Let me add some context to the excerpt on housing affordability in this post. The source article leaves out a couple of things.
White liberals with significant incomes (doctors, lawyers, business execs, university administrators, etc.) and Jewish professionals who preach the benefits of diversity don’t want diversity around except in token amounts. This subtle discrimination leads to middle-class whites being frozen out of the housing market because of high prices created by costly regulations favored by liberals and Jews.
Meanwhile, wealthy Chinese and Hindus move into cities after migrating from their own countries to the U.S. They come with hundreds of thousands of dollars in their pockets, ready to buy up homes, thus also freezing out middle class whites (and blacks).
The housing affordability problem affects London, Sydney, and a host of other cities being flooded with diversity. This article focuseson the U.S.
Excerpt from Wired
The affordability crisis in US cities is not just about buying homes. Rents, too, have been rising since the Great Recession. In the coastal and hot cities like Denver and Austin, those increases have put even rentals out of reach for many in the middle class–defined as those making between $50 to $125,000 depending on household size. In 2016, the capital required to sign a lease on the average-priced $3,500-a-month apartment in San Francisco often topped $12,000, thanks owing to requirements for first and last months rent plus security deposits and a broker fee.
The savings that used to be associated with the middle class has dried up in the past few years, as interest rates stayed low and wage growth stagnated. Not only does this make it harder for people to stay in the middle class, but it makes coming up with high sums to rent or buy city apartments impossible.
“It’s very hard to get people to understand that the affordable housing crisis is not for the very poor,” says lawyer Mechele Dickerson of the University of Texas, an expert in housing and the middle class. It’s for people with good jobs who are not poor enough to qualify for subsidized housing, nor rich enough to pay the rising housing prices. “A family that makes $100,000 can’t afford to buy a house in most US cities,” Dickerson says.
The intractability of the middle class’ affordable housing problem stems largely from strict zoning laws that restrict building new housing, and the not-in-my-backyard mindsets of homeowners who oppose affordable housing initiatives.
“Housing issues are a product of economic growth in the city bumping up against strict zoning constraints, that’s what leads to the unaffordability problem,” says David Shulman, Senior Economist at UCLA’s Anderson School of Management. “You don’t want to stop economic growth.”
The opposition to change drives the price of the existing housing supply up—which homeowners love—and ripples into the rental market. Landlords are able to charge more, and long-time rental residents get displaced when they can’t afford the new prices. That’s what’s happening in Fort Hill, a traditionally African American neighborhood that is whitening every year as black residents who’ve rented there for decades are replaced by high-turnover college students willing to pay the ever-higher market rates for apartments.
“As a landlord, if you can turn it over, you’re always at the market, and you want to turn it over faster,” says Lee Lin, economist and cofounder of the rental site Rent Hop.
The price difference below illustrates how demand and supply factors can mean big differences in housing prices.