New York Times complains about lack of affordable "starter homes" - Politics Forum.org | PoFo

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#15248515
The New York Times published an article lamenting the lack of affordable "starter" homes.
It admits that one of the main reasons is land prices.

This just goes with what I've been saying all along. The cause is immigration. Immigration leads to overcrowding in the already more densely populated areas where people want to live and where the job opportunities are concentrated. This drives land and home prices up.

The overall population replacement rate in the U.S. had already entered into negative territory. The only reason the population numbers continue to grow is because of immigration from other foreign countries.

Ironically the New York Times is complaining about this, even though they support mass immigration.

I believe one big part of the reason that that Americans are having fewer children--especially middle class Americans--is due to the fact that houses have become unaffordable to young families.

When you think about it, most children come from a very specific demographic of the population: women between the ages of 20 and 30. (The median age of childbirth in the U.S. is about 26 ) With the parents not having had time to establish themselves yet in their careers, these are families that usually can't afford to buy a house costing $400 or $500,000. Indeed, many American women now fear that if they have children before the age of 30 they might not have time to establish a career.

(Of course ironically affordability problems are more likely to make the middle class postpone having children rather than families with lower income backgrounds, who have lower expectations and may still likely choose to have children even if they are living in a small apartment and there is no yard for their children to play in and their children will not have separate bedrooms)


(I will copy the article here for three reasons. They have recently made the article available for free on MSN. The link will probably not continue to work for very long. Some people may have a slower internet connection and have trouble accessing the site.)

Whatever Happened to the Starter Home?

