Interesting that this report is produced by an academic institute in the US (in this case Harvard), in the UK the government releases statistics annually [1] around the same issues of affordability and access to housing.
Indeed, while simultaneously doing little of note to address the issue (beyond further propping up the house of cards with schemes like the lifetime ISA).
Sorry to be ignorant about this, but I just checked out the stats and the US has had like 50% population growth in the past 40 years, which is a crazy amount (proportionally more than China).
Where does this come from? Natural growth? Immigration? If so, what countries do people come from?
In contrast, most West-European countries (where immigration seems to be an oft-discussed issue), the growth in the same period is much more modest.
Foreign-born immigration caused the U.S. population to continue its rapid increase, with the foreign-born population doubling from almost 20 million in 1990 to over 45 million in 2015,[19] representing one-third of the population increase.[20] The U.S. population grew by 1.6 million from 2018 to 2019, with 38% of growth from immigration.[21]
In 2021, nearly 40% of immigrants, about 600,000 people, came to the US from Asia, followed by North America at 35%, Europe at 12%, Africa at 6%, and South America at just under 6%. The other 1.94% of immigrants were from Oceania or had an unknown nationality.
Mexico, India, and China were the most common countries of origin for immigrants. The highest number of immigrants came from Mexico: 424,791. India followed with 202,567 people. China was third with 114,121 immigrants.
TFR has been around or just below replacement rate for the last 40 years, so probably not due to that
Given China's one child policy between 1980 and 2015, comparing the growth percentage between US and China probably doesn't make sense (of course China population would grow slower).
We either need to reduce population growth, or convince politicians, voters, people looking to buy, and developers that just because we can't make a new hip metro area overnight doesn't mean we simply ignore all our available land (rather than continuously talking past each other on the issue of "we need more housing in desirable areas" vs "we need to not harm desirable areas").
That population growth did not go into "most of the USA is empty", it went into the same metro areas of SF Bay, LA, NYC, Texas, DC, etc. contributing to the speculative investment cost of living crisis that many homeless peoples lives have been destroyed by.
Took me a moment to get that heatmap. An axis labelled 1-10 from pale to red seemed absurd to me at first. "On a scale from-one-to-ten, how expensive are houses?"
It is a shame how vulgarization of science and statistics seems to necessitate a simplification of the data set to the point where its usefulness becomes debatable. It always seems to me like I want access to the axes that they've simplified away down to just a mean or an average. I get that presenting data is hard, but if I'm left more puzzled than informed at the end, what have you really presented to me?
In this case, I wish I could see the distribution of salaries through time and by location, as well as that of home prices. There ought to be a more interesting metric available than simply calculating the average of either and dividing the two.
I was eager to see the data, but exporting from the first source only gives the same data shown in the article, although in a spreadsheet.
The explanations in your second link are more like definitions than justifications for why this and those boiled down quantities are worth talking about.
The retired people who brought their house in 80s/90s can stay and hold onto the house for much longer, since the property tax is very "affordable". Whereas in other states, the property tax will push people to move to cheaper places during retirement years, thus increasing the supply to the market.
This will _eventually_ get phased out with recent changes, but only as the owners die off. You can still pass on a residence to an heir but they have to actually live in it (within 1 year of you dying, IIRC).
The effects of prop 13 are overstated. The problem is California didn't build enough where people want to live. Many states have laws restricting property tax growth, my own state limits it to the lesser of inflation or 5%. It's the lack of building that pushed prices so high that selling only makes sense to leave the state.
No, the effects of prop 13 are not overstated. NIMBYism is a bigger problem, but prop 13 makes it financially reckless to ever move. Yimby policy would lead to less drastic divergence between value and tax rate as value increases slower, but there would still be a gap as people who bought SFHs in the town center would see the properties value grow due to the lack of land value tax.
There's literally just too much money. Covid involved creating many trillions of dollars right when it was about time for a recession. What those dollars are doing now that they can't just be easily taken back is... well inflation and booming stock markets and nobody getting a raise.
I'd like to see an overlay showing which red areas are also college towns. Did easy student loans help fuel the increase in rents? That's what happened where I live, where dormitories are mainly for new undergrads. After a year or two, students are expected to find apartments. (And I wonder if something similar would happen if Universal Basic Income became a thing.)
