The Housing Market Isn't for Single People
thewalrus.ca41 points by pseudolus 3 hours ago
41 points by pseudolus 3 hours ago
It's frustrating that the problem is acknowledged (Housing prices are too high) but the solution seems to evade the author and nearly everyone involved in setting housing policy; not because of a lack of rent control.
Housing is too expensive because it's illegal to build enough of it.
No, multi-generation households will not save us. We should not make it impossible for young people to move to cities where high-paying jobs are, or force anyone to stay in abusive homes because we have made it impossible to live on your own.
The fundamental problem is that building quality housing is a society-level project - you don't just need to build a house/apt but supporting infrastructure, such as water, power, waste, public transport, supermarkets, and figure out how to connect it to the city's infrastructure.
There used to be political will to do this. Nowadays what I see around me, is that developers keep plopping down housing projects either in the middle of nowhere or in some highly undesirable area (like next to the train tracks, or some old industrial development) and sell the resulting apartments at crazy pricess. Zero infrastructure of course.
No it isn't. We deliberately hobble home construction with zoning and permitting rules, which aren't based in any infrastructure carrying capacity concerns (in fact, dense housing has advantages for infrastructure and energy uses --- few things are as inefficient as a single-family home).
Fixing exclusionary zoning rules isn't a society-scale project.
There still is political will to do this, it happens all the time around the USA. Do you think all these neighborhoods with hundreds of new houses get built without water, power, waste, and supermarkets? See DR Horton/Lennar/Toll Brothers/etc websites, and they will all be connected to utilities and have retail mixed in or somewhere near.
> Housing is too expensive because it's illegal to build enough of it.
A lot of us are in the US, where (except for SF and handful of specific cities) housing is legal to build practically everywhere, municipalities are handing out free money for any form of development, so people do build tons of new housing all over...
...and the prices still rise anyway.
80% of the buildings within a 1 mile radius of me did not exist at all 20 years ago. There's almost 5,000 new units around. Half of the new apartment buildings are only at like 70% utilization. We barely hit 1% population growth year-over-year.
Prices are at 40 year record high prices anyway (yes, even after factoring for inflation).
> Housing is too expensive because it's illegal to build enough of it.
A lot is being built. The problem is ruthless cost extraction, parasitic chain of agents and agencies, and oftentimes real estate is the only investment vehicle free of capital gains tax. Have you seen what is being built everywhere from Australia, through Europe, to America? 20-30 sqmt apartments where you walk in straight to the kitchen and sleep next to the oven and dishwasher, if the place is even large enough to fit the full kitchen.
> Housing is too expensive because it's illegal to build enough of it.
This is part of the problem, and one that many people actively want to avoid discussing so it is important to discuss it, but it is only part of the problem.
I think for real reform in this area you need to have the government strictly regulate rental properties.
That includes determining the rental price, and imposing fines for empty units.
Every time there is a stimulus check or an increase in minimum wage the detractors say "this will just be captured by the landlords".
We need to have clear stipulations for rental prices and ideally link it to another value that also changes over time.
I would argue a 1 bedroom apartment should have its rent capped at less than 40% of the monthly take home of someone on minimum wage.
Let the landlords and employers battle over who gets the bigger slice of that pie, while allowing the workers to survive their petty skirmish.
Here is Adam Smith talking about a minimum wage:
> A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation. Mr Cantillon seems, upon this account, to suppose that the lowest species of common labourers must everywhere earn at least double their own maintenance, in order that, one with another, they may be enabled to bring up two children; the labour of the wife, on account of her necessary attendance on the children, being supposed no more than sufficient to provide for herself: But one half the children born, it is computed, die before the age of manhood. The poorest labourers, therefore, according to this account, must, one with another, attempt to rear at least four children, in order that two may have an equal chance of living to that age. But the necessary maintenance of four children, it is supposed, may be nearly equal to that of one man. The labour of an able-bodied slave, the same author adds, is computed to be worth double his maintenance; and that of the meanest labourer, he thinks, cannot be worth less than that of an able-bodied slave. Thus far at least seems certain, that, in order to bring up a family, the labour of the husband and wife together must, even in the lowest species of common labour, be able to earn something more than what is precisely necessary for their own maintenance; but in what proportion, whether in that above-mentioned, or any other, I shall not take upon me to determine.
https://www.gutenberg.org/files/3300/3300-h/3300-h.htm#chap1...
