> Ketchum is facing a cascading housing crisis caused by a rush of new residents during the Covid-19 pandemic, growing demand for workers during the economic boom that has followed
> or that we lost half a million people in the labor force...
This is not true, unless you're considering all ages in the labor force. Stats from this page[0] seem to indicate that COVID-related deaths are <120k for people under age 65. That's quite a bit less than "half a million people" in the labor force. (Assuming, like I am that people tend to retire at 65.)
I think they meant “lost” as in “not participating” not “lost” as in “dead”
I haven’t looked up the change in labor force stats myself, but they’re not simply the total number of living people in a certain age bracket. There are plenty of people between 18-65 who aren’t part of the labor force: i.e: disabled, retired, stay-at-home, incarcerated, etc.
The town is having an economic boom because it saw a large influx of remote workers this past year. Those workers require goods and services, which leads to job openings to fill the demand.
It may come as a surprise to people in large cities, but the vast majority of the country (geographically) was pretty much business as usual from summer 2020 onward.
Yes, the US economy is measured in US dollars. If you are trying to make a cryptic remark about inflation, I've linked some information on how GDP is measured.
Specifically, "The nation's gross domestic product totals trillions of dollars. Most often, the number you'll hear people refer to as "GDP" is a percentage. That's the rate of change in real GDP from the previous quarter or year. "Real" or "chained" GDP numbers have been adjusted to remove the effects of inflation over time, so different periods can be compared."
This reminds me of housing problems in boom towns. People move to the towns because reasons and overwhelm the basically static housing supply. Towns are reluctant to build out infrastructure because it's expensive and time consuming and they aren't sure how long the boom will last. Developers are reluctant to build because they don't want to take the risk of building out more housing and then just as they open everyone leaves, again.
People are spending their summers, remotely working, in a winter resort town. But what happens when the winter comes and the town isn't so fun anymore. Or when the SV office wants you closer to home. Will some of these remote working migrants be willing to take on a pre-construction loan and 30 year mortgage? Probably not, which is why housing is the way it is. Everyone is grazing and trying to figure out this new era of labour.
This country is rapidly approaching a serious precipice. The decades of stagnating wage growth is catching up with the pace of modern life. Corporations run the country and governments don't give two shits. I've always been an optimist, living in the best days of civilization etc, but it gets harder and harder every day to continue thinking this.
I feel like most of these problems can be solved by increasing density and having fast transportation links. We are better off having Chinese ghost cities than low density superstar cities where the average worker has to commute hours thanks to a woke left fear of “gentrification”. Build, baby build.
Does a country really benefit from a majority of its people living in hyperdense incredibly urbanized cities, stacked on top of another in 200 sq. ft apartments? Gotta be a better solution - I of course don’t know what it is, but just my 2¢
If we thought it was worth forcing people to move the problem could be solved without creating a bunch of new ghost cities, there's already a LOT of undesirable cheap places.
But forced relocation is not something you're gonna get many people on board with.
Force some highly paid remote workers to move there and get some more money circulating somewhere that needs it instead of these trendy places.
Sure, you gotta trample all over what highly-paid people want, but no big deal, right? It's for the greater good? Not really any different from trampling over what poorer people currently living somewhere low-density want, if you drop a bunch of high-density development on them, right?
Most people want a life where they don't spend most of their waking hours in small boxes called apartments, where they actually raise their children and eat and sleep in. They even want a place called "outside" where they can let their kids play on surfaces that are green and not abrasive to the touch and on their own.
Most of European cities are people living in flats and these are known for pretty good quality of life. Shops, cafes, schools, all nearby this way. I don't quite get the American urge to own houses even in the most populous places
The problem is that American housing prices have very little to do with actual supply and demand, but are valued almost-exclusively by their proximity to density. (i.e, "location"). The density is the solution to the physics problem, but that same density is simultaneously the root cause of the cost problem. Americans can't just build empty cities and have people move into them, until America stops financially punishing people for moving into those buildings.
It's not a "woke fear" of gentrification. It's simple fact-of-life stuff. Most Americans are either poor, or are one-or-two minor mistakes away from becoming poor (the so-called 'middle class'). Regardless of whether they own or rent, they all rightfully fear the explosion in cost of living, and are doing anything they can to get the gross financialization of living away from their own lives.
And, as most policy exists in the US today, if you increase density anywhere in the US, all housing nearby instantly becomes more expensive (regardless of whether wages are rising or falling, regardless of whether the population is growing or shrinking, regardless of any actual human behaviour elsewhere). People, rightfully, are scared shitless this will happen to them.
And they can't directly fight it, because it's literally federal policy -- comparables are how all mortgages are underwritten, and comparables don't care who actually did what, and are trivial to game.
Oh, this building has rents that are completely unsustainable for the local population? Who cares, they're on the market, so they're part of the "market rate" now. Oh, some rich guy got mad that Americans got a trivial amount of emergency cash during the pandemic, and is now ranting about "Fiat Currencies" and "Hyper-inflation", so decided to convert his spare cash into property to sit on it? Guess Mom and Pop now have to compete against him when home shopping, that's "just the way things are". Oh, this building got purchased at 3x what it's actually worth, because an investment firm panicked over getting caught shorting GameStop stock earlier this year and has nowhere better to park it's spare cash with zero risk? Comparables don't give a shit, every real human has higher rents and higher housing prices, just to make those specific people happy.
In a neoliberal Econ-101-only world view, all that mess "counts as demand" and must be "serviced by supply", just as if they were all real people needing a real place to live.
So, someone who has only taken Econ 101, thinks the fix is always as simple as "build baby build, it's just supply and demand, duh". They usually get their way (in every place that's not SF/BayArea), and then they wonder incredulously why all the real people left and no one can afford to live there anymore.
"I don't understand why people making $36k/yr won't pay $2k/month for our studio micro-apartments. I guess we just didn't gentrify enough. We'll just keep ramping up the gentrification, because that's what Econ 101 theory says to do. ".
Density increases prices for sure in much of the US - all you have to do is look at Manhattan, SF, or the denser parts of LA to see that - but it's wrong to say it has nothing to do with supply and demand. The expensive places that are dense also have lots of high-paying jobs, so people who get those jobs want to live close to those. But then it spirals: that concentrated pool of talent encourages the creation of more jobs which bring in more people which pushes prices up which impacts a wider and wider radius. That's not a problem that can be solved through increasing density alone, though.
> The expensive places that are dense also have lots of high-paying jobs,
Yes, this is true of some of the places, but definitely not all of them. Just look at most of the Midwest for an abundance of density-driven explosion in cost-of-living, but without any abundance of "high-paying jobs" to match.
I get that most of Hacker News is experienced with major cities (NYC, Boston, DC, Phily, SF, LA, Seattle, Portland, etc). And so it's tempting to tie housing costs to the specifics of that cities economy. But that's not the scary part. The scary part is looking at cities with "boring"/"normal" economies, and seeing the exact same thing happening to CoL over there.
Seattle can at least point to Amazon and say, "see, look, any random fresh grad can be making over $120k/yr at Amazon HQ!" to justify their insane housing prices. Indianapolis, Cincinatti, Louisville, and many more are increasingly getting up to similar prices, without any similar wages to justify it.
This article, for example, is about Ketchum Idaho. The person interviewed works two jobs to make $60k/yr and still can't find housing, because (according to Zillow, anyway) today's average sale price is over half-a-million dollars each!. Surely, Ketchum did not suddenly get an abundance of "high-paying jobs" to justify these prices. And Ketchum's total population has been basically flat for 20 years now, and today's estimate is still lower than their peak population from the year 2000, so there's no magic huge influx of new residents to point to to justify the prices either.
I want to understand what you're saying, but at first glance this is contradictory: housing prices are driven by density, and housing prices are increasing in Ketchum. But Ketchum didn't increase density, and neither did anywhere nearby as far as I can tell. So what is driving the increase there?
I've visited Ketchum and think I have an idea, but I'd like to hear your explanation.
We have the largest generation hitting retirement age who want to keep their largest source of value at peak levels. They're also the most active voters who can contribute the highest level to campaigns.
I'm not sure the "average worker" you're talking about is actually the average.
And "woke left fear" is more like "economic certainty". I mean, did you read the article? If the workers can't afford to live there, there's no workers. Gentrification leads to failure unless you just happen to have a pocket of your city dedicated to housing all the poor people you need to run your 50 Starbucks.
Fast transportation links are definitely useful. For example, in many densely populated cities, there are large, incredibly poor, crime-ridden neighborhoods on the outskirts of those cities, as that's where are the poor people were pushed by gentrification, redlining, etc. Even if there were jobs for them within a reasonable distance, public transportation would take them 3+ hours to get there, and not run late/early enough for many jobs. Faster and more transport links could help raise up huge swaths of oppressed people - though it has to be paired with increased access to education, food, small business loans, job programs, affordable childcare and healthcare, community outreach, etc.
Increasing density would only exacerbate the problems of poor communities if it doesn't come with solutions to all those other problems I mention. Unless your intention is to create favelas.
This is regarding the housing affordability of a small, isolated, mountain ski resort town 3 hours from the nearest big city (Boise) in the immediate aftermath of a global pandemic just so we’re clear.
“The plural of anecdote is not data” I repeat to myself after 4 of my 25-35 year old working/newly lower middle class (HVAC/RN/CBP) cousins have purchased homes over the past 6 months in an area where salaries, educational attainment, and life expectancy especially are still chugging along up the slopes.
The good news is we have plenty of resources to solve the problem. In other countries, there is no money that can be poured into the govt, or legislation created, to solve their systemic issues. There's no way Greece could have fixed its economy. But with the US, it's literally just a matter of deciding to re-balance the budget or pass new laws, and the problems go away.
Start with some national protests/riots around wages, housing, etc. Then politicians will magically pass laws to require 50% of new development to be for public housing, for rents not to rise above 2x the median income, and for the cost of public housing not to exceed 2x the comparable cost of private development. Add in closing tax loopholes / taxing the rich more if needed. Corporations and the rich will bitch and moan, but it won't mean jack shit against passed legislation.
It has to happen everywhere at once, or the rich will just move development somewhere else. But they (should) also know the same shit will happen elsewhere.
NIMBYism is an overwhelmingly popular, bottoms-up policy and is pervasive because local governments are highly accountable to their engaged citizens. If corporations ran the country and governments didn’t give two shits, there would be adequate housing supply.
How many ISPs, and what speeds are offered in Ketchum? By that I mean what speeds will one actually achieve, at what hours of the day (or are they a 3AM exclusive), and how often will we hit that maximum?
My brother-in-law left Ketchum several years ago to move to Boise specifically because housing costs are too high for middle-class wage earners.
something something free market something pay more
Regarding Boise, something similar is happening. My BIL purchased a family home after making that move a few years ago and on paper, the value of the home has doubled.