It's not even about student loans. A group of students can always outbid the average family for housing. They need less space per person, because it's a temporary phase of life and most of their activities are elsewhere. And because students must afford studying and living on their own, their income per person needs to be on the same level as for the average family with kids.
Extra students were financed by (student) debt, ie. made up money, which could lead to inflation. Whereas UBI could be done without any money printing - just via taxation.
> If demand continues to tick up while the slowdown in construction persists, the Harvard report warns that this will "risk sparking another period of rapid rent increases similar to the recent run-up that has contributed to the worst renter affordability conditions on record."
That may be true in certain areas, but I don't think it applies where I live. Prices of existing homes just simply chase the cost to build a new home. The older the neighborhood, the less authoritarian the covenants are. The new development down the road start out at about $150k more for smaller lots, less house, and an HOA primed with rules ready to ream you a new one for simply breathing wrong. I poked around and some of the other recent developments have the same or similar covenants.
Most large metros land costs around 300-500k just for an empty lot. In chicago lots are often 400k while houses next door are 550k. Clearly the cost to build the house is not the issue here.
So many good things would happen if the coastal class occasionally remembered that the United States is a huge country with a vast interior. There are tons and tons of towns with affordable housing in Ohio, Kentucky, Michigan, Pennsylvania, and so on. The problem is that the incomes are lower, too – but that is fixable with remote work, companies being incentivized to hire locally, and so forth. There is really no reason why everyone needs to be centralized in 10 urban centers on the coasts.
Readit News
1. https://www.ons.gov.uk/peoplepopulationandcommunity/housing/...
Where does this come from? Natural growth? Immigration? If so, what countries do people come from?
In contrast, most West-European countries (where immigration seems to be an oft-discussed issue), the growth in the same period is much more modest.
Foreign-born immigration caused the U.S. population to continue its rapid increase, with the foreign-born population doubling from almost 20 million in 1990 to over 45 million in 2015,[19] representing one-third of the population increase.[20] The U.S. population grew by 1.6 million from 2018 to 2019, with 38% of growth from immigration.[21]
From Asia and North America mostly - https://usafacts.org/articles/where-do-us-immigrants-come-fr...
In 2021, nearly 40% of immigrants, about 600,000 people, came to the US from Asia, followed by North America at 35%, Europe at 12%, Africa at 6%, and South America at just under 6%. The other 1.94% of immigrants were from Oceania or had an unknown nationality.
Mexico, India, and China were the most common countries of origin for immigrants. The highest number of immigrants came from Mexico: 424,791. India followed with 202,567 people. China was third with 114,121 immigrants.
TFR has been around or just below replacement rate for the last 40 years, so probably not due to that
https://www.macrotrends.net/global-metrics/countries/USA/uni...
Also, longer life expectancies.
We either need to reduce population growth, or convince politicians, voters, people looking to buy, and developers that just because we can't make a new hip metro area overnight doesn't mean we simply ignore all our available land (rather than continuously talking past each other on the issue of "we need more housing in desirable areas" vs "we need to not harm desirable areas").
Both seem like impossible tasks, depressingly.
Dead Comment
It is a shame how vulgarization of science and statistics seems to necessitate a simplification of the data set to the point where its usefulness becomes debatable. It always seems to me like I want access to the axes that they've simplified away down to just a mean or an average. I get that presenting data is hard, but if I'm left more puzzled than informed at the end, what have you really presented to me?
In this case, I wish I could see the distribution of salaries through time and by location, as well as that of home prices. There ought to be a more interesting metric available than simply calculating the average of either and dividing the two.
Explaining price to income ratio (the 1 to 10): https://data.oecd.org/price/housing-prices.htm
The explanations in your second link are more like definitions than justifications for why this and those boiled down quantities are worth talking about.
The retired people who brought their house in 80s/90s can stay and hold onto the house for much longer, since the property tax is very "affordable". Whereas in other states, the property tax will push people to move to cheaper places during retirement years, thus increasing the supply to the market.
That may be true in certain areas, but I don't think it applies where I live. Prices of existing homes just simply chase the cost to build a new home. The older the neighborhood, the less authoritarian the covenants are. The new development down the road start out at about $150k more for smaller lots, less house, and an HOA primed with rules ready to ream you a new one for simply breathing wrong. I poked around and some of the other recent developments have the same or similar covenants.