Intro
In this episode of the Science vs podcast, host Wendy Zukerman delves into the issue of affordable housing and explores the factors contributing to its scarcity. She investigates the impact of high house prices, the role of developers and Airbnb, the influence of zoning laws, and the need for changes in the financial system to address the crisis.
Main Takeaways
The Impact of High House Prices
- High house prices and rents are making it hard to find affordable housing.
- During the pandemic, rents went up by almost 20% and house prices shot up even more.
- Baby boomers’ active presence in the housing market has made it difficult for millennials to buy a house.
The Role of Developers and Airbnb
- Developers are often blamed for high housing costs and seen as greedy and opportunistic.
- New apartments in a freshly built building are generally more expensive than older ones.
- The new building itself doesn’t necessarily raise prices or rents in the neighborhood – it’s often the neighborhood’s desirability that causes those to rise.
- Developers are not consistently making huge profits, so blaming them for high housing costs may be misplaced.
- Airbnb began as a way to help with unaffordable housing costs in San Francisco.
- Most Airbnb rentals are entire homes, not spare rooms.
- The transition to entire homes was marked by generic art on the walls.
- Professor Nicole Garan studied the number of year-round Airbnb rentals in Sydney.
- There is a significant difference between the number of Airbnb rentals and long-term rentals available for residents in Sydney.
- Airbnb rentals in Sydney are equivalent to about half of the rental vacancy rate, with one Airbnb rental for every two long-term rentals available for residents.
- A recent study in the US found that Airbnb’s were responsible for 20% of the increase in rent during the time period they looked at, meaning that if your rent went up $100, $20 of that was because of Airbnb.
The Influence of Zoning Laws
- Zoning laws play a significant role in housing affordability, as they dictate what can be built and where.
- Zoning laws in many towns make it easy to build single-family detached homes, but harder to build other kinds of housing like apartment buildings or duplexes.
- Single-family detached homes are less efficient in terms of housing people compared to other kinds of properties like apartments or townhouses.
- In Connecticut, 91% of the state is set aside for single-family detached homes, making it difficult to build smaller denser housing in those areas.
- Zoning codes, such as minimum lot sizes and parking requirements, can make it harder to build affordable housing, particularly for first-time buyers and those with lower income.
- NIMBYs (Not In My Backyard) are people who oppose new development in their neighborhood.
- Older people tend to be the ones who vote against new development.
- Zoning laws can be used to keep certain groups of people out of a neighborhood.
- Areas with stricter zoning tend to be whiter and more expensive.
The Need for Changes in the Financial System
- Demand for housing has gone up due to changes in banking industry rules in the 80s.
- Credit has increased access to mortgages, leading to bidding wars and higher prices.
- Changing the financial system is necessary to address the affordable housing crisis.
Summary
The Impact of High House Prices
The increasing prices of houses and rents have made it challenging for individuals to afford housing. During the pandemic, rents rose by almost 20%, exacerbating the issue. The presence of baby boomers in the housing market has also made it difficult for millennials to purchase homes.
The Role of Developers and Airbnb
Developers are often blamed for high housing costs, but their profits are not consistently substantial. The desirability of neighborhoods, rather than new buildings themselves, drives up prices and rents. Airbnb, initially aimed at addressing unaffordable housing costs, has transitioned to offering entire homes for rent. Studies have shown that Airbnb rentals contribute to the shortage of long-term rentals, with significant impacts on rent increases.
The Influence of Zoning Laws
Zoning laws play a crucial role in housing affordability. Many towns have zoning laws that favor single-family detached homes, making it difficult to build other types of housing. Stricter zoning laws can result in limited housing options, higher prices, and exclusionary practices. Minimum lot sizes and parking requirements imposed by zoning codes further hinder the construction of affordable housing.
The Need for Changes in the Financial System
The changes in banking industry rules in the 80s have increased the demand for housing. Access to credit has led to bidding wars and higher prices. Addressing the affordable housing crisis requires changes in the financial system to ensure fair and affordable housing opportunities for all.
Conclusion
The affordable housing crisis is a complex issue influenced by various factors. While high house prices, the role of developers and Airbnb, zoning laws, and the financial system all contribute to the problem, a comprehensive solution requires addressing each aspect. Balancing the interests of different stakeholders and implementing equitable policies can help alleviate the shortage of affordable housing.
