{"id":1436900,"date":"2023-11-04T16:15:00","date_gmt":"2023-11-04T20:15:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1436900"},"modified":"2023-11-04T16:15:00","modified_gmt":"2023-11-04T20:15:00","slug":"why-bidens-policies-are-a-nightmare-for-housing-affordability","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/why-bidens-policies-are-a-nightmare-for-housing-affordability\/1436900\/","title":{"rendered":"Why Biden’s Policies Are A Nightmare For Housing Affordability"},"content":{"rendered":"

Why Biden’s Policies Are A Nightmare For Housing Affordability<\/span><\/p>\n

\n

Authored by Brandon Smith via Alt-Market.us,<\/em><\/a><\/p>\n

We\u2019re enduring a stagflationary crisis \u2013 there\u2019s no way around it.<\/strong><\/em><\/p>\n

It doesn\u2019t matter how much oil Joe Biden dumps on the market from the Strategic Reserves.<\/p>\n

It doesn\u2019t matter how many jobs he is able to temporarily buy with $8 trillion-plus deficit spending.<\/p>\n

It doesn\u2019t matter how many times the mainstream media claims we are \u201cin a recovery\u201d or claim to see the \u201cgreen shoots\u201d of a \u201csoft landing.\u201d<\/p>\n

In reality, most Americans are struggling to afford necessities \u2013 increasingly, they\u2019re simply unable to participate in essential markets. The longer this goes on, the deeper the hole and the harder it will be for people to climb out.<\/strong><\/p>\n

<\/a><\/p>\n

This is how economic disasters work<\/h2>\n

For most people, it feels like they wake up one morning at the bottom of a pit, barely able to see the sun, wondering what happened.\u00a0Everything was going just fine yesterday \u2013 how\u2019d we end up here?<\/em><\/p>\n

For those who pay attention, we can watch the pit get deeper, a shovelful at a time\u2026
\nGranted, we\u00a0have<\/em>\u00a0seen worse conditions in the U.S. in the past. Both the Great Depression and the stagflation crisis of the 1970s were truly severe.<\/p>\n

The people who think conditions are bad\u00a0now<\/em>\u00a0haven\u2019t seen anything yet (interest rates eventually climbed to 20% in the early 1980s). That said, there is a growing potential for today\u2019s crisis to\u00a0become<\/em>\u00a0the biggest financial crisis in our nation\u2019s history \u2013 given a little more time, and just a little more digging.<\/strong><\/p>\n

Part of this ongoing problem is the heavy inflation in housing prices, and make no mistake,\u00a0this is one of the biggest threats<\/em>\u00a0facing middle-class America right now.<\/p>\n

Let\u2019s describe the problem, then solve it.<\/p>\n

The current state of the housing market<\/h2>\n

Rental prices on the average American home have climbed to $2,047 per month. Depending on where you live, that might sound outrageous or it might sound like a bargain. Either way, compared to the average in 2019 was $1,465.<\/p>\n

That\u2019s a 30% increase in rental prices in the span of\u00a0four years<\/em>. Know anyone whose take-home pay has risen 30% in those four years?<\/p>\n

For apartments, which are generally the lower-end rental option, the average cost today is $1,372 per month, compared to $1,078 per month back in 2019. That\u2019s a 27% monthly price hike\u00a0on the cheapest form of housing.\u00a0<\/em>Know anyone whose take-home pay has risen 27% in the last four years?<\/p>\n

We know that no more than 30% of a family\u2019s income\u00a0should\u00a0<\/em>be spent on housing. If it costs more than 30% to keep a roof over your head, you\u2019re considered \u201coverburdened\u201d by housing costs. Spending too much on shelter forces us to make tough choices, economizing where we can, cutting back on other categories of discretionary spending\u2026<\/p>\n

Well, the rent-to-income ratio in the U.S. is now 40% \u2013 meaning, on average,\u00a0all households are overburdened<\/em>.<\/p>\n

