Introduction to Housing - City Beautiful Basics
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Date: 2025-10-11
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Comments and reviews: 20
firefalcoln
Small starter homes make more sense IMO to be used to provide affordable rentals than a path to more affordable ownership.
If you’re buying a starter home with a loan like nearly every person starting out, you pay way more towards interest than principal near the beginning because of how amortization schedules work. So people rely largely on homes going up in value or making extra payments towards principle for starter homes to really help grow their wealth before they move. It’s also no guarantee that interest rates will be as cheap or cheaper in the future when you’d like to move up to a better home. It’s also generally cheaper per bedroom to buy a larger home or a duplex or triplex. And as long as you live somewhere where decent rental demand and the property is in decent shape, you could rent out the extra space of a larger property to offset your costs if you can afford the larger and more expensive home. There are also big transaction costs every time you trade homes. This is one of the main reasons people recommend that people keep their home that they purchase for 5, 7, 10 or more years before selling. If you purchase a forever home first, you don’t have to worry about forcing yourself to stay for a long time.
It’s also generally simpler and more speedy to build wealth through the stock market. And if you put all your money into buying a starter house as soon as possible, you can miss out on building your liquid investment account, which is probably better to have in the long run. Home values beat inflation by about 1-2% per year on average. Stocks are closer to 7% on average. If you rent and heavily invest, you could have enough down the line to buy a home with cash and have other investment money for retirement. And then you avoid having to pay any interest on your house payment, and can buy a home exactly where you want as you’re retiring or about to retire. You can withdraw all the money out of a Roth IRA tax free once you turn 59. 5 years old. Given that the starting age for a first time buyer now is 38, that’s not that much later when you figure that at 59. 5 you can have the home not only owned, but completely or nearly completely paid off with that Roth IRA money. If you start at 38 on a 30 year mortgage, you’ll be 68 when it’s paid off, if you make the minimum payments.
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Small starter homes make more sense IMO to be used to provide affordable rentals than a path to more affordable ownership.
If you’re buying a starter home with a loan like nearly every person starting out, you pay way more towards interest than principal near the beginning because of how amortization schedules work. So people rely largely on homes going up in value or making extra payments towards principle for starter homes to really help grow their wealth before they move. It’s also no guarantee that interest rates will be as cheap or cheaper in the future when you’d like to move up to a better home. It’s also generally cheaper per bedroom to buy a larger home or a duplex or triplex. And as long as you live somewhere where decent rental demand and the property is in decent shape, you could rent out the extra space of a larger property to offset your costs if you can afford the larger and more expensive home. There are also big transaction costs every time you trade homes. This is one of the main reasons people recommend that people keep their home that they purchase for 5, 7, 10 or more years before selling. If you purchase a forever home first, you don’t have to worry about forcing yourself to stay for a long time.
It’s also generally simpler and more speedy to build wealth through the stock market. And if you put all your money into buying a starter house as soon as possible, you can miss out on building your liquid investment account, which is probably better to have in the long run. Home values beat inflation by about 1-2% per year on average. Stocks are closer to 7% on average. If you rent and heavily invest, you could have enough down the line to buy a home with cash and have other investment money for retirement. And then you avoid having to pay any interest on your house payment, and can buy a home exactly where you want as you’re retiring or about to retire. You can withdraw all the money out of a Roth IRA tax free once you turn 59. 5 years old. Given that the starting age for a first time buyer now is 38, that’s not that much later when you figure that at 59. 5 you can have the home not only owned, but completely or nearly completely paid off with that Roth IRA money. If you start at 38 on a 30 year mortgage, you’ll be 68 when it’s paid off, if you make the minimum payments.
