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[MorleyDev]

There's a few options I can think of:

Build affordable houses through setting a regulated maximum sales price, subsidizing construction to ensure quality, and prohibiting buy-to-rent or multiple ownership, and constraining reselling prices on those builds.

Introduce/expand 'council housing' schemes for low income earners (I'm British so not sure what USA term equivalent would be for welfare-backed housing).

Eat the landlords.

[McTraveller]

Sounds good except for regulated maximum sales price.  That never works well...I'd do something a bit softer like you can sell for whatever you want, but make the tax on gain much more progressive.  So instead of tiers, do something like the tax is such that profit after tax is capped at something like a multiple of inflation. So if you sell 1 year later and inflation was 9%, maybe you start getting taxed heavily at sale price more than 9% such that max return is 15% or something.  I'd pick a formula like... allowed profit after tax scales like 1-e^(-saleprice/(interest_factor_based_on_years_held*buyprice)).

I do like the idea of penalizing buy-to-rent, etc.  Devil's going to be in the details though; some folks are what I would call "reluctant landlords." I'm in that category because my wife owned a condo that was terribly underwater in 2012, so we have been renting it out and haven't seen a reasonable opportunity to sell it yet.

Maybe you do the same thing - you set taxes such that they are based on gain relative to inflation, not some numeric value.

[Dostoevsky]

Now minimum wage - I think that has not fared as well.  Let me check... 8 years ago federal minimum wage was $7.25.  It's now $15, so just over doubling (!) in the past 8 years, which is more than my local housing cost increases! I'm surprised by this actually, I didn't realize that was the case.

Hold on a sec, where did you get that federal minimum wage is $15? It's still $7.25, as it has been since 2009. Some states have gone higher, and Biden did some EO stuff to try and encourage higher pay in niche circumstances, but it's still $7.25 when all is said and done. (And then there's tipped wage, which is even lower.)

[MorleyDev]

My thought behind the regulated sales price on new builds targetted at 'affordable builds' (not all house sales) is that the current investment/price/profit balance for new builds is such that, in my experience, new builds are not what a reasonable person would describe as 'affordable'. Instead, they are often hundreds of thousands more expensive than the housing they are built near (looking at the new builds down the road from me and sighing). So there needs to be added pressure on developers to not build nothing but detached three story 6 bedroom houses, call it 'affordable housing', then sell it to buy-to-leters who split it into three flats and rent those out.

Contracting them to explicitly build housing within a set price range would mean that they have to publically agree to and meet a definition of 'affordable'.

But then there's still a need to shut down loopholes like stopping those houses being simply purchased and immediately resold at a higher price, so some extra constraints on the purchase/sale snowballs from there.

Hold on a sec, where did you get that federal minimum wage is $15? It's still $7.25, as it has been since 2009. Some states have gone higher, and Biden did some EO stuff to try and encourage higher pay in niche circumstances, but it's still $7.25 when all is said and done. (And then there's tipped wage, which is even lower.)

I should have double checked his claim! Not being American don't know your mw off top of my head.

Redo:
2000 minimum wage: $7.15 | 2022 minimum wage: $7.25 | Growth: 1.41x
2000 average wage: $42,148 | 2022 average wage: $53,480 | Growth: 1.27x
2000 median house price in the USA: $119,600 | 2022 median house price in the USA: $428,700 | Growth: 3.58x
2000 price of Gallon of Whole Milk: $2.78 | 2022 gallon of whole milk: $4.40 | Growth: 1.58x

[nenjin]

This conversation has a decidedly negative tone.

What positive actions can be made here?  Does it have to rely on government action ("external force") or is there any opportunity for community-building grass-roots action?  Complaining never helped solve a situation, unless it's complaining to people in power so much they take action just to get the complaints to stop.

I'm pretty sure nobody here is a policy maker, so complaining here is... not fruitful once we get past the venting stage.

Nobody here is a policy maker so "plans" are about as much use as complaining. Sorry, I didn't realize there's a threshold for how much we're allowed to vent. Did I miss a forum rule somewhere?

Here's my plan: actually regulate the housing market instead of letting it continue to be a free-for-all.

[McTraveller]

Ok weird, my brain must've been more disengaged than I thought last night when I saw something about minimum wage being $15 effective Jan 2022... which I should've realized couldn't be right since places in my town have non-tipped wages posted for less than that.

I'd actually be interested in looking at housing breakdowns by percentile; I don't think comparing median house prices to minimum wage is meaningful.  A more meaningful breakdown would be something like compare each percentile of housing - so how does the bottom 10% income compare to bottom 10% housing, how does next 20% compare, etc.

I think there are systematic adverse incentives though. Consider "the government" contracts a builder to build some houses at a given price. But what do you do when people start bidding more than that to make a purchase?  If you disallow overbidding, how do you decide which of 30 offers gets selected for a given property?  If you say "first-come, first-serve", how do you prevent swooping in by people who are more advantaged by having transportation or online access to get in the queue first?  This at least was part of the thought I had related to taxing gains, because that should discourage people just buying stuff as an asset with no intent to live in a property.

