Housing Sucks

I have been wanting to post some things.  I have been very busy with investing, but also finding a new place to live has taken too much of my time.

Renters are the second wave of Sonoma County fire victims.  Unlike people who lost their homes, we have no charities or insurance.  I am not saying we are as bad off, as some people lost irreplaceable things and even their lives.  However I have never experienced anything close to the greed brought about by the fires.  Before they were even extinguished, investors swarmed to profit from our losses.  Almost everyone I know is either facing rent gouging or are simply being ejected.  We fall in to the latter category.  There are laws, but no one to enforce them.  Rent gouging is all but legal, despite state and local laws, because qualifying for the loopholes is effortless.  Strangely enough the only places that seem to not be gouging are large multi-unit apartment complexes.

We are done renting.  Done with the mini-Napoleon landlords who think that everything you own, from your paycheck to your free time, belongs to them.  That isn't to say that all of them are bad, maybe we just have bad luck.  Our yearly rent increase has been $200 most years, and one year they tried $400 but I talked them out of it.  Meanwhile paychecks go up maybe 2-3% once every three years.  It just feels wrong, having to get a second job to line the pockets of the owners because "the market went up."  We are becoming a nation of peasants.

Even though the market has reached ludicrous speed, we are buying.  We won't have to worry any longer about losing deposits, illegal fees, rent increases, or invasion of privacy, all of which we have experienced at multiple residences.  The only reason we are able to buy is because I am very good at investing.  I don't know how the average person could possibly afford to buy in this market.  And it makes me sad that I can benefit so much from fudging numbers around, while the people who really contribute struggle.

I am 100% sure that this is the peak and that I will lose money on paper in the short run.  But it doesn't really matter.  Every year fewer people can afford to buy.  So if I ever want to move I can just rent the place to peasants!  We have had hyper inflation the last decade or so, but paychecks have barely gone up.  I recently read an article that companies can't find employees, but it isn't that there is a shortage of workers.  There is a shortage of pay.  Even if housing tumbles again it doesn't matter: we will be safe in a house that we own, that no one can eject us from on a whim.

If I had the luxury I would wait a year or so to buy.  The market was softening before the fires: more inventory and static or falling prices.  But now everything is overpriced and "turnkey" means just barely not falling apart.  We are again seeing some price reductions on the sillier listings, but there just isn't the time to wait it out.  Maybe if we didn't have children we could live in a car for a few months, but I won't do that to my kids for the sake of saving some money.

The one comfort is that the more I learn about the housing market and its driving forces, the more I realize how heavily manipulated it is.  Things are changing.  Tomorrow's America will be very different than yesterday's.  We will look back to the golden years, when a person could simply get a full time job and pay the bills.  Soon, maybe even now, we need dual income plus overtime or second and third jobs just to pay the bills.  Not to buy luxury items, but for the simple luxuries of food and shelter.  How the heck did we get here?  Trickle down?

The solution to affordable housing is easy: limit the number of single family houses that can be owned by investors.  If the number is already higher than x% owned by investors, no one has to sell, but only people who intend to live in the home can buy it.  When the percentage owned by investors drops below the threshold, houses can once again be bought by anyone.  Muli-unit properties are too costly for the average person and thus by their nature must be run by investors.

This solution does not require absurd sums to be spent.  It is simple and easy to implement.  unfortunately it will never happen, because who in their right mind would legislate against their own financial interest?