Income and Housing Costs

[Ron Scott]

This chart tells a sad story.

https://www.visualcapitalist.com/median-house-prices-vs-income-us/

[twinstudy]

It seems pretty obvious to me that house prices as a function of the median income will keep going up. For one thing, houses track *average* income, not median; medians are only applicable for things where there is a 1:1 correspondence, and houses do not fit that; one family can buy many houses while another family misses out altogether. So obviously 'median' is not the right measure of central tendency. Mean is - and you would take the mean of the proportion of families (<100%) that can actually afford to buy in the first place.

Separately from the above, assortative mating and women's increased participation in the workforce means that income disparity between households is now greater. 50 years ago it was only the man who was earning. Now in most high-income households both partners are earning. That gives 2x the scope for income disparity, noting that like income tends to marry like income.

Finally, globalisation has meant that income disparity between skilled and unskilled jobs has increased.

The surprise is not so much that the house price to income ratio has increased, but that people cannot at once see the obvious reasons for it.

[GilesMM]

This chart tells a sad story.

https://www.visualcapitalist.com/median-house-prices-vs-income-us/

What story?   Who is buying and pushing up prices if incomes do not support them?  Outsiders?  Investors?


Hot real estate markets have proven resilient in the Coastal areas of the US and other parts of the world for decades.  Somehow people figure out how to buy.  In western Australia, the median home price is 10x median hh income and yet everyone is buying a house it seems.

[Laura33]

This is what happens when you focus on only one side of the story.  Housing prices matter less than cash-in-hand requirements.

In 1984, you needed a 20% downpayment.  Now 5% is fairly normal, and you can even get a no-downpayment loan.  There are also a lot of first-time and low-income homeowner assistance programs that did not exist 40 years ago.  All of that allows more people to get into the housing game.

In 1984, interest rates were over 13%.  Not that long ago, they were 3%.  A $100K loan costs c.$400/mo. at 3% and $1100/mo. at 13%.

In 1984, your options were limited to 30-year and 15-year fixed-rate loans.  Now you can get ARMs that can make initial payments even lower.

Not to mention that national averages are going to be significantly skewed by VHCOL areas.  There's a big difference in affordability between NYC and Topeka.

Yes, there are affordability issues.  But there always are in various areas of the country and over specific periods of time.  Right now, interest rates have spiked much faster than housing prices have adjusted.  That has resulted in a period when housing seems particularly unaffordable.  But it would be a mistake to conclude that the way things feel right now represents the way things have always been and will always be.

[Chris Pascale]

I make a similar comparison of my dad to current young people:

In 1975 he was a college graduate. The average grad made $12k, and he and my mom bought a house in Westbury for $41,000, or about 3.5x is income.

Today a college grad with his degree could expect to make $60k, but that same house, which is the same size as it was, costs closer to $400,000, or about 6x the salary.

The house I bought for $500k in 2021 can sell for $800k right now (my neighbor's identical home just sold for that much) and it boggles my mind. Where are the incomes to buy a home at that price at current interest rates?

[Ron Scott]

I make a similar comparison of my dad to current young people:

In 1975 he was a college graduate. The average grad made $12k, and he and my mom bought a house in Westbury for $41,000, or about 3.5x is income.

Today a college grad with his degree could expect to make $60k, but that same house, which is the same size as it was, costs closer to $400,000, or about 6x the salary.

The house I bought for $500k in 2021 can sell for $800k right now (my neighbor's identical home just sold for that much) and it boggles my mind. Where are the incomes to buy a home at that price at current interest rates?

I wonder if they’re just running out of space, and homes, in the burbs—-hoping with WFH we’d see more development on the outskirts at more reasonable pricing.

Why is there always sooo much political bullshit about adding housing to already congested cities and their immediate surrounds? NY politicians are even pushing for more and more development in Manhattan!? Have they actually gone there? People on 1/5th of an acre in Westbury are supposed to convert their garages as studios or they’re “low-life capitalists”? Isn’t this thinking out of control? What’s the point? Most land in America is actually undeveloped. Let’s go…

[seattlecyclone]

Why is there always sooo much political bullshit about adding housing to already congested cities and their immediate surrounds?

There is insufficient housing in these areas to meet demand, that's why. That's pushing prices up in these areas, creating a lot of political pressure to fix that marketplace. The real bullshit is the long-standing zoning regulations that literally prohibit people from constructing more much-desired homes on their own land, and it's past time that these be revisited.

[YttriumNitrate]

This chart tells a sad story.
https://www.visualcapitalist.com/median-house-prices-vs-income-us/

A sad story? Are you sure about that? Even with today's inflated prices it's still much better than the early 1980s. For example, the chart explicitly states "Although houses were more affordable in the 80s, steep interest rates consumed nearly half of household income in mortgage payment." (emphasis original).

[Ron Scott]

The real bullshit is the long-standing zoning regulations that literally prohibit people from constructing more much-desired homes on their own land .

Oh don’t worry. We have plenty of real estate developers bribing politicians to do just that here in NY. One asshole even became president and we’re STILL trying to get rid of him.

Hard pass on that bunch LOL.

[EchoStache]

A data point that often seems missed in the discussions of housing affordability are home size.  In 1985, the average house was ~1650 ft^2.  In 2023, ~2500 ft^2.  Peoples perception of necessity has changed a lot.  It seems a lot of young people who are just starting out are trying to figure out how to afford 2800 ft^2 McMansions rather than the 1200 ft^2 3 BR starter homes young couples were content with in the past.