Spent last summer there in Ketchum, aka Sun Valley, during the pandemic. An absolutely beautiful place to be, but I heard the same thing many times. The lifties at the ski mountain have to bus in 30 minutes from the nearby town Hailey every day to work. The area has become a lot more popular in recent years, and there are huge waiting lists to get into the schools. There's overregulation, yes, but most of the locals also don't want it to change. Frankly, a lot like CA. We decided not to stay. These trends are happening in other mountain towns we visited.
It's a fair comment, and I had to reflect on why it seemed bad to me, when I've done much worse commutes on a bus for a software job. I guess it's that you're supposed to be there for a passion, but you're in snow gear, on a wet bus, in the cold, for minimum wage, and 30 minutes is the best case - probably more like 45-50 - only to work for people who make much more money than you, go to places you see but can't afford, who don't understand the local culture, and generally act like they're better. I realize this happens all over, but most workers are seasonal and doing it for a short time as a so-called once-in-a-lifetime experience. I actually took some time off college to do this 10 years ago, and 3 friends and I were able to get a large-ish home in a big ski town within walking distance to the mountain. It was great. We did have friends that drove in from the next town over, but I always felt bad for them, that they were wasting time during this short year. It sucks that that's the default in Ketchum. But I know skiing has only gotten more popular, and maybe this is just the new reality in certain places.
Ketchum is a resort town surrounded by national park with a larger more inexpensive town down the road.
Ketchum is a city in Blaine County, Idaho, located in the central part of the state. The population was 2,689 at the 2010 census, down from 3,003 in 2000. Located in the Wood River Valley, Ketchum is adjacent to Sun Valley and the communities share many resources; both sit in the same valley beneath Bald Mountain, with its world-famous skiing.
Yes, Hailey and Bellevue, both within 30m drive. Additionally, the historic tax records in Zillow give some indication of a boom-bust cycle in which now is a boom.
Wife grew up in Hailey. It's not by any means inexpensive, especially when you consider the type of people that live there - working class. Many of our friends survived by having 2 - 3 jobs, working at the ski resort, airport, and coffee shops. Normal houses there are selling for 500 - 700k, way beyond what the existing jobs can support.
The stats don't do justice compared to the experiences of real people, for sure.
Statistically, the median family income in the county is $73,929 (2010 census). I see a house in Hailey right now on Zillow whose mortgage would likely scrape right under the 30% of income mark. Not a great situation.
IANAE but if housing prices are too high, and no one can afford to live in them, at what point or timescale does the price lower to meet demand ability? Clearly there are places to live in, but the prices have become so high that on one can afford them, so that means they sit empty. I would hate for a rental property to sit empty month after month. Is it greed that keeps landlords and companies hanging on to the higher prices, or is there some other dynamic I'm missing?
I guess the better question now that I've written all that is this: When does competition kick in?
Well, basically the restaurants will close or just start charging like $50 for a burger and fries. People will find a way. Like maybe they just won't have convenience stores, or restaurants, or w/e. That'll lower the quality of life, or people will just say it's not worth it to have those things in the town.
The free market (and voluntary association) is the only solution to this problem. And although I'm a pro-free market guy, I try to view things as what I think might be the best solution. Government intervention here won't work.
There is no truly free market anywhere anyway which isn't relevant to any conversation. And besides, you're demonstrating the point - the government already intervened. So there's no reasonable criticism of the free market to be had here, in fact, without government intervention there would be new and additional construction.
Anyway.
The government is made up of the citizens, it's their choice isn't it? At what point does that no longer become true? And if they've made their choice to not build more housing, then the market dynamics that follow that decision will come to bear. In this case maybe it's no stores or shops, or the citizens will have to pay extremely high prices for things.
> And besides, you're demonstrating the point - the government already intervened.
Yes, as the comment I'd responded to is worded to suggest the government hadn't yet intervened and such intervention wouldn't work. Otherwise, yeah, I agree with you.
That's what you'd think, but not what's happening at the moment. Rents and house prices have skyrocketed across the vast majority of the country, and nothing is sitting empty. People are paying the higher prices.
What's it take to change? A rise in foreclosures and evictions. Usually caused by economic turbulence, but in this case, just as likely caused by people buying more than they could afford. I'm seeing a -ton- of this in my home city. Houses that should be about 200k selling for 300k, and some beatup Ford Aerostar in the driveway. Feels very 2008ish.
Those foreclosures you speak of are forthcoming over remaining part of this year and next year. The foreclosure moratorium and government mandated "you don't have to pay your mortgage payment during COVID" is ending and stupid people are in for a rude awakening when they realize that a year of mortgage payments are now due (in addition to their ongoing monthly payment). It is going to be interesting, few are talking about it.
Same goes for rent moratorium. Do people think that their landlord is just going to forget the 1 year of rent they didn't pay because "they didn't have to"?? Evictions are going to sky rocket and rentors are going to be sued in numbers we may have never seen before.
While you are right in that we have not yet seen the foreclosure/eviction impact, I think not all of it is 'head in the sand'.
At least in the US, there are more systems in place to help people who are behind. Lenders are more apt to do a modification then risk another market collapse.
And, I would be willing to bet our current administration will be happy to do what they can. A failure to contain the situation will not be good for them -or- their donors.
One thing we are already seeing; the CFPB is putting in safeguards in that will likely delay a number of foreclosures even further [0]. Another change is FHFA loans being eligible for interest rate reductions that wouldn't be possible under the LTV.
How this 'smoothing' plays out remains to be seen.
You can afford to keep empty buildings when you are making more on the property value increase overall.
This is a common tactic in Coeur d'Alene with the commercial units. They leave them empty instead of lowering rents because the property value is largely based on what you can rent them for. I have been watching and there are several buildings which perpetually have empty units with for lease signs.
Just started happening more with the rentals. Big investment companies came in and bought up a ton of houses at way above market value and held them (not speculation...they knocked on my parents door too). Then they either leave them empty or make vacation rentals from them. This lowers the availability of houses. It was not a coincidence that these companies came to the town April 2020-September 2020 and made these purchases...I have heard stories about the unreal prices people got for just standard houses local.
So now that the availability is down they hold the houses and trickle them out slowly as the prices raise due to competitive bidding from people moving to the area who don't realize that the house they are buying isn't worth the price (nor is it able to be rented by anyone working in town at the price they need to get).
If the property values stay the same then it is going to collapse to the point of tent cities. If the valuses go down not only will those who just bought houses lose a lot of money...but also those who just refinanced their houses are likely going to be underwater.
I lived in Breckenridge, Colorado, a rather fancy ski resort town a couple years back. At the time a large portion of service industry workers could not afford any housing at all within 45 minutes and slept in their cars in alleys near their work.
Same as this, the issue is people moving in from areas with higher housing costs who can afford higher prices, while they depend on workers whose wages aren’t nearly enough to live nearby even if doubled.
This is not a new phenomenon or a much different than what has been going on in cities such as Denver. It will be interesting to see whether the pandemic changes continue to have an effect on pricing near the central business district. Remote work etc is likely to make resort towns even worse in this regard.
I live in a ski town, and while I agree with you on the major problems that exist (here, too), _some_ of the 'living in your car in the alley' is the ski-bum ethos and viewed as a right of passage. Live to ski!
It’s true that mostly these are young people who choose to live there, and have party oriented lifestyles. I think packed 4 to an apartment would be more reasonable than homeless though.
Having friends that patrolled, ran lift and ski bummed in the 00s and 10s that's what they'd do. Pack people in party houses/apartments. The only time you'd sleep out of a car was when you were at another resort and didn't have any connections. *These were not the people who were working in at the restaurants or retail shops.
Eventually the market pressure causes construction or artificially constraining housing creates social and humanitarian crises like what you see in SF which will bring the market back to equilibrium in other ways.
I live in a small mountain town. You could swap many towns (usually tourist destinations) in place of Ketchum in this article, it's the same story. These towns tend to be fiercely anti-development, and many people demonize anyone who would like to see growth in housing, and make hyperbolic claims that their quaint little town will look like a Houston suburb at the first sign of a new house being built.
Anyway, places like Ketchum got what they wanted, which was generally to preserve the character of the town. Unfortunately they flunked Econ 101, as they're now discovering that the trade off they made (there's always a trade off) was a cost of living that goes vertical. In my town, the problem has surpassed affordability and it's now availability - there is nowhere to live regardless of money. A recent hiring sign in a shop window advertised they will overpay and you can slack off...but they can't fill it because there's nowhere to live.
The most frustrating part is that the anti-development crowd who architected all this - whether you agree with it or not - simply won't accept the reality that this was their choice. You can't even talk to them, they blame everything and everyone else. Over the years I've noticed that failure to understand/accept incentives has been the root cause of many problems.
The people who live in an area, it seems, should rightfully decide the rules of that area. It's in their interest to stop competition with their existing property so they will vote against it. At the same time, everyone lives somewhere, and if everyone votes for anti-development policies there will not be enough houses to go around. I guess the policy hurts the up-and-coming to help the established. Still, people should have a right to determine the future of their own communities. I would be interested to hear if any philosophers have untangled this one, because I can clearly see the conflict of two good principles.
It is a mess in a lot of places. I have lived in Florida for 49 years. Retirees basically work against the interests of people who need to work and raise children. I don’t see any solution other than limiting the voting franchise to those with skin in the game.
They won’t move again. They have the political power. There will be an ever growing service economy with an ever decreasing standard of living. The system is working as designed.
thats why you have holes in the southern border, to keep bringing fresh meat willing to work for peanuts and without entitlements to the social safety net
There is a related problem in that the businesses profiting from illegal labor are rarely punished when there is a round of deportations. It is not an accident that those who complain loudly about illegal immigrants are often not checking the I-9s.
We know that won’t happen. This is my point. It is not a healthy, free market for labor. The retirees have the political power. Enough people poor enough to pick up the slack will always be available.
I don't think you need to be a philosopher to realize the trade-offs.
The issue is that if every community does this (as they pretty much have) then anyone whose family didn't have property 50 years ago will be stuck with bad housing and anyone whose family had housing 50 years ago will be able to fund their housing.
Its a coordination problem. Clearly a small town may be sacrificing something by decreasing their own values with building - but if every town in the same country individually makes the optimal choice for themselves then the result for the country overall is not great for anyone.
> The people who live in an area, it seems, should rightfully decide the rules of that area
This sounds nice, until you consider that "people who live in an area" is merely a proxy for community members, and a poor proxy at that. The people who work in an area are part of the community too, and should not be excluded from the decision making process. If towns can tax non-residents who work there, they can give them representation.
"Allow the right [to vote] exclusively to property [owners], and the rights of persons may be oppressed... . Extend it equally to all, and the rights of property [owners] ...may be overruled by a majority without property.... "
Back in 1776, you could vote in the US. If you were
1) White
2) Male
3) Owned property
4) Were not Catholic, Jewish or Quaker
When Washington was elected in 1789, only 6% of the population could vote.
