back
518 comments
The problem is absolutley that housing is too expensive, which of course a bunch of realtors are not going to point out.

Increasing wages will not fix the housing crisis, and will just drive prices higher. How convenient for a bunch of realtors...

In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we get out of it. Of course, people went nuts offering over the asking price when interest rates were super low so I understand, to some degree, that baselines were reset.

But the current housing market doesn't feel sustainable. I don't understand how a proper middle class family could afford to buy in this environment, unless they are willing to put off any savings indefinitely.

Of all the jobs to get replaced by AI, I would be happy to see realtors to be first in line (but I also think this is wishful thinking).

I feel like I get very little value out of what seems to be a mostly fixed/required price.

I know flat fee realtors exist, and if/when we sell our home, I’ll be looking into this heavily.

But I feel like they rank up there with car salespeople/dealers.

Yea,

"We currently have 10 houses renting at $2500 for 15 people who have $2000 to spend on rent. WHAT IF, we gave those 15 people $2500 instead. Housing crisis solved?"

-This article...basically.

Supply and demand, supply and demand. It’s not that complicated.

I’m not sure how or why this article got published by an organization that should, given its very nature, understand economics. The article doesn’t paint them or their members as people I’d trust in either side of a major financial transaction.

Build baby build. It's the only way.
Vicious cycle. There was a story yesterday about a couple's rent going up 70% after they told the landlord they were having a baby around the same time the lease was up for renewal.

https://sfstandard.com/2026/06/17/san-francisco-marina-landl...

> Increasing wages will not fix the housing crisis, and will just drive prices higher.

This is true though?

Is it the case that housing was previously just very cheap and this is the normal price?
I don't think you're wrong; however, multiple things can be true at the same time.

In this case, housing prices are ridiculously high, and wages are ridiculously low, if you compare both to the overall cost of living excluding housing.

increasing wages will fix part of the inequality crisis because as you go up from working class to billionaires you get less income from wages and more from capital gains. if you raise wages that changes the distribution to be more equal and thats a good thing. but i agree it wont solve housing by itself.

for housing we need to replace zoning rules with a neighbor vote, put the community back in control instead of bureaucrats who block new apartments for dumb reasons or take bribes from developers to build luxury investment properties nobody wants. there should also probably be an escape hatch where anyone can build affordable/rent controlled apts without a vote but only if the location has high enough average rent. that would help balance out inequalities and break up exclusive rich neighborhoods, maybe even help against racism.

the other side is lower costs with less paperwork (removing zoning makes a big difference) and enforcing competition in the home building industry. make it easier to start a new business and break up corporate monopolies. create a safe path for undocumented immigrants to legalize themselves so they can have labor rights, make legal immigration cheaper and more predictable.

Realtors don’t own the houses.
Don't live in the US, but we're facing similar problems here in Norway. One main driver is that there's not being built enough new housing. It's a combination of building being too expensive, higher interest rates, etc.

So the second-hand/used market is red hot. Renting has become so expensive, that many landlords have exited - so we're likely heading into a really bad crunch in the near future for the renters. I've read about people spending 50%-60% of their net pay on rent alone.

> One main driver is that there's not being built enough new housing.

I recently entertained the idea of building a new house. Not terribly surprising, but worth mentioning that the time and materials to put up the structure was going cost even more than buying a used house. If nobody can afford to buy a less expensive used house then naturally nobody is going to build the much more expensive new house either.

Therein lies the bottleneck.

Similar problems here in Croatia, few reasons for it:

- Boom of AirBNB's and apartment rentals with tourism, with real low tax rates

- Limited liability abuse - company opens up, sells 30 apartments in a new building, build out the building, don't get any permits, just close the company down and open a new one. Legally, they are untouchable, and getting the permits is now on the apartment owners. Multiple friends live in such buildings, and maintenance is a PITA, trying to legalize it is a PITA, getting water/power is a matter of making shady deals with the neighbours, basically even living in it is technically illegal but not much they can do.

- Large influx of illegal money into the housing market (we have no law to investigate source of income), so money could be laundered easily.

- "Legalization procedures" where if you built a house before a certain year, or just started construction, it could be legalised. This caused people to build "fake roofs" and then claim it as a real building later on.

- Recently, immigration joined too - workers from non-EU countries are now allowed to get work visa's, and a lot of landlords are renting out a small 50m2 apartment to 10 people at the same time for ridiculous prices. The poor workers have to share bedroom with 10 other people, which is a terrible living condition, causing accidents like a whole floor collapsing due to 50+ people living in the building. While it's not legal, inspections are rare and the grey market is thriving.

