e
"The first lesson of economics is scarcity: there is never enough of anything
to fully satisfy all those who want it. The first lesson of politics is to
disregard the first lesson of economics."

Thomas Sowell

~~~
pizzazzaro
I see you are a religous acolyte of Friedman. May we be free of your ilk's
grasp soon.

~~~
dang
We've banned this account for using HN for ideological flamewar and ignoring
our request to stop.

If you don't want to be banned, you're welcome to email hn@ycombinator.com and
give us reason to believe that you'll follow the rules in the future.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

------
14
This article really rubbed me the wrong way. And I don't have statistics to
back up my opinion only personal experience. First it asks the question is
rent rising way faster then income then states no it is only rising slightly
faster then income. Okay but lets not forget that millions of Americans are
living check to check and any loss of income effects their ability to live. So
even a slight increase is cause for concern. Next it talks about rental
vacancy. I really don't know how that works and if there are a bunch of empty
houses around but I do know around here people are begging on Facebook for
rentals. If your budget is in the thousands no problem you can rent something
tomorrow but that is not the people we are talking about here. We are talking
about the poor and there is definitely a problem finding housing. I am
employed with a decent job and still had to move back in with my folks. A
place that would house me and my kids would set me back about 1400$. I make a
couple thousand a month if I am lucky so how can I afford to move out? I could
work more hours and see my kids less I guess. I could sacrifice some of the
food I personally eat. Perhaps not take the kids for an outing ever would save
me the money for housing. Or if I don't need any medicine then I could afford
housing. I certainly do a lot of home cooking that helps me keep the little
money I have but still not enough for housing.

Where do the sacrifices end that allows the average person to live comfortably
in a home? In my opinion there is a housing crisis.

------
8bitsrule
Lies, damned lies, and statistics. What does 'average' mean, in a country
where the 4 richest billionaires have as much money as the poorest 160
million?

"The distribution of U.S. household income has become more unequal since
around 1980, with the income share received by the top 1% trending upward from
around 10% or less over the 1953–1981 period to over 20% by 2007.... While
median household income has a tendency to increase up to four persons per
household, it declines for households beyond four persons."
[https://en.wikipedia.org/wiki/Household_income_in_the_United...](https://en.wikipedia.org/wiki/Household_income_in_the_United_States)

Clearly rentals have -risen sharply- in the past few years. In -some- places,
the number of people who can't afford -any- available rental unit has
increased rapidly.

------
DoreenMichele
_Nor has the nation “lost” 4 million low-rent apartments._

Since something like the 1970s, we've outright eliminated about a million SROs
and largely zoned out of existence the creation of new _Missing Middle_
housing. Historically, single young people with starter salaries routinely
lived in SROs or boarding houses. Now, we de facto expect most young people to
rent a place designed for a nuclear family and get roommates.

New homes have more than doubled in size since the 1950s and the news is
constantly filled with articles about the homeless problem.

[https://en.m.wikipedia.org/wiki/Single_room_occupancy](https://en.m.wikipedia.org/wiki/Single_room_occupancy)

[https://missingmiddlehousing.com](https://missingmiddlehousing.com)

[https://en.m.wikipedia.org/wiki/Missing_Middle_Housing](https://en.m.wikipedia.org/wiki/Missing_Middle_Housing)

~~~
masonic

      Historically, single young people with starter salaries *routinely* lived in SROs
    

That's not true, and even your own listed source doesn't say that.

~~~
DoreenMichele
The SRO link was provided for this quote:

 _Between 1955 and 2013, almost one million SRO units were eliminated in the
US due to regulation, conversion or demolition._

Military barracks and college dorms are not hugely different from SROs. Most
people who join the military do so at age 18, the same age most people start
college.

I don't readily have some percentage for how many youth were housed in SROs,
but both college dorms and military barracks strike me as a lingering form of
that legacy from a time where Americans generally figured a single adult
didn't really need a full apartment, they just needed a room to sleep in.

I'm still trying to to put together stats, but it's a problem space I've
studied for years. In a nutshell, our current housing policies and resulting
housing stock were born of policies created post-WW2 for the generation that
produced the Baby Boomers.

Thus, it is all posited on a nuclear family model with a breadwinner father,
homemaker mother and 2.5 kids. Meanwhile, our demographic has diversified away
from the nuclear family. People are getting married later, having children
later, having fewer children, etc.

There is a huge mismatch between our housing stock and our housing needs.

~~~
masonic
Nothing there says "single _young_ people".

~~~
DoreenMichele
I don't have any idea what point you are trying to make here.

I'm not suggesting that SROs were solely for single young people. I'm only
trying to paint a general picture of the kind of housing that once was
commonly available and is no longer which is well-suited to a demographic we
have more of now.