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city_beautiful
A major driver, perhaps the biggest driver, of unaffordability is the massive subsidies given to car drivers. (Pun intended) Drivers only cover about 10% of the costs they impose on taxpayers when road construction and maintenance, policing, emergency services for crashes, road carnage, air pollution, climate change and sprawl are accounted for. This may seem unrelated but it is not at all. It has encouraged artificial suburban expansion and sprawl which is the most absurdly wasteful and expensive way of life anybody could have ever conceived to live. It wastes enormous resources, including time stuck in traffic, and returns low tax revenues to governments which go increasingly broke as sprawl continues. It forces everybody to own a car when they can't even afford their home. And broke governments can't help solve the problem of broke people.
If drivers had always had to pay their true costs, we'd all live in more compact, walkable neighbourhoods with great transit. We'd use land more efficiently returning higher tax revenues (without taxing you more, reduce the high costs of sprawl and the high costs of congestion, pollution and climate change. There would be less social isolation an stronger communities too.
This does not require high rise towers or especially large apartments. Modest apartments and more row houses could triple or quadruple density without feeling too urban. That would be enough to reverse the affordability crisis permanently at no cost.
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A major driver, perhaps the biggest driver, of unaffordability is the massive subsidies given to car drivers. (Pun intended) Drivers only cover about 10% of the costs they impose on taxpayers when road construction and maintenance, policing, emergency services for crashes, road carnage, air pollution, climate change and sprawl are accounted for. This may seem unrelated but it is not at all. It has encouraged artificial suburban expansion and sprawl which is the most absurdly wasteful and expensive way of life anybody could have ever conceived to live. It wastes enormous resources, including time stuck in traffic, and returns low tax revenues to governments which go increasingly broke as sprawl continues. It forces everybody to own a car when they can't even afford their home. And broke governments can't help solve the problem of broke people.
If drivers had always had to pay their true costs, we'd all live in more compact, walkable neighbourhoods with great transit. We'd use land more efficiently returning higher tax revenues (without taxing you more, reduce the high costs of sprawl and the high costs of congestion, pollution and climate change. There would be less social isolation an stronger communities too.
This does not require high rise towers or especially large apartments. Modest apartments and more row houses could triple or quadruple density without feeling too urban. That would be enough to reverse the affordability crisis permanently at no cost.
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Lazycakes
I've increasing been thinking about the whole home as an investment thing. The system we have is set up so houses are always increasing in price, pretty much across the board. This seems nice for the homeowner, but not good for anyone wanting to buy a house. Ultimately affordable housing and this idea of a store of investment are at odds.
But also, if all houses are more expensive, then when it comes time to move, you're just moving into another expensive house. So where is all that extra money you made It's still in the house. And it will always be in the house unless you move to a much cheaper market, and are actually able to collect that difference in price (which does happen, but that's a big change. also this makes the opposite movement very painful. Otherwise your looking at a downsizing situation, but places to downsize are limited, and also have inflated prices. Or you could move into a renting/assisted living situation, but once again the money you gained is eaten up by high rents.
And if you die and your house is passed on to your kids All that money from the sale of the house is just going to offset the massive mortgages the kids had to take to afford their own expensive homes.
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I've increasing been thinking about the whole home as an investment thing. The system we have is set up so houses are always increasing in price, pretty much across the board. This seems nice for the homeowner, but not good for anyone wanting to buy a house. Ultimately affordable housing and this idea of a store of investment are at odds.
But also, if all houses are more expensive, then when it comes time to move, you're just moving into another expensive house. So where is all that extra money you made It's still in the house. And it will always be in the house unless you move to a much cheaper market, and are actually able to collect that difference in price (which does happen, but that's a big change. also this makes the opposite movement very painful. Otherwise your looking at a downsizing situation, but places to downsize are limited, and also have inflated prices. Or you could move into a renting/assisted living situation, but once again the money you gained is eaten up by high rents.
And if you die and your house is passed on to your kids All that money from the sale of the house is just going to offset the massive mortgages the kids had to take to afford their own expensive homes.
