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I’m going to proclaim that there is not a housing shortage. But the problem is in fact, too many individuals owning too many houses. https://finance.yahoo.com/
by Podgajski 3y ago
I’m going to proclaim that there is not a housing shortage. But the problem is in fact, too many individuals owning too many houses.
https://finance.yahoo.com/news/two-thirds-wealthy-americans-now-150051439.html https://finance.yahoo.com/news/two-thirds-wealthy-americans-...
It’s not that we don’t have enough housing, the issue is that we have people that want too many houses for themselves. It’s just greed. I can’t even count on my hands How many people I know that own more than one house and I am homeless. So I’m sure wealthy people pretty much don’t know anyone that doesn’t own a single house.
- Aurornis 3y agoSecond homes tend to be in vacation locations, not where people are trying to buy their primary residence. People aren't buying two homes in the same city alternate between them while keeping young homeowners out.
- AlexandrB 3y agoYes they are. I know such people. Usually the second/third/fourth homes get rented out as AirBnBs.
- hammock 3y agoAnecdotally, of the many people I know who own second homes, ~80% or more are not rented out when the owner is not there. In at least half of the cases Airbnb is expressed prohibited by their community/municipality
- busterarm 3y ago> Second homes tend to be in vacation locations > AirBnBs It's unfortunate that sometimes vacation destinations also can be places where lots of people want to live but the PP was not wrong.
- hotpotamus 3y agoI stand to inherit from such people. They own five homes, are building a sixth, and have plans for 1-2 more at least. 4 are rentals, 1 is a charity to my Uncle who is mentally unwell and unable to provide his own living. They don't think they have that much money.
- twothreeone 3y agoIt's all relative, but supposedly the top 1% had $11M in the US in 2022 (e.g., via https://www.forbes.com/advisor/investing/financial-advisor/are-you-in-the-top-1-percent https://www.forbes.com/advisor/investing/financial-advisor/a...). That means, 5 averagely priced houses do not put you in the top 1%, however, 1 big mansion in a nice area could.
- kelnos 3y ago$11M is net worth, not all of which needs to be held in residential real estate. I would expect a lot of people in that ballpark of net worth to probably "only" have a few million sunk into real property. The rest would likely be in securities. Also consider that someone with 5 houses may not even have all that much of their net worth in the houses; the could largely be financed.
- Podgajski 3y agoExactly, and what’s the occupancy rate for those Airbnb? 80%, 50% 20%? I knew one family that could make more an Airbnb in a week than they could renting it for two months. We are incentivized by our greed nothing else.
- kelnos 3y agoPerhaps, but so what? Acting morally superior doesn't fix that. You don't change people's habits or desires. You either change the incentives (good luck with that in this particular case), or you... build more housing and make it not a problem that people own multiple homes.
- Podgajski 3y agoShame used to work wonders to get people to change their behavior. It’s still does. That’s the thing about morals, included with it is shame.
- gremlinsinc 3y agoGood luck with counting on people to have shame and a moral compass (esp the wealthy). There's a ton of bigots on X (Twitter) who just love beating their chest showing they're a bigger biggot than the next. It's the generation of F* you, I've got mine, and not all of us are like that, but too many definitely are.
- AlexandrB 3y ago
- ororo7 3y ago[dead]
- ororo7 3y ago[dead]
- Podgajski 3y agoKnowledge != Wisdom
- pillosophy 3y agoPhilosophy != physics The aggregate will bin philosophy for direct confrontation if philosophy manufacturers too many vacuous excuses that over burden biology
- kelseyfrog 3y agoIt's a reasonable thing to predict quanatatively. If second homeownership was not legally possible, how much would it affect home ownership rates? (given all other things equal)
- PierceJoy 3y agoThat is exactly what’s happening in many places. A new condo development went up near me, and over 80% of units were immediately purchased by investors. Not giant corporations, but local individuals buying for mainly AirBnB use.