------
jseliger
This piece verges on daft or disingenuous. The major problems are major cities
(SF, NYC, Seattle, LA, and so on) that have artificially restricted housing
since the '70s ([https://jakeseliger.com/2015/12/27/why-did-cities-freeze-
in-...](https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-
the-1970s/)) and yet we've also seen increasing economic returns since then to
those superstar cluster cities ( _The Triumph of the City_ is a good and
readable description:
[https://www.nytimes.com/2011/02/13/books/review/Silver-t.htm...](https://www.nytimes.com/2011/02/13/books/review/Silver-t.html)).

So yeah, there's no housing crisis in Eastern Oregon, but there are also no
jobs and none of the economic clustering and spillover effects that one gets
from superstar cities. So you can try to live in cities and first-tier suburbs
where the jobs are, but where exclusionary zoning has made housing ungodly
expensive ([https://www.vox.com/cards/affordable-housing-
explained/exclu...](https://www.vox.com/cards/affordable-housing-
explained/exclusionary-zoning-what-is-it-and-why-does-it-matter)), or you can
live in the boonies where there are no jobs but (relatively) cheap housing.

Those of you who are going to reply about remote work: remote work is lovely,
but it doesn't generate knowledge spillovers and has a bunch of other problems
as well. See again the Glaeser book. It is not a practical, mass solution,
although I'm glad it works well for you.

Part of this problem can and should be solved at the state level, but DC
should also tell states and municipalities that, if they don't end
exclusionary zoning, they're also not getting federal highway funding and
other federal transit funding. That's the stick DC has.

~~~
jedharris
The article cites well grounded aggregate statistics. Eastern Oregon doesn't
affect the statistics because not enough people live there. So Eastern Oregon
and all the other very low population places are a red herring. Please argue
with the points presented not some other issue entirely.

Drum specifically calls out the high cost cities. But the aggregate statistics
show that these are exceptions to the general pattern. We should not argue
from our personal experience when the statistics show it is not typical.

This is policy relevant. If the Feds are going to intervene, it is very
important that they intervene in the actual problem, not some misunderstood
version of the problem where intervention would be at best a waste of
resources and political capital, and at worst further proof that "government
intervention is always bad."

A question with potentially constructive answers: "What federal interventions
would potentially be helpful given that the housing crisis is mainly in a few
high-rent cities?"

~~~
helen___keller
>The article cites well grounded aggregate statistics.

That's the problem, it's in aggregate when the problem is very localized.

The nation is producing a ton of high paying jobs but only in places where
rent and property values are skyrocketing, which is in a tiny sliver of
American cities. That's the problem and why aggregate statistics will never
capture the problem.

My wife works in biotech. I work in tech. A year back we asked ourselves if we
wanted to move to the mid sized American city where my parents live. Homes are
very affordable there and if we had children, we could raise them near my
extended family.

One factor in choosing not to move is that there's only one employer in the
entire metropolitan region that hires in her specialty of biotech. I would
have to take a pay cut or work remotely, which I'm okay with, but we might be
totally ending her career altogether which we are less okay with.

So instead we're now renting at 3500 a month (3 bedrooms) and saving up for
the enormous downpay we will need in greater Boston

>A question with potentially constructive answers: "What federal interventions
would potentially be helpful given that the housing crisis is mainly in a few
high-rent cities?"

Parent already offers an answer, tell states to end exclusionary zoning or
lose federal transit/highway funding. Exclusionary zoning is born out of a
dark period of American policymaking (redlining) so personally I'm on board

~~~
ZeroGravitas
Something this reply chain suggested to my brain:

If the hyper concentration is part of the problem, then won't forcing SF or
other popular hubs to build high rise just make them even more popular and
further increase the gravitational pull that will send another wave of
migrants from the 2nd tier cities and we just repeat the same cycle with
higher buildings?

Isnt this the same as making streets wider because of traffic? Now even more
people decide to drive.

~~~
coryrc
That's what Tokyo is; increasing in population despite Japan as a whole
falling. People in cities have smaller greenhouse gas emissions than people
living rural or suburbs; they don't need cars because things are close and
mass transit is affordable and convenient because there are enough people
sharing it. The US can't get there until they enforce standards of conduct in
the public sphere and stop exclusionary zoning.

------
closeparen
Of course there is a good ratio of housing units to households nationally.
Total population isn't growing that much, and homes aren't being destroyed en
masse... how could it be otherwise?

The point is that we're undersupplied in growing economies; of course we're
also oversupplied in shrinking ones.

------
a3n
The guy talks about millionaire country, dismissing these areas.

It takes a lot of poor people to support a millionaire's lifestyle and
business.

~~~
mark-r
The problem is those poor people can't live anywhere near the millionaires.

There was an article linked here on HN recently detailing the problem of
running a restaurant in SF. They couldn't pay their employees enough to live
within a reasonable commuting distance.

~~~
a3n
Exactly. So the more you are a throw-away person in a throw-away job, the more
there is a housing crisis.

If you're not one of those people, all is well.

------
ninth_ant
The housing crises that exists in many cities is the direct result of NIMBY
bylaws and regulations. So yes, state and federal governments can mitigate
these.