Even as late as 1850, some states (North Carolina for example) still denied the vote to white men (let alone anyone else) who didn't own property, and it was 1964 when the idea of paying to vote was finally outlawed with the 24th amendment.
Right. People seem to think that if the cost of hotdogs goes up, that home owners who's $1M house appreciated an extra 10% are getting screwed. They're not. Unless they're spending an absurd amount of money on local services.
The people who made $100k on paper will end up without it if they hold on to their house until the market gives up on moving people in to their housing-constrained locale. They'd have to sell it during the rush to benefit, otherwise they pay the higher living costs for a while only to see their equity return to its original valuation.
No they are not. I've lost a ton of money on houses in the past. However it is clearly a matter of how much housing is built, when you are not allowed to build as much housing as the market wants prices go up and prices remain sticky. So long as the market is allowed to build, the cost of materials/labor is the factor. (Land is less a factor than you think because someone will get the idea of building up if allowed thus amortizing over less area)
Where you can build more $1M houses? Not many, if any. Where houses can cost $1M and there's plenty of room to build more housing? NYC metro for one, and I'd guess other major metro's as well. Though I've noticed plenty of anti-apartment and other anti-development signs here in my NYC-area suburb. We're not the SF bay area yet, but seem to be aiming for that.
No, they aren't gaining - not yet. They only gain when they sell. In the meantime, their property taxes probably go up, and their cost of services goes up because businesses have higher costs.
For anybody who earns more than their expenses- additional cash flow and increases in net worth are interchangeable.
Meaning that if you gave me 10k in cash I'd just invest it in an asset that appreciates, so if you give me 10k in home equity, which is an asset that appreciates, it's almost just as good.
If housing hadn't exploded in the US over the last 30 years the US would have needed to confront the fact that wages would never allow anyone to retire or build any wealth.
There seem to be four 'big' models for quitting-work-when-you're-old: kids; socialized safety nets; pensions; and, home-wealth. One of these things is not like the others.
Housing prices will find whatever level is necessary to price out the excess housing seekers relative to available homes. Higher wages simply mean a bigger number.
At any given snapshot of time this is true. In the long-term there is a lot of policy controlling the supply of housing to benefit existing home owners as well as a steady lowering of interest rates which improves the nominal home price a buyer is able to procure. Given that humans have finite lives the increase in home prices benefits owners who are near retirement the most.
When you combine these effects you have an intergenerational wealth transfer machine that rewards existing home owners.
The only reasons for home prices to rise as they have in the US are due to policy decisions, if these policy decisions never occurred the baby boomer generation would be unable to retire without changes to entitlements or improvements to working wages.
Available homes is not a constant. New structures can be built, inefficiently utilized land can be rezoned, and transportation infrastructure can be improved to increase the effective size of an area. You might seriously run out of living space in an area like Manhattan, but in 99.9% of cases increased demand should lead to increased supply in a functioning market.
Speaking as an anti-growther who has been in this situation, this almost never the case. Inflated housing doesn’t help them at all, it just drives up all ancillary costs of living and causes property taxes to rise. They are anti-growth because they bought a specific location for a specific reason. If you go through all that to find and invest in your ideal community, you don’t want it to be bulldozed and changed into high density shit with bad traffic, long lines, crowded attractions, higher crime, more noise, etc.
That seems like a policy the newcomers coming in setting up winter homes would do and not the locals who are slowly driven out through rent/price increases brought by market restrictions.
Affluent people coming into the town later and buying up homes for vacation properties and/or AirBNB style rentals will suck up any remaining capacity in the housing supply, as well as further driving prices up.
But it was residents and locals who set the stage, by being against development, voting for restrictive zoning, and so on.
Is this even a problem? It's a problem for the no-dev people, but they brought it on themselves. As long as they're the only people who "get hurt", seems like the problem will take care of itself?
Unless they start allowing shanty-towns, which seems like where this is going.
It's not a problem. People like that don't really care for the town either, only their bottom line. If small businesses go bust, tax revenue craters, and municipal services are gutted, they're still making money on their investment.
It's as if you rely on the younger generation to fulfill your quaint small town vibe at the coffee shops, farmers markets etc but you don't give them a place to live.
Yeah, like I said, these people all failed Econ 101. It's really bizarre, they never accept that they can't have things both ways. So we've ended up with a town that's shockingly beautiful and unique, but it's becoming more dysfunctional by the day because of the development ethos, and instead of doing something everyone just complains. It's great if you've got tons of money, and then it just gets harder and harder for those who don't. I mean, that's the most ironic part, is that the same hyper liberal people who are so against development have directly caused such wild living disparities across income brackets.
> is that the same hyper liberal people who are so against development
A bit of a nit pick here, but this issue does not fall cleanly across partisan lines. Some of the most vocal advocates for zoning reform are on the left. And at least in my town, a fair number of folks in the anti-development camp are traditionally right leaning well off suburbanites. If I could pick one issue that most scrambles the traditional partisan alignments, this would probably be it.
That's because there's three factions now. "woke"-left, center classical liberal, and "alt"-right. Both the "woke"-left and "alt"-right are generally NIMBY anti-development, for different mistaken reasons.
Why is the alt-right NIMBY? Homeowners are NIMBY because their home is their retirement fund, and housing scarcity boosts the value of their home. Anti-development is literally in homeowners' immediate self-interest.
While some part of the issue is some homeowner's financial interest, I believe that it is mostly lifestyle/neighborhood preservation. They moved there because they like it exactly as it was when they moved there (or otherwise they would've moved to a more developed place), and over years and years things change because our world is dynamic and increasing population-wise.
I characterize it as "alt"-right because the right has largely been taken over by Trumpian issues. And the right is generally anti-density and all that it comes with like, rural and suburban areas, cars, and keeping the undesirables away. Trump even had that bill that was about preventing zoning fixes that would "invade the suburbs."[0]
That's awesome, in general it hasn't been my experience with those on the most left (lefter than say Pelosi/Biden in US politics). I hope you're able to advocate for how development helps the people the left most advocates for, like the poor and working class. There are many that are shooting themselves in the foot by opposing development on the grounds of "gentrification", "colonization", or other scary strawmen.
> is that the same hyper liberal people who are so against development
Kind of a weird statement. Having grown up in a small town, there's wasn't a "hyper liberal" person in sight.
The elitist, anti-growth, outsiders-are-destroying-this-place attitude is pervasive everywhere. It's absolutely not a party thing. It just so happens that California has a lot of outsiders wanting to move there, and is left-leaning. That's it. You see the same exact attitudes in towns in Wyoming, Texas, and Florida too.
Perhaps injecting partisan into it was dumb of me, however, in my experience it was the very liberal people who were the ones who spearheaded some of our largest long-term planning blunders. But you're right, the pervasive attitude in most smaller communities is generally "Everything was great until a shortly after I moved here" which really drives me crazy. I suppose it's just more acute in a town of 3,000.
If everything truly was great until shortly after you moved there, especially if it happens at several theres, that means that you were what made the places fall from greatness.
It's a very longstanding cliche to complain about people from California moving into the nearby states. Lots of that when I went to school in AZ in the 90s.
> Interestingly, homeownership has a split effect on political party affiliation. Those who use private mortgages “polarize,” according to the authors, with some becoming Republican and others becoming Democrats. But homeowners who get mortgages backed by the Federal Housing Administration, so-called FHA loans, are much more likely to become Democrats.
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In fact, the authors point out, even those who were previously Republicans “shift markedly” toward the Democratic party once they receive an FHA loan. It could be that those who receive FHA-backed loans recognize the value of government in helping them obtain a low-interest mortgage or perhaps it is because FHA loans are only available for more modest loans, and are more likely to be taken by working- or middle-class people. At the same time, Republicans who do not use FHA loans become even more Republican.
> It’s not just that becoming homeowners makes people more NIMBYish, or that homeownership locks people into place, but buying a home changes people’s political behavior writ large. Once someone buys a home, they act politically to protect its value. As the authors point out: “Overall, the results suggest that individual economic circumstances importantly influence political beliefs and behavior, and suggest that homeowners have special influence in American politics in part because their ownership motivates them to pay attention and to participate.”
> It's really bizarre, they never accept that they can't have things both ways
It’s not really that bizarre when you accept that it’s part of the human condition. Then you start seeing the pattern all over the place, especially in politics.
I have two degrees where the concept is pretty much taught in the first hour of 101 classes: economics (cost of opportunity) and software engineering (design trade-offs). And while I see through the pattern quite well, I wish I could say my behavior is always perfectly consistent with what I know.
Can we get rid of this please? Your little piece of green is better served as an undisturbed park that can support wildlife.
I’d love to see small towns replaced with a single highrise. More room for trees and deer and migratory birds.
This is a real thing:
https://amp.usatoday.com/amp/4893153001
Amazingly we can say a similar thing about small, advanced, usually university towns in Germany like Freiburg, Heidelberg or Tübingen (among many others).
It‘s like a new version of town vs gown. Cost of living of course skyrockets…
It’s not a zoning issue, it’s a WFH issue. If they build more housing, more tech workers will just buy it. The pool of people who earn more than local service industry folks and have location flexibility is extremely deep now, and it will only continue to grow. Pre-COVID had a proximity requirement to the high paying jobs that prevented this sort of arbitrage.
It happens in every market where the wealth is generated outside of the local economy. That’s the
Econ 101 that zoning activists misunderstand. For a more prominent example, see New Zealand.
Only in the US would they brag about the economy based on anecdotal evidence of 1 person working two jobs but can’t afford housing.
The mayor proposing “allowing” tents should be forced to live in a tent with the people, I bet the mayor would come up with some new proposals real fast. In fact all politicians should be stripped of healthcare from their compensation packages as well.
No need to be so extreme, you need only make them be near the riffraff to get similar results.
If anything can be learned from Seattle (my home), a politician's proximity to a problem is the key indicator for how much that problem will need to be actually solved versus just used as a tool for virtue signalling about how others should live.
> No need to be so extreme, you need only make them be near the riffraff to get similar results.
Thing is placing tents near the Mayor’s house would just result in either a rezoning or other form of criminal sanction.
Tents are just a way to sweep the problem of homelessness under the rug not to solve it. Soon enough this mayor will be re-running on a platform of having solved the homelessness problem and successfully housing “x” people all while helping business keep wages down.
I personally think banning private schools is a bit extreme, but it is astonishing to now live somewhere were even families with two professional incomes send their kids to private secondary schools, compared to where I grew up that only the extremely wealthy would do so.
> In fact all politicians should be stripped of healthcare from their compensation packages as well.
Ha, I've never thought about that (not American) - I suppose it's no different than choosing a provider for anything else (like travel or couriers) or in-housing it (like pensions) but it does seem funny to me to think of politicians having employer-provided health insurance.
Coeur d'Alene, ID is about to go through this same thing.