They are also most often dual income families with two new expensive cars, 2 brand new iPhone 15 ProMax phones financed with Verizon for $300/month, Cable, internet, Disney, Hulu, Amazon Prime, HBOMax, Netflix, Paramount, etc etc etc, lots of eating out, door dash, grub hub, daily Starbucks, and daycare so that they can both work to afford 2 brand new vehicles and all of the wealth killing spending mentioned. 

I'm not denying in total that housing affordability has decreased overall.  But there is more to the story IMO.

[Fomerly known as something]

Why is there always sooo much political bullshit about adding housing to already congested cities and their immediate surrounds?

There is insufficient housing in these areas to meet demand, that's why. That's pushing prices up in these areas, creating a lot of political pressure to fix that marketplace. The real bullshit is the long-standing zoning regulations that literally prohibit people from constructing more much-desired homes on their own land, and it's past time that these be revisited.

And it’s those that are already there who benefit from these zoning policies.  My Father bless his heart, does not want multi family, or AUDs in his neighborhood, “We aren’t zoned for that”.  Even though a duplex or four plex really doesn’t change the neighborhood, heck he’s against a SFH development because it would add “too much traffic” tho his local street.  OTOH I live in an area that is mixed use to include a good sized Apartment complex down the street, I’m surprised at how relatively little traffic there is compared to what I’d think it would be.

[Ron Scott]

Why is there always sooo much political bullshit about adding housing to already congested cities and their immediate surrounds?

There is insufficient housing in these areas to meet demand, that's why. That's pushing prices up in these areas, creating a lot of political pressure to fix that marketplace. The real bullshit is the long-standing zoning regulations that literally prohibit people from constructing more much-desired homes on their own land, and it's past time that these be revisited.

And it’s those that are already there who benefit from these zoning policies.  My Father bless his heart, does not want multi family, or AUDs in his neighborhood, “We aren’t zoned for that”.  Even though a duplex or four plex really doesn’t change the neighborhood, heck he’s against a SFH development because it would add “too much traffic” tho his local street.  OTOH I live in an area that is mixed use to include a good sized Apartment complex down the street, I’m surprised at how relatively little traffic there is compared to what I’d think it would be.

I too lived on a beautiful block in my youth in western Queens NY that had 2 apartment buildings. It was fine! (Disclosure: I lived in one with a single mom who couldn’t afford more.)

I react negatively to wingnuts on both ends of the political spectrum and in some cities, on the left, they’ve been having heart attacks about zoning regs for decades. This is fine. We are in a democracy with free speech and everyone deserves to voice their opinions. The problem is people on the extremes don’t really like democracy because it means they don’t always get their own way. In the US this has resulted in socially destructive partisanship and even violence too often.

The laws and regulations governing real estate development should be led by the state and any local municipalities the state delegates to. Changes in such laws should have the support of the majority, through their local officials and through the political process.

As I alluded to above the real estate developers are all over this, every day. There would be no end to the rethinking and redevelopment of areas people invested their life savings into if they got their way by banging their fists on the table. There has to be some controls and I am glad citizens still seem to be able to exercise some.

[seattlecyclone]

In my state we've had a few recent state laws aimed at limiting unreasonable local control over land use decisions, and I think it's great.

A fourplex harms nobody. There's little justification for city residents to be able to ban them. Allowing our cities to densify is good for affordability and good for the environment. Within a few years the larger municipalities will be required to allow a minimum of 4-6 homes on all residential lots. Bills requiring even higher levels of zoning than this near major transit centers have almost passed each of the past two years, and I think it's only a matter of time before that becomes law as well. This makes a ton of sense too. If we're making public investments of billions of dollars into new train service and frequent buses, that investment is squandered when there are legal limits to how many people we allow to live in walking distance of the stations.

Here in Seattle we've had a "design review" process where we've allowed unelected boards to use subjective aesthetic concerns to block development permits. A recent redevelopment of an old one-story supermarket into a new supermarket with apartments on top was held up for three years and multiple rounds of redesign because the review board was displeased with the color and pattern of the proposed brickwork. A new state law reins in these boards; they can now only apply objectively written regulations. Denying hundreds of people the right to live in a desirable neighborhood for three whole years because a few arbitrary citizens thought the new housing isn't beautiful enough is just nonsense.

[Ron Scott]

…and in NY similar legislation that would affect individual building lots on Long Island was pushed, quickly fought, and rejected. Good is Seattle, not in NY. No problem. Viva democracy.

[obstinate]

For what it's worth as demographics in the US shift over the next two decades we might see this trend reverse.

Or maybe not. Someone should do a chart of real purchasing power after paying for housing in the US. I'll bet it's been growing.

[former player]

I make a similar comparison of my dad to current young people:

In 1975 he was a college graduate. The average grad made $12k, and he and my mom bought a house in Westbury for $41,000, or about 3.5x is income.

Today a college grad with his degree could expect to make $60k, but that same house, which is the same size as it was, costs closer to $400,000, or about 6x the salary.

The house I bought for $500k in 2021 can sell for $800k right now (my neighbor's identical home just sold for that much) and it boggles my mind. Where are the incomes to buy a home at that price at current interest rates?

Only a small proportion of houses are that expensive, and there is a small proportion of people who earn a lot of money, the sort of money that can pay for that sort of house.

The other factor is that there is a lot more capital in the country than there used to be, witness all the people on this forum who have been busily accumulating capital for years, some of them using that capital to buy multiple houses.

