How should the U.S. address its ongoing housing crisis?

[Maricarland]

I originally left this question as a post on reddit, but I am curious as to the thoughts of the people here at NationStates.

Here is my opinion:

As for me, I think one the main drivers of this problem is people treat housing as an investment asset instead of as homes. I think that there are a number of policies that the federal government can enact to help resolve the housing crisis, such as:

Market Regulation

• Place a high tax on vacant properties. This way people who have extra housing while others don't have housing, will be motivated to either sell their extra housing or rent it out, just to avoid the tax, and they will have to sell or rent it at an affordable rate or else they won't get any buyers or tenants and the housing will still be vacant and the owner subject to the tax.
• Enact a national rent control program to control the rate of rent inflation. Because it is national, landlords can't just avoid the regulation by leaving areas with rent control, because everywhere will have the rent control. This however must apply to all rental housing (existing and new), so to avoid landlords jacking up rents on new tenants. Landlords may decided to just stop renting, but then they would be subject to the vacant property tax and they won't make any money; even if they would lose money by renting out at the rent controlled rates for some reason, the vacant property tax should make it so that they would lose more money by not renting out at the rent controlled rates.
• Placing limitations on home owner associations (HOAs) and providing more options for communities to abolish their HOAs, thereby requiring the locality to cover the services that the HOA provided, so that homeowners subject to HOAs don't have essentially double taxation from both the locality's taxes and fees and the HOA's fees, for no additional increase in real services. This will at least make some housing more affordable.

Mortgage Reform

• Providing an option for households whose income decreased sometime after taking out their mortgage or whom have an sudden and unexpected cost, like medical debt (though I would prefer if we just switched to single-payer Medicare for All), to have partial mortgage loan forgiveness/cancellation, which the lender must absorb as a loss, and won't affect the borrowers credit in any way.
• Providing an alternative way to get a mortgage besides private banks, by offering affordable mortgages through public banking, and by providing subsidies and other benefits to credit unions and community banks to offer affordable mortgages.
• Enacting regulations that make it easier to refinance, always in favor of the borrower and never in favor of the lender.

Alternatives to the Private Market

• To ensure that everyone can get housing no matter what, we should offer a universal guarantee to high quality and rent-free public housing to all residents who want it. This will also serve to force private landlords to increase the quality of their rental properties if they want to attract any tenants, as tenants would have the affordable and appealing option to just go to the public housing option (any time you have a public competitor that offers a universal guarantee, such as a federal job guarantee or a public option for health insurance or anything, you force the private sector to at a minimum match the public competitor's offer). Even if we don't want to go that far, we can at least set up a public housing system similar to Singapore's.
• We can also support other forms of social housing, besides a government's public option, such as housing cooperatives, by providing subsidies and other advantages to social housing.
• We should establish and subsidize community land trusts, for people seeking to become homeowners without becoming housing speculators as well.
• Giving more power to tenants to establish the tenant equivalents of unions, so that they may collectively negotiate prices, conditions, rules, evictions, etc... and so that they may go on a rent strike if needed.

Addressing Supply

• NOTE: The U.S. has more than enough vacant homes per homeless person (person, not household), so there is not a problem with real supply, and the policies listed above would lead to more vacant housing reentering the rental market or housing market. However, there are some local areas in the U.S. where demand does outstrip supply, and a lot of the vacant housing in the U.S. is in a state of disrepair or in reduced livability for one reason or another. These reasons necessitate addressing housing supply.
• We should establish and subsidize, non-profit community development corporations (CDCs), to build more high quality and affordable housing to be sold to the people (not to corporate landlords, housing speculators, or investors), and to repair and retrofit existing housing. This service can also be provided by a public jobs program, such as a green new deal, or even a federal job guarantee. This will also help provide enough supply for a public or social housing program if such programs fail to purchase enough housing supply from the private market.
• I know that there is an argument for easing, reducing, or eliminating zoning regulations to make it easier for construction corporations to build more housing, however I think that this is unnecessary and may have some serious negatives as well. That said, I am willing to compromise on this pro-market policy, especially regarding making things easier for community development corporations and construction cooperatives. I am also supportive of mixed-use planning/zoning, and if easing zoning regulations leads to more mixed-use planning/zoning, I would be a little more supportive of easing zoning regulations as well.

