馃攳
Skyrocketing home prices and rents create housing crisis - YouTube
Channel: unknown
[3]
John: In today's highly
[4]
competitive housing market,
[5]
millions of Americans are priced
[7]
out of buying a home, often
[9]
competing with all cash offers
[11]
well above asking prices.
[13]
And rents are skyrocketing, too,
[17]
causing overall housing
[20]
affordability to collapse at its
[20]
fastest rate on record.
[22]
Roben farzad is host of public
[24]
radio's "Full disclosure."
[25]
Roben, thanks for joining us.
[27]
What's going on here?
[28]
What's driving this?
[29]
Roben: So many peculiar, perfect
[32]
storms coming out of this great
[32]
pandemic of 2020.
[34]
Could anybody have romanced how
[38]
much we'd have this renaissance
[40]
in interest in staying at home,
[41]
work from home, people who are
[42]
on the fence about selling their
[44]
homes or aging out of their
[44]
homes suddenly not just start
[45]
adding to their homes right now,
[50]
but are buying homes in
[51]
satellite markets.
[52]
Parallel to that, you had
[53]
interest rates taken down to
[53]
really attractive levels and
[54]
people could get a 3% mortgage.
[56]
And in a broader sense, the
[57]
mobility of the workforce, the
[60]
great unlock of going from high
[60]
priced markets in New York and
[62]
California to places like Miami
[63]
or Asheville, North Carolina and
[64]
Austin.
[66]
And that's caused a tremendous
[69]
kind of sluicing of hot money
[71]
into these markets where you
[72]
just never had the inventory.
[73]
John: And interest rates.
[75]
You mentioned interest rates are
[76]
low.
[77]
They're creeping up, but they're
[81]
still at historic lows.
[82]
Mortgage applications at a
[83]
22-year low now, but at the same
[85]
time, rents are skyrocketing.
[86]
How does that work?
[87]
Roben: There's a shortage of
[89]
affordable housing.
[92]
If you were thinking that I'm
[93]
going to husband cash and save
[94]
for years and a starter home or
[96]
starter rental type thing in
[98]
order to, if you had a price in
[99]
mind, suddenly that price in
[101]
many cases was blown out of the
[105]
water because mortgage rates are
[106]
-- were so low, because you had
[107]
such a piping hot housing
[109]
market.
[110]
And, John, on top of that,
[111]
homebuilders did the rational
[112]
thing and pulled back
[113]
drastically after the great
[113]
financial crisis.
[114]
We thought that that was going
[116]
to be a generational overhang.
[117]
And so now we're paying for the
[119]
decisions that were kind of made
[120]
in the fog of 2009 and 2010.
[123]
Millennials have come to the
[125]
market.
[127]
They see boomers hanging onto
[127]
inventory longer, and so you
[129]
have a generation of people that
[130]
are locked out of affordable
[131]
housing and have no choice but
[133]
to pay rent and pay ever more
[134]
rent.
[134]
John: Is anyone benefiting from
[136]
this?
[137]
Roben: Investors, Wall Street.
[139]
I mean, those who are able to
[141]
show up with cash.
[143]
You see these these signs
[144]
outside of homes, there are
[144]
people that come in and buy them
[145]
and they'll buy your homes and
[147]
turn them around and sell them
[149]
into the institutional market.
[149]
We've seen small flippers, hard
[150]
money, loan lenders.
[152]
We've seen the largest of buyout
[153]
firms and private equity firms
[154]
involved because this is a
[157]
generational megatrend.
[158]
John: You talked about how the
[159]
inventory dropped because
[161]
builders stopped building after
[164]
the real estate bust.
[165]
Is there likely to be a sort of
[168]
a pendulum shift in this?
[169]
Will they start building again?
[170]
Roben: When you see things
[172]
happen, such as people showing
[173]
up even at the whisper of a home
[174]
being listed to be able to put
[176]
in enormous preemptive bids,
[177]
forgoing a home inspection.
[179]
Of course, housing developers
[181]
are going to enter the fray.
[184]
I have a dead mall near my house
[184]
here in Richmond, Virginia, and
[186]
the sears was razed and you have
[188]
luxury condominiums and
[189]
apartments put there.
[191]
That's cold comfort for people
[192]
who need affordable housing.
[193]
But it shows you that the market
[196]
wants to meet a demand.
[197]
You do need policy solutions to
[199]
make sure that people aren't
[200]
kind of doomed to becoming a
[203]
generation of kind of usurious
[204]
renters.
[205]
Some of these rents have gone up
[206]
in such chunky terms.
[208]
You look at markets like los
[209]
Angeles, where there's a
[210]
concurrent homelessness problem,
[212]
Manhattan, Miami, where it's
[215]
just become arguably one of the
[216]
most unaffordable markets in the
[218]
United States, largely because
[221]
out-of-towners have come in with
[221]
hot New York and California
[222]
dollars.
[225]
And there's really nothing that
[226]
locals with their pay scales can
[226]
do.
[227]
John: You talked about policy
[228]
solutions.
[229]
What can be done to address
[231]
this?
[232]
Roben: You know, I mentioned a
[233]
great unlock earlier.
[234]
We have concurrent to this
[239]
-- parallel to this, huge
[240]
overhang about hybrid work and a
[241]
return to work.
[242]
I can go to the canyons of
[243]
midtown Manhattan.
[244]
We can go to whole swaths of
[244]
Washington, D.C., Miami, los
[245]
Angeles, Hartford, Connecticut,
[249]
and very scarcely used
[249]
commercial real estate property.
[251]
And the question is, to what
[253]
extent is there going to be a
[255]
public-private partnership to
[256]
come in and refurbish these
[257]
things?
[258]
The risers kind of rip them out,
[260]
actually put in bathrooms and
[263]
somewhat affordable housing for
[265]
people, because the opportunity
[266]
cost of all of that, I mean,
[267]
millions and millions and
[268]
millions of square feet.
[269]
If you think about midtown
[271]
Manhattan, go in on a Monday
[272]
morning, it's still a bit of a
[273]
ghost town, but there is a
[275]
desperate need for housing and
[276]
you're going to have to see that
[277]
in parallel in other markets
[278]
where the commercial epicenters
[279]
have been cored out.
[283]
Which kinds of forces are going
[284]
to intervene to kind of convert
[285]
that to the housing that's
[286]
desperately needed?
[286]
John: Roben farzad of public
[287]
radio's "Full disclosure."
[288]
Thank you very much.
[289]
Roben: My pleasure.
[292]
Thank you.
Most Recent Videos:
You can go back to the homepage right here: Homepage