American Dream, Young People and Politics
Plus, a July 4th sale offer on VIP subscriptions
It’s July 4th weekend! I plan on doing my part to add to carbon in the air for trees and plants by grilling burgers, steaks, and… well, I’d say hot dogs, but Sunny really doesn’t like those… so maybe not that.
Anyhow, like so many other businesses, I figured I’d offer a July 4th Sale to Notorious VIP. Get 20% off monthly or annual subscriptions for a year. This offer is good until July 6th.
I don’t often do sales, so… if you’ve been wanting to see what is behind the paywall, this is your chance.
American Dream and the Young
But thinking about America’s 249th birthday, just before the huge 250th birthday bash next year, I couldn’t help but think about a topic that is near and dear to my heart. It is one I have agitated about for at least 15 years.
That topic is how our gravest challenge as an industry is to restore the American Dream of homeownership to younger generations.
If you search for “Millennials” on Notorious ROB, you’ll find posts going back to 2010 on this topic. This is the oldest one I remember:
Do We Believe in the Millenials?
Starting a few years ago, I've been hearing a lot about how the Gen-Y or Millenials (people aged anywhere from 18 to 30 today) are going to change everything -- but particularly in real estate. A random sampling of opinions about how the Millenials will affect real estate, from a Google search I just ran, turned up these recent posts and articles:
I have since written things like asking YPN to accept a new mission, interviewed Nicole Lopez, a Millennial REALTOR, about the plight of her peers, and warned about the political impact of the housing crisis for the young.
The interview with Nicole, I think, is now 5 years old… but I think it remains extremely valid and on point today… except what she says now applies to Gen Z as well as to Millennials… who are, after all, in their 40s now. Let’s rewatch it together.
In my “Chickens Will Come Home to Roost” post above, I wrote:
I'll keep pointing this out, I suppose, because I am genuinely concerned for the industry, for REALTORS, whether they are Boomers or not, and because I care about the country as a whole. These chickens are coming home to roost, and sooner than we think. We have got to figure out a better way, lest the "some sort of corrective" is something none of us want to see.
Well… in case you missed it… the largest city in America is on the verge of electing an openly socialist candidate for Mayor. Some critics—based on Zohran Mamdani’s past words—have called him an outright communist. There is cope, pointing out that working people did not vote for him. There is triumph, suggesting that finally, the “billionaires” are going to get their comeuppance. And there is no shortage of political handwringing over the rise of Mamdani.
And a few people have thought more about why an open socialist could win the Democratic Party primary in our largest city.
Housing is the Root Cause
I found this YouTube short that at least points to one possible reason:
These guys were quoting/paraphrasing Peter Thiel, billionaire and Trump insider, speaking at the Hoover Institution in 2020:
The relevant part, for us, comes around the 14:00 mark. Transcript:
There's a generational problem where it is difficult for young people to acquire capital, and that's the young people that are supporting Bernie Sanders. And the sort of the two simple political things that one should really think about are the runaway student debt in colleges, you know, it was $300 billion in student debt in 2000, it's up to $1.7 trillion today, and if you start your life in debt that can never be discharged in bankruptcy it will be much harder to accumulate capital and you might be less friendly to capitalism. So that is a big problem. And I don't think we should socialize the student debt but we should deal with it in a non-socialist way, we should internalize the costs onto the universities. We should redo the bankruptcy laws, yes, you can discharge the student debt, and when you discharge it, it's the college that gave you a bad education that gets stuck with the bill. This is the non-socialist alternative.
And then I think the other basic problem of a lack of capital or inequality is that it's very hard for people to get onto the housing ladder. The main way that the people in the middle class in this country accumulate capital is through owning real estate, through owning your house, and if through a series of urban zoning laws and bad planning and impossibility of building things, it has become impossible for people to get onto that, and if you could find ways for people to own more houses you would have much less of the sort of millennial crazed socialism.
People have summarized Thiel essentially as this: If you can’t get a stake in the system, you have no incentive to support the system.
