TzarKazm t1_jcydssp wrote on March 20, 2023 at 2:41 PM

Reply to comment by CocaineSlippers in Report: Affordable housing shortage has worsened in RI for renters with extremely low incomes by GhostOpera406

I think I somewhat answered my own question below. But if the population isn't really growing, we wouldn't have to increase supply. There are less than 50k new people living in RI since 2000. at a household rate of 2.6 people per household according to the census, we would have needed about 20k new houses over 20 years to hold every one of those new households.

Turns out RI lost housing over 20 years. So I guess that's the answer, but the new question is why?

Edi: I might have gotten bad data on units, which leads me back to why an increase in population of less than 5% leads to a cost increase of 50%.

realbadaccountant t1_jcym2m2 wrote on March 20, 2023 at 3:42 PM

The answer is NIMBYs. We don’t have more housing because every development that includes more housing than a site had before is pushed back on by “concerned citizens” who claim to want to prevent this or that or save this or save that, but ultimately don’t want condos near them, especially if they’re “affordable”, whatever that means. And because less housing means homeowners net worth goes up, it’s there’s little incentive to allow further development.

CocaineSlippers t1_jcyumx1 wrote on March 20, 2023 at 4:38 PM

You also need to account for the increase in access to inexpensive money. The cheap and easy loans drive additional demand by allowing more participants into the marketplace who wouldnt have been able to buy before, and simultaneously empowering those already in a position to purchase to spend more.

Run this up alongside the fact that were not building new housing at any significant pace, and you get back to what i was saying about supply and demand.

Not enough houses to meet demand. it's that easy.

They raise rates hoping that they can kill demand, but the reality is that even at increased rates its still sensible to buy the house with fixed rate debt, because those who carry fixed rate debt in an inflationary environment will see the real costs of repaying their loan decrease.