Why there's no affordable housing...

Here are the three main parts of the problem:

Part 1: Large companies like BlackRock have dedicated tens of billions of dollars to buy homes and turn them into rentals. Depleting the market of affordable homes. 1 in 14 home purchases in 2023 were bought by investors.

Part 2: Builders make more by building bigger. The profit per house is bigger the larger the home. Not against people making money, recognizing the need for smaller houses as family formation (the number of new households / soon to be first time home buyers) is on the rise.

Part 3: New construction JUST barely caught up to 2007 numbers in 2019. We have almost 13 million homes that that weren't built because the recession knocked 70% of builders out of business.

What this is causing. Spikes in rent and home values. 40 years ago rent accounted for 18% of household income, now it's over 35%. Renting used to be a way to save for a home, at 35% that's not happening. Homes have spiked in cost over the last 4 years 78%. Homeownership is the number 1 determiner of wealth for a family. People not being able to afford to buy means those people/families lose the interest deduction (2-4k/yr off taxes) they're not building equity paying down a mortgage & don't have an appreciating asset.

WORSE: Where a fixed rate mortgage is fixed, giving people stability, rent has averages an 8% increase per year.

What we know: 1st We're missing 190,000 rental properties here in Michigan alone (apartments, houses, duplexes), over 6 million nationwide. 2nd Builders build for profit, whether it's rentals or single family homes.

Solve: Use the tax code to incentivise builders to build smaller more affordable homes for people to buy. Maybe it looks like tax credits if a certain percentage of their sales are 25% or more below a cities median sales price? I'm not smart enough to come up with the exact thing, but am to know the direction we should go in. 2nd use that same tax incentive to push builders to build more affordable non-luxury rentals & apartments. Bring the supply and demand of both into equilibrium.

What do you think should be done?

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