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I can’t speak to other markets but in California, the housing bubble is in part supported by investment from around the world. Chinese and Russian nouveau rich are buying homes in CA because it’s a safe place to keep their money relative to their other options. They might even just leave them empty and watch them appreciate. It’s disgusting, when people are struggling like hell just to live.
Perhaps the state could regulate this and ban international purchases or empty homes but I highly doubt it since the horse has left the barn decades ago and this would deeply impact many rich people, and those people have influence. It would also tank the home values of many average Americans, which would be deeply unpopular as many of those folks are banking on taking that value with them to Mexico or Ecuador to retire on. So this regulation would be bad for the rich and unpopular at large. It would help the young and the poor, the two chronically underrepresented groups.
So unless we can change the entire world order, I don’t see this wholly going away. Can we make it better? I think so. We need more supply, and it needs to be high density and low cost. Those are not insurmountable. But right now, private developers and the government don’t have what it takes to do anything.
I know someone who works for a low income housing non profit and they manage 8 big apartment buildings that their non profit built or bought and they operate them as homes for low income people. They are funded by philanthropists large and small as well as some public money.
If we could find a way to direct more money to such things, we could make a real impact. Perhaps a wealth tax that goes directly to such housing.
But even then, it’s like MediCal - it will only help those in abject poverty. It wont help my cousin who is making $125k and still can’t afford to buy a home. Middle class will never get help, basically, and this is why you see them moving elsewhere.
It's not just the Russians and Chinese. In rural wine country where I grew up, more than a third of the properties have been bought up by millionaires that visit maybe two weeks out of the year, hollowing out the town, and gentrifying anyone who was middle class or lower out of the area. Another third of what used to be rental housing is now air BnBs. Teachers and EMTs can't afford to live within an hour drive, so public service quality has cratered. None of the kids I went to high school with still live in the area (although many commute in, as they tried to make their careers where they grew up).
While recently we've seen more Chinese, the Russians haven't really made an impact. The trend (in this locality), however, was absolutely started by New York financiers, and had been ongoing for at least 15 years before foreign investment capital showed up.
This is what irritates me when people say there isn't enough housing supply. There are 16 million vacant homes in the US. It's not a supply issue. It's a class and economic issue.
I know it sounds radical, but I support a law would force landlords with property that has been vacant more than six months to offer it to section 8 recipients as a rental. I think this would cause a significant positive adjustment in the market, making housing more affordable and expanding access to those who need it most. Many landlords refuse to rent to section 8 whatsoever, so if they still want to avoid those tenants, they'd have to ensure their property is rented, opening up more housing and driving down rents.
+1 to everything you said
Airbnb type situations is part of the problem too. They're buying apartment buildings to rent out as airbnb's. Those need to be regulated and corporations can only buy above a certain amount (maybe 10-30) or be regulated as a hotel.
Yes, that too.