[twinstudy]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

[former player]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

I live in a part of the country that combines limited supplies of expensive housing with mostly low-income employment (it's a holiday area with little industry and highly protected landscapes).  It used to be the case that someone on a "local" income could afford to buy a basic cottage here.  Then that got out of financial reach but they could afford to rent a basic cottage.  Now demand is such (and renting to holiday makers is far more lucrative) that renting is out of their financial reach too.  There are almost no apartments, and shared houses and caravans are unsuitable for bringing up a family.

The only solution, if local families are not to have to move away, and if local businesses and services are able to continue to find staff to employ, is to build social housing reserved for local people. Luckily the planning system has allowed just enough of this to keep things going.

[Ron Scott]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

I think the issue is that the average person needs to spend so much more of their income on housing today than 30-40 years ago. Since home buying drives dreams and fuels local and regional economies, its affect is meaningful. Prices like this have a real affect on social perspectives…when to marry and start a family, your relationship to others in your locale, the demotiating feeling of missing-out, feelings of resentment, etc. When the majority of people are in good economic shape, we all benefit.

Additional information that shed light on the problem, especially about the variability of housing costs in the country: https://nlihc.org/oor

[spartana]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

I live in a part of the country that combines limited supplies of expensive housing with mostly low-income employment (it's a holiday area with little industry and highly protected landscapes).  It used to be the case that someone on a "local" income could afford to buy a basic cottage here.  Then that got out of financial reach but they could afford to rent a basic cottage.  Now demand is such (and renting to holiday makers is far more lucrative) that renting is out of their financial reach too.  There are almost no apartments, and shared houses and caravans are unsuitable for bringing up a family.

The only solution, if local families are not to have to move away, and if local businesses and services are able to continue to find staff to employ, is to build social housing reserved for local people. Luckily the planning system has allowed just enough of this to keep things going.

This is a growing problem in my area of Calif as well. Housing that use to provide affordable rentals are all being used as short term "vacation" rentals now at exorbitant prices and further limiting affordable rentals. Even housing prices are being driven up by developers with cash in hand who buy, either rehab or raze and rebuild smaller older houses and turn them into expensive rentals or short term rentals.

 Like @seattlecyclone  mentioned, Calif now allows multiple ADU units built on single family home properties with few limits. While it sounds like an ideal.solution to limited housing supply for rentals, most are also turned into vacation rentals. I'm watching one expansion of the house across the street from me. A regular SFH that was rented to a family and once their lease was up they were booted out and the owner is expanding the main house, building a 3 bedroom ADU and a garage conversion ADU. All to be used as an airbnb. This is what happened to the house 2 houses down (main house, ADU back house and ADU garage conversion all vacation rentals) and the house inbetween the was sold and now is a multi-unit long term rental but likely to go the short term rental route.  That's happening to a friend now (have a post about it here), happened to me last year when renting an ADU (also posted about it here), and it's what happened to my own small 1000 SF old home when I sold and the cash buyer developer razed it and built 2 new 2 story homes (total of 8 or 9 tiny bedrooms and attached baths) and turned each room into short term vacation rentals (also posted about it here lol!).

ETA: I think it's happening in lots of areas but maybe larger cities can limit the number of short term rentals and thus have more affordable long term ADU or multi unit rentals. As for semi-nimby me I'll probably move again as my quiet little street is already greatly impacted by so many cars, people and wild parties I don't think I can deal with it once things are built.

[GuitarStv]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

If home owners in an area are capable of preventing higher density dwellings from being built in their neighbourhoods then there is no longer a free market at work.  This is the case in an awful lot of areas here in North America - it artificially inflates the price of housing by creating artificial scarcity.

[seattlecyclone]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

If home owners in an area are capable of preventing higher density dwellings from being built in their neighbourhoods then there is no longer a free market at work.  This is the case in an awful lot of areas here in North America - it artificially inflates the price of housing by creating artificial scarcity.

Right, the market is only as free as the set of regulations controlling it. Plenty of areas where housing products in high demand are subject to intense scrutiny before they're allowed to be produced, if they're even allowed at all. That has follow-on effects on the price of housing, which in turn controls what types of people are allowed to live in a neighborhood or city and how much of their income they need to pay to do so. As a parent raising kids in one of these expensive areas, "your kids might have to move away from their family and friends when they grow up if they fail to successfully achieve a high-paying career, the invisible hand says so!" is a bug rather than a feature.

[wageslave23]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

If home owners in an area are capable of preventing higher density dwellings from being built in their neighbourhoods then there is no longer a free market at work.  This is the case in an awful lot of areas here in North America - it artificially inflates the price of housing by creating artificial scarcity.

Right, the market is only as free as the set of regulations controlling it. Plenty of areas where housing products in high demand are subject to intense scrutiny before they're allowed to be produced, if they're even allowed at all. That has follow-on effects on the price of housing, which in turn controls what types of people are allowed to live in a neighborhood or city and how much of their income they need to pay to do so. As a parent raising kids in one of these expensive areas, "your kids might have to move away from their family and friends when they grow up if they fail to successfully achieve a high-paying career, the invisible hand says so!" is a bug rather than a feature.