[The Hazar Amisnery]

They should give in to socialism and provide every citizen with a free house/apartment.

[Maricarland]

They should give in to socialism and provide every citizen with a free house/apartment.

I am supportive of this idea.

[The Hazar Amisnery]

They should give in to socialism and provide every citizen with a free house/apartment.

I am so supportive of this idea.

In Australia, the government provides people who are struggling with a free house which they can say in until they can afford their own house but some people abuse that system and stay in their free house for a very long time and spend their unemployment fund on drugs and alcohol.

[Drew Durrnil]

only allow people to own one house at a time, which is the house that they are currently residing in

[Maricarland]

I am so supportive of this idea.

In Australia, the government provides people who are struggling with a free house which they can say in until they can afford their own house but some people abuse that system and stay in their free house for a very long time and spend their unemployment fund on drugs and alcohol.

I am happy that Australia provides people with a free house and wish more countries would emulate them. I don't really care what people spend their money on, a home should be a right, and people should be just as entitled to a home as they are to an education, healthcare, and potable water (among other things).

[Kowani]

effortpost later
build more fucking homes, abolish single-family zoning requirements, throw mandatory parking minimums out the window, end local control of zoning, build decent public transit systems (to address the contradiction of density and car culture), revamp the owned but uninhabitable homes (which is the vast majority of them, for the 500 people going to pile in here with "well actually there are more homes than homeless people"), and stop planning around cars


but the big two are simple: abolish single-family zoning and build more apartments/townhouses/duplexes/condos

we're undoing the legacy of harland bartholomew and making functioning cities for once

[Maricarland]

effortpost later
build more fucking homes, abolish single-family zoning requirements, throw mandatory parking minimums out the window, end local control of zoning, build decent public transit systems (to address the contradiction of density and car culture), revamp the owned but uninhabitable homes (which is the vast majority of them, for the 500 people going to pile in here with "well actually there are more homes than homeless people"), and stop planning around cars


but the big two are simple: abolish single-family zoning and build more apartments/townhouses/duplexes/condos

we're undoing the legacy of harland bartholomew and making functioning cities for once

YES YES YES

I have been so done with car culture and suburban community design. I think this is a great plan to increase both housing supply and quality. However, am not sure if this alone would be able to adequately address the housing crisis.

[The Blazeland Administration]

That wasn't very free market of you

[Picairn]

effortpost later
build more fucking homes, abolish single-family zoning requirements, throw mandatory parking minimums out the window, end local control of zoning, build decent public transit systems (to address the contradiction of density and car culture), revamp the owned but uninhabitable homes (which is the vast majority of them, for the 500 people going to pile in here with "well actually there are more homes than homeless people"), and stop planning around cars


but the big two are simple: abolish single-family zoning and build more apartments/townhouses/duplexes/condos

we're undoing the legacy of harland bartholomew and making functioning cities for once

Yes to all of this.

Some comments on the OP's proposal:

Market Regulation

• Place a high tax on vacant properties. This way people who have extra housing while others don't have housing, will be motivated to either sell their extra housing or rent it out, just to avoid the tax, and they will have to sell or rent it at an affordable rate or else they won't get any buyers or tenants and the housing will still be vacant and the owner subject to the tax.

A vacancy tax doesn't punish huge parking lots, empty plots of land or single-family housing, which are the bane of suburbs and cities. In addition, it may discourage the construction of large apartments, since people will be unsure whether or not they can sell or rent them quickly enough to avoid the tax. So under a vacancy tax they may be more incentivized to build single-family houses and small apartments, which is still inefficient land use.