What\u2019s going on?<\/strong><\/p>\n

The price of the average home has\u00a0soared.\u00a0<\/em>From $313,000 in 2019 to $431,000 today \u2013 an astonishing\u00a038% increase<\/em><\/strong>. That puts a home\u00a0far beyond<\/em>\u00a0the income of\u00a0the majority of American households<\/em><\/strong>, pricing out\u00a0more than 67% of the population<\/em><\/strong>.<\/p>\n

It\u2019s not just a price problem \u2013 there\u2019s also declining availability across the nation.<\/p>\n

Rentals in many areas (outside of crime ridden metro neighborhoods) are awash in applications, so much so that a new scam has developed among some property owners requiring\u00a0up-front, non-refundable fees<\/em>\u00a0just to apply. These \u201cscreening fees\u201d can climb into the hundreds of dollars for each applicant, and that\u2019s the price\u00a0to even be considered.\u00a0<\/em>You\u2019re unlikely to get the rental, even if you cough up the fee \u2013 but you\u00a0definitely\u00a0<\/em>won\u2019t get the rental if you don\u2019t.<\/p>\n

Rentals\u00a0are available<\/em>, but it\u2019s a seller\u2019s market and new housing simply can\u2019t keep up.<\/p>\n

There are claims that this trend will soon reverse and that builders are set to flood the nation with affordable new properties, but I seriously doubt it given current conditions. When it costs about the same to build a luxury multi-million-dollar home or a low-rise multi-tenant building, and the profit on the former is several times the latter, what sane builder would opt for \u201caffordable housing\u201d construction?<\/p>\n

Skyrocketing mortgage rates are pusing more and more middle-class families into the rental market \u2013 people who would\u2019ve been homeowners a few years ago are now becoming renters. Which makes the supply and affordability problems worse.<\/p>\n

So what can be done about this?<\/strong><\/p>\n

I\u2019ll rephrase the question: What solutions can be pursued that will have fast results, rather than taking a decade or more with minimal effects? The truth is, the solutions are simple, but they require actions that some people would consider contrary to their political and\/or business aims.<\/p>\n

Certain interests would do everything in their power to prevent such solutions from being achieved and that\u2019s the ultimate obstacle. It\u2019s not only that inflation is rampant and prices are high and supply is low, the greatest obstacles are the political groups and corporate cabals that will try to stop basic reforms from happening to alleviate the crisis.<\/p>\n

Let\u2019s ignore those concerns for a moment, and focus on solving the problem.<\/p>\n

A politically-incorrect guide to ending the housing crisis<\/strong><\/h2>\n

First off, these solutions would have to be enforced at the state level, because there is\u00a0no way<\/em>\u00a0under the current federal regime that such measures would ever become national law.<\/p>\n

Step one is the most important and would probably get the most opposition\u2026<\/p>\n

Step 1: Deport all non-citizens<\/h3>\n

America is taking on a population explosion that it cannot compensate for while acting as a steam valve for foreign governments to pawn off their problems. You want to know why housing prices are exploding? Because foreigners are sapping the supply. And there\u2019s an obvious solution.<\/p>\n

No refugees.<\/p>\n

No asylum.<\/p>\n

No two-to-three-year period where illegal immigrants are parked in a holding pattern, living off the system. If they didn\u2019t migrate here through the\u00a0proper legal channels<\/em>, they should be deported to their nation of origin.<\/p>\n

If you want to know why rental housing in particular has skyrocketed in the past couple years, it\u2019s not only because of inflation in the money supply. There have been more than 2.8 million illegal migrant encounters at the southern U.S. border in 2023 alone. At least 1.5 million of those migrants have been allowed to enter the U.S. by the Biden administration, and the rate of illegal crossings is only increasing with each passing year.<\/p>\n