Who should decide how dense an area is if not the residents of that area.  Let's say I'm 25, and looking to buy a home to raise a family in for the next 20+ years.  I get to choose if I want to live in a dense city, a sprawling suburb, etc within my budget.  After choosing the density I prefer, why should outsiders be able to dictate what's best for a community and change it from what the residents chose to buy in to and how they desire to see it continue?  I think prices of existing houses should increase because of supply and demand and they aren't making more land. So naturally younger families should continue to move outward to seek more affordable land. Then if they want to live in a dense city so badly they can vote to build a bunch of dense multifamily buildings in their area and turn it into a dense city.  As the population has doubled, there should also be double the amount of big cities, not just make the same cities doubly as dense as they were. We are not dependent on shipping and manufacturing like we used to be, Nashville, Las Vegas, etc are proof that dense cities can be created anywhere.

[former player]

I'm not sure what the issue is. It's the free market at work. If people can't afford houses they can buy an apartment, or rent, or share-house, or live in a caravan.

If home owners in an area are capable of preventing higher density dwellings from being built in their neighbourhoods then there is no longer a free market at work.  This is the case in an awful lot of areas here in North America - it artificially inflates the price of housing by creating artificial scarcity.

Right, the market is only as free as the set of regulations controlling it. Plenty of areas where housing products in high demand are subject to intense scrutiny before they're allowed to be produced, if they're even allowed at all. That has follow-on effects on the price of housing, which in turn controls what types of people are allowed to live in a neighborhood or city and how much of their income they need to pay to do so. As a parent raising kids in one of these expensive areas, "your kids might have to move away from their family and friends when they grow up if they fail to successfully achieve a high-paying career, the invisible hand says so!" is a bug rather than a feature.

Who should decide how dense an area is if not the residents of that area.  Let's say I'm 25, and looking to buy a home to raise a family in for the next 20+ years.  I get to choose if I want to live in a dense city, a sprawling suburb, etc within my budget.  After choosing the density I prefer, why should outsiders be able to dictate what's best for a community and change it from what the residents chose to buy in to and how they desire to see it continue?  I think prices of existing houses should increase because of supply and demand and they aren't making more land. So naturally younger families should continue to move outward to seek more affordable land. Then if they want to live in a dense city so badly they can vote to build a bunch of dense multifamily buildings in their area and turn it into a dense city.  As the population has doubled, there should also be double the amount of big cities, not just make the same cities doubly as dense as they were. We are not dependent on shipping and manufacturing like we used to be, Nashville, Las Vegas, etc are proof that dense cities can be created anywhere.

It's not a free for all though, and can't be given the need to create and maintain public infrastructure and public services.  No man is an island, right? There is a public good in managing development to a greater or lesser degree.  That isn't to say that the arrangements in place in your particular area are good ones or that the means of arriving at those arrangements are good ones - but that is an argument for improving them, not doing away with them altogether.

[seattlecyclone]

Who should decide how dense an area is if not the residents of that area.

Limiting density in your town doesn't only affect your town. If you don't let the people who might like to live in your town actually live there, they have to seek housing in other nearby towns. If those towns don't welcome population increases either, what then? The San Francisco Bay Area is a prime example of what happens when every town is given the power to restrict density and no town is terribly interested in increasing it. Employment kept increasing but home construction wasn't allowed to keep up. For every new high-paying job that is created without a corresponding new home, that newcomer has to essentially pay an existing resident to leave in order to have a place to live themselves. That pushes prices higher and higher, raising the income level you need in order to live anywhere near where the jobs are. Should a town have the right to make itself off-limits to non-millionaires? That doesn't seem to serve the public interest in my view and the view of many others, and is why state-level limitations on local control have been seen as increasingly necessary.

Let's say I'm 25, and looking to buy a home to raise a family in for the next 20+ years.  I get to choose if I want to live in a dense city, a sprawling suburb, etc within my budget.  After choosing the density I prefer, why should outsiders be able to dictate what's best for a community and change it from what the residents chose to buy in to and how they desire to see it continue?

The only thing constant in life is change. When you live in a community with a growing economy you can either improve the buildings in your community to allow more people to share in the benefits of living in a successful area, or you can keep the existing buildings and swap out the poorer residents for richer ones little by little, forcing the poorer people to enjoy a longer commute and generally worse quality of life than they now do. Those are the options. The desire to live in an unchanging community is understandable but fundamentally unattainable.

I think prices of existing houses should increase because of supply and demand and they aren't making more land. So naturally younger families should continue to move outward to seek more affordable land.

...and create untold environmental damage due to the loss of natural land required to build this new housing outside of existing settlements, the fuel usage required to transport the residents to their jobs, and the highway construction required to support this transportation. No thanks.

It's not a free for all though, and can't be given the need to create and maintain public infrastructure and public services.

Sure, though infrastructure costs are dramatically lower in higher-density areas. The cost to provide water/sewer/electric/road service to an area depends greatly on the length of pipe and wire and pavement per capita. This is not well-reflected in tax and utility rates. The cost to maintain a street and the pipes under it is about the same whether that street is fronted by detached houses vs. apartment buildings. A block of apartments pays a lot more property tax than a block of detached houses, and the apartment dwellers don't get a discount on their water bill to account for the fact that they represent more customers using the water main than the block of detached houses in the next neighborhood over.

[Ron Scott]

What percentage of usable land in the US is already developed with residential units? 10%? Add a percent or 2 outside what’s already built and you’re good to go, no?

[former player]

What percentage of usable land in the US is already developed with residential units? 10%? Add a percent or 2 outside what’s already built and you’re good to go, no?

It's more a question of what percentage of usable land is already developed in areas where people want to live.

Not so much undeveloped land in Manhattan, I think.

[Ron Scott]

It's more a question of what percentage of usable land is already developed in areas where people want to live.