A Land Value Tax, however, is more efficient. It punishes the above three targets, and incentivizes landlords to do more productive things with their land instead of speculation. https://theconversation.com/a-land-valu ... isis-49997

Enact a national rent control program to control the rate of rent inflation. Because it is national, landlords can't just avoid the regulation by leaving areas with rent control, because everywhere will have the rent control. This however must apply to all rental housing (existing and new), so to avoid landlords jacking up rents on new tenants. Landlords may decided to just stop renting, but then they would be subject to the vacant property tax and they won't make any money; even if they would lose money by renting out at the rent controlled rates for some reason, the vacant property tax should make it so that they would lose more money by not renting out at the rent controlled rates.

Rent control? Congrats, you just killed the housing supply. No more building new homes. Distorting the law of supply and demand is a bad idea. I would rather we build new homes with Kowani's proposal.

Placing limitations on home owner associations (HOAs) and providing more options for communities to abolish their HOAs, thereby requiring the locality to cover the services that the HOA provided, so that homeowners subject to HOAs don't have essentially double taxation from both the locality's taxes and fees and the HOA's fees, for no additional increase in real services. This will at least make some housing more affordable.

In addition, we should nuke the mortgage interest deduction. It is practically a public housing program for the rich. But I'm also fine with capping it at $500,000 (rather than the current level of $1 million) and use the savings on housing vouchers and support for low-income homebuyers. https://www.theatlantic.com/business/ar ... on/526635/

[*]NOTE: The U.S. has more than enough vacant homes per homeless person (person, not household), so there is not a problem with real supply, and the policies listed above would lead to more vacant housing reentering the rental market or housing market. However, there are some local areas in the U.S. where demand does outstrip supply, and a lot of the vacant housing in the U.S. is in a state of disrepair or in reduced livability for one reason or another. These reasons necessitate addressing housing supply.

A lot of vacant housing in the US are from dying rural or Rust Belt areas, which are hard to live in. You don't want to live in an area with little job opportunity or poor public services, do you? In contrast, the cities are facing housing shortages partly because they are much better areas to live in, more employment opportunities, better public services, etc.

[Major-Tom]

Besides waiting for the bubble to burst when frenzied, debt-ridden millennials simply run out of the disposable income in their insane run on the housing market?

Well, most cities are due for serious upzoning that will directly help with spiraling costs, most cities ought to listen to YIMBYs and not NIMBYS, most cities ought to more heavily regulate vacation rentals, but beyond that, the federal government should intervene far more heavily. Greedy foreign investors from the likes of China, UAE, Saudi Arabia, can outspend and outmaneuver us Yanks in the real estate market, and drive up prices while they buy block after block of housing, only to let it sit unused, waiting to dump it. At this point, I think we outlaw that for several years. No exceptions. Private firms and hedge funds like Blackrock practice the same technique, only fueling the insanity.

But those are small band-aids. The root of this problem is inequality in our country. A 35-year-old couple both employed in tech has the resources to buy at the peak of this insane market, a 35-year-old couple in healthcare that would've had the resources ten years ago no longer has that option. As the young wealthy get wealthier, thanks to things like lucrative tech jobs and generational wealth, they can keep contributing to a housing market that may well function as a playpen for the wealthy.

This is the issue that pisses me off the most and addressing the real causes of it go beyond small approaches, helpful as they may be. But, who knows...all economic data sets point to this being a housing bubble, and I'd be gleeful if all the foreign investors, parasitic home-flippers and ultra-rich who hoard housing take a massive hit.

effortpost later
build more fucking homes, abolish single-family zoning requirements, throw mandatory parking minimums out the window, end local control of zoning, build decent public transit systems (to address the contradiction of density and car culture), revamp the owned but uninhabitable homes (which is the vast majority of them, for the 500 people going to pile in here with "well actually there are more homes than homeless people"), and stop planning around cars


but the big two are simple: abolish single-family zoning and build more apartments/townhouses/duplexes/condos

we're undoing the legacy of harland bartholomew and making functioning cities for once

I await the effort post, because as it stands, you and I both know that things like exclusionary zoning are but one small piece of the problem. Housing costs in the suburbs have skyrocketed at nearly the same rate as most cities. Even rural areas are following suit. This is a crisis of our economic structure and a crisis of a society that is okay with a mentality of "fuck you, I've got mine."

