The rent is too damn high.

       "If we want to make it easier for more young people to buy a home, we need to build more units and clear away some of the outdated laws and regulations that made it harder to build homes for working people in this country."

            Barack Obama, Democratic National Convention, Tuesday night.

 

     “We will end America’s housing shortage."

           Kamala Harris, Democratic National Convention, Thursday night.

 

 The debate tonight will take place under a cloud of frustration among younger voters.

Maybe Democrats are waking up to one of the reasons for the discontent.

In prior generations, the "American Dream" of home ownership was accessable, accessable even for working people who earned and saved their own money from their work. Now it isn't. The cost of housing is too high in relation to average -- even above-average -- incomes, unless the home buyer has some kind of parental boost or inheritance, or significant equity from the sale of a prior house. Democrats are starting to become YIMBY: Yes In My Back Yard. This is controversial. Trump is warning suburban voters that Democrats may try to site moderate income housing in their neighborhoods -- potentially a threat to safety and property values. It is a lightly-coded racial threat; it is a direct warning about social class. Do you want poor people anywhere near your house? And in any case, new construction is expensive wherever it is sited. Low and moderate income housing doesn't pencil out unless there are tax abatements or other subsidies.

Robert Locher was the first to write me complaining that my praise for the current economy, with its high asset prices, failed to acknowledge who was hurt by those prices. Those people are voters, too, and they have drifted away from Democrats. Locher is in Gen X; he served four years in the navy aboard an aircraft carrier; he has an engineering degree and a good job. His complaint is a wakeup call.

Guest Post by Robert Locher

I believe I detect a bias in your post, that of someone who has owned his or her own home for a long time. You cite real estate values being up as a good thing.  Please allow me to give you my perspective, from the point of view of someone who doesn't own a house, is trying to get by on wages, and relies on health insurance for medical care.

Higher inflation is not always a bad thing for everyone. In a more-normal housing market, house prices drop when inflation rises, because mortgages get more expensive. But for someone who has carefully saved a down payment, higher interest could be the chance to buy a first house. Once into his or her first house, the first-time buyer enjoys the many benefits of being a homeowner: a mostly-fixed monthly payment, the mortgage interest tax deduction, more stability in general, and so on. If interest rates later decline, the new homeowner can refinance and benefit from a lower payment.

However, supply of housing of all types has been extraordinarily stagnant for 10 years or more, through administrations of both parties, and house prices essentially haven't dropped even with higher inflation. Why is the supply so low? In Oregon the finger can be pointed at our zoning laws that favor preservation of farm land and wilderness over new housing plots. But low housing supply is a nation-wide problem.

The net result is that the hopeful first-time buyer is being screwed, when he or she should be enjoying a rare opportunity. To make things worse, investors large and small have been buying up many of the few available houses, denying even more would-be first-time house buyers. Locally the rental market is very tight also, and rents are soaring.

I believe I detect another bias in your post, Peter, that of someone on Medicare. For those of us paying for health insurance, medical care is more expensive than ever before. Costs go up 15 or 20 percent annually with no break in sight, the highest in the world, an unsustainable trend. Non-union employers largely aren't able to absorb the increased costs, so instead they pass higher prices down to their employees.

It's not just high grocery prices fueling voter anger. Soaring housing and medical costs are hitting many people hard, especially young people. Is it any wonder that young people aren't engaged by politics when their concerns seem to be ignored by the politicians?

 

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