Mass Confusion in Today’s Housing Market
In last week’s Sunday edition of the Orange County Register, we saw what has grown to symbolize the confusion and chaos that is today’s housing market. On one hand, Marilyn Kalfus’ “Unaffordable Rents Keep Squeezing More of Us” and on the other, David Whiting’s “Building, Crowding” piece in the same Sunday paper. With one perspective, you have someone complaining about the problem and with the other, a complaint about the solution.
Today’s real estate market is more complex than ever in that you can no longer isolate and interpret just the rental space. To understand what is truly driving the affordability issue, one must also look at the for sale market. What’s more, societal shifts and consumer preferences are also important to understand as many of today’s renters are lifestyle renters who choose renting over buying.
With all of that said, the hot topic is again “affordability” and there are several ways to increase affordability. After all, it’s a simple figure of supply and demand in which you have a growing population, increasing renter base and somewhat limited housing stock. Here’s how to solve the problem in three steps.
1. Repeal Dodd Frank and the overly burdensome financial regulation that makes getting a loan virtually impossible.
2. Build more rental housing.
3. Build more affordable housing.
It’s been said that you can’t build your way out of a housing crisis, but you can certainly under-build your way into one and that’s where we are now. But with increased rental housing stock, affordable housing for those who need it most and safe, low-risk options for those looking to own a piece of the American Dream, we see a more healthy, low-pressure and dare I say “normal” real estate market?
The Governor’s budget trailer bill addressing housing is a big step in the right direction and should address items 2 and 3. Perhaps the incoming President and/or Congress will address item 1. We need the media to help tackle the real issues, to report accurately and accordingly.