- And my favorite - as a large number of apartments are bought as investments and uninhabited - around 22% in the capital, according to official estimates, with about 500k free total, in a country of 3.5 million people - the government got a great idea:

They will free up more housing, by offering the landlords of the empty apartments to rent thenm out with government guarantees. This means the government will pay them out 60% of the future rent money immediately, so the landlord can buy another apartment as an investment immediately using that money, and just get richer.

Now, we're in an interesting situation:

- Prices have risen quite a lot, like 3x over the last 5-6 years

- Existing landlords will get funding from the government to buy more apartments

- Meanwhile, new loan rules came out, prevent people from getting a loan that is more than 45% of their salary (after subtracting the costs, including your current RENT). 10% of the value has to be provided immediately by the buyer, and after loan payment and living expenses, you need to have at least 900 euros remaining each month from your salary.

In a country with a median salary of 1300 euros, with median rent being about 500-700 euros, this puts a lot of people in a locked position - you can't get a loan to buy, because you are renting. So from the 1300 euros of your salary, the bank subtracts 500 euros of rent as your "living expense", leaving you with 800 euros monthly total, which is under the legal limit for getting a loan, even tho once you buy the apartment you would not pay rent anymore.

So to get a 30 year loan to buy a 50m2 apartment, you need to have about double the median salary.

Now, they are talking about property taxes, which will force people barely making ends meet to sell the inherited land/houses/apartments for cheap to people that can afford it.

I bang on this drum a lot. We need Land Value Taxes to incentivize productive use of land, and we need to eliminate (or greatly reduce the burden of) Zoning (Japan has zoning but a great model that really allows building housing efficiently). When it costs $50k in permits and takes 2 years just to put a shovel in the ground, to build a single family home, and millions to build an apartment building, of course homes are expensive.

Inefficiently taxed land, and artificial scarcity via laws, turned housing into an asset class. This problem will not go away, in any country, as long as those two things are not resolved.

Land Value Taxes are the perfect economic solution, however they have the disadvantage of being nigh-on politically impossible to implement and keep, if they are implemented at the local level.

The political power base of a city is usually the land-owning class. Everyone from homeowners to commercial landlords that also live in the city. Roughly, every single person gets one vote when it comes to elections, but in the reality of local politics, the homeowners dominate due to their long-established social networks and the low-information environment of most local elections. Large landlords have barely any more influence than the random homeowner, and renters as usual are completely disorganized and are nearly impossible to organize.

We need both a much stronger organized tenant movement, and enough class-traitors in the homeowning class in order to get an LVT to stick. Ideally it would legally imposed at the state or federal level, and administered somewhat locally, with a mixture of funds going to the municipality, county, and state levels of government, IMHO.

Without a broader base of strong political support, LVTs eventually get voted out by the land owners, like in Vancouver in the 1970s.

Is it the wages or that shitty one bedroom apartments go for $2000+
In 1970 a $300/month apartment would be ~$2000/month in today dollars. I do think rents are too high as productivity and supply chains are much more efficient. I think in the 70s we were still using black pipe for gas, iron septic lines, and copper pipes for water. But, I don't think new builds or renovations are cheaper inflation adjusted (harder to estimate).

Cost of money (inflation), building, and maintenance is the floor for rents.

Again seeing some blaming poor immigrants for this in the very first answers.

Meanwhile, where do the money for OpenAI and the SpaceX IPO comes from? Who got hold of so much money? How did they got hold of it?

And here's the killer question: would they, and the rules and system supporting them, change in any way if there were less immigrants?

In most European countries this 30% rule has never worked. It's always been a completely out of touch rule, and, especially for single people, rent has always easily been 50% of their net income in major European cities.
Henry George was right about everything
Yet if I open X, I'm being told constantly that my European mind can't comprehend how poor we are and the richest European country is poorer than the poorest US state.
Wages in america are extremely high, its just property prices are even higher.
Landlords are the least productive class in society, and it's not even close in terms of ranking.
> Although this rule isn’t necessarily wrong, the reality is that modern budgets are much more complicated than they used to be, so you can’t take the 30% rent rule as a hard-and-fast guideline.

Modern budgets are not much more complicated. The rent is too damn high!

If companies would allow people to spread out more we could probably improve that situation some, but they want us all concentrated in 10-20 major metro areas. There's cheap housing in this country, its just in places where the job market is extremely limited.
Very Recently, wasn't there a lawsuit against apartment owners for a vast price fixing scheme based on them all using the same software package that was telling them all to raise prices at the same time.
I think right now, the only place I can afford a house (in a place I would actually like to live in), is in some derelict, abandoned Italian town in Sicily, or something like that.
On a note about addressing housing concerns, it certainly would only help a minority of folks but what do people think about right of first refusal?