In what US city can someone on minimum wage raise two children? On the US federal minimum wage?!
>That includes determining the rental price, and imposing fines for empty units.
We already have a fine for empty units. They're called property taxes, and they're the strongest and easiest-to-use tool that local governments have for reducing vacancies.
>I would argue a 1 bedroom apartment should have its rent capped at less than 40% of the monthly take home of someone on minimum wage.
Then you're making it de facto illegal to build new housing. No bank is going to lend money to anyone to build more housing if they can't charge enough rent to cover the loan.
>In what US city can someone on minimum wage raise two children? On the US federal minimum wage?!
Maybe not the US federal minimum wage, but Austin has become the second-most affordable city in America (median rent price to median household income ratio), just by permitting a huge number of apartments.
"Affordability" is more than just rental prices which is why I think building more units is insufficient.
You need to address wages as well.
> Then you're making it de facto illegal to build new housing. No bank is going to lend money to anyone to build more housing if they can't charge enough rent to cover the loan.
This implies you think landlords are trying their best to lower prices, only charging enough rent to just cover their loan payments, which is absurd.
Children aren't being produced. Birth rates are declining.
People conflate the carrying capacity of the economy with GDP, but these are different. The economy grows but requires fewer workers over time. As the carrying capacity decreases, the population decreases. On the ground, this manifests as the inability to afford child rearing.
The excerpt you cited assumes that this race of workers must afford to perpetuate itself in order to be viable. It cannot perpetuate itself, and it is not viable.
I wish this site had a lot less ill conceived free market fan fiction woven into racially charge eugenics.
> In what US city can someone on minimum wage raise two children? On the US federal minimum wage?!
Federal minimum wage is a strawman in large cities.
I'm in a medium cost of living city and I doubt I could find a minimum wage job listing if I tried. Fast food places and government buildings even advertise $15-20/hr jobs because they can't hire enough people.
Both assertions display an offensive level of detachment and ignorance.
> Federal minimum wage is a strawman in large cities.
I did first mention city minimum wage, and only referenced federal minimum wage after to drive the point that federally this discrepancy is even more grotesque.
States with "large cities" that use the federal minimum wage:
> Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Three states, Georgia, Oklahoma and Wyoming, have a minimum wage below $7.25 per hour. In all eight of these states, the federal minimum wage of $7.25 per hour generally applies.
https://www.ncsl.org/labor-and-employment/state-minimum-wage...
> I'm in a medium cost of living city and I doubt I could find a minimum wage job listing if I tried.
Tell me your city and I will find you a minimum wage job posting.
> Housing is too expensive because it's illegal to build enough of it.
This is a factor in some places, but a gross over-simplification in others.
There are neighborhoods full of affordable new construction houses not far from where I live. They sell slowly because people would rather live in the popular areas.
There are affordable high density housing options for rent here. They stay on the market because everyone wants their own house.
It's not even about remote work here, as the popular location for office builds and jobs is actually closer to those affordable housing neighborhoods few people want to live in. Being near the office buildings is actually a reason why they're undesirable.
There are some obvious broken housing situations like San Francisco, but I don't see permitting reform as a magic cure-all in every city.
https://x.com/nickgerli1/status/2006872715316121750
Permitting reform made Austin, Texas the second-most affordable city in America by rent to income ratio.
>There are neighborhoods full of affordable new construction houses not far from where I live. They sell slowly because people would rather live in the popular areas.
Mortgage rates rose and property prices have not yet fallen to match reality. I would bet that this is a much stronger factor in preventing those new homes from selling rather than buyers simply having a preference for different neighborhoods.
The book the two income trap describes this. It talks about better schools etc but if you are competing with people that have two incomes as an individual you better have two incomes worth of salary.
