I attend talks on the real estate economy as often as I can. When they are sponsored by the Realtors®, I translate them back to the needs of buyers, not owners. In a March 22 presentation, this slide stood out for me. Why is metro Boston in such a mess of a seller’s market? This is why:

housing starts graph

As long as there is a housing shortage, sellers have the upper hand. So, on March 22, there was self-congratulations all around that Realtors® will weather the storm of high interest rates. The sellers and their representatives are going to be just fine. This does not bode well for our clients, who are buyers.

Of course, Dr. Yun also talked about employment and other factors. He is a wonderful speaker, who turns economics into something that most Realtors® can follow. It is a complicated business and I really admire him.

Meanwhile back in the real world

Meanwhile back in the real world, I am answering calls and emails from wanna-be homeowners – also called buyer prospects – who are feeling dread instead of excitement about buying a property of their own.

Meanwhile back in the real world, I am referring buyer prospects to agents who work deeper into the suburbs. There is nothing for these buyer prospects in their price range in our work area. I am turning down people who can spend $500,000 or more in these conversations (depending on what they are looking for).

Meanwhile back in the real world, I am answering calls and emails from people who are leaving because of rental inflation or house price inflation, or both.

Meanwhile back in the real world, I’m hearing from my friends that they are not willing to move to the Boston area, because it is too costly. I am also hearing from friends who left and now cannot afford to return.

In short, housing inflation is changing the community by making this area affordably only to people with high incomes or wealth.

A Modest Proposal to end the housing shortage:

Are there any housing or urban policy folk who would be willing to school me in whether or not I am dreaming? I have it in my head that a new G.I. Bill (the housing provisions) would solve many problems that I care about.

  • It would create jobs in construction and manufacturing.
  • It could undo at least some of the racial wealth gap.
  • It could provide opportunity for more affordable housing in metro Boston.
  • It would even give Realtors® business opportunities.
  • It would, however, put a dent in housing inflation. Homeowners won’t like that much.

My fantasy: Reboot of the G.I. Bill. Benefits would go to any person of color who had an ancestor who could not benefit at the time. It might even be feasible to include all service members and their descendants since the end of World War II, except those who used the benefits in the original G.I. Bill.

 

Can you imagine how a change like this would solve the housing problems that are plaguing us? As a result of the G.I. Bill:

  • VA loans authorized by the Servicemen’s Readjustment Act of 1944 (the G.I. Bill) often required little or no money down, making five million Veterans able to buy homes. These loans were widely accepted and used!
  • National housing production jumped from 140,000 units in 1944 to a million in 1946. It kept going at a high rate through the 1950s.

Summary: What I am reacting to is the monumental change in housing that took place in 1946 and the years following. America had to house the service members returning from war duties. Millions and millions of new homes were built. 4.3 million low interest, low down payment loans were issued. These houses were intentionally affordable for former service members, who had one full-time worker in the family. We need this again. It needs to include all of us, not just the white people. If this can be done, America can turn itself around!

Policy wonks! What do you say?

Fair housing month

April is Fair Housing Month. I encourage everyone to get a handle on housing history and what needs to be done. Please join the Somerville Fair Housing Commission for an in-person or Zoom event this month to discuss Segregated by Design or The Color of Law. I learned so much from Richard Rothstein’s work that I created these programs to share it.