Not so much undeveloped land in Manhattan, I think.

I guess you don’t know Manhattan, since the question is usually “developed for what?”…

https://nypost.com/2024/05/24/real-estate/64-nyc-office-buildings-are-looking-to-tranform-into-housing/

[seattlecyclone]

I (perhaps cynically) view office-to-residential conversions as the next in a long line of NIMBY-oriented bright ideas on how to solve the housing problem without actually constructing new buildings. Other ideas promoted by the same folks include banning short-term rentals and taxing vacant homes. The underlying idea is that new buildings should be seen as a last resort to be pursued only once all of the existing buildings are housing as many people as they possibly can.

Some office buildings can be converted relatively easily to housing, especially older ones that were built in skinnier pieces so that more workers could be close to windows (as air conditioning and artificial light were expensive and/or unavailable at the time), More modern towers that can be 100' or more across, these are less well-suited to a conversion. People expect to be able to see a window from most parts of their home, and that's hard to achieve when the front door of your apartment is 50' or farther from the edge of the building.

[Ron Scott]

Owners of office space challenged by wfh—and municipal governments fearful of RE tax losses—view residential conversion as a potential economic lifeline. Some space is relatively convertible…some not so much. Locals need the services viable real estate supports. Newcommers value the opportunity. It’s not a panacea—and it doesn't always address affordability—but it’s an intelligent adaptation to our times, and a step in the right direction.

[obstinate]

It's more a question of what percentage of usable land is already developed in areas where people want to live.

Not so much undeveloped land in Manhattan, I think.

I guess you don’t know Manhattan, since the question is usually “developed for what?”…

https://nypost.com/2024/05/24/real-estate/64-nyc-office-buildings-are-looking-to-tranform-into-housing/

Manhattan is famous for its talls and super-talls, but most of the island by area is still covered with relatively small buildings.

https://tbaldw.in/nyc-buildings/

[SunnyDays]

I honestly don't understand how it's possible for so many short-term rentals to be reasonably full.  Are that many people taking that many vacations?  If not, then it's a matter of the owner getting the same amount of money for say, 5 nights accommodation as for a normal month's rent, meaning the house sits empty the vast majority of the time.  It's my understanding that Airbnb allows only 90 days per year of rental for any given property.  The waste is a problem, but more so that it deprives a family of a home they could otherwise buy.  Short term rentals are not much of a thing in my area, so they don't affect me personally, but if they did, I would have a HUGE problem with them.

[seattlecyclone]

I don't believe Airbnb has any such restriction on how many nights per year a home can be rented on their platform. Local municipalities can and do put restrictions on it. I have little problem with short-term rentals. There are all sorts of reasons a person might want to rent a home for less than a standard year-long lease, including but definitely not limited to tourism. People need places to stay for a while if they're a temporary worker, if their main home is under renovation, if they broke up with their partner and are figuring out next steps, if they're accompanying a family member to seek treatment at a hospital, the list goes on. These folks (plus tourists) represent demand for a very small percentage of the housing stock in most cities. Yes, a house on Airbnb isn't available for sale to a househunting family new to town, but hey...my house isn't either. The solution is to build a few more homes so that the new family has a place to buy and all these people who want to live in your town for a shorter period of time have a way to do that too.

[Fomerly known as something]

I think short term rentals problems are more about the proportion of them to overall housing stock in the area.  100 units in a town of 5000 units not necessarily a big deal, 100 units in a town that has 150 housing units much bigger deal.  And then those short term rental people want things like restaurants, but workers can’t afford to live near where work is.  At some point it’s not worth it.

My Sister and BIL live near Destin, FL.  They got in when just across the bridge in Niceville was affordable for normal people.  Heck even just across the road from the beach they had a $600 2 bedroom apartment when they first moved there.  Now “normal people” have to live in Crestview 45 minutes and a toll bridge away without traffic.  Heck the apartment my sister rented at first probably isn’t even available at any price to long term renters.  (Coast Guard folks have a hard time renting in many places because there isn’t any rentals as many of their duty stations are in high tourist areas).

The phrase “no one wants to work anymore” is thrown out by a certain segment, but really it’s no one wants to work here, for the wage we are willing to pay them.  High nearby housing adds to this problem.  While I might be willing to take a lower salary, I’m not willing to have a lower salary plus a long expensive commute in order to have someplace “affordable” to live.

[seattlecyclone]

Making people commute from long distances for relatively low-wage tourism jobs is a bad situation, I agree. Ban short-term rentals in beach towns and the customers for those tourist jobs will be much lower in number, which is also not great for these workers. Why not just build some more homes in these towns so there's plenty of room for both the tourists and the residents?

[Laura33]

Who should decide how dense an area is if not the residents of that area.  Let's say I'm 25, and looking to buy a home to raise a family in for the next 20+ years.  I get to choose if I want to live in a dense city, a sprawling suburb, etc within my budget.  After choosing the density I prefer, why should outsiders be able to dictate what's best for a community and change it from what the residents chose to buy in to and how they desire to see it continue?

And yet why should my neighbors have any authority over what I do with my property?  Who should decide how dense an area is?  Well, if it's my property, then the answer is me.  Unless I'm creating a nuisance, it's no one else's business.

Note that I don't actually believe that -- I am actually in favor of really good urban planning.  But it seems to me we have the worst of both worlds here.  People seem to think that they should have the right to control what their neighbors do and the government should protect their own property interests by ensuring that the neighbors do only those things that they view as positive.  And yet the minute you talk about intentional planning efforts, those same people will all be whining about the government interfering with their property rights.  You really can't have it both ways.