There is an estimated\u00a016.8 million illegal immigrants<\/a>\u00a0residing in the U.S. as of 2023, though the real numbers could be much higher. To put this in perspective, only\u00a03 million Gen Z Americans<\/em>\u00a0have turned 18 since the year 2000 (and I think it\u2019s safe to assume they\u2019re going to want to live somewhere).<\/p>\n

Removing illegal immigrants (who are\u00a0not supposed to be here in the first place)<\/em>\u00a0would greatly relieve the rental market\u2019s supply issues and leave ample options for young Americans. The increased supply would quickly bring down rent prices and perhaps even home purchase prices.<\/p>\n

Fixing the problem at the state level would require stepping on the toes of the federal government and enacting immigration enforcement within state borders. Greg Abbot, the governor of Texas is partially doing this by busing migrants out of Texas to Democrat sanctuary cities. The crisis will not be fully averted until illegal migrants are bused out of the U.S. entirely, but booting them out of red states would help and blue states would probably be forced to follow as they suffer under their own foolish sanctuary policies.<\/p>\n

Step 2: Stop foreign purchases of U.S. real estate<\/h3>\n

This is an action that some state governments are already pursuing. More so in the case of preventing the Chinese government and their corporate partners from buying up property, but this should apply to\u00a0all<\/em><\/strong>\u00a0foreign buyers. (China has\u00a0already taken this step<\/em>, along with\u00a028 other nations<\/a>.)<\/p>\n

Just how big a solution would this be? Consider: Roughly\u00a040 million acres of U.S. agricultural land<\/a>\u00a0is owned by foreign companies, and\u00a0foreign buyers purchased<\/a>\u00a0over 84,900 homes in the U.S. just in the past year. Yes, higher interest rates are slowing these purchases, but\u00a0not enough<\/em>.<\/p>\n

States can and\u00a0should<\/em>\u00a0make it illegal for foreign nationals to buy property within their borders. I would suggest a moratorium passed on foreign buyers for\u00a0at least a decade<\/em>, if not\u00a0forever<\/em>.<\/p>\n

I don\u2019t think many in the public realize how open our property markets are to foreigners. Back in 1987, Joan Didion described the Miami skyline at night, noting the sheer quantities of dark windows in the high-rise condos \u2013 purchased as combination investment and sanctuary by Latin American elites who wanted an overseas bug-out location for the next coup. That was a long time ago, but even today, foreigners own\u00a0more than 1 in 6 Miami homes<\/a>.<\/p>\n

Just one example of a challenge that ranges from $50-$150 billion\u00a0per year.\u00a0<\/em>Now, in times of prosperity this might not matter as much to some, but in times of inflationary crisis the rules need to be changed to favor Americans first.<\/p>\n

And it doesn\u2019t even require another few trillion dollars in federal government spending.<\/p>\n

Step 3: Moratorium on corporate home buying<\/h3>\n

According to data compiled by Pew, corporations owned nearly\u00a0one quarter of all homes<\/a>\u00a0in the U.S. Many disguise themselves as smaller investment groups to muddy the water.<\/p>\n

That\u2019s 25% of the total housing market controlled by\u00a0a handful of corporations<\/em>\u00a0who can leverage that housing supply shortage into higher profits for themselves nationwide \u2013 and, of course, higher rent costs for everyone.<\/p>\n

Keep in mind, this is similar to what happened during the Great Depression when major banks bought up distressed property mortgages on the cheap as owners struggled to stay above water. In the end banks were snatching up homes for pennies on the dollar.<\/p>\n

It\u2019s unlikely that the current federal government would ever place restrictions on these companies, but state governments might, given the level of homelessness that is about to hit their economies in the next few years.<\/p>\n

Again, if the primary danger in U.S. housing is lack of supply driving up prices, then we must create more supply to make housing affordable again.<\/p>\n

We can\u2019t compel the market to build more houses for cheaper, and we can\u2019t compel home builders to take a loss. What we can do is free up the existing supply and take it out of the hands of people who\u00a0shouldn\u2019t own it in the first place,<\/em>\u00a0and restrict those groups who are attempting to corner the market.<\/p>\n