As recently as the 1990s, when Jason Nageli started off, the home-building industry was still constructing what real-estate ads would brightly call the “starter home.” In the Denver area, he sold newly built two-story houses with three bedrooms in 1,400 square feet or less.
The price: $99,000 to $125,000, or around $200,000 in today’s dollars.
That house would be in tremendous demand today. But few builders construct anything like it anymore. And you couldn’t buy those Denver area homes built 25 years ago at an entry-level price today, either. They go for half a million dollars.
The disappearance of such affordable homes is central to the American housing crisis. The nation has a deepening shortage of housing. But, more specifically, there isn’t enough of this housing: small, no-frills homes that would give a family new to the country or a young couple with student debt a foothold to build equity.
The affordable end of the market has been squeezed from every side. Land costs have risen steeply in booming parts of the country. Construction materials and government fees have become more expensive. And communities nationwide are far more prescriptive today than decades ago about what housing should look like and how big it must be. Some ban vinyl siding. Others require two-car garages. Nearly all make it difficult to build the kind of home that could sell for $200,000 today.
"It's just become where you can’t get to that number anymore," said Mr. Nageli, now the operations manager for the Utah builder Holmes Homes.
Nationwide, the small detached house has all but vanished from new construction. Only about 8 percent of new single-family homes today are 1,400 square feet or less. In the 1940s, according to CoreLogic, nearly 70 percent of new houses were that small.
Those starter homes came in all kinds over the years: mill worker’s cottages, shotgun homes, bungalows, ramblers, split-levels, two-bedroom tract homes. American families also found their start in brick rowhouses, cozy duplexes and triple-deckers.
But the economics of the housing market -- and the local rules that shape it -- have dictated today that many small homes are replaced by McMansions, or that their moderate-income residents are replaced by wealthier ones. (A little 1948 Levittown house on Long Island, the prototypical postwar suburban starter home, now goes with a few updates for $550,000.)
At the root is the math problem of putting -- or keeping -- a low-cost home on increasingly pricey land.
"When we started out 20 or so years ago, we could buy a lot for $10,000-$15,000, and we could build a home for under $100,000," said Mary Lawler, the head of Avenue Community Development Corporation in Houston, a nonprofit developer. "It was a totally different world than we are in today."
In Portland, Ore., a lot may cost $100,000. Permits add $40,000-$50,000. Removing a fir tree 36 inches in diameter costs another $16,000 in fees.
"You've basically regulated me out of anything remotely on the affordable side," said Justin Wood, the owner of Fish Construction NW.
In Savannah, Georgia, Jerry Konter began building three-bed, two-bath, 1,350-square-foot homes in 1977 for $36,500. But he moved upmarket as costs and design mandates pushed him there.
"It's not that I don’t want to build entry-level homes," said Mr. Konter, the chairman of the National Association of Home Builders. "It's that I can’t produce one that I can make a profit on and sell to that potential purchaser."
That reality conflicts with demographics. The typical American household has fallen in size for decades, even as the typical home has grown larger. Downsizing baby boomers and young adults who delay children figure to drive demand for smaller homes. So will increasingly diverse young buyers who have more debt and less access to family wealth.
These shifts may force communities, builders and buyers to rethink what a starter home looks like. In places where even small single-family houses are out of reach for many, the answer might be a condo.
Today in some parts of the country there is hardly anything on the market for under $300,000 resembling the American starter home of the last 70 years. In Raleigh, N.C., entering this weekend there were 17 such single-family homes with at least two bedrooms listed for sale. Across the Denver metro, there were six; around Salt Lake City, three.
In Houston, Felecia Ellis has been driving around on lunch breaks from a dental clinic looking for such a home in the $200,000-$250,000 range.
"Driving through a neighborhood, I’m like, 'Oh my god, this is a beautiful home, I know I can afford it,'" Ms. Ellis said. Then she pulls out her phone in the hopeful ritual of the first-time home buyer. The answer in the listing, more often than not, is that, in fact, she can't afford it.
"And I’m like, 'You've got to be kidding me,'" she said. "'This house is $425,000.'"
'It's flexible, it's malleable'
The starter home has always done a lot of work. It builds equity, creates stability, gives shelter from landlords and inflation. It has been an incubator of small businesses and community institutions like day care centers. And in an earlier form and time, it was more adaptable. Just add a bathroom when indoor plumbing arrived, a second unit to collect rental income, a garage once cars became common.
"It's flexible, it's malleable, and it allows for improvement, investment and change over time," said Marta Gutman, dean of the City College of New York's Spitzer School of Architecture.
In the early 20th century, communities were effectively using all kinds of models to solve for affordable, entry-level housing. But the arrival of the car enabled people to move further out, and new planning ideas declared what would be built there.
"That allowed us to say, 'Forget all those other typologies -- a starter home is going to be a two-bedroom detached house on a 7,500-square-foot lot,'" said Nolan Gray, the research director at California YIMBY, as in the opposite of NIMBY.
For a long time, that suburban model worked, although only for white families at first. But the economics and the politics shifted as the land within a reasonable driving distance of downtown filled in.
Land grew more expensive. But communities didn’t respond by allowing housing on smaller pieces of it. They broadly did the opposite, ratcheting up rules that ensured builders couldn’t construct smaller, more affordable homes. They required pricier materials and minimum home sizes. They wanted architectural flourishes, not flat facades.
"Local communities in the last 30 to 40 years have gotten really good at this -- way better than they used to be," Joseph Gyourko, a professor at the Wharton School of Business, said of rules that restrict development that neighbors don't like.
This mix of good intentions (energy efficiency, tree preservation) and exclusionary ones (aesthetic mandates, minimum lot sizes) has pushed up the cost of building on top of the rising cost of land. Cities have also shifted more of the burden for funding public infrastructure like parks and sewer systems off taxpayers and onto homebuilders.
The result today is that a builder who can put up only one home on an expensive piece of land will construct a large, expensive one.
Another result is that more affordable homes built decades ago are less likely to stay that way. A small house now sitting on land worth $500,000 will make sense mostly as a tear-down. A family earning $150,000 a year will compete with a family earning $60,000 when there are so few entry-level homes to buy.
"They still have the starter home," said Ed Pinto, director of the A.E.I. Housing Center, pointing to pricey Santa Clara County, California. "They still have the 1954 1,200-square-foot rambler."
It now sells for $1.4 million.
Or take the early 1900s bungalows in the Greater Heights area of Houston. Many were cheap rental housing in the 1990s, with chain-link fences and dismal carpeting.
"When you removed the chain-link fence, pulled back the carpet, and painted the walls back to white, these are charming homes which today we sell for $600,000-$800,000," said Bill Baldwin, a local broker and city planning commissioner.
Houston has relatively lax land-use restrictions, and reduced minimum lot sizes have enabled a townhome boom. But it’s not immune to rising costs, either.
One last result of these forces is that investors who surged into the housing market during the pandemic have become attracted to entry-level houses, too. These houses are more reliable as rental properties than high-end homes would be. They can house, after all, the renters who can’t afford to buy them.
Building a dependency over decades
The simplest way to put entry-level housing on increasingly expensive land is to build a lot of it -- to put two, three, four or more units on lots that for decades have been reserved for one home.
The outcome would look more like housing built a century ago, with more duplexes, more rowhouses, more homeowners adding their own rental units.
"We need to shift our culture away from this dependency on single-family detached housing, and thinking it’s the only solution," said Daniel Parolek, an architect and author of a book on "missing middle" housing.
Mr. Parolek worked with the Utah builder, Holmes Homes, to design one model outside Salt Lake City. They rotated the more typical rowhouse on its side, attaching small two-story homes along an intimate pedestrian path. The homes first came on the market in 2015 at about $200,000.
"It was a home run the minute we built them," Mr. Nageli said. But costs have risen even since then. And the builder hasn't repeated the concept elsewhere because most communities wouldn’t allow it.
From a builder's view, there's nothing particularly preferable about higher-end homes. Their profit margins aren’t generally higher. They demand more customization. They’re riskier to build in economic downtimes. Entry-level housing, on the other hand, is invariably in deep demand.
If more communities permitted it, builders would return to that end of the market, Mr. Nageli said.
"We would be thriving in it," he said.
In Portland, where Mr. Wood has long tried to build entry-level single-family homes, zoning reforms now allow multiple units on what were previously single-family lots. Today Mr. Wood is pursuing permits for his first triplexes and fourplexes.
"In 2022, we started our last single-family detached homes in Portland," he said. "I do not think we will ever do it again."​