Housing market ramped up values. Landlords are raising rents across the board. There was a recent local article where one rent was raising from $800/mo to $1400. One of the apartment buildings in town went from $1250/mo to $1400 for a 1bd apartment (had to help move my friend from there) and apparently a large portion of the people in the building are behind on rent.
When I went to rent a uhaul the lady said all her trucks have been pretty busy. All of their storage units are full of either people who are moving to town or people who have nowhere to go (her words).
The jobs which are unable to be filled local are the ones which were typically taken by the 18-30yr crowd. Even though they are paying considerably over minimum wage now there is still a massive shortage of workers (many restaurants are shutting down 1-2days a week due to lack of staff...particularly back of house staff).
McDonalds in town is paying $14/hr now to start...minimum wage is $7.25.
My pet theory is that the people who normally filled these jobs condensed their living expenses during covid. Moved back in with parents, moved into multi person dwellings. etc. but also even still they realize there is very little hope. If you make the average rate of pay in town $20/hr you can barely rent...and you need to make 3x that to even be considered for the "average house" in town.
From my viewpoint I do not see a solution. Either we have tent cities or everyone who speculated and bought in a bubble without paying any attention to what "rent the town can bear" is going to take a massive loss (50% at least).
My personal opinion is that this issue is largely caused by vacation rentals. It isn't that everyone is moving here (we have had that since the 70s) it is that everyone moving here is buying 2 houses and turning what was once affordable rentals into unregulated hotel rooms that cost $6k/mo. Idaho enacted laws in 2017 to prevent any area in the state from blocking vacation rentals in any way. Ketchum, Coeur d'Alene, Boise...are all seeing this issue.
The next big crash will come when the large portion of remote workers who moved here are asked to come back to the office. If they refuse they won't be able to find a comparable job anywhere in the area. What was once a "steal" and "so cheap" now becomes way out of their price range once they are required to find local work. Again, I don't have a solution. Just observing from the trenches.
One pretty simple solution seems to be enacting common-sense laws prohibiting turning zoned housing into rental properties - I’m not sure if the state govt. would ever do it though.
My other proposal would be to enact laws against buying a home and not living in it, but again, not sure how legal/morally right to prohibit property ownership just like _that_
Idaho did the opposite in 2017...they created laws preventing any town from blocking vacation rentals in any way.
Also, they have non disclosure laws which make the state very nice for real estate investors.
I wonder how many people moving here know that the lake was supposed to be a superfund site...or that their nice little cottage was a meth lab just a decade ago.
This is the only solution I think might work. Tax vacation rentals and empty properties at a higher rate...while allowing tax discounts for keeping rent low.
Genuine question: Why is enforcement so difficult? Let everyone declare their primary residence and give property tax credits based on the number of occupants (with pass-throughs for rental properties, etc). Everyone has an incentive to declare a primary residence and it shouldn’t be too difficult to find people declaring multiple.
You could cap the number of occupancy credits per sqft to keep things reasonable.
It would also help with things like state taxes based on primary residence.
Another reason why these jobs (especially restaurant kitchen staff) are hard to fill is that many people who were working them have died from covid. Cooks particularly have had the highest mortality of any job, though I can only guess why.
Coeur d'Alene didn't seem to have that issue very much. The town never really shut down.
What started the lack of workers (based on my observation and discussions with the people in these jobs) was they were getting more on unemployment than they did at their job...and when the unemployment ran out they realized that there was little point...because if they go back to work they still can't afford rent. I have a suspicion a large portion of them are just waiting to be evicted or have already moved in with someone (family, couch surfing, etc).
Our death rates here were not high for the age range that takes these jobs...we likely lost more to the opioid crisis than anything.
Coeur d'Alene was wide open for operation June 2020...the restaurants had a record year (due to Washington being locked down). I suspect this area will be one of the much studied regions in terms of Covid. Almost no lockdown, very limited mask usage, schools were largely open, as well as a very low vaccination rate in the county. I consider this area as close to a "control group" as you can get.
You used to have to be really rich to own a vacation property. There were vacation rentals, but the system was used a lot less, had a lot more friction, etc.
Now, "everyone" can afford a vacation property, but depending on how much money you have, it depends on low interest rates, and as-close-to-full occupancy on AirBnB as possible just to pay the mortgage.
It's like when "hey, maybe our household could use a second income" turned into "everyone needs 2 earners to get by". It's inflation.
I reached the same conclusion as you about people "condensing expenses". I was puzzling over how the economy is on fire, and yet businesses "aren't able to find workers" (read: workers who will accept what they're offering in pay) on the back of a huge unemployment spike, where you'd expect that previously-unemployed folks would be desperate for a paycheck. Some people point to Covid unemployment assistance, which is going away, but they must have compressed those living expenses in order to afford to demand higher wages.
Perhaps some people who "condensed expenses" also realized that when they get sued for past due rents or house payments any money they save now will likely get ripped away anyways. Might as well wait until after bankruptcy?
Or, they simply left while out of work and everyone on the remote work end of the labor pool was taking walks, on zoom meetings, baking banana bread. In texas, I feel like we got an influx of low wager earners from other states because cost and really more open economy. Meanwhile a good portion of our existing low wagers went south.
5 years ago in Des Moines McDonald's was starting people at $13/hour, so $14 isn't really out of line for a starting wage. McDonald's has always been the low wage leader just barely able to get enough people to work at the wages they pay.
I short, I don't think there is anything abnormal about your claim that they are starting at $14 and unable to find anyone.
It is out of line for starting wage in the region. And it isn't just that particular chain which is having issues. Construction is also getting hit hard. Most food service in town has now hiring signs...and some places are closing for multiple days a week due to lack of staff.
Just an observation. As a business owner I need to keep track of what the people are expecting as pay if I hire them (assuming I can find people to show up). The last 6mos every single business owner I know local is struggling to find people. They are turning away business due to lack of staff.
When Des Moines is that high, I suspect your area is just catching up, rather than out of line. Des Moines is not a high cost of living city where I would expect wages much higher than any other semi-rural town.
Idaho housing boom is insane. They are building thousands of cookie-cutter homes in the Boise area, and they sell well before they are finished, and they sell for prices that would look at home in California about 5 years ago (of course, California got more expensive since). And they have nowhere near enough infrastructure for all those houses (the roads are tiny for the number of people in those houses, for example) and I have no idea how people living on Idaho salaries could afford any of that California-priced housing. I have no idea how it would work - my hope is all taxes from all those housing would be used by the government to upgrade the infrastructure and do something smart with it, but my trust in governments being smart is kinda low... No idea what would happen. I once thought about moving there but I really don't want to end up in the middle of the volcano...
>but my trust in governments being smart is kinda low
Particularly in governments run by politicians who agree with and were elected by folks that don't trust governments. Which means [that] government can't be trusted to maintain or upgrade infrastructure because that requires government to collect and spend tax dollars.
>my hope is all taxes from all those housing would be used by the government to upgrade the infrastructure and do something smart with it
"all taxes from all those houses" is likely not going to be enough to properly upgrade, let alone maintain, the infrastructure. I'm interested to see what those parts of Idaho look like in 5 to 15 years from now.
Given how many houses there are and how expensive they are, I'd think there's quite a chunk of change coming in - property taxes, sales taxes, permits, etc. - so I think financially it should be enough, but I haven't seen this really being addressed. And building new roads when the existing ones are already choking up would be really tough, they need to do it now before all those new houses are fully occupied. Doesn't look like they realize it, at least from my vantage point (I of course have no inside info, maybe they're working on it day and night...)
Do you have any idea what it can cost to move in the US? Saving up first and last months rent, plus a security deposit, then finding a new rental who's start lines up somewhat closely with the end of your current lease, then renting a moving van and spending money on a move that will take multiple days of travel/hotels etc. Not to mention things like paying for a new driver's license, new registration on your car, having to move all your insurance over to places with potentially higher rates. It's not as easy as just 'hop in the car and find a new place'.
Don't forget you are saving for all this while paying an ever increasing cost of living. Your rent has already increased 40% before you realize that it is time to go.
Also, where do you go? It isn't like there is some perfect spot right now where jobs match cost of living. Not to mention...a lot of people have long term ties in areas. Most of my family is here. In my case I have lived in my town for 40 years...but I am being priced out of the town.
I'd say the hurdle of moving are the same anywhere in the world - including deposits and trucks and insurance and all that. I can't even imagine moving in other ways... moving is a costly hassle which sometimes is the only option.
i believe most people only move at significant stages in their life. when they move out of their parents house, when they finish university, when they get married, and maybe when their kids leave the house. in most places, only single people are able to move to change jobs, everyone else needs to find jobs where they live. and once kids are in school, moving is often simply not an option, because changing schools is not something done lightly if you don't want your kids to be disturbed by loosing all their friends. the actual cost of moving doesn't even factor into all this.
Now I'm curious, are furnished apartments rare/a minority in the US?
As for the lining up, do apartment hotels exist? They are basically hotels that rent out apartments on a month by month basis. I knew people who also put stuff in storage and lived hotels or hostels, while waiting for the actual apartment residents to leave. Is that not a possibility?
Of course, when the contract dates overlap, then things get a little more difficult...
Very rare. Rentals are 99% bare bones. Apartment hotels are also very rare. Usually available on the low end of desirability. Usually run down and so on.
In the US, monthly furnished apartments come in two flavors:
SRO (single room occupancy) -- typically very shitty and dangerous. Full of people priced out of society, junkies, people transitioning out of prison, etc.
Executive housing -- typically very expensive, used by traveling execs or temporarily by employees a company relocated
and as @pomian said, the vast vast majority of apartments in the US come with no furniture, though (in contrast to at least Germany), they do come with a kitchen and appliances. Washer/dryer/AC are not standard but common.
Seems to me that anybody looking for a job would do a cost of living evaluation in addition to what their potential salary is and decide accordingly. This isn't rocket science folks.
In regards to employers, raise pay if can't get workers. Employees will come when they can live on the pay.
I love when simple, real-world examples of basic econ 101 show themselves.
In all transactions- buying, selling, or exchanging labour for money- both sides of the agreement have to see a beneficial deal. You feel that the iPhone 27 is worth however much money, and the store selling you feels that the money is worth giving you the iPhone. If either side does not agree, there is no sale.
"Plenty of available jobs" is what happens when the deal you are offering- cash for labour- is not an acceptable deal to the labour side. When businesses cannot be profitable at market-chosen labour prices, the businesses will close down.
The article isn't actually about housing being unaffordable. It says housing is unavailable.
They could build more housing, but no one wants to get caught holding the bag if the boom turns to a bust as the world returns more to normal.
And even if they did choose to build the housing, housing next year doesn't solve the issue of housing today.
That said, where I live we are building plenty of housing but we still can't fill jobs. Why exactly is hard to say, but general consensus is that government unemployment benefits are currently compelling enough that people will trade taking a hit on their income in exchange for not having to work. Can't blame them, I guess.
Seems like a painful readjustment in the coming years as we unwind all the emergency decisions we made last year.
