Real Estate Expert Answers US Housing Crisis Questions | Tech Support | WIRED

I'm Kate Nisher, I'm a professor of urban planning, let's answer some

questions

from the Internet, this is

housing

support

. Ethan also says why the rent has to increase every year, but my salary doesn't have a sad face, that's

real

ly disappointing, so if you look back from 1995 to now, the percentage increase is almost a 100% increase in the amount of rent people pay, but incomes don't increase as fast, of course rent increases with inflation, but this is more than that, many of the low cost units are disappearing. of the market because they have transitioned to luxury homes, owners are increasingly charging more based on the improvements they have made or have transitioned to homes for sale, there has also been an increase in what is called institutional investment, these They are corporations that buy homes and also multiple family residential buildings to rent them out for a profit.

In 2001, only about 18% of rental units were owned by corporations today, that's about 50%, so it's very likely. who is paying rent to a corporate landlord in Gareth McDade asks: is there a

housing

emergency or are we not in a housing emergency and we are also in a housing

crisis

housing emergency is actually a legal term if unemployment falls below 5% the municipality can declare state of emergency and that allows them to access all these different types of policies rent stabilization rent control are examples of this a healthy housing market has a vacancy rate greater than 5% the vacancy rate in New York City is actually 1.4% right now anything charging less than $2,400 a month in rent the vacancy rate is actually 0.4 to 0.8 a very low vacancy rate.

I love it b43 asks why are houses so expensive. Houses are very expensive right now. Number one. It's a supply and demand problem. The United States is about 4 million homes short of current demand and shortages of any basic product mean the price goes up, in fact, 2023 was the least affordable year to buy homes in the United States. Interest rates are rising. It is very expensive to invest in development projects and also encourages developers to develop luxury housing rather than more affordable housing. housing because there is this rich market the developers are building to target that market they are building very expensive luxury homes that means no other housing is being built so everyone's prices increase as a result of more luxury developments in true nyjet GC asks why cities won't use these abandoned towers to create affordable or homeless housing.

What is wrong with this country? Depending on the age and condition of the building, it may sometimes be more economically viable to demolish the building and build something new. Older or pre-war office buildings. Ventilation of office buildings required windows to be provided for each office space, so it is easier to convert these older office buildings to residential because they are already designed like our residential buildings. Newer buildings are very difficult to convert to residential and very expensive to do so. This, if you want to convert it into a residential building, you must replace all these windows.

You can't have a bedroom without a window that can open. You would have to drill a hole in the middle of the building to provide access to the windows. Reconfigure everything. building plumbing to connect all the individual bathrooms and kitchens changing the electricity supply changing the HVAC systems, so this requires simply completely transforming the interior of these buildings in New York City there are about 94 million square feet of unused office space that's equivalent to all the office space in Dallas and Houston combined, it's a lot of bacon right now and we have to figure out what to do with it up top for housing, says what

tech

nology Housing is here to stay modular, modular homes can also be called prefabricated.

Different components will be manufactured at different manufacturing sites. They will all be brought back to the site and put together like a puzzle. Manufacturing can take place where labor is cheaper and doesn't bother the neighborhood as much either. Another new construction

tech

nology that I'm

real

ly excited about is something called Mass Timber, where wood is laminated with a special glue to create really large wooden beams that are very strong, are also fire resistant, and have a smaller carbon footprint. Mass Timber is now getting stronger and can therefore be used to build taller and taller buildings. A couple of years ago, the tallest building you could build in the United States with Timber, at six stories, now you can build 18 stories, so "We're going to start seeing skyscrapers built entirely out of wood.

It's pretty amazing. Readlight says it will be interesting to see how waterfront property values ​​change as sea levels continue to rise. This will be really interesting so far, although it hasn't really affected home prices, oh Hawking. asks what redlining is, in some ways it has come to mean any type of racial discrimination in housing, but there is actually a very specific history surrounding redlining, this is a map of redlining of Cleveland in the decade 1930, the federal government of the United States decided to start a new mortgage program to allow home buyers to access federally backed mortgages the government created these maps to determine where their investments would be safe green areas where you see here below is Where the federal government felt that their money would be put to good use they also created a class d or red class, which was actually a no-go zone where the federal government did not want to grant government-backed mortgages.