The New York Times, Emily Badger, September 2022
https://www.nytimes.com/2022/09/25/upsh ... at%20small.
#15248595
late wrote:For the most part, no.

Btw, I had already read that article, did you read it?? Because that's not what it says.

Unlike you, I am able to independently use logic and come up with my own opinion about issues that the media discusses.

Maybe you can't believe there could be a connection between A and B unless the media tells you it is so?

I don't know about you but I think it's kind of a dangerous thing to be giving media a monopoly on how we interpret facts. Sometimes a little critical thinking is warranted.

You wouldn't respect me if I just copied and pasted someone else's opinion from the media, would you?

Now, would you perhaps like to proffer any other possible explanations for this? Or is it just going to be the predictable "blame Capitalism" and "greedy corporations"?
#15248610
Pants-of-dog wrote:This seems like more anti-immigration pseudoscience.

Is there anything anti-immigration that you do not consider to be pseudoscience?


Pants-of-dog wrote:Studies do not show that high housing costs are due to immigration.

Probably because those "studies" have not been done.

"An immigration inflow equal to 1% of a city's population is associated with increases in average rents and housing values of about 1%. The results suggest an economic impact that is an order of magnitude bigger than that found in labor markets."
Immigration and Housing Rents in American Cities, Albert Saiz, University of Pennsylvania, Wharton
https://repository.upenn.edu/cgi/viewco ... %20markets.
#15248624
Puffer Fish wrote:
I don't see what's so complicated about this. It's pretty basic market theory, supply and demand.
Prices go up when there are more apeople trying to buy something that is in limited available supply.

But hey, if you don't think that home affordability is a big issue, keep adding more population from other parts of the world.