- tomjakubowski 3y agoUntrue - it often takes the form of: somebody bought a townhome in the city 20 years ago, they use the appreciation to buy a house in the suburbs, they move and keep the city home and rent it out.
- Aurornis 3y ago> Untrue - it often takes the form of, somebody bought a townhome in the city 20 years ago, they use the appreciation to buy a house in the suburbs, they move and keep the city home and rent it out. Renting a home out is still productive. Keeping it empty is not. I was pointing out that people aren't buying two homes in the same city to keep one empty.
- Podgajski 3y agoRenting a home out is not productive. It’s financial capitalism. Is rentier capitalism. There’s no product being made.
- mikeyouse 3y agoEh.. there are housing shortages in almost every one of the locations where people buy second homes too. All of the ski towns, all of the beach towns, tons of Southern warm-climate cities like Sedona and Las Cruces.
- thfuran 3y agoJust about every vacation destination in the world is a place where other people are trying to live. Pretending otherwise is bizarre.
- jeffbee 3y agoI am sorry about your situation. I feel that simply building more houses is easier than trying to get the surplus houses out of the possession of the people who want several houses. As the fine article concluded, we are a rich country and we should act like it by building the appropriate number of houses.
- khrbrt 3y agoBut what's to stop wealthy people from buying the newly built houses as yet another asset to their real estate portfolio to the exclusion of first time homeowners?
- davidw 3y agoIf we keep building housing, it ceases to become an interesting investment. That's what would stop them.
- hotpotamus 3y agoI hope you can keep building land, specifically land nearby a lot of employers and services, in order to build those houses upon.
- davidw 3y agoWe do have the technology to stack dwellings vertically, which is a good way to use scarce land more efficiently. The problem is that it's not legal in most parts of most cities.
- webdood90 3y agoI am a YIMBY and still understand that these forms of housing are nowhere near as valuable as the SFH. Just stating that Americans love their yards/privacy and it's not so simple to fix.
- 3y ago
- slothtrop 3y agoHigh net-worth individuals (as per the article) represent a small fraction of Americans (if you break a $1000000 you're in the top 5%). That they might own a second home makes no meaningful impact on the market, notwithstanding the fact that average people aren't even competing in the same range (multi-million dollar houses). More housing starts means more affordable homes. We've seen what zoning reform has done for cities. We don't build enough. Investors collectively do purchase a good amount of new housing starts (like 18%?) but that's also spurred by interest rates and confidence that demand will grow. It's neither here nor there, build more and houses become more affordable.
- hiddencost 3y agoSmall fraction of people but a huge fraction of wealth. Top 10% having 70% of the wealth, e.g. If we make the (extremely crude) assumption that the capital expended on that 2nd home could be moved elsewhere, we could have built more housing in cities instead of building and maintaining that home. [0]https://www.google.com/amp/s/www.statista.com/chart/amp/19635/wealth-distribution-percentiles-in-the-us/ https://www.google.com/amp/s/www.statista.com/chart/amp/1963...
- slothtrop 3y agoIf you consider what actually deters construction/building rates, there's no reason to believe that capital "moved elsewhere" (appropriated by some abstract entity / people) would translate to more housing. Supposing everyone had more money in their hands (all else remaining equal), that would just be reflected in the market. Houses would increase in cost. Now you're where you started. Housing supply is just too inelastic in most US cities.
- thomasahle 3y agoIf we make the assumption that each mansion housing a millionaire could be rebuild to a multi family home housing 10 people (or families), then those 5% houses become homes for 50% of Americans.
- 3y ago
- busterarm 3y agoIt's not greed. You cannot blame people for taking what's incentivized and in front of them. One resource America has is a lot of space and we had many generations of easy money and government policy that encouraged such behavior.
- kulahan 3y agoThat's... still greed. It's just not a big deal to be greedy, because we all kinda are. We all have negative traits to some degree though.