These areas marked in red were where black families lived, making it very difficult for predominantly black residents living in these areas to access mortgages. of these maps exist for communities throughout the United States. These maps were not made public until 1978, when a historian stumbled upon them. If you look at the neighborhoods that were historically redlined, these are still some of the most racially segregated neighborhoods in the entire United States. and those effects are still felt today, many of the historically redlined neighborhoods have experienced disinvestment and, more recently, many of them have become targets of gentrification, displacing many of these residents, just as Don Gotti says that gentrification is so bad that there is something called direct displacement people.

They are directly displaced from their homes because they can no longer pay the higher rents. Something else also happens called indirect displacement. The stores are different. Community members are different and this makes you feel uncomfortable in your own neighborhood. Both. Things are bad. I think a lot of people think of gentrification associated with these kinds of design choices that hipsters make, so you think of Swiss house numbers or sometimes gentrification fences around houses. Actually, these are kind of an effect of gentrification, they are not. causing gentrification gentrification is actually caused by institutional investment in low-income neighborhoods.

Investors are coming in and recognizing what's called a rental gap. The gap between the current rents charged in low-income areas and the potential to charge higher rents. These neighborhoods could actually be centrally located. could be close to Transit and therefore investors see an opportunity to buy and upgrade buildings and then take advantage of that gap by charging higher rent on burns2 Regina says I'm confused as to how exactly Airbnb is affecting the real

estate

market a A lot of rentals that would have been provided for permanent residents have transitioned to Airbnb housing, meaning it reduces the total number of rentals available on the market and drives up prices, for example, we can look at London, it's the city ​​with the largest number of Airbnbs in the world.

Previously, 50,000 Airbnb units were long-term rental units in London, meaning 50,000 rental apartments were taken off the market and are no longer available to permanent residents. Additionally, some research has shown that the rise of Airbnb actually contributes to gentrification and rising home prices in certain neighborhoods. on Scotty Zs she says how my parents bought a house when I was 26. Well, I have $2,000 in my bank account. I feel your pain. Scotty Zs things really are very different for Millennials than they were for Boomers when Boomers were reaching purchasing age. a house around the late '880s and early '90s, if you made around $50,000 a year, the average house at that time was about $121,000, so that's actually only an increase of two times of their income;

There is a small drop here after the 208 recession, but it increased dramatically as the median home price increased by 43%, where the median income only increased by 7%. The average right now in the United States is a house price that is about six times the median income if you think about very expensive places. like coastal California or New York City, which can be about 11 times the median income in Kevin V dalren ask what the root cause of homelessness is, there are many common misconceptions among people who are homeless, that maybe drug use is involved, that there is Mental illness and these things exist, but they are not the causes of homelessness.

Recent research from the University of California, San Francisco found that the primary cause of homelessness is lack of access to affordable housing. It is very easy to lose your house. 8.5 million. Americans right now are at risk of homelessness because rents are so high and incomes are so low. Any increase in rent or perhaps a medical emergency could be the difference between someone staying in their home and becoming homeless. Newsmenu says Why are there so many homeless? In Los Angeles there is a common myth that there are many homeless people in Los Angeles because they move there for the good weather.

This is actually not true. Researchers have found that the vast majority of homeless people in Los Angeles are from California. and even in that specific county where they previously had housing in that area and then they were priced out and became homeless, California, as you can see here, has the highest number of homeless people of any state in the entire country , this number has increased by 40% since 2007 New York also has a very high number of around 103,000 people, there are differences, although the majority of homeless people in California are unsheltered, meaning they do not have access to facilities of temporary shelter.

In New York, most of those people are sheltered, that's a result of a policy in New York City called right to housing. New York City is the only city in the country that requires the city to provide a shelter bed. to every person who asks for it in Don J says why do corporations buy houses just to rent them, why should any house be owned by Walmart? I don't know anything about Walmart, but corporations are certainly buying houses. There was a lot of speculation online about a company called Black Rock, which is a private equity firm that buys single-family homes and rents them out.