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kylepickus5712
I’m a case manager at a Young Adult Shelter. The Housing Choice Voucher is great, and certainly should be expanded. That being said, the biggest issue with HCV is that it relies very heavily on the good will of the private sector. The reason why the waitlist for HCV is so long is not necessarily because there is not enough housing, but because not every landlord or property manager accepts HCV, nor would they accept it exclusively, because on the surface it is a very bad investment. Why risk a renter not being able to pay for a few months Why risk bringing in a crowd of highly vulnerable people into the same place The solution is far more complicated than just build more affordable housing and fix zoning laws (though we should.
The solution requires us to think more broadly about how we understand housing not as a basic necessity, but as an appreciating asset. It requires us to be more bold in increasing the public sector and the public market. It may not mean full nationalization, but at least more centralization and a housing policy more in line with seeing it as a right, not an asset. We need to build more housing without questioning if it would be a profitable endeavor to do so.
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I’m a case manager at a Young Adult Shelter. The Housing Choice Voucher is great, and certainly should be expanded. That being said, the biggest issue with HCV is that it relies very heavily on the good will of the private sector. The reason why the waitlist for HCV is so long is not necessarily because there is not enough housing, but because not every landlord or property manager accepts HCV, nor would they accept it exclusively, because on the surface it is a very bad investment. Why risk a renter not being able to pay for a few months Why risk bringing in a crowd of highly vulnerable people into the same place The solution is far more complicated than just build more affordable housing and fix zoning laws (though we should.
The solution requires us to think more broadly about how we understand housing not as a basic necessity, but as an appreciating asset. It requires us to be more bold in increasing the public sector and the public market. It may not mean full nationalization, but at least more centralization and a housing policy more in line with seeing it as a right, not an asset. We need to build more housing without questioning if it would be a profitable endeavor to do so.
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seaotter42
It's a little dismissive to claim NIMBYism is driven by concerns about home values. On a day to day basis most people don't care about and aren't impacted by the value of their home. If someone wanted to build a factory or a freeway right next to my house I'd be less concerned about the value of my house and more concerned about traffic, pollution, and noise. When the city permitted a 4 story self-storage facility across the street from me, I didn't care about the impact on the value of my house, I do care about the fact that sunrise in my backyard is now 10-15 minutes later than it was when there wasn't a building three times the height of my house blocking out the sun to start the day. I guarantee that everyone watching this has something that would turn them into a NIMBY. maybe its high rise apartments, maybe its a freeway, or an datacenter, or a hot sauce factory. We need to stop automatically dismissing the concerns of people anytime someone wants to build something.
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It's a little dismissive to claim NIMBYism is driven by concerns about home values. On a day to day basis most people don't care about and aren't impacted by the value of their home. If someone wanted to build a factory or a freeway right next to my house I'd be less concerned about the value of my house and more concerned about traffic, pollution, and noise. When the city permitted a 4 story self-storage facility across the street from me, I didn't care about the impact on the value of my house, I do care about the fact that sunrise in my backyard is now 10-15 minutes later than it was when there wasn't a building three times the height of my house blocking out the sun to start the day. I guarantee that everyone watching this has something that would turn them into a NIMBY. maybe its high rise apartments, maybe its a freeway, or an datacenter, or a hot sauce factory. We need to stop automatically dismissing the concerns of people anytime someone wants to build something.
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city_beautiful
After working with housing subsidy programs for the last 6 years, I've noticed one reason why rent is so his are subsidy housing programs. When land lords learned our city was given some major housing grants due to homelessness, some bought up tons of property and immediately raised rents like crazy. 6 years ago you could still find some units around here going for $450 a month. Those same units are now going for anywhere from $900 t0 $1, 150 a month. That's more than doubled and yet how many people have had their income double in that same amount of time We need to encourage companies to make more housing that can be paid for by those with lower incomes instead of paying landlords extra money to house people with lower incomes since they will just raise prices and those who don't qualify for those programs will no long be able to afford housing.