- JohnFen 3y agoSure, it's certainly greed. That people were (are) incentivized to be greedy doesn't mean it's not greed anymore.
- busterarm 3y agoNot at all. Greed requires selfishness. If you're presented with abundance, everyone is taking a similar share and there isn't counterpressure from your peers (e.g., laws that we vote for), then there is no selfishness and thus no greed. To define greed you need a feedback loop. We're simple dumb animals. We take what's available. If you want to talk about defining arbitrary limits on consumption that are disconnected from circumstances then you're basically out here preaching religion.
- JohnFen 3y agoTaking more than you need when others are lacking is selfishness. Counterpressure doesn't enter into it. If the only thing that stops you from being greedy is that other people or laws pressure you to not be, then you're still a greedy person. Our values are expressed by what we do in the absence of such pressure.
- busterarm 3y agoIn the scenario I just described no-one is lacking. When boomers bought all of these second/vacation homes cheaply in the 80s it wasn't in places with huge demand from underhoused people. These arguments need a little more consideration of facts rather than appeals to emotion.
- AlexandrB 3y agoI think you're right on, but this position is deeply unpopular with the people that own those additional homes. It should also be said that, anecdotally, the same people that own a bunch of homes as "investment properties" are also the most likely to be NIMBYs because their wealth is tied up in real estate property values.
- Racing0461 3y ago> individuals It's not the individuals owning the houses. It's corporations.
- PierceJoy 3y agoIt’s both. Tens of thousands of units are owned by individuals looking to cash in on Airbnb in any given city.
- robertlagrant 3y ago> It’s not that we don’t have enough housing How do you know?
- Podgajski 3y agoI would not be homeless if my sister let me live in her second house. That’s how I know.
- robertlagrant 3y agoI meant more: how do you know we're keeping up with building vs population increase, but so narrowly that some people having second homes that they don't rent out are making all the difference?
- doctorpangloss 3y agoThere is truth to this. 3/3 interns of mine whose parents live in the Bay Area have # of homes in the neighborhood > # of adults occupying them. > It’s just greed. These people whom I know personally, they are not greedy. They're not even selfish. They're not the bad guys. Why don't the rich rent their vacant homes to the poor? At least we can answer this question objectively: if you're poor, you have less to spend, you can't fix your stuff, you will have more occupants, you will pay late more frequently, you will not be able to pay rent increases, you will not be able to adapt to extraordinary events like fires and layoffs, you have higher legal risks like tenant lawsuits, you will... The crazy thing is, in every sector, sellers are less interested in poor buyers.
- Podgajski 3y agoIf you have more than you need while others are suffering it’s greed. You can’t change the definition of greed just because it makes you uncomfortable. What if we made it a law that no one could own a second home before everyone owned a first home?
- metadat 3y agoNot to nitpick, but the common definition of greed is different: > Greed is an insatiable desire for material gain (be it food, money, land, or animate/inanimate possessions) or social value, such as status, or power. Keyword: Insatiable. Lots of the people in the Bay Area are simply looking for a secure future for their children. Why is this unreasonable? Edit: Thanks Podgajski, I like your definition below better.
- Podgajski 3y agoI found a less extreme definition: intense and selfish desire for something, especially wealth, power, or food.
- featuregag 3y agoJust about every single Westerner has more than they need in some way, and there’s plenty of folks suffering in the world. Your definition uselessly labels everyone greedy and also does nothing to help those that are suffering. It’s not the job of individuals to fix our global economic system by changing their individual (legal) behavior. This is a regulatory problem.
- kelnos 3y agoSo... we have a housing shortage. I try (and sometimes fail, but I try) not to judge people for what they choose to spend their money on. Wealth inequality is a thing, to be sure, and we can argue that perhaps there just should not be that many people who can afford 2 (or 3 or 4) homes. But that aside... If people want to buy more houses, that's fine. If there are people who can't find an affordable home, that means we have a shortage, and building more will tend to alleviate that problem.