The issues starts to arise that people with two income households are more likely to lose one of those jobs and that puts a lot of pressure on the finances if you need both jobs for your house payment.
The price of rent is set by local household wages.
If both partners typically work: rent rises to eat nearly all the gain.
If AI makes everyone 20% more productive: rent rises to eat nearly all the gain.
If minimum wages lift the bottom earners from $7.50/hr to $18.50/hr: rent rises to eat nearly all the gain.
The only countervailing forces are:
* landlords not wanting as much money (unlikely, although it happens at small scales)
* rent control-type policies
* competition
And as far as I know competition is the only thing that works at scale. Although, people tend to emphasize intralocal competition as where this gets fixed. But I tend to think that the even larger issue is that so many places suck to live in (due to schools, jobs, culture, lack of prosocial governance...) that everyone with options congregates in the good ones.
There's an effect every larger than all of those, though, which is wealth disparity. If incomes differ by fewer orders of magnitude then prices can't vary as much across markets. At the end of the day when rich people can and do buy 2-5 homes and everyone else can barely buy one of course you're going to have problems.
We had two types of competition in the past that are much less common now:
- competition from new builds
- competition from different locations
The first was killed by restrictive zoning. The second still exists but is no longer useful. You can move to West Virginia for cheap rent, but you'll have to move to a location without jobs.
The combination of far less people moving across states and of jobs concentrating in expensive places to live is what killed that second type of competition.
If you add more lanes to the interstate, people move further out, and the rent rises to eat nearly all the gain.
This is an easy problem to solve, regulate the amount of profit you're legally allowed to make from renting land you did not create.
We do this in other industries all the time.
Health insurance is heavily regulated to ensure that there are profit caps (think 80/20 rule) this means that the company is legally compelled to actually spend a certain amount on customers of said product.
Imagine if landlords were compelled to spend 80% of their rent dollars in improving the space or helping the renters.
> Health insurance is heavily regulated to ensure that there are profit caps (think 80/20 rule) this means that the company is legally compelled to actually spend a certain amount on customers of said product.
This notoriously does not work at all.
Look up pay-vider structure and the type of manipulation of medical loss ratio it enables.
How does this help young people who want to move to a new city, but can't because all apartments are already rented because rents are far below market rate? This is reality in cities like Berlin and Stockholm.
You need more housing. Rents in Austin have collapsed because the city made it legal to build a lot more housing.
You should look at Vienna public housing then, rents there are typically less than 20% of the median monthly salary. Socialized housing works for the people that want to live and make a community with the limited time on this Earth they have.
It doesn't work for landlords that just want to extract wealth from others.
Relying on private developers that only want to build luxury housing is kinda how we're in this current mess. Expecting them to solve the problem we know, build more housing, is just silly. They didn't do it when money was the cheapest it ever was the last 15 years, they aren't going to start building it now.
This is why the government needs to step in and build more/better public housing.
It works for Vienna, this young chap even speaks about it at great length:
https://www.youtube.com/watch?v=LVuCZMLeWko
I sure hope he goes into politics, we need people with this type of imagination to better our society and give us hope for a better future which we can create now, not later.
It makes more sense to me (both from a personal, and the bank's perspective), that a single person on double income goes to zero salary when he loses his job, thus its riskier lending to him with his monthly payment being 25% of his income, than say 2 people at half salary, in which case one person's income share of loans jumps from 25% to 50%, a financially difficult situation, but temporarily manageable.
I agree in principle but I would venture a guess that number of two-income families that can deal financially with a loss of one source of income is very low.
the very first financial discussion I had with my wife (fiance at the time) was that we will always live off a single salary and 2nd salary will always go into future bucket (we tap in for larger purchases or fancy vacation here and there). I don’t think many families are setup this way though - in my limited personal experiences a loss of one source of income leads to sale of the house/condo and move (rent or downsize)
You need more than two incomes worth of salary in any country that does income tax bands. In the UK, two people earning 30k each will take home a combined 50k. A single person needs to earn almost 70k to take home the same. And for council tax you end up paying 75% of what an entire household would pay.