[New haven america]

Give people houses!

There are more living spaces than people in the US, and the ultra wealthy of the country could by everyone in the country a house and still have money left over, so there's really no excuse for a crisis like this.

[Major-Tom]

effortpost later
build more fucking homes, abolish single-family zoning requirements, throw mandatory parking minimums out the window, end local control of zoning, build decent public transit systems (to address the contradiction of density and car culture), revamp the owned but uninhabitable homes (which is the vast majority of them, for the 500 people going to pile in here with "well actually there are more homes than homeless people"), and stop planning around cars


but the big two are simple: abolish single-family zoning and build more apartments/townhouses/duplexes/condos

we're undoing the legacy of harland bartholomew and making functioning cities for once

Yes to all of this.

Some comments on the OP's proposal:

Market Regulation
[list]
[*]Place a high tax on vacant properties. This way people who have extra housing while others don't have housing, will be motivated to either sell their extra housing or rent it out, just to avoid the tax, and they will have to sell or rent it at an affordable rate or else they won't get any buyers or tenants and the housing will still be vacant and the owner subject to the tax.

A vacancy tax doesn't punish huge parking lots, empty plots of land or single-family housing, which are the bane of suburbs and cities. In addition, it may discourage the construction of large apartments, since people will be unsure whether or not they can sell or rent them quickly enough to avoid the tax. So under a vacancy tax they may be more incentivized to build single-family houses and small apartments, which is still inefficient land use.

A Land Value Tax, however, is more efficient. It punishes the above three targets, and incentivizes landlords to do more productive things with their land instead of speculation. https://theconversation.com/a-land-valu ... isis-49997

[*]Enact a national rent control program to control the rate of rent inflation. Because it is national, landlords can't just avoid the regulation by leaving areas with rent control, because everywhere will have the rent control. This however must apply to all rental housing (existing and new), so to avoid landlords jacking up rents on new tenants. Landlords may decided to just stop renting, but then they would be subject to the vacant property tax and they won't make any money; even if they would lose money by renting out at the rent controlled rates for some reason, the vacant property tax should make it so that they would lose more money by not renting out at the rent controlled rates.

Rent control? Congrats, you just killed the housing supply. No more building new homes. Distorting the law of supply and demand is a bad idea. I would rather we build new homes with Kowani's proposal.

.

As little as two months ago, I would've agreed with you on rent control. But look at the law of supply and demand in the housing market right now? Does it not seem artificial? Does it not seem absurd beyond the rational restrictions we often try to place on what our conception of a "functioning market is?"

The housing market is more akin to a gold rush or like a speculative boom than it is a genuine market. It is akin to playing the stock market. Distorting the nature of its supply and demand may be wholly necessary when studies now show that almost every American living in an urban area cannot afford rent on a minimum wage, even the lowest wage rents.

There are few rational actors in real estate. Rent control is a must at this juncture, an unnecessary evil made necessary by greed and absurdity.

[Maricarland]

effortpost later
build more fucking homes, abolish single-family zoning requirements, throw mandatory parking minimums out the window, end local control of zoning, build decent public transit systems (to address the contradiction of density and car culture), revamp the owned but uninhabitable homes (which is the vast majority of them, for the 500 people going to pile in here with "well actually there are more homes than homeless people"), and stop planning around cars


but the big two are simple: abolish single-family zoning and build more apartments/townhouses/duplexes/condos

we're undoing the legacy of harland bartholomew and making functioning cities for once

Yes to all of this.