Our younger generations increasingly cannot get a stake in the system. Therefore, what do they lose if they support socialism and rent control and taxes? For that matter, what do they lose if they support outright communism and government ownership of all real estate?
Nothing.
And while the student loan problem is a major one, fact is that only about half of the younger generations (52% of Millennials in 2003, 49% of Gen Z in 2023) go to college and have the student loan problem. 100% of them need to live somewhere, which means housing affects them more than does student loans.
The Industry’s Burden
The reality is that the real estate industry as we understand it (brokerages, MLS, Associations, vendors) does not control housing costs. Those are frankly above our pay grade. Macroeconomic factors like employment, interest rates, permitting costs, construction rates, etc. control housing costs far more than what we do.
But that ignores the fact that NAR is the second largest lobbying organization in the country (2023 below):
U.S. Chamber of Commerce - $69.58 million
National Association of Realtors - $52.40 million
Pharmaceutical Research & Manufacturers of America (PhRMA) - $31.72 million
American Medical Association (AMA) - $26.30 million
AARP - $15.90 million
We talk about “Big Pharma” all the time, but NAR outspends Big Pharma by over $20 million. Chamber of Commerce is bigger, but since the Chamber supports pro-business policies, real estate interests are also represented there.
The truth is that while NAR and the industry does do some good work in pushing for housing affordability—advocating for rollbacks on zoning and other restrictions to building, advocating for cheaper loans—our hands are tied because REALTOR commission is dependent on home values. High home prices = high commissions; lower home prices = lower commissions. That isn’t an opinion; it’s math.
I fully understand the difficulty involved. But housing affordability is not simply a matter of REALTOR income; it is a matter of our entire system’s survival.
What I asked YPN to do back in 2019 was to make housing affordability the single most important issue for NAR. They are the ones coming up into leadership positions, and people like Elizabeth Mendenhall (2018 NAR President), Brian Copeland, Dale Chumbley and others have already ascended into leadership. So, six years ago, I wrote:
YPN should be, must be, the group that puts housing affordability front and center of the agenda across the real estate industry. The next generation of leaders must address the issues of the next generation of consumers whose main concerns are not flood insurance or availability of loans or net neutrality but affordable housing. The YPN must slant REALTOR politics away from homeowners to home buyers and potential home buyers, even if that means advocating policies that result in drops in home values and REALTOR commissions.
…
Whatever the ideas are that y'all come up with, they have to drop the price of homes to a level where the average Millennial can afford to even dream about ownership one day. Just telling them they can take out larger and larger loans when they have the largest student debt load ever is not going to do the trick, y'all. So that's going to be a tough slog. We know this. You should know this going into it. But go into it you must.
What I feared then was that if we did not do our very best to reverse the trend for younger generations, our politics would become radical.
Because we all might need you to save us from what's coming otherwise. If the industry's future leaders do not step up and accept this mission, then rest assured that outsiders will. They might be political demagogues who take advantage of the frustration and rage of the younger Have-Nots who vastly outnumber the Elite Haves, or they might be giant corporations who see a way to profit from the rise of Renter Nation
In 2025, I think it’s safe to say that we have seen both political demagogues and giant corporations forming Renter Nation.
It may be unfair, and it may be asking too much of our industry to shoulder the burden of housing affordability. Yet, it is what it is.
And if the REALTOR Code of Ethics means anything at all, it means recognition of and embrace of social responsibility and patriotic duty. The Founders knew that upon the wise utilization of land and widely allocated ownership of land depend the survival and growth of free institutions and of our civilization.
Is that highfalutin’ idealism? Yes. Is it too much to ask of mere humans trying to make a living? Yes. And yet… if we want to see our civilization survive and thrive… that is what is being asked of us.
Restoring the American Dream
It goes without saying that restoring the American Dream, giving younger generations a stake in the system, providing positive capital (in Peter Thiel terms) in the civilization we inhabit, involve every institution and every person in the country. That is not the real estate industry’s burden alone.
It is, however, our burden in part. Whatever small (or large) part we play in that mission, we must at least try.