@nenjin I'm all for "plans" but simply saying "regulate the market" is too vague for me. What does that mean, specifically?  What are the goals, and can you show the regulation would actually satisfy that goal without having even worse unintended consequences?

[nenjin]

Depends on whose consequences you care about.

Regulation means conglomerates and banks can't control the supply as much and therefore make less money.

Setting caps on the yearly growth of housing prices, taxing unutilized properties so they're are incentivized to sell. There are many ways the government could exercise some basic control over the housing market instead of just "letting the housing market figure it out."

[MorleyDev]

I think there are systematic adverse incentives though. Consider "the government" contracts a builder to build some houses at a given price. But what do you do when people start bidding more than that to make a purchase?  If you disallow overbidding, how do you decide which of 30 offers gets selected for a given property?

Those with the greatest need get greatest priority. If it's regulated and integrated with a welfare system, you can have welfare people appointed to make the judgement call as to who is highest need based on criteria. So things like single parents, people from abusive householes etc, get given higher priority than someone whose parents can support them. Same as how other needs-based queues work.

[McTraveller]

I like the idea of heavily taxing un-utilized units.  Have to figure out how to make it work without causing undue burden relative to natural vacancy rates.

I don't like caps on prices, because what happens if you get things like pandemics or wars that really *do* affect supply, like what if cost of materials goes up by more than that amount?  Then you'd need all kind of "special measures" to make exceptions, and that's just wasteful busywork.

@MorleyDev thanks for that insight into needs-based queues.  I have a big blind spot there.  I suppose part of the issue there is the idea of waiting in line for a house, letting someone else say it's now your turn, is very anathema to US culture.

[Frumple]

I mean, it may be anathema but it's also inflicted, sometimes violently, on our poorest demographics. The wait lists and related hoop jumping horseshit for assisted housing can take sometimes take over a fucking decade to navigate (and you're probably going to be waiting years at a minimum regardless, which helps exactly as much as you'd think for someone facing immediate eviction or somethin'), and far as I'm aware this goddamned country still has a moratorium on just straight up government constructed housing.

Part of the reason you don't see as much "just bloody build the damn things" is because some pile of gigantic assholes put a legislative block on it some decades ago, so the supply of genuinely public housing has somewhere between held steady and outright shrunk since, even as demand has steadily increased.

It's just one facet of the colossal block of shit that is the US housing situation, especially for the poor.

[anewaname]

One vector of the housing problem is the hidden "taxes" of local politics...

So, your state is going to receive federal funding for housing... Who chooses who receives the project work? Who chooses what businesses will be allowed nearby? Who chooses the access roadways available for the housing?

By the time the local politicians are done in the backrooms, it may seem like they are not profiting greatly, but they have chosen who will get paid for the project work and they have chosen who will have economic control over those being housed (by controlling their access to food sources and roadways). This is how a system of economic slavery is constructed.

[Flying Dice]

4) Due to supply shortages, new building is down.

This is not the cause of shortages of new-construction single-family starter homes, at least where I live.

The reason there isn't much new construction of single-family homes on the market is because almost all of the new construction is of apartment blocks, townhouse blocks, condos, &c. which all fall into some category of occupation more predatory than direct ownership. It's exacerbated by the way most existing construction homes of the same type are being bought massively over market value by rich people and property holding companies to convert into rentals, which not only blocks sale to owner-occupants but also semi-permanently reduces the pool of available houses.

I gave up on finding a house for the time being because of my experiences along those lines. I'd go in offering 10-15% over the asking price, 20% cash, and the sale would close almost instantly because some company made an all-cash offer for 50%+ the asking price (which in most cases was already inflated up to 2-3x the real value prior to the bubble). Give it a few weeks and the house would show up... in rental listings, for $1200-1500/mo in an area where average home rentals were <$750/mo before the bubble.

At this point I have a hard time convincing myself it's not a deliberate attack on the middle class by forcing current and future generations to settle for predatory situations like condos, HOA townhouses, lifelong rental, &c.

[EuchreJack]

...I moved back home with my mother, so fuck the housing market. 

I'd basically just say duck this housing market as much as possible. Like half those "Corporations" are just semi-rich individuals. And they are not all going to be successful with these strategies, since they're mistiming the market.
So there will be supply once they start folding.

[McTraveller]

I'd go in offering 10-15% over the asking price

Unless you are desperate for a house, this is part of the problem.  Why, as a buyer, would you ever overbid for something?  Note this isn't directed at Flying Dice in particular - but in aggregate. Why are people over-bidding for these items?  I think it's because there is speculation, not because there is desperate need and there really is no other choice. Or some kind of strange cultural affectation to "oh we've lived here for X years already, time for a change!"

While the cyclic nature of housing markets is true - I would rather not have periods of boom and bust, but a nice sustained growth.  Sadly such stability is not rewarded...

[EuchreJack]

Under the current housing market, going in over asking price is just where the market is at.
We're at the high end of the curve, but that bubble is going to burst eventually.