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After working with housing subsidy programs for the last 6 years, I've noticed one reason why rent is so his are subsidy housing programs. When land lords learned our city was given some major housing grants due to homelessness, some bought up tons of property and immediately raised rents like crazy. 6 years ago you could still find some units around here going for $450 a month. Those same units are now going for anywhere from $900 t0 $1, 150 a month. That's more than doubled and yet how many people have had their income double in that same amount of time We need to encourage companies to make more housing that can be paid for by those with lower incomes instead of paying landlords extra money to house people with lower incomes since they will just raise prices and those who don't qualify for those programs will no long be able to afford housing.
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rileynicholson2322
I think it would be worth a mention here that high density housing nearby is a risk to property values is basically just a completely false myth. Like property values in general may fall if you address housing shortages, but high density zoning and mixed use zoning generally increase property values at the local neighbourhood or street level because they bring in more amenities for existing properties.
Also the racial component of housing wealth accumulation should be in any 102 version of this video along with how housing as a store of wealth may be convenient, but housing as a wealth accumulation (appreciation greater than inflation/wages) is intergenerational injustice and completely unsustainable in a democratic society.
Overall a pretty decent high level overview of the topic and complexity of the topic.
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I think it would be worth a mention here that high density housing nearby is a risk to property values is basically just a completely false myth. Like property values in general may fall if you address housing shortages, but high density zoning and mixed use zoning generally increase property values at the local neighbourhood or street level because they bring in more amenities for existing properties.
Also the racial component of housing wealth accumulation should be in any 102 version of this video along with how housing as a store of wealth may be convenient, but housing as a wealth accumulation (appreciation greater than inflation/wages) is intergenerational injustice and completely unsustainable in a democratic society.
Overall a pretty decent high level overview of the topic and complexity of the topic.
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city_beautiful
I tend to see homeownership as better than renting. Besides guaranteeing shelter after paying off the mortgage, rents tend to rise dramatically, suffocating people. Social housing programs are often poverty traps or have the primary weakness of being privatizable. What's the point of a public housing program if, after the next election, politicians privatize it and destroy the lives of tenants Ideally, the government would build properties itself and sell them at cost price with financing options that are cheaper than rent, preferably in areas that aren't being used for anything (like parking lots in downtown areas. This seems unrealistic in the United States, but similar policies already exist elsewhere. The only social housing model that I think is better than this is housing cooperatives.
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I tend to see homeownership as better than renting. Besides guaranteeing shelter after paying off the mortgage, rents tend to rise dramatically, suffocating people. Social housing programs are often poverty traps or have the primary weakness of being privatizable. What's the point of a public housing program if, after the next election, politicians privatize it and destroy the lives of tenants Ideally, the government would build properties itself and sell them at cost price with financing options that are cheaper than rent, preferably in areas that aren't being used for anything (like parking lots in downtown areas. This seems unrealistic in the United States, but similar policies already exist elsewhere. The only social housing model that I think is better than this is housing cooperatives.
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TylerR909
I'm so tired of this attempt to malign people who simply don't want a something as NIMBY. NIMBY is when you advocate for something, BUT Not in my backyard. Like We should build more wind turbines BUT not in my skyline! or We should build affordable housing BUT not in my neighborhood! This attempt to smear everyone who simply doesn't want something, didn't vote for it, didn't get a say in it, and is having it thrust upon their communities anyway as NIMBY is so disgusting.
Or should we just start calling all Native Americans NIMBYs Don't like Mount Rushmore Nimby! Don't like Westward Expansion NIMBY! Oh you're not a fan of manifest destiny NIMBY! The parts of Africa that were colonized They're just NIMBY. Gandhi was just a NIMBY don't you know
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I'm so tired of this attempt to malign people who simply don't want a something as NIMBY. NIMBY is when you advocate for something, BUT Not in my backyard. Like We should build more wind turbines BUT not in my skyline! or We should build affordable housing BUT not in my neighborhood! This attempt to smear everyone who simply doesn't want something, didn't vote for it, didn't get a say in it, and is having it thrust upon their communities anyway as NIMBY is so disgusting.