I also agree with all of Kowani's proposals.

Some comments on the OP's proposal:

Market Regulation

• Place a high tax on vacant properties. This way people who have extra housing while others don't have housing, will be motivated to either sell their extra housing or rent it out, just to avoid the tax, and they will have to sell or rent it at an affordable rate or else they won't get any buyers or tenants and the housing will still be vacant and the owner subject to the tax.

A vacancy tax doesn't punish huge parking lots, empty plots of land or single-family housing, which are the bane of suburbs and cities. In addition, it may discourage the construction of large apartments, since people will be unsure whether or not they can sell or rent them quickly enough to avoid the tax. So under a vacancy tax they may be more incentivized to build single-family houses and small apartments, which is still inefficient land use.

A Land Value Tax, however, is more efficient. It punishes the above three targets, and incentivizes landlords to do more productive things with their land instead of speculation. https://theconversation.com/a-land-valu ... isis-49997

I am all in favor of a georgist style land value tax (I have often argued that we should be replacing regular property taxes with a combination of land value taxes, luxury property taxes, and commercial property taxes). However I still think that a vacant property tax will be effective in getting housing stock that currently exists back on the market, and I do not think it will lead to a significant decrease in housing construction because people still need to have housing and housing developers are still going to try to make money even if it is less than it used to be. Though to be fair, if the vacant housing tax is as high as I want to be, in order to be an effective disincentive to holding vacant housing, than it would also be a disincentive to the developer that first builds new (and therefore vacant) housing, but in that case we could just have the government build the homes or commission community development corporations (CDCs) to build them and than give the CDCs a vacant tax exemption. Though, I think I will do more reading on how a land value tax may negate or replace the function of a vacant housing tax.

Enact a national rent control program to control the rate of rent inflation. Because it is national, landlords can't just avoid the regulation by leaving areas with rent control, because everywhere will have the rent control. This however must apply to all rental housing (existing and new), so to avoid landlords jacking up rents on new tenants. Landlords may decided to just stop renting, but then they would be subject to the vacant property tax and they won't make any money; even if they would lose money by renting out at the rent controlled rates for some reason, the vacant property tax should make it so that they would lose more money by not renting out at the rent controlled rates.

Rent control? Congrats, you just killed the housing supply. No more building new homes. Distorting the law of supply and demand is a bad idea. I would rather we build new homes with Kowani's proposal.

I would love a program to build new or renovate/retrofit existing housing, but that takes time, and rent control can act as a barrier against gentrification in the meantime. Just as before I don't think people would stop building homes because there is still demand for it and money to be made, and even if the private sector did fail to build enough homes, we can just have the government or CDCs take over that responsibility. Now, rent control may lead to less building of housing in an area if a nearby area did not have rent control, because that nearby area without rent control would attract all the new construction, but if it is national than there is no where for developers and landlords to go to escape rent control. Though I do admit that it would be better to just provide a guarantee to rent-free and quality public housing for each and every person who wants it. This way instead of forcing prices below their market value derived from the law of supply and demand, we provide a public competitor that puts pressure on private landlords to provide better housing stock and other services as well as lower prices to convince and justify people renting from them instead of going to the nice and rent-free competitor. I also admit that the way rent control was designed in the past was very flawed, though without national backing, there was little that could be done to improve the design.

I should also add that the law of supply and demand applies to commodities on a market, and while housing is currently treated as a commodity, I believe that is wrong. Homes are not for buying, selling, acting as a store of value, or an investment instrument, they are for living in and providing shelter. We should be working to completely or partially decommodify housing.

Placing limitations on home owner associations (HOAs) and providing more options for communities to abolish their HOAs, thereby requiring the locality to cover the services that the HOA provided, so that home owners subject to HOAs don't have essentially double taxation from both the locality's taxes and fees and the HOA's fees, for no additional increase in real services. This will at least make some housing more affordable.