As practical and sensible as my proposal is, I doubt it will ever happen. Certainly not nationwide, at best in an uncoordinated hodgepodge of state-level policies.<\/p>\n

So what will happen instead?<\/strong><\/p>\n

Jerome Powell has a different plan<\/h2>\n

The Federal Reserve\u2019s plan (at least the plan they openly admit to) is completely different \u2013 they are actively attempting to crash the economy and cause untold financial harm in order to drive inflation back down. The same way that zero interest rates and trillions in printed money drive prices up (not just prices of food and gas, but of assets like homes), raising interest rates and bleeding liquidity out of the economy makes prices fall.<\/p>\n

See, once people lose their jobs, they can\u2019t afford food or gas or rent. Remove demand and prices fall \u2013\u00a0problem solved!<\/em><\/p>\n

Yes, it\u2019s the financial equivalent of carpet-bombing which punishes the guilty and the innocent alike. Yes, it will work \u2013 by pushing the entire nation into a recession so brutal that\u00a0the only solution\u00a0<\/em>is Federal Reserve intervention\u2026 Cue money-printing and interest rate cuts \u2013 which sets the stage for the\u00a0next\u00a0<\/em>enormous surge in the cost of living.<\/p>\n

Welcome to the modern economic cycle, where your economic well-being is managed by an unelected cabal of academics who\u2019ve\u00a0never\u00a0<\/em>had a real job in their lives. Unfortunately, there\u2019s no way to opt out of this financial manipulation\u00a0completely<\/em>, although I think it\u2019s smart to diversify some portion of your savings with tangible, inflation-resistant assets the Federal Reserve can\u2019t control (physical gold and silver<\/a>). They can\u2019t be hacked or inflated away, and they\u2019re a lot more liquid than other forms of tangible assets like farmland or livestock or fine art.<\/p>\n

You may think my proposed cure is worse than the disease. I disagree \u2013 that\u2019s fine. What\u2019s more important to understand is the Federal Reserve\u2019s \u201ccure\u201d is worse than the disease, and\u00a0it isn\u2019t even a\u00a0real cure!\u00a0<\/strong><\/em>More of a palliative, temporarily easing the pain of the economic decline.<\/p>\n

The required dosage to mask the pain gets larger and larger, though \u2013 setting the stage for a more precipitous decline\u00a0next time<\/em>, guaranteeing more severe and widespread suffering\u2026<\/p>\n

It\u2019s smart to insulate yourself and your family from this financial manic-depression as much as you can. We can\u2019t\u00a0entirely\u00a0<\/em>decouple ourselves from the Fed\u2019s economic puppeteering, but we can sever a few of the strings. I think the best way to do that is to diversify with assets like gold and silver \u2013 real, tangible metal \u2013 whose intrinsic value offers a stable foundation for building a more predictable financial future.<\/p>\n

*\u00a0 *\u00a0 *<\/p>\n

The people in Washington are destroying your retirement account! Slowly but surely, the value of your 401(k) or IRA is being eaten away thanks to out-of-control inflation. And our elected officials in D.C. don\u2019t care! In fact, they seem to be accelerating this trend with new legislation to print trillions of new dollars. And this is why I recommend Gold IRAs. To see how they work,\u00a0Get this FREE info kit from Birch Gold Group about Gold IRAs.<\/a>\u00a0(Comes with NO obligation or strings attached.)<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSat, 11\/04\/2023 – 12:15<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/personal-finance\/why-bidens-policies-are-nightmare-housing-affordability<\/a>\u00a0<\/p>\n

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Why Biden’s Policies Are A Nightmare For Housing Affordability Authored by Brandon Smith via Alt-Market.us, We\u2019re enduring a stagflationary crisis \u2013 there\u2019s no way around…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1436900","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1436900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1436900"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1436900\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1436900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1436900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1436900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}