OP's comment still holds true: "Plenty of available jobs" is what happens when the deal you are offering- cash for labour- is not an acceptable deal to the labour side. When businesses cannot be profitable at market-chosen labour prices, the businesses will close down.
When low paid workers can't afford to live locally because of availability of affordable housing, they must live further away. Commuting has a cost too so if low paid workers can afford housing an hour away, it still might be cost prohibited to take those jobs because commuting costs too much (or "affordable" transportation isn't available). Then if you include the 2+ hours of commute time per shift to take those jobs, it may very well make those jobs less attractive as the effective hourly pay rate is lower than elsewhere.
> Commuting has a cost too so if low paid workers can afford housing an hour away
Maybe I'm wrong, but given my experience driving through the Rockies, I doubt there is any more housing an hour away than there is town. It's just a giant vastness of undeveloped land.
Wikipedia says that the county Ketchum is in has a population density of 8 people/sq mile, and an area of 2600 sq miles. Wikipedia also says that many people commute in for work from neighboring Lincoln county, population 5000.
I think the OP's comment is correct in general, but the particular situation in question has more nuance to it. I don't see any conflict between the two.
Another econ issue I'm seeing is that home ownership markets run in a different lane to "place to live" markets. Because homes are closer to investments nowadays than a "place to live", the rental prices don't seem to reflect the appropriate value to the demand of people looking to rent or buy for the sake of living.
This is playing out in a lot of Western countries. Canada, NZ, Australia...
Can't speak for those but housing is seen as an investment in the UK too. Everyone wants their house prices to go up, to get a return on having a place to live. The government won't lift a finger because they also have their money in property, as does the electorate that keeps voting them in. Advocating for any kind of regulation or intervention would be sheer political suicide.
The generation that has enjoyed affordable housing the most has been making short work of pulling up that ladder behind them.
This problem is an American problem - the only places that seem to not have affordability problems are the areas that are shrinking. Name any town in the US that experiences even slightly above average growth and you'll also find some sort of affordability issues. My $0.02 is because local residents have entirely too much control over building and zoning rules, and their interest are always such that they rationally oppose new developments.
Given the fractured nature of building and zoning laws in the US, the only long term solution I see to this is state or federal level zoning requirements coupled with a slowdown of monetary stimulus and/or restrictions on non-resident purchases of properties for renting.
Houses in my 3rd-tier (2.5th if we're generous) city in a painfully dull part of the country have appreciated ~30% in the last 2 years with no sign of slowing down. We're not in the news. No tech giants have announced new campuses here. We're not, so far as I know, any kind of notable destination for ex-Californians. There's house and apartment construction all over the place and it sure doesn't seem to be hard to get more approved, unlike some places that report that housing's not being built. This during a pandemic that should have cooled the economy somewhat. WTF.
This is also the a major reason why building non-housing infrastructure (bridges, rail, &c.) is so slow and expensive in the US compared to Europe. Any infrastructure that might possibly disturb someone who can afford a lawyer will be delayed and expensive.
One project I was personally familiar with was delayed for over 10 years because a neighbor would challenge the plan. Each time found a different ordinance to nit-pick with. It was catch-22; if the nit-pick was fought, it caused delays, if the plans were modified, then it was now a new plan, and he could start all over with challenges to it.
Another great example is that people living in a tiny town in Virginia were able to get a major bridge over the potomac completely redesigned from a suspension bridge to a draw-bridge (making it more expensive, a shorter lifespan, and less amenable to shipping) because the towers of the planned suspension bridge would be visible from their houses. Wikipedia calls this "considerable study and public debate[1]"
The labor shortage is something that doesn’t make sense to me, and it might just be basic ignorance, but I have a few questions:
1) if we so often hear about how corporations have the money to pay more, and they’re simply using it to line corporate pockets, wouldn’t they rather pay a livable wage to employees over shutting down restaurants, businesses, etc. entirely?
2) is it primarily affecting small businesses, or are the posts I’ve seen about Taco Bell/chains not finding labor true as well?
3) how is it that only now employees are realizing they can make more money from unemployment than working - what uniquely changed? Was it just the absurd amounts of money being pumped from stimulus checks?
> if we so often hear about how corporations have the money to pay more, and they’re simply using it to line corporate pockets, wouldn’t they rather pay a livable wage to employees over shutting down restaurants, businesses, etc. entirely?
If they were perfectly rational actors, sure. But businesses and corporations aren't real, they're fake entities that exist just to shield owners from liability. The actual owners of these things are humans, with human emotions just like any other person.
What we're seeing is owners getting angry, and refusing to pay fair wages despite the fact that it makes them less profitable to be upset like this. Depending on how they choose to vent their anger, it is sometimes labeled as a https://en.wikipedia.org/wiki/Capital_strike
> how is it that only now employees are realizing they can make more money from unemployment than working
They aren't -- employees aren't making more money from unemployment than working. They're just realizing "working" isn't really working (it costs more money to go to work, than most of these companies will pay them back in wages). You could eliminate all unemployment entirely, this situation would not change at all.
> Was it just the absurd amounts of money being pumped from stimulus checks?
No. The stimulus checks had tiny, paltry amounts of cash, and also ended months ago. Some unemployment benefits existed for longer, but they are also running out (or already have, depending on your state). Either way, the situation won't change at all when that ends, because the problem has nothing to do with outside checks.
The problem is that in many places in the US, it costs workers more money to show up to work, than they earn from doing that days work.
Why would you go punch a clock at Taco Bell, if you ended up poorer every day for working? If after a hard days work, you had less money on you than you did the day before? You wouldn't, no rational person would do this. But that's the actual reality in much of the US today, which is why a lot of people simply aren't doing these jobs anymore.
If Taco Bell pays you $14/hr, but it costs you $20/hr just to be able to show up to work at all (that's a realistic number in many cities today), then you lose $6/hr for every hour you work. You are, effectively, donating money to a for-profit corporation. Most rational folks aren't going to be happy to do that, so they aren't taking those "jobs" anymore.
Despite what many pundits and politicians are saying, simply raising wages does not solve the problem. That's like telling people that are struggling to find a home to simply pay more.
The real problem is that there is a lack of supply. We know this because the workforce participation rate is at record lows. Yes, employers can try to poach employees off of each other, but until the fundamental issue is resolved, which is that there is a lack of workers in the labor pool compared to any time in the last several decades, these problems will persist.
I don't see 1031 exchange mentioned much in the discussions of housing problems. People who own real estate absolutely lose their shit when this is brought up as something that should go away which is by itself a pretty good indicator. There's so much tax collection being 'lost' on this it's something that should be repealed but likely won't.
I have also noticed that although people are recognizing their is a massive growing homeless population in all cities, particularly the west coast, it gets pushed away as just a bunch of drug users on fent, instead of realizing the bulk of these people became homeless in the last 3 years as housing and rentals have blown up in costs without wages matching.
There's so little resources for the people at the bottom suffering homelessness, the only thing keeping a lot of people housed right now is the soon-expiring eviction moratoriums.
Yeah they're about to expire, just like they've been about to expire for a year. I'll believe it when I see it.
"The Biden administration announced on June 24 an extension of the federal eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) through July 31, 2021, and that it will implement a whole-of-government approach to prevent an historic wave of evictions this summer" [0]
I don’t have a problem with the tools in the tax code to defer realization for capital gains taxes during a lifetime e.g. 1031 exchange, traditional 401(k) or IRA, in-kind redemption for ETFs, etc., so long as the taxes eventually do get paid on the gains. The real issue in my opinion is the loopholes in the tax code to avoid capital gains taxes completely e.g. step-up basis on death + $11.7 million estate and gift tax exclusion per person, $500k capital gains tax exclusion for sale of a home for a married couple (Section 121), Grantor Retained Annuity Trusts, Roth IRAs.
Of course the opposition to new housing is from existing homeowners whose property values benefit from increasing scarcity amidst sky-high demand.
> In late May, dozens of people gathered in Ketchum’s town square to protest the lack of housing and support a new 56-unit affordable-housing complex that a developer wants to build downtown. Some residents oppose the project, which the city council is still weighing, saying it would shrink what limited parking there is and concentrate low-income housing in a single area.
How much of increased housing costs are due to current increased cost of building materials for new construction?
If there's one force that is more national than local it's the supply of construction materials. Construction labor is at least regional, if not national.
There was also a significant dip in new construction during the pandemic which must have had an effect on pricing.
Having built my own house ~15 years ago (I only contracted out earthwork, concrete finishing, trusses, and shingles) I am aware that construction materials are generally a small fraction of total cost, but labor can easily be half of the total cost.
Finally there is probably an aspect of financial bubble happening as people try not to miss out on rising housing prices, willing to pay a steep premium to own housing the traditional way instead of through a mutual fund or similar investment.
If workers can't afford housing, you'll have plenty of empty and available positions, even at $15 / hour. Especially if you want / need reliable (ABLE to reliably show up for shifts) workers.
Let me break it down...
Let's start with $15 an hour.
Let's be generous and assume five 8 hour shifts per week (2080 hours per year: 5 shifts per week * 8 hours per shift * 52 weeks per year).
That's $600 per week ($15 per hour * 5 shifts per week * 8 hours per shift). Or $31200 ($600 per week * 52 weeks) per year.
Let's assume affordable housing is 30 miles away and takes an average of 1 hour to commute one way.
That's 10 hours of commuting per week (5 shifts, 1 hour EACH way or 1 * 5 * 2) or 520 hours commuting per year (10 hours per week * 52 weeks per yr).
The time commitment of the worker is 10 hours per shift (8 paid working, 2 unpaid commuting).
The yearly time commitment is 2600 hours per year (2080 working, 520 commuting).
So the effective hourly rate is $31200/yr / 2600 hours/yr which is $12 per hour.
BUT! Commuting isn't free. Let's assume the worker owns a car in order to get to and from work. Let's round off the cost per mile (gas, wear and tear) to be 50 cents a mile.
So the cost of commuting per shift is $30 (30 miles one way * 2 ways * $.50 / mile) or $7800 per year ($30 per shift times 5 shifts per week * 52 weeks per year)!
SO! To have the $15 per hour job costs the worker $7800 per year and 2600 hours per year!
So, ($31200 per year - $7800 per year) / 2600 hours = $23400 / 2600 hours = $9 per hour!
$9 per hour! That $15 per hour job is competing with $9 per hour jobs that are closer and more local to affordable housing and giving thousands of hours per year back to the worker.
A couple of times in recent decades, North Dakota had an oil boom. The jobs were out in the middle of nowhere; available spaces in nearby small towns quickly filled. Somehow the people hiring managed to find hundreds of mobile homes for the workers to live in, and a location or two near the job site.
OTOH, towns that want permanent workers better wise up.
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[ 3.4 ms ] story [ 264 ms ] thread> the economic boom that has followed
Is this what we're calling it?