Here's the part I don't get -- if the market mechanism is all-glorious then why the anxiety-mongering about *immigration* -- ?

Like wouldn't / shouldn't you be like 'Hey, it's all good -- the markets *got* this one and any situation you can *think* of, including *immigration*. Chill!'

But instead you're like 'Supply and demand rules the day, but now let's *interfere* with that, with some heavy-handed government actions that spend billions on a new wall, and backlogs asylum seekers, and displaces them into Mexico, and separates families, for a total nightmare for *any* migrant.'

So don't you find this *contradictory*, PF -- why interfere with supply-and-demand by enforcing a freaking *wall* -- ?
#15248637
Puffer Fish wrote:Is there anything anti-immigration that you do not consider to be pseudoscience?



Probably because those "studies" have not been done.

"An immigration inflow equal to 1% of a city's population is associated with increases in average rents and housing values of about 1%. The results suggest an economic impact that is an order of magnitude bigger than that found in labor markets."
Immigration and Housing Rents in American Cities, Albert Saiz, University of Pennsylvania, Wharton
https://repository.upenn.edu/cgi/viewco ... %20markets.


How does this compare to costs increases from other factors?

—————-

Okay, let us math.

    The median home sale price for all of New York City in the first quarter of 2010 was $383,699, according to data provided to Curbed by Miller Samuel/Douglas Elliman. Prices started rising in earnest around 2013, boosted by an onslaught of luxury housing hitting the market; by the third quarter of 2019, that number had almost doubled to $675,000.

Now, if your study is correct, and your claim that this is mostly due to immigration, that would mean that immigration almost doubled the population in NYC.

Did that happen?
#15248652
Pants-of-dog wrote:Now, if your study is correct, and your claim that this is mostly due to immigration, that would mean that immigration almost doubled the population in NYC.

NYC is a little bit different. NYC has been the subject of gentrification.

Yes, I know, this can all get very complicated.

We could have a whole other thread on the gentrification phenomena in NYC, and I believe I have already touched on it in some other threads.
To summarise, it ironically had a lot do with limited job opportunities in the wake of the 2007 Recession and young professionals rushing into the big cities because that's where they had to go for decent job opportunities. Combined with the fact that these young professionals were delaying family formation and didn't need a conventional house with yard space. Another irony is that improving race relations and lowering crime levels (partly as new immigrant groups replaced African Americans in certain areas) was another factor that contributed towards gentrification. Once it begins, it is a self-reinforcing cycle of course, much like the polar ice caps.

I think everyone knows that immigration has always put upward pressure on rent prices in NYC, but I will concede there was another very big factor here.
#15248657
Puffer Fish wrote:
Unlike you, I am able to independently use logic and come up with my own opinion about issues that the media discusses.

Maybe you can't believe there could be a connection between A and B unless the media tells you it is so?

I don't know about you but I think it's kind of a dangerous thing to be giving media a monopoly on how we interpret facts. Sometimes a little critical thinking is warranted.

You wouldn't respect me if I just copied and pasted someone else's opinion from the media, would you?

Now, would you perhaps like to proffer any other possible explanations for this? Or is it just going to be the predictable "blame Capitalism" and "greedy corporations"?



The article is more than opinion. Unlike your fantasy, it's based in the real world.

I got interested in what makes cities tick when Jane Jacobs published Cities and the Wealth of Nations, which I think was in the 90s.

Btw, putting words in my mouth is what morons do. Your ignorance tries my patience.
#15248697
Interesting Puffer Fish would blame the very people who are building housing in the US.

It is also interesting to note that the USA is one of the cheapest places in the world in which to buy a house. Mortgage to income levels put us at the 7th lowest.

Comparing the US to other nations is a difficult task though. We expect home ownership for young families and I am not certain that this is typical among developed nations. WRT home ownership in general we are far from low. Higher than the UK. Much higher than Germany. About middle of the pack.
#15248786
Pants-of-dog wrote:@Puffer Fish

If gentrification is an issue, then your claim (that immigration is the main reason for high housing costs) is incorrect.