IMO the biggest problem with most zoning is that is largely solidifies a long history of redlining.  Many years ago, you could directly say "no ______ allowed" in a property deed or zoning regulation.  Once those were outlawed, we shifted to the "unstated but understood" rules about "those" people.  And now we're all so sophisticated that we've managed to shift the whole argument to one about socioeconomic status.  And yet while those original directly discriminatory rules are no longer on the books, the system of neighborhoods that were developed based on those rules remains the same and in fact has now been codified into pre-existing property rights. 

I think any zoning should be done on a state-wide basis, with local planning experts representing each area.  Right now, there is a huge disincentive to change the status quo, because if your local council rep votes for more dense zoning, they're going to be out on their ears the next election, no questions asked.  So there is no incentive to look beyond the status quo.  Meanwhile, various parts of the state tend to be growing rapidly, and yet the state has no way to actually plan to absorb that growth in a thoughtful manner that deals with things like traffic and stormwater runoff and mass transit and all that. 

One local example:  near me is a small old mill town, located at the bottom of a valley.  Over the past 30 years, many developments have sprung up in the surrounding hills (some in the same county, some in an adjoining county).  As a result, the town has experienced two major floods over the past 10 years, people died, and the county has now condemned/demolished some of the town and is having to completely rework the river system as it goes through the town.  Every single one of those new developments was constructed completely in compliance with the applicable environmental and zoning laws.  Every single development replaced some forests/fields with some acres of impenetrable concrete.  Individually, each decision was meaningless and even sensible, given the demand for local schools.  And yet the combined effects of each of these individual decisions has had very significant impacts on the people who live downhill -- and left the county and state holding the bag to fix it. 

[Laura33]

I think the issue is that the average person needs to spend so much more of their income on housing today than 30-40 years ago.

You know, just continuing to say it doesn't make it true.  You apparently missed my post, as well as this one:

A sad story? Are you sure about that? Even with today's inflated prices it's still much better than the early 1980s. For example, the chart explicitly states "Although houses were more affordable in the 80s, steep interest rates consumed nearly half of household income in mortgage payment." (emphasis original).

[Fomerly known as something]

Making people commute from long distances for relatively low-wage tourism jobs is a bad situation, I agree. Ban short-term rentals in beach towns and the customers for those tourist jobs will be much lower in number, which is also not great for these workers. Why not just build some more homes in these towns so there's plenty of room for both the tourists and the residents?

Actually instead the workers are saying it’s not worth it and moving away and the tourists are complaining about 2 hour waits for a table at a restaurant.  So that doesn’t work either.

[GilesMM]

Making people commute from long distances for relatively low-wage tourism jobs is a bad situation, I agree. Ban short-term rentals in beach towns and the customers for those tourist jobs will be much lower in number, which is also not great for these workers. Why not just build some more homes in these towns so there's plenty of room for both the tourists and the residents?

Actually instead the workers are saying it’s not worth it and moving away and the tourists are complaining about 2 hour waits for a table at a restaurant.  So that doesn’t work either.

Those things tend to be self-correcting - if restaurant situations are intolerable, tourists move on.  But in most places the labor shortages of 2020 and 2021 have cleared up. Workers are back.  Restaurants and pharmacies are staffed and open regular hours, etc.

[Ron Scott]

Actually instead the workers are saying it’s not worth it and moving away and the tourists are complaining about 2 hour waits for a table at a restaurant.  So that doesn’t work either.

Those things tend to be self-correcting - if restaurant situations are intolerable, tourists move on.  But in most places the labor shortages of 2020 and 2021 have cleared up. Workers are back.  Restaurants and pharmacies are staffed and open regular hours, etc.

Workers are back and for the most part restaurants are operating “normally”. But the experience is sucking more now than ever.

I’m getting actual phone calls from staff or whatever outsourcer they hire to remind me of my reservation…plus a text or email. The prices are a joke, some places charge a 3% fee for credit card use, the check contains recommended tips (18%? 20%? 25%?) including tips on the tax, and 1 place we’ve gone to for years now charge extra —per person fee—if you ask for bread.

When businesses start acting like they’re doing you a favor letting you be a customer its time to move on.

[Fomerly known as something]

Actually instead the workers are saying it’s not worth it and moving away and the tourists are complaining about 2 hour waits for a table at a restaurant.  So that doesn’t work either.

Those things tend to be self-correcting - if restaurant situations are intolerable, tourists move on.  But in most places the labor shortages of 2020 and 2021 have cleared up. Workers are back.  Restaurants and pharmacies are staffed and open regular hours, etc.

Workers are back and for the most part restaurants are operating “normally”. But the experience is sucking more now than ever.

I’m getting actual phone calls from staff or whatever outsourcer they hire to remind me of my reservation…plus a text or email. The prices are a joke, some places charge a 3% fee for credit card use, the check contains recommended tips (18%? 20%? 25%?) including tips on the tax, and 1 place we’ve gone to for years now charge extra —per person fee—if you ask for bread.

When businesses start acting like they’re doing you a favor letting you be a customer its time to move on.

It’s not necessarily a problem of staff at current restaurants, it’s that it is not economically feasible to open new ones, so just like housing there is more demand than supply the tourists are willing to pay higher prices, so few new places are opening or filling into those ones that closed, because they can’t foot start up costs, because it’s too expensive to live.  Oh and the tourists who are driving up housing costs think they are the bulk of the local economy and act as if the locals should be grateful.  actually the nearby military bases account for 2/3rds of the overall economy. 