In the US, two moderate incomes see a similar federal tax bill to a single person, with things actually getting worse at higher incomes for the married couple. Is the UK tax code really that different?
Huh? In the US the married filing jointly tax brackets are exactly double the single tax brackets for every rate except the top 37% rate. A single person making 100k definitely pays a lot more in tax than than a married couple making 100k together. It's generally advantageous to be married filing jointly unless you're at the absolute top 37% rate, at the very bottom (where means tested benefits phase out), or both spouses make roughly equal incomes (in which case MFJ vs two single filers works out around the same).
Huh?
In your $100K scenario, that single person pays about $6K more in taxes, but has $36K more in take home pay per person, so that additional tax bill seems reasonable in light of their ability to pay it and pay for their cost of living.
Isn't this obvious?
Yes, per-adult, multi-generation family homes are even more cost-effective than for couples (even accounting for smaller pensions compared to salaries), and both are more cost-effective compared to singles.
Apart from growing prices, my experience (not in Canada though) is that living spaces are growing too, as we are not satisfied to live in the same cramped 20m2 studio as singles were 30 or 50 years ago.
> we are not satisfied to live in the same cramped 20m2 studio as singles were 30 or 50 years ago.
I conjecture that this is, at least partially, caused by modern people being more isolated and even when they do socialize there's less "third spaces" to get together with friends so someone ends up having to host the superbowl watch party in their apartment, for example.
> living spaces are growing too
Median home sizes have gone from 1400 sqft in the 70s to 2400 sqft in recent years.
https://www.bankrate.com/real-estate/average-home-size/
Part of it is the economics of construction. Part of it is growing threshold for “bare minimum”. In unit laundry was optional in the 70s and I’ve heard people wanting a “laundry room”. Pandemic has pushed the need for an office. Larger kitchens and more storage space is also a big difference in newer units vs older ones.
In the '70s, in-unit laundry in a rental apartment was almost unheard of except at perhaps very top end. An on-premises shared laundry room was normal but having to go to a laundromat was not uncommon either.
I did not have laundry facilites of my own until I bought a house.
30-50 years ago, a cramped 20m2 studio as a single was a luxury; the standard was to have roommates if you didn't have a partner.
30 years ago I did not need to rent a 20m² studio. As a young college student I rented a spacious 750 sq. ft. 1-bedroom, furnished apartment that was more than affordable on my paycheck from driving a forklift at the pipe yard.
Currently it's impossible to rent 70 sqmt furnished apartment anywhere in the developed world from a warehouse, agriculture, or hospitality job. Maybe if you worked in Amsterdam and lived in Cambodia.
Indeed. We need a lot more small apartments for individuals. It goes against conventional wisdom that we need more "family-sized homes" but in reality every jurisdiction just needs a ton of 1-bed units.
This brings to mind one of my all time favorite quotes.
Paraphrasing madd scientist, Dr. Frankenfurter, from the Rocky Horror Picture Show:
I didn't make it for you!
Ironically, the Argument just a few months ago ran a long and well-researched piece on how the housing market isn't for parents --- in many rental markets, there are policies that lock out parents, particularly through permitting processes that favor developments for seniors while icing out any other developments.
https://www.theargumentmag.com/p/no-country-for-young-famili...
Meanwhile, a really important dynamic to keep in mind is that in most inner-ring suburbs in the US, the primary driver of home values (and of property taxes) are school systems. If you don't actively enact policies that work against the dynamic, you get trapped in a spiral of increasing prices, in part because parents can bid up prices and suffer them only for the span of time their kids are in school --- "renting the schools".
When people pay higher rent while their kids are in school and compete with FAANG software engineers, isn't that the market working?
Both groups could live somewhere else, but don't.
It's not a free market, so it's hard to appeal to market purity arguments. The market is deeply distorted by zoning rules. Most popular/expensive locales would look differently if the market was actually allowed to function.
