I think it'd really be better if young people stopped getting student loans, and just didn't go to college, so they wouldn't have this problem. Eventually, the problem of overpriced housing will correct itself.
By the same logic, if they keep at it, eventually wages will rise to accommodate increased housing costs, and the problem corrects itself.
The problem is “eventually” has an unclear definition in both cases, and few are willing to sacrifice their potential of attaining certain careers or income in exchange for working low wage jobs waiting for a hypothetical future correction of this inequality.
It’s hard to level existing residences in many historic cities and so housing costs rise, yet people are still wanting the opportunities afforded by those cities enough to sacrifice having better housing conditions elsewhere.
>It’s hard to level existing residences in many historic cities and so housing costs rise, yet people are still wanting the opportunities afforded by those cities enough to sacrifice having better housing conditions elsewhere.
We don't have historic cities in America. At best, we have a few small historic districts, but everything else in the metro area is certainly not historic. But they don't build enough housing anyway, because too many Americans want McMansions instead of condos which are far more space-efficient.
The Bay area is particularly awful since existing homeowners have too much power (and local government has way too much power; local government should have NO power to restrict development, that should be the state's decision) and won't allow higher-density housing to be built as it affects their property values. This is a uniquely American problem.
>The problem is “eventually” has an unclear definition in both cases, and few are willing to sacrifice their potential of attaining certain careers or income in exchange for working low wage jobs waiting for a hypothetical future correction of this inequality.
My proposal is to just let the economy crash and take a couple of generations to recover, so just worry about your kids or grandkids having a better future. It's basically what's going to happen anyway, so you might as well not burden yourself with student debt. The situation we have now is totally unsustainable.
On the other hand, better education is (particularly on this board) usually recommended as the most important defense against unployment due to automation or outsourcing. How does this fit together?
This board, and other places, are wrong: better education isn't a fix. The problem is that many people just can't be productively educated to do higher-level jobs. For some reason, well-educated people frequently think that everyone is nearly as smart as them, and just lacks opportunity, but that's simply not the case. Lots of people just don't have the aptitude or interest, and nothing will change that. Even if they aren't stupid, you can't make someone interested in being educated; that's likely a product of their upbringing, and the only way to fix that is to wait a few generations while attitudes change.
The only fix for automation-based unemployment I see is a Universal Basic Income. We already have something like this with welfare and WIC/SNAP, basically paying people to sit at home and raise kids in poverty.
Anecdata, so please take with a grain of salt- in the past 5 years of my life I've spent significant time in Pittsburgh, DC, central NJ, and NYC. In each of these areas I've seen large luxury apartment projects, but not one project for affordable housing.
If you create high priced housing that no one (including students paying off massive ampunts of debt, where the min payment + rent = a mortgage payment) can afford, your high-priced housing will stay empty. Developers beware.
No one is ever going to make affordable housing on a scarce resources like land in a city. Developers will always build luxury housing.
When building was allowed, you got richer people moving into new luxury housing and as buildings aged, instead of fixing the luxury features, landlords would lower the rent and target a different market.
Now that many cities do not allow enough building you get richer people staying on those aging buildings or even moving into the city and competing for fairly run down housing.
If we don't allow building then two options are allocating housing by price or by lottery(like rent control), but either way people lose out because you can't put 110 families in 100 apartments. Unless more housing is allowed to be built there will be this frustration
They will build affordable housing if the government requires it as part of doing business. In NYC there are affordable housing tax incentives for developers that have resulted in small but meaningful additions to affordable housing. These programs are not at scale to impact the broad populace, but a stronger regulatory and incentive structure is possible.
That's still just a lottery based on who gets their application in first if it's not based on market pricing. If you command "affordable housing" be built and that's all that's available, then the people who would have paid for luxury housing will move into the "affordable housing" and drive up the price because that's all that's available. Additionally this will lower the efficiency of the market and makes less housing available as developers who would have built housing at X price drop out of the market when the price is mandated to be X-Y.
I am all for getting people help to get housing, but everything societies have tried to do to fix housing shortages for lower income people has failed other than building more housing. It's all just trying to paper around the fact that at the end of the day there are more people who want to live in the cities than there are apartments/condos/houses.
If you built like crazy and added 50% more housing in a year to a city, you'll find that suddenly a lot more housing is available
A lottery still drops people, it's just based on luck in the lottery and not how much you can pay. If that's what you want, then that's a position to hold. It does not, however, change the fact that there will still be the same number of people unable to get housing
Technically affordability is peripheral to profit margins - although they are very related right now. If they could make more money and get through building tenements they would because that is where the money is and that is what they can get approved.
In order for cheaper housing to win for new construction it requires both acceptance and greater profit margins.
Granted one doesn't need /new/ affordable housing if the new luxury leaves enough vacancies that the older high end becomes the new low end. The persistent historical lack of high density housing does make things worse because of the lack of dense housing to wind up relatively downgraded creates a bottleneck in density growth for affordable housing. If they were building only new luxury high density for 70 years there would be effectively a relative affordable housing from degradation and shifting designs.
> If you create high priced housing that no one (including students paying off massive ampunts of debt, where the min payment + rent = a mortgage payment) can afford, your high-priced housing will stay empty.
if too many developers do this, that high-priced housing will have to become low-priced housing if they actually want to clear the market.
definitely this. i can already afford a house, but getting the down payment saved up without crippling my social life (which is more important to me) is difficult (not impossible, though) b/c of student loans.