In addition, we should nuke the mortgage interest deduction. It is practically a public housing program for the rich. But I'm also fine with capping it at $500,000 (rather than the current level of $1 million) and use the savings on housing vouchers and support for low-income homebuyers. https://www.theatlantic.com/business/ar ... on/526635/

Yes, I agree, except for the part of relying on housing vouchers instead of just giving rent-free and quality public housing.

[*]NOTE: The U.S. has more than enough vacant homes per homeless person (person, not household), so there is not a problem with real supply, and the policies listed above would lead to more vacant housing reentering the rental market or housing market. However, there are some local areas in the U.S. where demand does outstrip supply, and a lot of the vacant housing in the U.S. is in a state of disrepair or in reduced livability for one reason or another. These reasons necessitate addressing housing supply.

A lot of vacant housing in the US are from dying rural or Rust Belt areas, which are hard to live in. You don't want to live in an area with little job opportunity or poor public services, do you? In contrast, the cities are facing housing shortages partly because they are much better areas to live in, more employment opportunities, better public services, etc.

I believe I admit to this being a problem in the quote itself: "there are some local areas in the U.S. where demand does outstrip supply, and a lot of the vacant housing in the U.S. is in a state of disrepair or in reduced livability for one reason or another. These reasons necessitate addressing housing supply." As well as suggest proposals to increase supply.

Anyway, I have found this conversation productive. Thank you for your thoughtful reply.

[Maricarland]

Give people houses!

There are more living spaces than people in the US, and the ultra wealthy of the country could by everyone in the country a house and still have money left over, so there's really no excuse for a crisis like this.

You are 100% correct.

[The Black Forrest]

Housing crisis? Shouldn’t you address the resource problems like water?

[Conservative Republic Of Huang]

As little as two months ago, I would've agreed with you on rent control. But look at the law of supply and demand in the housing market right now? Does it not seem artificial? Does it not seem absurd beyond the rational restrictions we often try to place on what our conception of a "functioning market is?"

The housing market is more akin to a gold rush or like a speculative boom than it is a genuine market. It is akin to playing the stock market. Distorting the nature of its supply and demand may be wholly necessary when studies now show that almost every American living in an urban area cannot afford rent on a minimum wage, even the lowest wage rents.

There are few rational actors in real estate. Rent control is a must at this juncture, an unnecessary evil made necessary by greed and absurdity.

The theoretical issue with rent control is that it causes housing shortages, by keeping the market under equilibrium. What ends up happening is landlords let their property go to shit, since they can't make more money by improving it and charging higher rents and the ball is in their court during a shortage anyways. The much better alternative, that doesn't hurt the renter, are rent subsidies.

Of course, the demand and supply curves are fucked up right now by Covid, so who knows what the proper theoretical model for the current situation.

[Torisakia]

Build more houses. Next question.

[Washington Resistance Army]

Literally just give everyone a house.

[Drew Durrnil]

Literally just give everyone a house.

very wise of you to suggest that

[Equitania]

The solution to the housing crisis is the same as the solution to many of America's other problems. Reparations.

[Salus Maior]

The solution to the housing crisis is the same as the solution to many of America's other problems. Reparations.

It's not just minorities that have an issue with homelessness.

[Picairn]

The solution to the housing crisis is the same as the solution to many of America's other problems. Reparations.

Virtually any low income city dwellers (including poor whites) are fucked by the housing crisis.

[San Lumen]

Stop building luxury housing for rich people and build only affordable housing. That would go s long way.

[The Black Forrest]

The solution to the housing crisis is the same as the solution to many of America's other problems. Reparations.

Virtually any low income city dwellers (including poor whites) are fucked by the housing crisis.

In my area we have six figure income people unable to purchase a home.

The problem with building is there needs to be resource planning as well. Something that gets ignored these days.