Adam Smith observed in his "wealth of the nations" that when people get more money they almost always spend it on better housing. There is a limit to how large a house people will want before they decide not to (many rich are living in mansions smaller than they could afford - and in some cases the size of their mansion seems to be set because they want to be the biggest not because they want/use the space), but I don't know where that limit is.
I guess I’m unusual because my house is far cheaper than I could afford. It’s quite modest compared to the surrounding area.
"The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give." — Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter XI "Of the Rent of Land"
Hasn't this been true forever? Of course people who have a partner will be better off financially since they can pool incomes and split expenses.
"Flophouses" or SROs used to provide affordable housing for young people new to a city, single people, workers, etc but they depend on density and transit to be cheap. They were largely made illegal in the mid-20th century. Land use/zoning laws are why we've built nothing but car-dependent suburbs for the last 50 years.
They are still around but less common. Some progressive cities like Austin calls them a "Boarding House"[0] I'm not sure if there is a unit cap where something like your historical tenement housing could happen like in Manhattan. It's the same idea just a different format.
[0] https://www.austintexas.gov/department/get-boarding-house-li...
SRO's are for single people, but they're a form of shared housing, so I think the point stands.
It has not been forever true that households have had two incomes. Now it is common.
Well, only because one of the household did a huge amount of unpaid labor. A lot of which now has been replaced with paid labor (child care, restaurants, house cleaners, and so on).
I meant it's been true forever that people with partners generally have a financial advantage over single people. (Even if they're not in a two-income household.)
What has changed is that dual income became the norm, and is no longer an advantage, but mandatory to compete on the housing market.
When single income was the norm, the norm was to put a family of 6 in an 800-1200 sq ft residence. That's still roughly equivalently affordable today.
Where I live you're pretty much screwed if you're single, or a family that needs extra bedrooms. Extra screwed if you're a single parent, obviously. People spending 50%-60% of their net pay on rent alone, basically stuck renting, because housing prices have increased 10% annually for almost 15 years.
It is also a town that has seen explosive growth in tourism, so the new trend is that people are only willing to rent 6-8 months to normal people. Rest of the year they'll rent out their unit on airbnb, where they can earn 3-5 times more.
Actually Airbnb received a firm push back, nowadays everything lands on Booking. There are virtually no places in developed world cheaper than 100EUR/USD/GBP per night, the standard price is closer to 200. Why bother with long term rental if full month rent can be fetched within a week, or within two days if there is a concert or event nearby.
This fact makes the high levels of singledom in recent years even more remarkable and concerning. Even with strong economic incentives, a large fraction of people really don't want to pair up.
> a large fraction of people really don't want to pair up.
Don't want to pair up, or can't meet/find someone with which to pair up?
Because from your massive oversimplification, you're making it sound like everyone has 50 potential partners knocking on their door daily asking to hook up or get married, and they tell them to get lost so he/she can keep play videogames in peace.
Have you asked single people why they're single to better understand the issue? I think you'll find that most people actually WANT some sort of loving partner in their lives. Otherwise the pet industry wouldn't be so massive in the west if people were so happy living alone without any company.
In my experience, financially savvy/well-off young people usually get an apartment before they get married - they either get it (or a large downpayment) from their parents or they buy one some time in their 20s - but don't get married until their late 20s to 30s.
People of my parents' generation got married way earlier, typically in early to mid 20s, so it was natural for them to build a life together.
Forget being single, having a housemate/roommate is so painful that I refused to have one once I was in my late 20s. I’d rather pay a fat chunk of my salary to the landlord than have to deal with someone who created a mold problem by running a humidifier 24x7 because they wanted better skin.
What if the higher levels of pairing up was due to even stronger economic incentives in the past, specifically for women?
What about in LCOL areas?
When I moved to SF when I was 25, I sure could not afford a house or even a condo.
But I sure could have bought a house in the Tahoe area.
Would the commute suck? Yes. Could I have made a go of it? Slept in my car during the week?
I sure would have built a lot of equity, plus you'd have a cool place to go on weekends and invite your friends.
There is no world where a 4 hour commute to work is reasonable. That said, Stockton and Tracy seem like they happen more often at an hour and a half (to San Mateo or San Jose)
But why are we building a world where that is necessary? That's an awful world.
