Part II - How cities, counties, and companies work together to increase home prices.
Have you ever driven through an older neighborhood and wondered why all of the houses in that neighborhood are so small? They all appear to be only enough for two people and maybe two people plus a kid. Well, would you be surprised if I told you that this was by design?
You see, decades ago there was a market for what were known as "starter homes." They were something for young couples to purchase that would allow them to build equity and to prepare to purchase a larger home as their family and needs grew.
Today, you really do not see this anymore. Do you wonder why?
Well, the answer may upset you, but I doubt it will surprise you.
It will not surprise you because it is all about taxes. Yep, taxes.
Modern cities have a voracious apatite for taxes. They consume taxes like a high school football lineman at an all you can eat buffet. The worse part? They are never satisfied and are always looking for more.
A small neighborhood of starter homes on smaller lots leaves a lot of undeveloped land which then limits a city's tax revenue. It is much more economically feasible for them to give preferential treatment to apartment developers who will fill the available land with as many people as possible which makes the property value go up and thereby the taxes too.
Plus, a multi-million dollar apartment complex is far more profitable for property owners, lending institutions, and municipal utility companies too.
The fact that people do not want to be packed in like sardines? Well, that is just irrelevant.
Yet even that does not do the problem justice.
In order to combat this, real estate developers have begun to plan all neighborhoods as full family houses and often they are only interested in building developments if the cost per home is over the average of the city in which they are located.
That is why you are unlikely to find a new home ANYWHERE in San Antonio that is under $200,000. That way the city is more likely to approve the development since they will see enough property tax revenue per square acre to make the development worth it for them and their utility company.
But this really hurts small and starting families. Imagine if you had just as many developments going up of neighborhoods full of tiny houses for starter families as you do, "homes starting in the low $250,000s."
But a $50,000 tiny house on a quarter acre lot does not generate enough income for anyone to be interested in it, especially as a full neighborhood. Well, unless you count all of those Millennials and Gen Zers who need a home to purchase...
But hey, it is not about them anyway.
So when you have a decreasing dollar, and homes being built that are either Crackerjack Box apartments or big and expensive family homes, you cannot be surprised that people cannot afford or find homes to buy.
So why does the government not take the blame for this?
Simple, they have effectively demonized the land lords as greedy for charging reasonable rents as a way to cover their complete fiscal money grab. They are the ones stealing home ownership opportunities from the lower income populace and then are daring to turn around and blame those who are providing them with housing?
It is criminal, but that is how it goes when your government would rather gaslight you into hating the person providing you a good or service rather than apologize for their own greed and never ending consumption.
Yet it is not ALL their fault, part of what has gotten us here is a refusal by young couples to look at and/or purchase starter homes. They want what their parents have without realizing that their parents did not have what they have when they started out either. This only adds fuel to the fire and further disincentivises both cities and companies from helping to fix the problem.
But that is an article for another day.
My continued prayers for your success and blessings my readers. As always, I'm cheering for you in the New Year.
Next - Part III - How the younger generation's home buying practices work against them.