No, that is a stupid comment on your part.

I conceded that gentrification was a big reason for the price increases (over that specific time period) in New York City.
That does not mean that immigration plays no role in New York City, and that does not mean anything for areas in the rest of the country.
#15248787
Drlee wrote:Interesting Puffer Fish would blame the very people who are building housing in the US.

It's true it is a big irony, but that does not mean logically I am wrong.

If you removed that immigrant labor, those houses would still be built, the construction costs would only be a little bit higher. (The construction would probably be a little bit better quality as well, another issue)

But like I stated before, the cost of homes (if we are only specifically considering new homes) is composed of three factors: Construction materials, cost of labor for construction, and land price). I think we can all agree that immigration results in a decrease in the cost of labor, but an increase in land price. What this will do, overall, is raise the cost of new houses in more expensive areas, and decrease the cost of new houses in inexpensive areas where lots of open space is available.

You can agree with that, I assume?

Unfortunately it is true that the best job opportunities tend to be in the more expensive areas. (That's why those areas are more expensive in the first place and why so many people moved there)


There are still some more remote parts of the U.S. where most of the construction workers are not immigrants. Obviously it becomes difficult to compete when contractors can come in and employ immigrant construction workers for much less money.
I am aware of some parts of the U.S. where Americans in the construction industry were forced to move away because their career became no longer viable in the face of so much immigrant competition.
#15248789
It's obviously mostly land speculation, and immigration has little to do with it. I don't know New York, but in my neck of the woods housing is also unaffordable. It isn't because immigrants are coming in and buying up the land, it's the speculators. We live in a terrible society. It is unjust when speculators can jack up the land prices to the extent that locals can't afford housing. But, that is the scenario.
#15248796
Crantag wrote:It's obviously mostly land speculation, and immigration has little to do with it.

I don't think you see how the two play into each other.

Pressures on prices to rise and shortages can fuel speculation.

People are not going to speculate on something in the first place if there is not a shortage of it and prices have not been rising.
#15248806
Crantag wrote:I don't know New York, but in my neck of the woods housing is also unaffordable. It isn't because immigrants are coming in and buying up the land, it's the speculators. We live in a terrible society. It is unjust when speculators can jack up the land prices to the extent that locals can't afford housing. But, that is the scenario.

Crantag, isn't it true you live in the Portland, Oregon area?

I think immigration very much has been playing a role in the driving up of prices in your area, but you just do not see it.

Maybe you need to familiarise yourself with the concept known as "chain migration". That's where one group moves from A to B, and it causes another group that was previously leaving in B to move to C. (It is the reason why Attila the Hun is considered one of the reasons for the collapse of the Roman Empire even though the Huns did not directly invade the Roman Empire)

A lot of the people who have been buying properties and moving to Portland over the last 20 years were not born in Oregon. Just because they are white does not mean it is not caused by immigration. Maybe you need to think about the places where they originally moved from - in particular California.

This could be the subject for another thread, and I will not discuss it here because I think there would be an argument over it, but immigration has resulted in a huge exodus of population out from California. And California contains about half the entire population in the western half of the country, so even a small exodus of people (relative to the total California population) could easily overwhelm surrounding states.

Consider this: If it was really all just "speculation", then a lot of these homes would be empty. You know as well as I do that that is not the case. All the homes are filled with people. They keep building more homes everyday and the homes are full; they fill up with tenants as fast as they are built.
#15248817
Puffer Fish wrote:

Consider this: If it was really all just "speculation", then a lot of these homes would be empty.

You know as well as I do that that is not the case. All the homes are filled with people. They keep building more homes everyday and the homes are full; they fill up with tenants as fast as they are built.



You're like one of those little dogs that has muckled onto something and won't let go.

You started this thread with an article that did not agree with you. It's not that you are completely wrong, it's that your understanding is incomplete...
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