And yet people bemoan the number of batchelor / studio / one bedroom condos cluttering up the market in places like Toronto or Vancouver.
And why shouldn't it be easier to own property with the resources of two people behind the purchase?
Travelling isn't, either, found that the ward way during the last few years. If anyone has a good-ish solution for how they've handled that, feel free to share.
You mean the costs? Travel is expensive but I don't think there's much of an argument that it's gotten more expensive like housing. International flights used to be quite a luxury, now it's so easy that the popular destinations are getting swamped.
Most of the relaxation-oriented holiday industry is definitely designed for couples and families, but backpacking, adventures, and cultural immersion are, in my opinion, better alone so that you don't have the easy escape of sitting around with your partner. And if you want to relax nothing's stopping you from booking a few nights alone at a Japanese onsen or one of those treehouse style resorts in a Central American rainforest. I've spent many nights at onsens in between more outdoorsy climbing and skiing legs of trips in Japan.
Hmm I think this depends alot on the individual and their particular life situation though. I've done a ton of travel solo over the years and the vast majority of the time it was really fun.
All the justified complains about housing prices aside, I want to focus on this part
"Some people are fine with getting a roommate, but what if you’re not?[...]Usually, people get to a certain stage of life, and they like their independence.”"
No usually it's the other way around. You get to a certain stage of life, your household size grows. There's exogenous factors like lack of construction but all other things being equal, housing used to be more affordable because the entire nation didn't consist of single person households. Multi-generational homes and large families were the norm because it saves resources. People who decide to want to live independently are going to take a financial hit.
If you're not interested in a traditional family I'd strongly suggest societies think about cooperative housing collectively and having a flat mate or two individually.
In the US at least having roommates carries massive risk. Sharing a place requires taking on full legal and financial responsibility for a total stranger. If your roomie ends up a drunk who trashes the place, that's 100% on you if they bail out. maybe you could hire a lawyer and take action, but more than likely you're going to be on the hook for any damages (and if you can't pay that debt, you are blacklisted from legitimate rentals until it's cleared.)
We are missing the private bedroom, shared kitchen/dining/living space that a lot of single people want. There are people I couldn't live with, but for the most part people crave some human contact and having the ability to grab a meal with a random person who happens to want to eat at the same time is nice.
When you are married (or acting like married) a shared bedroom is good. However single people often want that personal/private space all to themselves.
I think there's also a huge gap in costs and in people's willingness to tolerate shared spaces with bathrooms.
I think shared bathrooms are vastly cheaper, but also vastly less desirable.
There's probably a selection bias in that people who opt-out of dating/relationships probably just want to be left alone most of the time. I doubt there's a huge overlap between people who want to share meals with strangers and people who remain single.
In college in the university dorms I was logistically and emotionally fine day to day sharing a room with a friend and a hall bathroom with a hall of acquaintances, although in hindsight the price was absurdly inflated for that amount of real estate.
https://housing.unc.edu/apply/rates/
Yep, at the moment renting a room at UNC costs 2200 a month if you share it, nearly twice the mortgage on a 3 bedroom house. There's some disease in the american economy where cost cutting code actions magically inflate costs, and we buy it.
University is the one place where you find a lot of single people and thus housing the fits their needs. Though I agree the costs seem out of control.
> Government policy is married to outdated expectations of how we live
Maybe your modern ideas are dumb?
No, the modern ideas are fine for what they are. You can disagree with them if you want, but they are just ideas and for many people they are good.
The problem is we are setting government policy based on a one-size fits all idea of expectations and those who don't want those are forced to either follow anyway or live a worse life in other ways for not.
Not really, governments have been encouraging family formation because it brings up new taxpayers since, well, forever.
Which does not make single-living idea weird or dumb, ofc, but it makes it additionally expensive on top of the natural cost (just like multi-floor houses are cheaper per surface built).
yes thats how society works, you give up certain freedoms for structure, safety, and access to resources. This idea that society should conform for lifestyles that dont support the continue existence of the society is pretty dumb