This is not actually happening, however, Black Rock is investing in real

estate

investment trusts that invest in acquisitions and rentals of apartment buildings, so Black Rock is not buying suburban homes, it is investing in the housing market. rental, so corporations are recognizing real estate. Equity as an asset class that you would like to invest in, just like stocks and bonds, is a form of what is called financialization of housing and this really means the transition of housing from a social good to something that we need to live something that can be bought, sold and exchanged and where people can make a lot of money in hod hi highbar ali1 asks why there are so few houses on the market.

Developers take a long time to receive approvals to build their projects in Santa Monica, California, the average development takes 48 months to be approved, that is, 48 ​​months in which the developer waits for approval before construction can begin. Rising interest rates are also affecting housing. Specific supply for existing homes if you buy your home before the recent increases in interest rates. I don't want to sell and buy a housenew and run the risk of getting a bad interest rate if we look at the home. Supply before the financial

crisis

was pretty stable, but it actually increased just before the financial crisis and then jumped off a cliff that just collapsed. 6 million Americans lost their homes, housing production started again but at a much slower pace because developers were a little scared, demand skyrocketed but there wasn't enough supply to meet it, some cities have actually seen a 50% reduction in housing inventory since the pandemic in our new Local coach asks a serious question: where in the world are they getting housing policy right?

I would love to learn from that place that is doing well is Vienna in Austria it is dense it is lively it is vibrant it is a huge cultural center in Vienna 60% of people live in public housing, which compares to about 1.5% in The US. This graph shows the available housing in Vienna, as you can see, approximately 57% is market price, while a large percentage of the available housing is public housing, meaning it is owned and run by the government by private non-profit organizations that receive government subsidies to provide this housing, so if you are looking for an apartment in Vienna right now, you will most likely qualify for public housing because in Vienna public housing It is not only for low-income families, but also for Middle-income families in the United States are only for low- or very low-income families.

His fake mother says what exactly squatters' rights are. So what that means in a place like New York is that if someone lives in a property without a 10-year lease, they take care of that property, it's known to the neighbors, they don't do it secretly, they can claim that they have rights to that property that You are the owner of that property because you have used and maintained it for that period of time just because you claim squatter rights does not mean the property becomes yours; It is a court ordered process when you go to court to claim squatter rights, the original owner can of course come and defend their right to own the property, if successful the property will be transferred to You, if unsuccessful, will have to vacate the property in Chippity.

Doah says: is there anywhere affordable to live? There are almost no places like California, New York. These are places where the ratio of house price to income can be around 10 to one. It would cost you approximately 10 times your income to pay the median home price. Things get a little more affordable if you venture into smaller rural communities in some places in rural Texas. They are also somewhat on the more affordable scale, but even these are becoming increasingly unaffordable because the supply of housing is decreasing in these areas due to a lack of interest in development, for example in a place like Buffalo, which tends to be quite affordable. it's getting scarce because there isn't enough development, which means it's getting more and more expensive in Thor says I should buy a house on Amazon, let me know guys who are feeling impulsive.

I would say it's not a good idea. The Amazon home listing is really part of it. of this broader tiny house trend, these are very small houses that can be built on very small lots with just tiny houses, they look like scaled down mini versions of suburban development. This is exciting, but not a big trend, but only about 1% of the current active housing market is small houses, not a solution for housing affordability in Rosie Dell says what policies would reduce housing prices housing what policies would help tenants have sufficient access to affordable housing, so when we talk about housing prices we are actually talking about increasing supply, that is what will drive down housing prices.

When talking about rents, it is of course necessary to increase the supply of rental housing, but policies can also be introduced: the government gives tax incentives to developers based on the promise that they will include affordable units within their new developments. Rent control and rent stabilization are things that are really useful in a certain context, so there are about 16,000 rent-controlled apartments in New York City and about a million rent-stabilized apartments. Rent controlled apartments are only those that were built before 1947, this means that rental prices are set at what is called a base maximum, meaning rent controlled apartments cannot fluctuate above that maximum rent.

Rent stabilization means there are limits to how much rent you can pay. They increase year after year, so those are all the

questions

we have for today. Thanks so much for looking.