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!
I think if we as an industry, a community, REALLY put our heads together *and are willing to sacrifice sacred cows, like high home prices* I'd bet there are great ideas out there.
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.
I’ve been looking for a statement by the NAR against Mamdani. Did I miss it? All of the talk about advocacy in our organization rings hollow if we can’t be bold enough to speak against a housing socialist.
And you are absolutely correct. If affordability and attainability were an actual goal, there would be a different conversation. Instead, we fought as an organization for tax benefits for the most wealthy.
And I say that as a hard-core conservative.
Happy Independence Day! Give Sonny whatever she wants. 🇺🇸🇺🇸🇺🇸
I agree, and affordable home ownership is something I'm passionate about as well. But too often when we talk about "affordable housing" we are either talking about:
1. Some kind of subsidized or deeply affordable housing - apartments - for people making 80% of AMI or less; or
2. "Affordable" rental housing for YIMBY elites in the Top 20 U.S. cities like LA and NYC.
Very rarely does it seem we are talking about starter homes for sale to the average person making a median income.
And how do you get those? IMO you have to make it profitable for private developers to build smaller homes on smaller lots. That's going to require tax credits, in my opinion. Think Opportunity Zones, but for starter homes.
Which people - including those who would benefit from it! - oppose because it "benefits rich developers." Which means as a matter of basic economics affordable starter homes at scale can't happen. So the death spiral continues.
Maybe I'm wrong. But if this country could build however many homes they did post-WWII for returning GIs, why can't we do it now for Millennials and Gen Z?
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!
Thank you for these comments, Paul.
I think if we as an industry, a community, REALLY put our heads together *and are willing to sacrifice sacred cows, like high home prices* I'd bet there are great ideas out there.
We just have to make it a real priority.
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.
I’ve been looking for a statement by the NAR against Mamdani. Did I miss it? All of the talk about advocacy in our organization rings hollow if we can’t be bold enough to speak against a housing socialist.
And you are absolutely correct. If affordability and attainability were an actual goal, there would be a different conversation. Instead, we fought as an organization for tax benefits for the most wealthy.
And I say that as a hard-core conservative.
Happy Independence Day! Give Sonny whatever she wants. 🇺🇸🇺🇸🇺🇸
I agree, and affordable home ownership is something I'm passionate about as well. But too often when we talk about "affordable housing" we are either talking about:
1. Some kind of subsidized or deeply affordable housing - apartments - for people making 80% of AMI or less; or
2. "Affordable" rental housing for YIMBY elites in the Top 20 U.S. cities like LA and NYC.
Very rarely does it seem we are talking about starter homes for sale to the average person making a median income.
And how do you get those? IMO you have to make it profitable for private developers to build smaller homes on smaller lots. That's going to require tax credits, in my opinion. Think Opportunity Zones, but for starter homes.
Which people - including those who would benefit from it! - oppose because it "benefits rich developers." Which means as a matter of basic economics affordable starter homes at scale can't happen. So the death spiral continues.
Maybe I'm wrong. But if this country could build however many homes they did post-WWII for returning GIs, why can't we do it now for Millennials and Gen Z?
I don't know exactly how we get affordable housing. No one really knows, until we try.
But two ideas.
1. Bryan Caplan's "Build, Baby, Build" book is really useful. I wrote about that on these pages.
2. I put forth MADRE a while back. Take a look at that if interested.
Well said! Loved this piece.