Or should we just start calling all Native Americans NIMBYs Don't like Mount Rushmore Nimby! Don't like Westward Expansion NIMBY! Oh you're not a fan of manifest destiny NIMBY! The parts of Africa that were colonized They're just NIMBY. Gandhi was just a NIMBY don't you know
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city_beautiful
The only solution to homelessness is increase the number of available homes. Could be ADU, town houses, medium rise apartment buildings, or other. Smarter zoning is a must, transit oriented development means fewer parking spaces required as families won't need a second car, just make sure to adjust or abolish parking minimums. What does NOT help AT ALL to address the issue of homelessness, is subsidies and tax breaks for renters and homeowners. If people on average have more to spend, but supply does not increase, this merely drives up prices. It's basically funnelling public funds to the pockets of landlords and financial institutions, while everyone ends up paying more for the same house or apartment.
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The only solution to homelessness is increase the number of available homes. Could be ADU, town houses, medium rise apartment buildings, or other. Smarter zoning is a must, transit oriented development means fewer parking spaces required as families won't need a second car, just make sure to adjust or abolish parking minimums. What does NOT help AT ALL to address the issue of homelessness, is subsidies and tax breaks for renters and homeowners. If people on average have more to spend, but supply does not increase, this merely drives up prices. It's basically funnelling public funds to the pockets of landlords and financial institutions, while everyone ends up paying more for the same house or apartment.
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mindstalk
Imagine a government that committed to making sure there was 10% more housing than people, by whatever means necessary. Housing abundance, the way we make sure our farmers produce food abundance.
Imagine a society that celebrated housing prices falling, like cheaper food or computers.
Lots of studies find that housing prices correlate with homelessness, but one found that what _really_ correlates is scarcity of spare rooms. People end up homeless when their friends and families don't have the means to help them out. (And it's the 'difficult' people who'll run out of willing help first) Places like SF, where even techies are often taking roommates, don't have spare rooms and have lots of homeless.
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Imagine a government that committed to making sure there was 10% more housing than people, by whatever means necessary. Housing abundance, the way we make sure our farmers produce food abundance.
Imagine a society that celebrated housing prices falling, like cheaper food or computers.
Lots of studies find that housing prices correlate with homelessness, but one found that what _really_ correlates is scarcity of spare rooms. People end up homeless when their friends and families don't have the means to help them out. (And it's the 'difficult' people who'll run out of willing help first) Places like SF, where even techies are often taking roommates, don't have spare rooms and have lots of homeless.
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kod-s
My favorite thing in the housing debate is to correct for survivor's bias. 40% of the homeless are addicted, true. but the homelessness rate among the addicted is 1% (roughly 200, 000 homeless with addiction from 20, 000, 000 of total addicted in the US. Meanwhile, half of the homeless were in the foster system, and half the people from the foster system became homeless (accidental symmetry. So, in terms of homelessness risk factors, becoming an orphan is #1 by an enormous margin: 50%, over 1% of the addiction.
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My favorite thing in the housing debate is to correct for survivor's bias. 40% of the homeless are addicted, true. but the homelessness rate among the addicted is 1% (roughly 200, 000 homeless with addiction from 20, 000, 000 of total addicted in the US. Meanwhile, half of the homeless were in the foster system, and half the people from the foster system became homeless (accidental symmetry. So, in terms of homelessness risk factors, becoming an orphan is #1 by an enormous margin: 50%, over 1% of the addiction.
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city_beautiful
All good points, but I'm disappointed you didn't mention the destructive impact private equity has had on the housing market. Wall Street is buying up a huge portion of SFH at inflated prices, outbidding would-be homeowners and forcing them back into the rental market. Any conversation about the housing crisis that doesn't acknowledge the existential problem posed by corporate takeover of the housing market is incomplete at best and misleading at worst.
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All good points, but I'm disappointed you didn't mention the destructive impact private equity has had on the housing market. Wall Street is buying up a huge portion of SFH at inflated prices, outbidding would-be homeowners and forcing them back into the rental market. Any conversation about the housing crisis that doesn't acknowledge the existential problem posed by corporate takeover of the housing market is incomplete at best and misleading at worst.