[GilesMM]

Actually instead the workers are saying it’s not worth it and moving away and the tourists are complaining about 2 hour waits for a table at a restaurant.  So that doesn’t work either.

Those things tend to be self-correcting - if restaurant situations are intolerable, tourists move on.  But in most places the labor shortages of 2020 and 2021 have cleared up. Workers are back.  Restaurants and pharmacies are staffed and open regular hours, etc.

Workers are back and for the most part restaurants are operating “normally”. But the experience is sucking more now than ever.

I’m getting actual phone calls from staff or whatever outsourcer they hire to remind me of my reservation…plus a text or email. The prices are a joke, some places charge a 3% fee for credit card use, the check contains recommended tips (18%? 20%? 25%?) including tips on the tax, and 1 place we’ve gone to for years now charge extra —per person fee—if you ask for bread.

When businesses start acting like they’re doing you a favor letting you be a customer its time to move on.

Pay cash and choose your own tip. I like tipping for great service.

[jrhampt]

Actually instead the workers are saying it’s not worth it and moving away and the tourists are complaining about 2 hour waits for a table at a restaurant.  So that doesn’t work either.

Those things tend to be self-correcting - if restaurant situations are intolerable, tourists move on.  But in most places the labor shortages of 2020 and 2021 have cleared up. Workers are back.  Restaurants and pharmacies are staffed and open regular hours, etc.

Workers are back and for the most part restaurants are operating “normally”. But the experience is sucking more now than ever.

I’m getting actual phone calls from staff or whatever outsourcer they hire to remind me of my reservation…plus a text or email. The prices are a joke, some places charge a 3% fee for credit card use, the check contains recommended tips (18%? 20%? 25%?) including tips on the tax, and 1 place we’ve gone to for years now charge extra —per person fee—if you ask for bread.

When businesses start acting like they’re doing you a favor letting you be a customer its time to move on.

It’s not necessarily a problem of staff at current restaurants, it’s that it is not economically feasible to open new ones, so just like housing there is more demand than supply the tourists are willing to pay higher prices, so few new places are opening or filling into those ones that closed, because they can’t foot start up costs, because it’s too expensive to live.  Oh and the tourists who are driving up housing costs think they are the bulk of the local economy and act as if the locals should be grateful.  actually the nearby military bases account for 2/3rds of the overall economy.

Here's the problem with saying just build more affordable housing in a vacation town.  I live in a small vacation town on the coast with about 10k year round pop, 40k in the summers.  There's limited space to build here because we have wetlands/flooding considerations.  It's always a battle to build anything new or even repurpose abandoned space because you can't just build more parking without thinking about how that affects flooding potential.  You have to conserve the wetlands because they absorb a lot of that storm surge where pavement/nonpermeable surfaces don't do that.  There's also no sewer system here - septic only.  So you cannot make dense housing without dealing with that first.  And yes, the roads aren't built to handle high traffic volumes either.  So not everyone gets to live here who wants to, and we can't just build more restaurants, parking, housing, nonpermeable surfaces etc.  Some of these are unique considerations for coastal areas that won't apply elsewhere, but it is sometimes not possible to build infrastructure to support the population of everyone who wants to live in desirable places.

[wageslave23]

Actually instead the workers are saying it’s not worth it and moving away and the tourists are complaining about 2 hour waits for a table at a restaurant.  So that doesn’t work either.

Those things tend to be self-correcting - if restaurant situations are intolerable, tourists move on.  But in most places the labor shortages of 2020 and 2021 have cleared up. Workers are back.  Restaurants and pharmacies are staffed and open regular hours, etc.

Workers are back and for the most part restaurants are operating “normally”. But the experience is sucking more now than ever.

I’m getting actual phone calls from staff or whatever outsourcer they hire to remind me of my reservation…plus a text or email. The prices are a joke, some places charge a 3% fee for credit card use, the check contains recommended tips (18%? 20%? 25%?) including tips on the tax, and 1 place we’ve gone to for years now charge extra —per person fee—if you ask for bread.

When businesses start acting like they’re doing you a favor letting you be a customer its time to move on.

It’s not necessarily a problem of staff at current restaurants, it’s that it is not economically feasible to open new ones, so just like housing there is more demand than supply the tourists are willing to pay higher prices, so few new places are opening or filling into those ones that closed, because they can’t foot start up costs, because it’s too expensive to live.  Oh and the tourists who are driving up housing costs think they are the bulk of the local economy and act as if the locals should be grateful.  actually the nearby military bases account for 2/3rds of the overall economy.

Here's the problem with saying just build more affordable housing in a vacation town.  I live in a small vacation town on the coast with about 10k year round pop, 40k in the summers.  There's limited space to build here because we have wetlands/flooding considerations.  It's always a battle to build anything new or even repurpose abandoned space because you can't just build more parking without thinking about how that affects flooding potential.  You have to conserve the wetlands because they absorb a lot of that storm surge where pavement/nonpermeable surfaces don't do that.  There's also no sewer system here - septic only.  So you cannot make dense housing without dealing with that first.  And yes, the roads aren't built to handle high traffic volumes either.  So not everyone gets to live here who wants to, and we can't just build more restaurants, parking, housing, nonpermeable surfaces etc.  Some of these are unique considerations for coastal areas that won't apply elsewhere, but it is sometimes not possible to build infrastructure to support the population of everyone who wants to live in desirable places.

