The Senate on Monday passed a bipartisan measure aimed at lowering housing costs by streamlining construction and permitting, ending months of fraught negotiations on a priority for both parties ahead of November’s midterm elections.
The 21st Century Road to Housing Act would limit investors’ ability to buy homes, waive some federal permitting rules in a bid to ease new construction, and authorize pilot programs to facilitate grants for home improvements and planning affordable housing. It passed the Senate overwhelmingly, with a vote of 85-5, and now heads to the House of Representatives.
The legislation comes as Democrats and Republicans prepare for November’s midterm elections, in which concerns about affordability are expected to loom large in the minds of the voters who will decide control of Congress for the final two years of Donald Trump’s term.
A shortfall in construction of new homes is seen as a key driver of housing costs, which have crept higher in recent years. Last year, House and Senate lawmakers began working on legislation that could draw the bipartisan support needed to pass, but wound up producing competing bills, creating an unusual standoff between the chambers.
First of all, “crept higher?” Maybe somewhere, but locally, “surged” is more accurate.
That’s a mere quibble; the larger issue is the reality of what passed. Notwithstanding that this is election posturing that won’t actually affect prices before the election (and, of course, Trump’s threat that he won’t sign anything before the Orwellian “Save America Act” is on his desk), the bar is set absurdly high:
The version the Senate approved on Monday combines aspects of both chambers’ bills, and includes language banning investors from buying single family homes if they already own 350 or more properties …
Individual investors not distorting the market have nowhere near 350 properties in their portfolios. I wouldn’t know where to look for reliable figures in terms of average holdings, but 5-10 seems a far more reasonable cap that would actually cause structural pricing changes.
Left unsaid is whether institutions will be required to disgorge 351-plus (highly unlikely) and the timeline thereof. In short, this locks in the status quo and only quells further distortions.
Looks good on the campaign trail (“Look, I voted for something that looks like a fix if you squint!”), but does nothing about the ongoing issue that got us into this mess.
First of all, “crept higher?” Maybe somewhere, but locally, “surged” is more accurate.
To be fair, my home has only really fluctuated in price the past few years. Realistically, it shouldn’t creep higher over time, and it’s a problem that it does.
Individual investors not distorting the market have nowhere near 350 properties in their portfolios. I wouldn’t know where to look for reliable figures in terms over average holdings, but 5-10 seems a far more reasonable cap that would actually cause structural pricing changes.
This one, at least it’s a step in a direction. I agree that 350 is comically high, but it at least shows a willingness to enact that kind of legislation. Hopefully more restrictive laws start to pass in lower jurisdictions and it starts a trend. Also, I’m curious if it counts “an apartment complex” (or similar) as one property or as one per apartment because the latter would definitely have an effect on at least some businesses at least.
God only knows what the final legislation will look like, but the impression I’m left with is it only applies to SFHs.
The bill doesn’t really seem to address the issue of developers only wanting to build houses in certain over supplied categories that are the most profitable. Like it doesn’t really help prices if they only want to build “luxury apartments” and mc-mansions. We already have a massive over supply of those categories and yet the prices aren’t falling. So making it easier for developers to build won’t really solve the issue.
Zero money for non-market housing, public or co-op. Lots of hand outs for “affordable housing” which is rarely actually all that affordable. Like, in my area they calculate affordable housing as 1/3rd the average income. But like, bruh, the average income is like 60K, so like, “adorable” housing here is like 1600$ a month, and they won’t let you move in unless you make 3 times that monthly, so you’re basically priced out if you make less than 60K a year.
We need shit that’s actually cheap, and not built to generate a profit or to be a valuable asset in a portfolio. We need public housing projects and investments in turning existing corporate owned housing in to co-ops. The best way to lower prices on the market is to build a category that forces prices on the market to compete with something not trying to make profit. Building transit lines to areas of housing over supply would also probably help.
I’ve seen some adorable tiny homes over the years … but, yeah, my last apartment accepted me based on income (3x rent) at $940/month. I had to leave four years later when it hit $1350 and I was making less at a new post-Covid job. Problem was, that was on the cheap end for “you’re highly unlikely to be a victim of crime” complexes in the metro area.
So I built out a van with solar and batteries, found a great parking spot, and spent the better part of three years living in it. Not having housing costs or utilities was really nice. With summer on the way, though, I decided to take friends up on an offer to rent a room at the start of the month. I’m happy to share in the communal finances and chores, as everybody wins. But the medium-term goal for them is to sell the house and buy unimproved acreage out in the sticks, drill a well and get septic, then build out solar as needed to start a proper commune (with internet, of course).
Even if developers were magically churning out $150K houses to address demand, I have no interest in living in a bank’s house where I pay to fix everything in addition to an almost-guaranteed HOA (with perpetual fees!), so this seems like a good move. I’m debating selling my van or keeping it as my starter home on the land.
I suppose my point is, getting a lid on housing prices for us plebs is a step in the right direction. But with job stability being as it has been for more than menial labour for decades at this point, tying myself to a 30-year mortgage is a nonstarter, especially in an area where climate change is a serious problem. The calculus is totally different for people with kids (there are two in the house) who aren’t interested in going off grid.
Housing affordability is only one tine on the fork of the current fucked situation. I’m content to let others figure out the details, but experience suggests that anything that can be made unaffordable in short order will be, and greed is not the exclusive purview of people in gated communities. The scale of building new single-family houses that would be required to not have $150K homes turn into $300K homes is immense, and I don’t see government being up to the task anytime soon.
Now, if we taxed the rich and closed the loopholes they use …
See that’s the crazy part, we already have built enough houses that the prices should have dropped significantly, but the price hasn’t fallen. Many regional markets actually have a glut of housing supply but prices have barely fallen, because companies and realtors would rather the inventory not move than sell them for less.
Across the country local and state governments have been doing just about anything they can to enable private construction, and it’s not brought prices down, just created a supply glut and slowed the market to a crawl.
The private sector is unable and unwilling to solve the issue, policy aimed to work through the private sector to solve the issue is doomed to failure. We need public intervention and non-market housing.
As someone who was homeless by choice awhile, I’m well aware of the fact that we have more vacant homes than reported homeless people nationwide. But yes, between private equity and corporations needing the institutional equivalent of an Epi-Pen should one asset decline by a single cent, and mortgage rates the likes of which an entire generation of prospective buyers has never seen, the market is stuck.
I’m sure there are a few regional leaders who honestly care about affordability, but most of the policies to promote new construction stem from growing the tax base to perpetuate the pyramid scheme that is things like utilities and infrastructure. It’s like luring manufacturing “to create great jobs!” – except without any tax breaks. Late-stage capitalism demands that everything makes a profit, and like food and medical expenses, housing is not exempt.
Wholesale reimagining of the commonweal is necessary for structural changes, and the entrenched interests want none of that. Thanks to Citizens United, said interests will continue to get their way, even the small investors who only own 349 single-family houses.