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matthewprather7386
NIMBYism can stem from the reasonably founded perception of traffic problems. So along with revised zoning it seems important to help homeowners protect their property values by including transportation infrastructure development. In part it’s paid for by increased tax revenues from the higher population density. Transportation infrastructure should be in the form of rail and especially protected bike lanes.
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NIMBYism can stem from the reasonably founded perception of traffic problems. So along with revised zoning it seems important to help homeowners protect their property values by including transportation infrastructure development. In part it’s paid for by increased tax revenues from the higher population density. Transportation infrastructure should be in the form of rail and especially protected bike lanes.
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Vromiaris778
Townhomes & condo’s are great as a concept for starter homes, however, in the US, association fees are making these excellent concepts unattainable to those who want that lifestyle - any possibility on addressing this crisis in a future video I have family in Europe living in dense housing (like a condo would be here) and their association fees are below 50 per month in comparison to $500. 00/month in the US.
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Townhomes & condo’s are great as a concept for starter homes, however, in the US, association fees are making these excellent concepts unattainable to those who want that lifestyle - any possibility on addressing this crisis in a future video I have family in Europe living in dense housing (like a condo would be here) and their association fees are below 50 per month in comparison to $500. 00/month in the US.
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ansleythestewart
The HCV Program also allows an option to use the Voucher for Homeownership as well. It's vastly underutilized for a litany of reasons, but a big part of that is just simply the lack of knowledge surrounding its existence. Uses the same 30% constant, but ends up being beneficial especially in terms of cost efficiency, for many of the same reasons Leasing falls short.
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The HCV Program also allows an option to use the Voucher for Homeownership as well. It's vastly underutilized for a litany of reasons, but a big part of that is just simply the lack of knowledge surrounding its existence. Uses the same 30% constant, but ends up being beneficial especially in terms of cost efficiency, for many of the same reasons Leasing falls short.
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joeb4294
At this point, I think that the most likely way that housing shortages in the US get addressed is a cultural revolution where multi-generational living is more embraced. I know, it's not likely to actually happen. But the nuclear family was invented after World War 2, and multigenerational housing was far more common before that (and before the suburban housing boom.
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At this point, I think that the most likely way that housing shortages in the US get addressed is a cultural revolution where multi-generational living is more embraced. I know, it's not likely to actually happen. But the nuclear family was invented after World War 2, and multigenerational housing was far more common before that (and before the suburban housing boom.
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bryanbooneart
I recently attended a talk by Chuck Marohn of Strong Towns about the housing trap where we have expectations that house prices will always go up and also that we want housing to be more affordable. Obviously these are in conflict and his talk addressed how the US got here and some things we could do about it. See their site for more if interested.
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I recently attended a talk by Chuck Marohn of Strong Towns about the housing trap where we have expectations that house prices will always go up and also that we want housing to be more affordable. Obviously these are in conflict and his talk addressed how the US got here and some things we could do about it. See their site for more if interested.
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kamonbill5178
Another issue is smaller towns dont get funding so has less facilities less jobs no new developments so all rhe housing is delapidated and dying social life so everyone wants to move to cities where theres no space so has to urban sprawl so to even have work you have to commute and nimbys complain if we try to build public transit
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Another issue is smaller towns dont get funding so has less facilities less jobs no new developments so all rhe housing is delapidated and dying social life so everyone wants to move to cities where theres no space so has to urban sprawl so to even have work you have to commute and nimbys complain if we try to build public transit
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finnvallar
People want to own houses meant for 5 - 8 people but for themselves, and rarely a spouse. Then they'll at most have 1 child.
Buy a house for your purposes, not for status.
I'm 30, and have researched this topic extensively.
Every American knows that any issues are government related, every American, without exception.
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People want to own houses meant for 5 - 8 people but for themselves, and rarely a spouse. Then they'll at most have 1 child.
Buy a house for your purposes, not for status.
I'm 30, and have researched this topic extensively.
Every American knows that any issues are government related, every American, without exception.
reply
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