The Transformation of Housing: Generational Unaffordability?
Philip Ayles
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Over the last few years, the American dream of homeownership has become increasingly elusive for many, especially the younger generation. Today's real estate market is shaped more by corporate interests than individual homeowners. This shift has significant implications, not just for housing availability and affordability, but also for the broader American economy and the distribution of wealth.?
Soaring Demand and Corporate Domination?
A key driver of this change has been the voracious demand for housing, particularly in fast-growing areas like Jacksonville, FL. In these areas, many traditional buyers find themselves competing with deep-pocketed corporations. These companies snap up properties in vast numbers to convert them into rental units, or even create rental housing communities, effectively excluding these properties from the general market. This corporate activity shrinks the availability of affordable starter homes.?
Such trends in Jacksonville are mirrored in other parts of the country. In just five years, housing prices in Jacksonville surged by approximately 150%, with a townhouse purchased in 2018 for $192k now valued at $345k. For many residents, these price hikes push homeownership out of reach, and the proliferation of apartment complexes suggests a shift towards a rental-dominant landscape.?
The Role of Foreign Investment?
The influx of foreign investments in American real estate is another dimension of the problem. While global investment can provide liquidity and drive economic growth, unrestricted foreign property acquisitions have, in some areas, driven up prices and made it difficult for locals to afford homes.?
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The Changing Dynamics of HOAs?
Homeowner Associations (HOAs), meant to be a collective representation of the homeowners in a community, are seeing shifts too. In Jacksonville, for instance, bylaws have been modified to require just a 10% voter turnout for their passage. With investors buying up multiple units and influencing these HOAs, the interests of actual residents can easily be sidelined. For many homeowners, it feels like they're facing taxation without representation, as they pay fees without seeing proportional benefits.?
The Cost-of-Living Dilemma?
The housing market is not the only thing that is seen a spike. Jacksonville's cost of living has surged by an eye-watering 300% over the past 5 years. While the figures might vary, associated stories play out in cities across America. As the cost-of-living races ahead, incomes struggle to keep pace, deepening inequality.?
Looking Forward?
What we are witnessing is more than just a housing crisis; it is a profound transformation of the American socio-economic landscape. If current trends continue, we could be heading towards an era where corporations own most of the land, and most Americans become permanent renters, unable to build generational wealth.?
This situation begs several pressing questions. Is this trajectory sustainable, or even desirable? How can the balance be restored so that individual homeownership remains within reach? As the fabric of American homeownership transforms, it is crucial that policymakers, advocates, and the public engage in these discussions to ensure that the American dream remains attainable for all.?
San Francisco has proposed one solution. The proposal is that housing units that are purchased solely for investment - as a place to park money - would be taxed at a much higher rate than housing units proposed to actually live in
Senior Business and Commercial Real Estate Broker at Transworld Business Advisors, LLC Intermediary @ International Business Brokers Association & Florida Business Brokers Association
1 å¹´The apartments that are being built right now remind me of the pictures of Chinese worker housing. Institutional and Industrial housing on top of each other going to the sky. Private homes unaffordable and cannot be found. I do not know the answer. What will happen to the individual rights of land and home ownership, and is that important anymore? Younger people seem to be content wandering around in cyberspace, working for other people, and sitting on the phone. They do not need a meadow or a pasture or a yard to grow flowers and run in. Perhaps, the virtual world is of more interest and importance to the future people of the world. Perhaps our time is over, and this is the new world reality. . One thing I do know is, we all better start learning the Chinese language.
ReStore Manager at Habitat for Humanity of Wake & Johnston Counties
1 å¹´Great article and very true! Which is one of the many reasons why Habitat for Humanity advocates relentlessly for affordable housing at all levels of legislation.