Never mind that they're underpaying... or that we lost half a million people in the labor force...
This is not true, unless you're considering all ages in the labor force. Stats from this page[0] seem to indicate that COVID-related deaths are <120k for people under age 65. That's quite a bit less than "half a million people" in the labor force. (Assuming, like I am that people tend to retire at 65.)
[0]: https://www.statista.com/statistics/1191568/reported-deaths-...
I haven’t looked up the change in labor force stats myself, but they’re not simply the total number of living people in a certain age bracket. There are plenty of people between 18-65 who aren’t part of the labor force: i.e: disabled, retired, stay-at-home, incarcerated, etc.
Instead : capacity gets curtailed, prices are raised, and what people can afford goes down.
It may come as a surprise to people in large cities, but the vast majority of the country (geographically) was pretty much business as usual from summer 2020 onward.
Q1 2021 - 6.4% growth [0]
Q2 2021 - 7.8% growth [1]
[0] https://www.statista.com/statistics/188185/percent-change-fr...
[1] https://www.atlantafed.org/cqer/research/gdpnow
Specifically, "The nation's gross domestic product totals trillions of dollars. Most often, the number you'll hear people refer to as "GDP" is a percentage. That's the rate of change in real GDP from the previous quarter or year. "Real" or "chained" GDP numbers have been adjusted to remove the effects of inflation over time, so different periods can be compared."
[0] https://www.bea.gov/resources/learning-center/what-to-know-g...
If you're not planning on building more houses except those tents, how do you expect anyone to move out of the tents into houses?
People are spending their summers, remotely working, in a winter resort town. But what happens when the winter comes and the town isn't so fun anymore. Or when the SV office wants you closer to home. Will some of these remote working migrants be willing to take on a pre-construction loan and 30 year mortgage? Probably not, which is why housing is the way it is. Everyone is grazing and trying to figure out this new era of labour.
You learn how to ski, then you have fun in the winter.
But forced relocation is not something you're gonna get many people on board with.
https://www.newyorker.com/news/us-journal/can-infrastructure... "The housing stock is old, and much of it is dilapidated. (You can buy a single-family home for less than fifty thousand dollars.)"
Force some highly paid remote workers to move there and get some more money circulating somewhere that needs it instead of these trendy places.
Sure, you gotta trample all over what highly-paid people want, but no big deal, right? It's for the greater good? Not really any different from trampling over what poorer people currently living somewhere low-density want, if you drop a bunch of high-density development on them, right?
I want to have a life where I can walk places.
It's not a "woke fear" of gentrification. It's simple fact-of-life stuff. Most Americans are either poor, or are one-or-two minor mistakes away from becoming poor (the so-called 'middle class'). Regardless of whether they own or rent, they all rightfully fear the explosion in cost of living, and are doing anything they can to get the gross financialization of living away from their own lives.
And, as most policy exists in the US today, if you increase density anywhere in the US, all housing nearby instantly becomes more expensive (regardless of whether wages are rising or falling, regardless of whether the population is growing or shrinking, regardless of any actual human behaviour elsewhere). People, rightfully, are scared shitless this will happen to them.
And they can't directly fight it, because it's literally federal policy -- comparables are how all mortgages are underwritten, and comparables don't care who actually did what, and are trivial to game.
Oh, this building has rents that are completely unsustainable for the local population? Who cares, they're on the market, so they're part of the "market rate" now. Oh, some rich guy got mad that Americans got a trivial amount of emergency cash during the pandemic, and is now ranting about "Fiat Currencies" and "Hyper-inflation", so decided to convert his spare cash into property to sit on it? Guess Mom and Pop now have to compete against him when home shopping, that's "just the way things are". Oh, this building got purchased at 3x what it's actually worth, because an investment firm panicked over getting caught shorting GameStop stock earlier this year and has nowhere better to park it's spare cash with zero risk? Comparables don't give a shit, every real human has higher rents and higher housing prices, just to make those specific people happy.
In a neoliberal Econ-101-only world view, all that mess "counts as demand" and must be "serviced by supply", just as if they were all real people needing a real place to live.
So, someone who has only taken Econ 101, thinks the fix is always as simple as "build baby build, it's just supply and demand, duh". They usually get their way (in every place that's not SF/BayArea), and then they wonder incredulously why all the real people left and no one can afford to live there anymore.
"I don't understand why people making $36k/yr won't pay $2k/month for our studio micro-apartments. I guess we just didn't gentrify enough. We'll just keep ramping up the gentrification, because that's what Econ 101 theory says to do. ".
Yes, this is true of some of the places, but definitely not all of them. Just look at most of the Midwest for an abundance of density-driven explosion in cost-of-living, but without any abundance of "high-paying jobs" to match.
I get that most of Hacker News is experienced with major cities (NYC, Boston, DC, Phily, SF, LA, Seattle, Portland, etc). And so it's tempting to tie housing costs to the specifics of that cities economy. But that's not the scary part. The scary part is looking at cities with "boring"/"normal" economies, and seeing the exact same thing happening to CoL over there.
Seattle can at least point to Amazon and say, "see, look, any random fresh grad can be making over $120k/yr at Amazon HQ!" to justify their insane housing prices. Indianapolis, Cincinatti, Louisville, and many more are increasingly getting up to similar prices, without any similar wages to justify it.
This article, for example, is about Ketchum Idaho. The person interviewed works two jobs to make $60k/yr and still can't find housing, because (according to Zillow, anyway) today's average sale price is over half-a-million dollars each!. Surely, Ketchum did not suddenly get an abundance of "high-paying jobs" to justify these prices. And Ketchum's total population has been basically flat for 20 years now, and today's estimate is still lower than their peak population from the year 2000, so there's no magic huge influx of new residents to point to to justify the prices either.
I've visited Ketchum and think I have an idea, but I'd like to hear your explanation.
And "woke left fear" is more like "economic certainty". I mean, did you read the article? If the workers can't afford to live there, there's no workers. Gentrification leads to failure unless you just happen to have a pocket of your city dedicated to housing all the poor people you need to run your 50 Starbucks.
Fast transportation links are definitely useful. For example, in many densely populated cities, there are large, incredibly poor, crime-ridden neighborhoods on the outskirts of those cities, as that's where are the poor people were pushed by gentrification, redlining, etc. Even if there were jobs for them within a reasonable distance, public transportation would take them 3+ hours to get there, and not run late/early enough for many jobs. Faster and more transport links could help raise up huge swaths of oppressed people - though it has to be paired with increased access to education, food, small business loans, job programs, affordable childcare and healthcare, community outreach, etc.
Increasing density would only exacerbate the problems of poor communities if it doesn't come with solutions to all those other problems I mention. Unless your intention is to create favelas.
Maybe some sort of skills training cooperative? You teach me and I teach you?
“The plural of anecdote is not data” I repeat to myself after 4 of my 25-35 year old working/newly lower middle class (HVAC/RN/CBP) cousins have purchased homes over the past 6 months in an area where salaries, educational attainment, and life expectancy especially are still chugging along up the slopes.
Start with some national protests/riots around wages, housing, etc. Then politicians will magically pass laws to require 50% of new development to be for public housing, for rents not to rise above 2x the median income, and for the cost of public housing not to exceed 2x the comparable cost of private development. Add in closing tax loopholes / taxing the rich more if needed. Corporations and the rich will bitch and moan, but it won't mean jack shit against passed legislation.
It has to happen everywhere at once, or the rich will just move development somewhere else. But they (should) also know the same shit will happen elsewhere.
something something free market something pay more
Regarding Boise, something similar is happening. My BIL purchased a family home after making that move a few years ago and on paper, the value of the home has doubled.
The number of people moving here is crazy. It used to be a cozy town, but now it is LA 2.0.
Ketchum is a city in Blaine County, Idaho, located in the central part of the state. The population was 2,689 at the 2010 census, down from 3,003 in 2000. Located in the Wood River Valley, Ketchum is adjacent to Sun Valley and the communities share many resources; both sit in the same valley beneath Bald Mountain, with its world-famous skiing.
https://en.wikipedia.org/wiki/Ketchum,_Idaho
Or were you referring to Hailey?
Statistically, the median family income in the county is $73,929 (2010 census). I see a house in Hailey right now on Zillow whose mortgage would likely scrape right under the 30% of income mark. Not a great situation.
I guess the better question now that I've written all that is this: When does competition kick in?
The free market (and voluntary association) is the only solution to this problem. And although I'm a pro-free market guy, I try to view things as what I think might be the best solution. Government intervention here won't work.
The government has already intervened by not permitting enough new construction. There is no free market there.
Anyway.
The government is made up of the citizens, it's their choice isn't it? At what point does that no longer become true? And if they've made their choice to not build more housing, then the market dynamics that follow that decision will come to bear. In this case maybe it's no stores or shops, or the citizens will have to pay extremely high prices for things.
Yes, as the comment I'd responded to is worded to suggest the government hadn't yet intervened and such intervention wouldn't work. Otherwise, yeah, I agree with you.
What's it take to change? A rise in foreclosures and evictions. Usually caused by economic turbulence, but in this case, just as likely caused by people buying more than they could afford. I'm seeing a -ton- of this in my home city. Houses that should be about 200k selling for 300k, and some beatup Ford Aerostar in the driveway. Feels very 2008ish.
Same goes for rent moratorium. Do people think that their landlord is just going to forget the 1 year of rent they didn't pay because "they didn't have to"?? Evictions are going to sky rocket and rentors are going to be sued in numbers we may have never seen before.
That's not always what happens, and in the case of COVID in particular, many will have it tacked to the end of their mortgage.
see #3 "Lengthen your loan term and pay off the missed amount at the end of the extended loan term, with additional mortgage payments" [0]
[0] https://themortgagereports.com/69687/cares-act-mortgage-forb...
At least in the US, there are more systems in place to help people who are behind. Lenders are more apt to do a modification then risk another market collapse.
And, I would be willing to bet our current administration will be happy to do what they can. A failure to contain the situation will not be good for them -or- their donors.
One thing we are already seeing; the CFPB is putting in safeguards in that will likely delay a number of foreclosures even further [0]. Another change is FHFA loans being eligible for interest rate reductions that wouldn't be possible under the LTV.
How this 'smoothing' plays out remains to be seen.
[0] https://www.housingwire.com/articles/cfpbs-roadmap-for-the-f...
This is a common tactic in Coeur d'Alene with the commercial units. They leave them empty instead of lowering rents because the property value is largely based on what you can rent them for. I have been watching and there are several buildings which perpetually have empty units with for lease signs.
Just started happening more with the rentals. Big investment companies came in and bought up a ton of houses at way above market value and held them (not speculation...they knocked on my parents door too). Then they either leave them empty or make vacation rentals from them. This lowers the availability of houses. It was not a coincidence that these companies came to the town April 2020-September 2020 and made these purchases...I have heard stories about the unreal prices people got for just standard houses local. So now that the availability is down they hold the houses and trickle them out slowly as the prices raise due to competitive bidding from people moving to the area who don't realize that the house they are buying isn't worth the price (nor is it able to be rented by anyone working in town at the price they need to get).