Correct.  It's much easier to leave things alone and let the invisible hand determine pricing.  If there aren't enough people willing to work low wage jobs, then those businesses will have to keep raising wages and prices until people are willing to take those jobs. It's actually very simple.  When business owners say they can't find workers, it really means they can't find workers willing to work for what they are offering.  Let wages inflate and prices of services and products.  Then less people will want to live there and there will be less demand for housing and housing prices will decrease.  Price controls never work in the real world.

[seattlecyclone]

Here's the problem with saying just build more affordable housing in a vacation town.  I live in a small vacation town on the coast with about 10k year round pop, 40k in the summers.  There's limited space to build here because we have wetlands/flooding considerations.

Okay, so protect the wetlands and let people who want to build more densely in the already developed areas do that?

It's always a battle to build anything new or even repurpose abandoned space because you can't just build more parking without thinking about how that affects flooding potential.

Here in Seattle we have regulations about water retention and runoff in new development in order to protect the marine ecosystems. In most cases new dense infill development following these regulations manages rainwater better than the lower-density use that was there before.

There's also no sewer system here - septic only.  So you cannot make dense housing without dealing with that first.

Sure. Every place that now has a sewer system didn't at one point. Your town could be the next.

And yes, the roads aren't built to handle high traffic volumes either.

Denser development requires less pavement per capita than sparse development. Some infrastructure upgrades may be needed as your densify (especially bike lanes that become more useful when more destinations are closer to more homes), but in the long run people pay less to maintain their street grid (and water grid, and power grid) when they live closer together.

All of these are common excuses I see in my own town about why we couldn't possibly increase density, but they're just that: excuses. None of them are insurmountable problems when you're actually interested in accommodating growth instead of choking it off and lamenting how it's harder to find low-wage labor than it used to be.

[Fomerly known as something]

Here's the problem with saying just build more affordable housing in a vacation town.  I live in a small vacation town on the coast with about 10k year round pop, 40k in the summers.  There's limited space to build here because we have wetlands/flooding considerations.

Okay, so protect the wetlands and let people who want to build more densely in the already developed areas do that?

It's always a battle to build anything new or even repurpose abandoned space because you can't just build more parking without thinking about how that affects flooding potential.

Here in Seattle we have regulations about water retention and runoff in new development in order to protect the marine ecosystems. In most cases new dense infill development following these regulations manages rainwater better than the lower-density use that was there before.

There's also no sewer system here - septic only.  So you cannot make dense housing without dealing with that first.

Sure. Every place that now has a sewer system didn't at one point. Your town could be the next.

And yes, the roads aren't built to handle high traffic volumes either.

Denser development requires less pavement per capita than sparse development. Some infrastructure upgrades may be needed as your densify (especially bike lanes that become more useful when more destinations are closer to more homes), but in the long run people pay less to maintain their street grid (and water grid, and power grid) when they live closer together.

All of these are common excuses I see in my own town about why we couldn't possibly increase density, but they're just that: excuses. None of them are insurmountable problems when you're actually interested in accommodating growth instead of choking it off and lamenting how it's harder to find low-wage labor than it used to be.

The problem is the people who don’t want density.  It’s not the people looking for affordable housing, but the NIMBY who find excuses why there can’t possibly be more housing added.  The NIMBY neighbor will use anything they can, wetlands, Military land, my area it’s road size for Wildfire evacuations and water hook ups.  But basically it comes down to sucks for very one after me.

[Ron Scott]

Prices rise where demand is greatest…

[GuitarStv]

Prices rise where demand is greatest…

So according to that map, everywhere except Louisiana and Mississippi.  :P

[seattlecyclone]

The problem is the people who don’t want density.  It’s not the people looking for affordable housing, but the NIMBY who find excuses why there can’t possibly be more housing added.  The NIMBY neighbor will use anything they can, wetlands, Military land, my area it’s road size for Wildfire evacuations and water hook ups.  But basically it comes down to sucks for very one after me.

Yes, this is an accurate observation, and is why states are starting to preempt the rights of locals to declare their town "full." It's going to be a game of whack-a-mole though, because there are just so many excuses that can be used to block housing. Close off one, they'll latch on to another.

[sonofsven]

I'm on Maui right now where this issue is on steroids.
Average SFH around 1.3-1.4 million.
They just passed a law that will attempt to remove close to 7,000 units from the short term rental pool, but how many of these units are likely to make good long term rentals for locals is yet to be determined.
Obviously the devastating Lahaina fire last August had a lot to do with this decision.
They are using zoning as the wedge, as many of these properties were built on residential and even agriculture zoning and then became STR's.
I read that approximately 12% of the units on "the list" are owned by Maui residents and rented out to visitors. The rest are owned by off island entities.
This will definitely end up in court, and it will also cost the county (Maui is a county) an estimated 30-50 million in lost revenue.
Some people are celebrating this as a strike against short term rentals; others are wondering why Maui hasn't been more proactive in using the high tax dollars it makes on the out of state owners to build more affordable homes for locals.
I just read about a proposal to build over 900 luxury homes above Wailea, a super fancy golf-beach resort community, aimed at off island owners. They are required to build, or fund to the county, 225 affordable units as well. The lead on the project is the former head planner for Maui County.
Which project is likely to move forward first, replacement housing in Lahaina or luxury homes in Wailea?
There is a tremendous amount of wealth concentrated here on Maui.