A homebuyer now needs to earn at least $114,000 a year to afford a $431,250 home – the national median listing price in April, according to data released Thursday by Realtor.com
The analysis assumes that a homebuyer will make a 20% down payment, finance the rest of the purchase with a 30-year fixed-rate mortgage, and that the buyer’s housing costs won’t exceed 30% of their gross monthly income — an often-used barometer of housing affordability.
Based off the latest U.S. median home listing price, homebuyers need to earn $47,000 more a year to afford a home than they would have just six years ago. Back then, the median U.S. home listing price was $314,950, and the average rate on a 30-year mortgage hovered around 4.1%. This week, the rate averaged 6.76%.
There isn’t enough of it because BUILDING IT IS ILLEGAL!!! This isn’t a failure of the market to build affordable housing, it is a failure of the government to allow affordable housing to be built due to the dominance of single family zoning! And furthermore, sfhs are cheaper than they should be because they are subsidized by the government - the taxes paid by sfh owners don’t even come close to paying for the maintenance costs for the infrastructure that serves them.
If you want to bring down housing costs:
It absolutely is.
I’m all for zoning reform. We should reduce or eliminate single family only zoning, and other unnecessary building requirements, in urban areas. But the idea that developers are champing at the bit to go build a lot of very low margin, quality, affordable multi family housing, and that the only thing holding them back is government regulations, is naive at best.
Right. Developers are champing at the bit to make money.
A lack of correctly zoned land and a plethora of red tape means that building multifamily will be extremely expensive, and thus, extremely risky. Thus, investors demand a high margin return for the risk they are taking. Upzoning and removing red tape increases the supply of land where you can build a multi-family unit, so investors are willing to accept lower-margin returns. It also opens the door to smaller local developers and cooperative developments. And the then expanded amount of multifamily housing drives down the cost of the luxury units as well.
One reason developers build luxury units instead of affordable units is that once they build, they can just sit on their investment and wait until people buy the units at the price point they want. Georgists tax schemes say “shit or get off the pot” - since they can’t profit from the underlying value of the land, they want to sell their units as quickly as possible so they can stop paying the tax. This incentivizes developers to build units that sell quickly, rather than units that sell for the highest price.
Are they? You seem pretty convinced, but I’m not so sure. Upzoning initiatives have been happening in various states and metro areas in the country in recent years, is there evidence that lower margin developments have increased in those areas?
That being said, I don’t necessarily oppose any of the measures you’re proposing, but, while they might work in theory, I’m not convinced they will achieve the results you believe they will achieve, in practice. I don’t think there’s anything wrong with trying this strategy, though. By all means, let’s try it, even if only as a trial somewhere.
https://www.texastribune.org/2025/01/22/austin-texas-rents-falling/
Well, that sounds great, then. I still think you’re being naive, and that you’re putting too much faith in the invisible hand of the free market, but, as I’ve said several times now, I’m not opposed to upzoning. Not at all. By all means, go for it.
America is huge and has tons of unused land. Style of housing is irrelevant.
If you were a developer, would you want to build houses so fast that your revenue declined? Probably not.
If you’re a government, would you want housing values to decrease from all those built houses, and with it, property taxes? Probably not.
Follow the money.
Not all land is created equal. You can buy some land in rural Nebraska right now and build your own modest house for less than $100k. You’d just have to commute an hour to get to the nearest dollar store.
Allowing more multifamily housing allows people to live affordably while simultaneously being somewhere they actually want to live, without having all their utilities and services subsidized by the government (ie, subsidized by people and businesses which exist in efficient and non-parasitic forms of development).
And yes, a big problem is that many americans’ life savings is tied up in their home value. Hence, liberalization of zoning codes and an implementation of a new taxation scheme must be done such that the vast majority of home owners don’t lose huge amounts of wealth and don’t have their lives significantly disrupted. This is very doable in any number of ways.
Under a Georgists tax scheme, government revenue would likely increase.
Arguably, our whole approach to small housing spaces needs to be looked at. Unlike in the UK and a lot of other European countries, you can’t lease or buy out your apartment, which really leaves you at the mercy of your landlord or your property company when they sell out or decide to throw you out for someone who can pay more.
Maybe zoning laws are bad, but I’m looking out of my window and see a mall that was built in place of a big square of grass where people would have picnics and sunbathe at summer in my childhood. The wind was also wonderful, and you could see all the way till the court building behind it from me (new, but not as ugly), and the ship-like Soviet enormous building on the side of it made the whole place beautiful. Now it’s just asphalt and that huge ugly mall in place of grass. Looks depressive and too expensive.
And right before my window there’s a two-story (almost 1.5) Soviet abandoned (some disagreement between ministry of defense that owned it in Soviet times and someone they illegally sold it to, there was some deadlock in deciding who owns it) cinema building, apparently the legal problems have been resolved and instead of it I might behold a buttfuck-ugly 5-story building instead soon. I’m certain that if that happens, a few trees and grass there would too vanish as if they never existed.
Moderation is gold, and all that.