And as I wrote in this post last year, making housing affordable could end up benefiting the industry far more than hurting it. In 2024, roughly 4 million homes were sold at a median price of $404,500. Individual commission checks might have been larger, but the commission pool as a whole for the industry was lower than in 2020-2023 and came in at only $82.6 billion. Getting to 7 million sales at $252K results in $93.8 billion in total commissions, a 13.5% increase.
The industry can do better while doing what’s right for younger generations, for working people, for our free institutions and our civilization.
I keep toiling away in this industry because I love the original REALTOR Movement (which is distinct from the current NAR leadership). At the heart of that movement is patriotic duty and deep love for this unique country of ours.
Seems to me, there’s no better time to remind ourselves of that than the nation’s birthday.
-rsh
Reminder pitch: July 4th Sale to Notorious VIP. Get 20% off monthly or annual subscriptions for a year. This offer is good until July 6th.
I agree - we can do better, and I am also stymied on the "how" of making homes more affordable. I have some ideas, but will they float?
Smaller? OK. We all have to start somewhere. That tracks. Better get those regulations in check first, or it won't even work. Somebody has to give. (government, are you there?)
Cheaper? I don't know. I've seen upper-end homes (golf course, lake views) with modern laminate countertops. Sure it works and looks good but it's... missing something. Plastic countertops in the age of quarried marble, granite, or custom quartz doesn't ring the same tone. If it's not IG-worthy, who's going to post about buying a home? And if nobody posts about it, did it even happen?
Attached? Not as desirable, and these turn into landlord's dreams after about a decade or two anyway.
Remote? For now, yes, but wait until Mr. and Mrs. Remote Homeowner begin their family (if they can afford to, a different topic) - pressure from Me-maw and Paw-paw will pull them back to the burbs before they have a name picked out.
Materials and labor are a huge piece of a home's cost, and so are land costs. How do we get those down?
How do we loosen regulations so the exacting specifications that simultaneously require triple-pane, low-e, argon-filled windows to minimize heat loss that then forces the necessity for a system to bring in fresh air from the outside (gasp!) so the ziploc home and its inhabitants can actually BREATHE?
Radon was fairly unheard of until we sealed every gap in the building envelope with fire-retardant caulking, built the homes with six-inch insulated exterior walls, and mandated that the new home meets the airtightness of a submarine in the Marianas Trench. And so now we have increased energy efficiency, AND increased energy usage to keep the home from poisoning its inhabitants. Oof.
So it's difficult. And somebody would have to give something up, even if on paper. And we'd all have to endure their toddler tantrum because God knows, they'd throw a big one.
The government is wasting time forcing homes to be more energy efficient but ignoring the standard American diet that is quickly killing many of us, and making many more very ill in new ways and in record numbers. Because the FDA approved it. To keep the machine humming along. But I digress.
To transition:
Getting homeowners to sell their $400,000 home for $250,000 is a much different thing. Once a toddler has a toy, he's much more possessive than if it was never his at all. And these may be paper losses to some, but losses they would be.
There would be loss of equity, turning some homeowners upside down; loss of financial security; loss of freedom; loss of daily Starbucks and brunch and endless Amazon shopping; the very things that home ownership is supposed to provide. This would be much more difficult than asking REALTORS and agents to earn less on the transaction (being careful to avoid any industry-wide conversation around setting pay, because it's always negotiable anyhow).
These are not easy things.
Thank you for talking about them, Rob. All of us together, we may be able to figure it out!
Rob - Superlative post, as always.
I see only one solution besides quickly and inexpensively expanding housing supply, which is highly challenging. What is it? Subsidized interest rates for first time homebuyers. They’ve not had the opportunity to build equity to help them afford their next home. They are the most challenged.
You don’t want prices to go down, because few will want a home. Part of the dream of home ownership is that it’s been a great investment.
And you don’t want wages to go up too fast because that propels inflation.
That leaves low interest rates, perhaps complemented by low down payments like the VA loan program for veterans.
Happy 4th. You are a treasure to our industry.