If the property values stay the same then it is going to collapse to the point of tent cities. If the valuses go down not only will those who just bought houses lose a lot of money...but also those who just refinanced their houses are likely going to be underwater.
Same as this, the issue is people moving in from areas with higher housing costs who can afford higher prices, while they depend on workers whose wages aren’t nearly enough to live nearby even if doubled.
This is not a new phenomenon or a much different than what has been going on in cities such as Denver. It will be interesting to see whether the pandemic changes continue to have an effect on pricing near the central business district. Remote work etc is likely to make resort towns even worse in this regard.
Anyway, places like Ketchum got what they wanted, which was generally to preserve the character of the town. Unfortunately they flunked Econ 101, as they're now discovering that the trade off they made (there's always a trade off) was a cost of living that goes vertical. In my town, the problem has surpassed affordability and it's now availability - there is nowhere to live regardless of money. A recent hiring sign in a shop window advertised they will overpay and you can slack off...but they can't fill it because there's nowhere to live.
The most frustrating part is that the anti-development crowd who architected all this - whether you agree with it or not - simply won't accept the reality that this was their choice. You can't even talk to them, they blame everything and everyone else. Over the years I've noticed that failure to understand/accept incentives has been the root cause of many problems.
Georgism?
The issue is that if every community does this (as they pretty much have) then anyone whose family didn't have property 50 years ago will be stuck with bad housing and anyone whose family had housing 50 years ago will be able to fund their housing.
Its a coordination problem. Clearly a small town may be sacrificing something by decreasing their own values with building - but if every town in the same country individually makes the optimal choice for themselves then the result for the country overall is not great for anyone.
This sounds nice, until you consider that "people who live in an area" is merely a proxy for community members, and a poor proxy at that. The people who work in an area are part of the community too, and should not be excluded from the decision making process. If towns can tax non-residents who work there, they can give them representation.
Madison for example said
"Allow the right [to vote] exclusively to property [owners], and the rights of persons may be oppressed... . Extend it equally to all, and the rights of property [owners] ...may be overruled by a majority without property.... "
Back in 1776, you could vote in the US. If you were
1) White
2) Male
3) Owned property
4) Were not Catholic, Jewish or Quaker
When Washington was elected in 1789, only 6% of the population could vote.
Even as late as 1850, some states (North Carolina for example) still denied the vote to white men (let alone anyone else) who didn't own property, and it was 1964 when the idea of paying to vote was finally outlawed with the 24th amendment.
There are few places in the country where houses are expensive, AND you can actually build housing.
Meaning that if you gave me 10k in cash I'd just invest it in an asset that appreciates, so if you give me 10k in home equity, which is an asset that appreciates, it's almost just as good.
Weird, so unlike them.
I've always felt like housing is the biggest indicator of inflation.
When you combine these effects you have an intergenerational wealth transfer machine that rewards existing home owners. The only reasons for home prices to rise as they have in the US are due to policy decisions, if these policy decisions never occurred the baby boomer generation would be unable to retire without changes to entitlements or improvements to working wages.
But it was residents and locals who set the stage, by being against development, voting for restrictive zoning, and so on.
Unless they start allowing shanty-towns, which seems like where this is going.
* Close to amenities
* Detached homes with yards
Communities can pick two.
A bit of a nit pick here, but this issue does not fall cleanly across partisan lines. Some of the most vocal advocates for zoning reform are on the left. And at least in my town, a fair number of folks in the anti-development camp are traditionally right leaning well off suburbanites. If I could pick one issue that most scrambles the traditional partisan alignments, this would probably be it.
I characterize it as "alt"-right because the right has largely been taken over by Trumpian issues. And the right is generally anti-density and all that it comes with like, rural and suburban areas, cars, and keeping the undesirables away. Trump even had that bill that was about preventing zoning fixes that would "invade the suburbs."[0]
[0]https://www.politico.com/news/2020/08/23/trumplow-income-hou...
it is sad that NIMBYs dont get it
Kind of a weird statement. Having grown up in a small town, there's wasn't a "hyper liberal" person in sight.
The elitist, anti-growth, outsiders-are-destroying-this-place attitude is pervasive everywhere. It's absolutely not a party thing. It just so happens that California has a lot of outsiders wanting to move there, and is left-leaning. That's it. You see the same exact attitudes in towns in Wyoming, Texas, and Florida too.
It's a very longstanding cliche to complain about people from California moving into the nearby states. Lots of that when I went to school in AZ in the 90s.
> By submitting my information, I agree to the Privacy Policy and Terms of Service. In fact, the authors point out, even those who were previously Republicans “shift markedly” toward the Democratic party once they receive an FHA loan. It could be that those who receive FHA-backed loans recognize the value of government in helping them obtain a low-interest mortgage or perhaps it is because FHA loans are only available for more modest loans, and are more likely to be taken by working- or middle-class people. At the same time, Republicans who do not use FHA loans become even more Republican.
> It’s not just that becoming homeowners makes people more NIMBYish, or that homeownership locks people into place, but buying a home changes people’s political behavior writ large. Once someone buys a home, they act politically to protect its value. As the authors point out: “Overall, the results suggest that individual economic circumstances importantly influence political beliefs and behavior, and suggest that homeowners have special influence in American politics in part because their ownership motivates them to pay attention and to participate.”
https://www.bloomberg.com/news/articles/2018-08-28/how-homeo...
Oh look, another HN commenter with 0 idea of what he is talking about, but all the bravado to support his dumb position.
Are homeowners more likely to have what political leaning?
It’s not really that bizarre when you accept that it’s part of the human condition. Then you start seeing the pattern all over the place, especially in politics.
I have two degrees where the concept is pretty much taught in the first hour of 101 classes: economics (cost of opportunity) and software engineering (design trade-offs). And while I see through the pattern quite well, I wish I could say my behavior is always perfectly consistent with what I know.
Can we get rid of this please? Your little piece of green is better served as an undisturbed park that can support wildlife.
I’d love to see small towns replaced with a single highrise. More room for trees and deer and migratory birds. This is a real thing: https://amp.usatoday.com/amp/4893153001
It‘s like a new version of town vs gown. Cost of living of course skyrockets…
It happens in every market where the wealth is generated outside of the local economy. That’s the Econ 101 that zoning activists misunderstand. For a more prominent example, see New Zealand.
The mayor proposing “allowing” tents should be forced to live in a tent with the people, I bet the mayor would come up with some new proposals real fast. In fact all politicians should be stripped of healthcare from their compensation packages as well.
If anything can be learned from Seattle (my home), a politician's proximity to a problem is the key indicator for how much that problem will need to be actually solved versus just used as a tool for virtue signalling about how others should live.
Thing is placing tents near the Mayor’s house would just result in either a rezoning or other form of criminal sanction.
Tents are just a way to sweep the problem of homelessness under the rug not to solve it. Soon enough this mayor will be re-running on a platform of having solved the homelessness problem and successfully housing “x” people all while helping business keep wages down.
I personally think banning private schools is a bit extreme, but it is astonishing to now live somewhere were even families with two professional incomes send their kids to private secondary schools, compared to where I grew up that only the extremely wealthy would do so.
Ha, I've never thought about that (not American) - I suppose it's no different than choosing a provider for anything else (like travel or couriers) or in-housing it (like pensions) but it does seem funny to me to think of politicians having employer-provided health insurance.
Housing market ramped up values. Landlords are raising rents across the board. There was a recent local article where one rent was raising from $800/mo to $1400. One of the apartment buildings in town went from $1250/mo to $1400 for a 1bd apartment (had to help move my friend from there) and apparently a large portion of the people in the building are behind on rent. When I went to rent a uhaul the lady said all her trucks have been pretty busy. All of their storage units are full of either people who are moving to town or people who have nowhere to go (her words).
The jobs which are unable to be filled local are the ones which were typically taken by the 18-30yr crowd. Even though they are paying considerably over minimum wage now there is still a massive shortage of workers (many restaurants are shutting down 1-2days a week due to lack of staff...particularly back of house staff). McDonalds in town is paying $14/hr now to start...minimum wage is $7.25. My pet theory is that the people who normally filled these jobs condensed their living expenses during covid. Moved back in with parents, moved into multi person dwellings. etc. but also even still they realize there is very little hope. If you make the average rate of pay in town $20/hr you can barely rent...and you need to make 3x that to even be considered for the "average house" in town. From my viewpoint I do not see a solution. Either we have tent cities or everyone who speculated and bought in a bubble without paying any attention to what "rent the town can bear" is going to take a massive loss (50% at least).
My personal opinion is that this issue is largely caused by vacation rentals. It isn't that everyone is moving here (we have had that since the 70s) it is that everyone moving here is buying 2 houses and turning what was once affordable rentals into unregulated hotel rooms that cost $6k/mo. Idaho enacted laws in 2017 to prevent any area in the state from blocking vacation rentals in any way. Ketchum, Coeur d'Alene, Boise...are all seeing this issue.
The next big crash will come when the large portion of remote workers who moved here are asked to come back to the office. If they refuse they won't be able to find a comparable job anywhere in the area. What was once a "steal" and "so cheap" now becomes way out of their price range once they are required to find local work. Again, I don't have a solution. Just observing from the trenches.
My other proposal would be to enact laws against buying a home and not living in it, but again, not sure how legal/morally right to prohibit property ownership just like _that_
I wonder how many people moving here know that the lake was supposed to be a superfund site...or that their nice little cottage was a meth lab just a decade ago.
https://www.nap.edu/read/11359/chapter/2#6
And that is why.
Heavy metal contamination...and not to mention the arsenic. 100 years of mining silver did a number on the downstream (Lake Coeur d'Alene).
Unfortunately, I think the crash will come first
You could cap the number of occupancy credits per sqft to keep things reasonable.
It would also help with things like state taxes based on primary residence.
/s
Our death rates here were not high for the age range that takes these jobs...we likely lost more to the opioid crisis than anything.
Coeur d'Alene was wide open for operation June 2020...the restaurants had a record year (due to Washington being locked down). I suspect this area will be one of the much studied regions in terms of Covid. Almost no lockdown, very limited mask usage, schools were largely open, as well as a very low vaccination rate in the county. I consider this area as close to a "control group" as you can get.
Now, "everyone" can afford a vacation property, but depending on how much money you have, it depends on low interest rates, and as-close-to-full occupancy on AirBnB as possible just to pay the mortgage.
It's like when "hey, maybe our household could use a second income" turned into "everyone needs 2 earners to get by". It's inflation.
I reached the same conclusion as you about people "condensing expenses". I was puzzling over how the economy is on fire, and yet businesses "aren't able to find workers" (read: workers who will accept what they're offering in pay) on the back of a huge unemployment spike, where you'd expect that previously-unemployed folks would be desperate for a paycheck. Some people point to Covid unemployment assistance, which is going away, but they must have compressed those living expenses in order to afford to demand higher wages.