Like if a landlord wants to sell their building and someone comes along with an offer for $500k then the current tenants have an option to buy it at that price.

Certainly would be annoying for investors looking to buy quickly but potentially life changing for long term tenants about to get a new landlord.

I’ve been on the 50/30/20 budgeting rule for a while now, and I agree it’s a healthier perspective for an individual than a “30% gross on rent/housing” arbitrary metric. Housing is one part of a larger bill of necessities you have to pay every month because society dictates these necessities are not rights, alongside food, energy, transportation, insurance, healthcare, and communications. Laying all this out on paper then multiplying by two and accounting for taxes, helped me remain calmer in salary negotiations because I knew not what I thought I was worth, but what I actually needed to survive.

The grim reality is that over-financialization of markets combined with a lack of regulations against predatory practices (like surveillance pricing and algorithmic rent setting) added gasoline to the bonfire that was a fundamental housing shortage brought about chiefly from treating housing itself as an appreciating asset rather than the land housing sits on and taxing accordingly (don’t even get me started on residential property tax schemes popularized by the Baby Boomers and the associated gap between sale price and tax assessed values dictated by law). Growing wages won’t fix this, nor will cutting interest rates. Building more housing is the only way out, but existing homeowners don’t want their assets to decline in value, so that’s generally not happening. Rent control is becoming increasingly popular, and I think it’s a good idea to protect existing renters and force landlords to side with wanna-be homebuyers instead of homeowners by forcing revenue growth through volume creation (new housing) instead of rent hikes.

this chart in the article has got to be the most confusing ever:

"Map showing the affordability decline by state as costs of living outpaced wages"

so a + is an increase in affordability as the title indicates (wages outpacing COL), or + is a decrease in affordability aka an increase in non-affordability (COL outpacing wages)

https://na.rdcpix.com/a19175a2a7e40c2a2272c013b8b3458aw-c174...

Canada here: it can absolutely, definitely get worse.
Not really. Rent is too high. It's not a problem unique to America. Rents in Munich, for example, have also doubled since 2012. A three-room apartment often costs between €2,200 and €2,700 per month in this city. For reference, that's close to an entire net salary for many, even for someone in the top 20% of earners in Germany, where salaries are relatively low and taxes are high. The median net income here is around €2,200 per month.

This has been a key factor in my fiancée's and my decision to move away, as it's simply unsustainable for families with children.

And yet listings in nice neighborhoods are gone in under a week in Seattle suburbs now. I started a rental 2 years ago and now again - similar houses are at least 25% more expensive now than two years ago. There was a line of families when I was viewing houses with good schools.

I think this is all demand/supply problem. There were way more rental listings May/June 2024 than this year.

At this point I honestly think this is a bit by design.

There is a crazy amount of land in the world, but either it's too expensive or you're not allowed to build over it, or a combination of both. Houses have been built for millennia but somehow in the most advanced period of humanity you're supposed to pay hundreds of thousands of dollars for a roof over your head.

I think that low key the ruling class + landlords are not interested that housing be an affordable thing, so the whole system works to create artificial scarcity. How's the population going to be forced to work unpleasant and low paid jobs if not by controlling their access to housing? You have to be too naive if you think that a few minds in your country's parliament haven't thought of this.

If someday economic activity gets automated enough, and the majority of people are not needed anymore for regular jobs, and this populace gets violent with their ruling class, then I think a lot of housing will be built outside of cities, and the supply of houses will no longer be a problem.

too bad houses AREN’T for living in, but for speculating
I am reminded of the phrase "Irrational exuberance" uttered by Alan Greenspan back in the mid 1990s. The housing market is absurdly over valued. It's going to crash. This is unsustainable.
For the ones that didn't read the article, it says there. The problem is that the state takes more and more away from the workers wages:

"The biggest flaw: It uses gross income, not take-home pay

One of the biggest issues with the 30% rent rule is that it’s based on your gross income—not the amount of money that actually lands in your bank account on payday.

To illustrate this flaw, let’s use some real-world numbers. According to the latest FRED data, the median household income in the U.S. is about $84,000 per year, or roughly $7,000 per month before taxes.

Under the 30% rule, you could theoretically spend about $2,100 per month on rent if this is your income.

But let’s take a look at what your take-home pay could be with this salary. "