How We Actually Created the Housing Crisis

[arwat23]

I bet at least 20% of the houses in my area are short-term rentals. Also, the contractors tell me they could build 3 times more houses if they could hire more people.

That's (one of) the big issue where I live when it comes to new housing. Up until this year, there were tons of new projects being proposed and permitted, but there's a huge lack of labor. It's been getting worse over the last half decade, but even now, where everything has slowed down and projects are relatively scarce, finding enough people to work on a project is hard.

The short term rental thing seems to have backfired in my area. The county introduced a cap on the number of short term rentals allowed, and all were snatched up within a week and there's a wait list of over a thousand structures. I see more houses for sale now than I ever have. I look at the history of a lot of these houses and a lot were purchased less than 5 years ago, improved, attempted to be rented out, failed to find a tenant or failed to keep a tenant for more than a year, and now they're trying to sell the house for double the price their paid. Most are on the market for weeks to months and sell below their asking price after a number of price cuts. Less than a year ago the same house would probably command a $500,000 markup because people are insane imo.

Last year I saw a house in terrible condition (mold seemingly everywhere, literal holes in the floor to the foundation, house looking like it was about to literally fall apart) sell for $800,000... in a neighborhood where a new house would sell for around $1 mil at best. At least that guy plans to live in the house once he fixes it up...

 

[Joe.B]

Impact Fees

Right, unless your government has prohibited charging those for ADU's.

 

[Paul Sweet]

Impact fees, proffers for rezoning, and similar measures help drive up the cost of housing. They are the same dollar amount for small "affordable" houses as they are for McMansions, which translates to double the percentage of the cost.

Some localities in Virginia have recently changed their zoning codes to ban single-family zoning, and increase the density dramatically - 4 to 6 units on what was single-family. I fear that this will result in more luxury condominiums being built than "affordable" units.

 

[Joe.B]

In order to answer the question, we need to answer another question first. Do we want home ownership as a right in our society?

If it is a societal right, everyone must (and logically should) pay for it (there is a peripheral discussion on income tax and corporate tax reform in this path).

If housing is a commodity, the developer should pay for the costs of utility upgrades.

My response was specifically targeting the idea that the problem is with zoning regulations. More specifically, zoning for existing developments. When someone plans a development, they have to design the infrastructure to match. Hopefully they're making those decisions based on what the community wants, but no guarantee, and community needs change. Years ago, someone looked at an area and said "okay, we need lots this size for houses this size, so we'll put in this size water, sewer, roads, etc."

Now state law comes in and says, "Go ahead and double that. Shoot, triple it, and don't charge them for it." Unfunded mandate.

 

[mtlogcabin]

New or Existing home if attached then the code classifies them as a two-family dwelling. Impact fees are assessed. If it is detached it is an ADU and permitted as such and no impact fees can be assessed.