Or, they simply left while out of work and everyone on the remote work end of the labor pool was taking walks, on zoom meetings, baking banana bread. In texas, I feel like we got an influx of low wager earners from other states because cost and really more open economy. Meanwhile a good portion of our existing low wagers went south.
I short, I don't think there is anything abnormal about your claim that they are starting at $14 and unable to find anyone.
Particularly in governments run by politicians who agree with and were elected by folks that don't trust governments. Which means [that] government can't be trusted to maintain or upgrade infrastructure because that requires government to collect and spend tax dollars.
>my hope is all taxes from all those housing would be used by the government to upgrade the infrastructure and do something smart with it
"all taxes from all those houses" is likely not going to be enough to properly upgrade, let alone maintain, the infrastructure. I'm interested to see what those parts of Idaho look like in 5 to 15 years from now.
An "available job" that pays less than the cost of living is nothing.
Also, where do you go? It isn't like there is some perfect spot right now where jobs match cost of living. Not to mention...a lot of people have long term ties in areas. Most of my family is here. In my case I have lived in my town for 40 years...but I am being priced out of the town.
As for the lining up, do apartment hotels exist? They are basically hotels that rent out apartments on a month by month basis. I knew people who also put stuff in storage and lived hotels or hostels, while waiting for the actual apartment residents to leave. Is that not a possibility?
Of course, when the contract dates overlap, then things get a little more difficult...
SRO (single room occupancy) -- typically very shitty and dangerous. Full of people priced out of society, junkies, people transitioning out of prison, etc.
Executive housing -- typically very expensive, used by traveling execs or temporarily by employees a company relocated
and as @pomian said, the vast vast majority of apartments in the US come with no furniture, though (in contrast to at least Germany), they do come with a kitchen and appliances. Washer/dryer/AC are not standard but common.
The situation does seem very limiting. I imagine it can "trap" people in undesirable locations.
In regards to employers, raise pay if can't get workers. Employees will come when they can live on the pay.
In all transactions- buying, selling, or exchanging labour for money- both sides of the agreement have to see a beneficial deal. You feel that the iPhone 27 is worth however much money, and the store selling you feels that the money is worth giving you the iPhone. If either side does not agree, there is no sale.
"Plenty of available jobs" is what happens when the deal you are offering- cash for labour- is not an acceptable deal to the labour side. When businesses cannot be profitable at market-chosen labour prices, the businesses will close down.
They could build more housing, but no one wants to get caught holding the bag if the boom turns to a bust as the world returns more to normal.
And even if they did choose to build the housing, housing next year doesn't solve the issue of housing today.
That said, where I live we are building plenty of housing but we still can't fill jobs. Why exactly is hard to say, but general consensus is that government unemployment benefits are currently compelling enough that people will trade taking a hit on their income in exchange for not having to work. Can't blame them, I guess.
Seems like a painful readjustment in the coming years as we unwind all the emergency decisions we made last year.
When low paid workers can't afford to live locally because of availability of affordable housing, they must live further away. Commuting has a cost too so if low paid workers can afford housing an hour away, it still might be cost prohibited to take those jobs because commuting costs too much (or "affordable" transportation isn't available). Then if you include the 2+ hours of commute time per shift to take those jobs, it may very well make those jobs less attractive as the effective hourly pay rate is lower than elsewhere.
Maybe I'm wrong, but given my experience driving through the Rockies, I doubt there is any more housing an hour away than there is town. It's just a giant vastness of undeveloped land.
Wikipedia says that the county Ketchum is in has a population density of 8 people/sq mile, and an area of 2600 sq miles. Wikipedia also says that many people commute in for work from neighboring Lincoln county, population 5000.
I think the OP's comment is correct in general, but the particular situation in question has more nuance to it. I don't see any conflict between the two.
Can't speak for those but housing is seen as an investment in the UK too. Everyone wants their house prices to go up, to get a return on having a place to live. The government won't lift a finger because they also have their money in property, as does the electorate that keeps voting them in. Advocating for any kind of regulation or intervention would be sheer political suicide.
The generation that has enjoyed affordable housing the most has been making short work of pulling up that ladder behind them.
Given the fractured nature of building and zoning laws in the US, the only long term solution I see to this is state or federal level zoning requirements coupled with a slowdown of monetary stimulus and/or restrictions on non-resident purchases of properties for renting.
One project I was personally familiar with was delayed for over 10 years because a neighbor would challenge the plan. Each time found a different ordinance to nit-pick with. It was catch-22; if the nit-pick was fought, it caused delays, if the plans were modified, then it was now a new plan, and he could start all over with challenges to it.
Another great example is that people living in a tiny town in Virginia were able to get a major bridge over the potomac completely redesigned from a suspension bridge to a draw-bridge (making it more expensive, a shorter lifespan, and less amenable to shipping) because the towers of the planned suspension bridge would be visible from their houses. Wikipedia calls this "considerable study and public debate[1]"
1: https://en.wikipedia.org/wiki/Woodrow_Wilson_Bridge#Replacem...
1) if we so often hear about how corporations have the money to pay more, and they’re simply using it to line corporate pockets, wouldn’t they rather pay a livable wage to employees over shutting down restaurants, businesses, etc. entirely? 2) is it primarily affecting small businesses, or are the posts I’ve seen about Taco Bell/chains not finding labor true as well? 3) how is it that only now employees are realizing they can make more money from unemployment than working - what uniquely changed? Was it just the absurd amounts of money being pumped from stimulus checks?
If they were perfectly rational actors, sure. But businesses and corporations aren't real, they're fake entities that exist just to shield owners from liability. The actual owners of these things are humans, with human emotions just like any other person.
What we're seeing is owners getting angry, and refusing to pay fair wages despite the fact that it makes them less profitable to be upset like this. Depending on how they choose to vent their anger, it is sometimes labeled as a https://en.wikipedia.org/wiki/Capital_strike
> how is it that only now employees are realizing they can make more money from unemployment than working
They aren't -- employees aren't making more money from unemployment than working. They're just realizing "working" isn't really working (it costs more money to go to work, than most of these companies will pay them back in wages). You could eliminate all unemployment entirely, this situation would not change at all.
> Was it just the absurd amounts of money being pumped from stimulus checks?
No. The stimulus checks had tiny, paltry amounts of cash, and also ended months ago. Some unemployment benefits existed for longer, but they are also running out (or already have, depending on your state). Either way, the situation won't change at all when that ends, because the problem has nothing to do with outside checks.
The problem is that in many places in the US, it costs workers more money to show up to work, than they earn from doing that days work.
Why would you go punch a clock at Taco Bell, if you ended up poorer every day for working? If after a hard days work, you had less money on you than you did the day before? You wouldn't, no rational person would do this. But that's the actual reality in much of the US today, which is why a lot of people simply aren't doing these jobs anymore.
If Taco Bell pays you $14/hr, but it costs you $20/hr just to be able to show up to work at all (that's a realistic number in many cities today), then you lose $6/hr for every hour you work. You are, effectively, donating money to a for-profit corporation. Most rational folks aren't going to be happy to do that, so they aren't taking those "jobs" anymore.
The real problem is that there is a lack of supply. We know this because the workforce participation rate is at record lows. Yes, employers can try to poach employees off of each other, but until the fundamental issue is resolved, which is that there is a lack of workers in the labor pool compared to any time in the last several decades, these problems will persist.
I have also noticed that although people are recognizing their is a massive growing homeless population in all cities, particularly the west coast, it gets pushed away as just a bunch of drug users on fent, instead of realizing the bulk of these people became homeless in the last 3 years as housing and rentals have blown up in costs without wages matching.
There's so little resources for the people at the bottom suffering homelessness, the only thing keeping a lot of people housed right now is the soon-expiring eviction moratoriums.
Yeah they're about to expire, just like they've been about to expire for a year. I'll believe it when I see it.
"The Biden administration announced on June 24 an extension of the federal eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) through July 31, 2021, and that it will implement a whole-of-government approach to prevent an historic wave of evictions this summer" [0]
[0] https://nlihc.org/coronavirus-and-housing-homelessness/natio...
> In late May, dozens of people gathered in Ketchum’s town square to protest the lack of housing and support a new 56-unit affordable-housing complex that a developer wants to build downtown. Some residents oppose the project, which the city council is still weighing, saying it would shrink what limited parking there is and concentrate low-income housing in a single area.
If there's one force that is more national than local it's the supply of construction materials. Construction labor is at least regional, if not national.
There was also a significant dip in new construction during the pandemic which must have had an effect on pricing.
Having built my own house ~15 years ago (I only contracted out earthwork, concrete finishing, trusses, and shingles) I am aware that construction materials are generally a small fraction of total cost, but labor can easily be half of the total cost.
Finally there is probably an aspect of financial bubble happening as people try not to miss out on rising housing prices, willing to pay a steep premium to own housing the traditional way instead of through a mutual fund or similar investment.
[*] https://www.cato.org/blog/how-us-trade-policy-contributes-ou...
Let me break it down...
Let's start with $15 an hour.
Let's be generous and assume five 8 hour shifts per week (2080 hours per year: 5 shifts per week * 8 hours per shift * 52 weeks per year).
That's $600 per week ($15 per hour * 5 shifts per week * 8 hours per shift). Or $31200 ($600 per week * 52 weeks) per year.
Let's assume affordable housing is 30 miles away and takes an average of 1 hour to commute one way.
That's 10 hours of commuting per week (5 shifts, 1 hour EACH way or 1 * 5 * 2) or 520 hours commuting per year (10 hours per week * 52 weeks per yr).
The time commitment of the worker is 10 hours per shift (8 paid working, 2 unpaid commuting).
The yearly time commitment is 2600 hours per year (2080 working, 520 commuting).
So the effective hourly rate is $31200/yr / 2600 hours/yr which is $12 per hour.
BUT! Commuting isn't free. Let's assume the worker owns a car in order to get to and from work. Let's round off the cost per mile (gas, wear and tear) to be 50 cents a mile.
So the cost of commuting per shift is $30 (30 miles one way * 2 ways * $.50 / mile) or $7800 per year ($30 per shift times 5 shifts per week * 52 weeks per year)!
SO! To have the $15 per hour job costs the worker $7800 per year and 2600 hours per year!
So, ($31200 per year - $7800 per year) / 2600 hours = $23400 / 2600 hours = $9 per hour!
$9 per hour! That $15 per hour job is competing with $9 per hour jobs that are closer and more local to affordable housing and giving thousands of hours per year back to the worker.
Think about that...
And this assumes no children, so no costs for child care. Throw that in the mix and it can actually cost some people money just to work.
We need to fix the incentives when businesses would rather scream and close their doors than make less and pay a living wage for their location.
OTOH, towns that want permanent workers better wise up.