The housing crisis thread
 

If only we all could afford multimillion dollar homes we could all buy or rent in super urban, beautiful, safe neighborhoods served by world class transit!

I'm sure you're being facetious, but most of the world manages to develop in more compact ways. It's sad that this country doesn't do far better, particularly the Houston/Dallas/Atlanta type.

My brother in law lives in the suburbs north of Austin and commutes 20+ miles to work. Funny enough though, with Miami's traffic his 20+ mile Austin suburban commute is probably shorter than my 5 mile Miami commute.

I knew one person in the LA area who lived in Palmdale and worked in LA, and one who worked at the Jet Propulsion Lab but lived at least 2 hours away, (I think in Irvine). I think both said that they woke at around 4am and left for work no later than 5 am to get to work by 7am or 8am. I remember one Houston telling me that the Woodlands was 'way out there' as if it was the hinterlands and one Dallas person saying the same thing about Plano a few years back.

MIDWEST!

The housing crisis is local.

Not national.



But ya gotta deal with some ewwww.

Most people are idiots.

As always.

This commute discussion is making me feel pretty good about where I live. Even being 8 miles out from city center, I can walk to the MAX from my suburban home and get to downtown Beaverton in 10 minutes, downtown Hillsboro in 20 minutes, and downtown Portland in 30 minutes. Since they extended the Red Line west, my station is now served by both Red and Blue, which means headways are every 7.5 minutes and I can get all the way to PDX without a transfer. Still, I wish it were faster, but it is what it is.

The country is doing better; Houston/Dallas/Atlanta are doing better but you can't undo 50 years of laissez faire urban planning or ignore the realities of the housing market and socio-economics.

Cities are getting more infill, but they're still sprawling like crazy in areas without decent growth management.

Growth management puts constraints on housing and ultimately impacts affordability.

Wildlife ranch? Was that one of those places stocked with wild animals from different parts of the world where people could hunt them for a fee? Anyway, I live in Belton just south of Temple and apartment complexes and houses are going up here and it's been said that some of those moving in are people priced out of Austin moving north for cheaper alternatives.

I mean, 90% of the developed world lives in urban, safe neighborhoods served by good transit. I don't think it's expecting too much for the wealthiest nation in the history of humanity to have more than a handful of such places.

And there are a TON of urban, safe neighborhoods in the U.S., often served by good transit too, that are rejected by buyers with choices. You can get a beautiful home in Shaker Heights, OH for like 300k, which is just wrong considering the location, housing stock, beauty, transit, schools and services. Most people would rather pay 500k for a McCrapShack in the sticks.

As a society we didn't invest enough into high-capacity, rail based rapid transit which left us to depend heavily on roads and cars for population growth. For some reason we think we already need densely populated places with people using transit to demonstrate a need for subway systems but we don't apply that same standard to building roads. But this isn't logical, nor is it how we historically developed cities. Much of what is now the NYC subway system was actually developed in farmland and the city grew up around it.

No, it constrains LAND. The number of housing units on that land can be enormous and not very expensive -- if local policy allows.

The places with good growth management tend to limit density too much, add millions in fees, and pile on unnecessary design and code requirements. But that's not an inherent fact of growth managagement.

We don't have to settle for the sprawly model just for affordability.

Good point, and that would be nice, but the US funding model makes it impossible. It's all short-term cost/benefit, decided on a per-project basis. Only long-term ongoing capital funding would allow generational goals to take precedence.

The Midwest is definitely being impacted by the housing crisis. Albeit not nearly as severe as other places. But most Midwest major cities do not have enough homes.

I cannot think of one major Midwest metro that suffers from a major lack of housing. Maybe a few college towns, like AA or Madison. But there's no way in hell the big metros are starved of housing stock.

I thought the same thing based on population and census data, but hadn't considered all the relevant factors. If you just look at how stagnant Michigan's population has been over the last 25 years while taking into account the 400k or so more housing units they've added over that time, it seems crazy. However, it's more complicated than that. The adult population of Michigan has risen ~9% in that time, with median age jumping from 35.8 to 40.1, and thus household formations are up. Conversion of housing to vacation rentals has also caused issues. Listings are also way down as people don't want to give up their low interest rates. The Midwest is projected to continue to have supply and affordability issues in the coming years while much of the south is seeing prices drop.

The city of Detroit alone demolished about 30,000 houses and apartment buildings over the past decade. Add up demolitions from private entities and we're probably in the 40k - 50k range. If there is a housing shortage now then it's the result of bad governance.

lol okay if you say so? Try telling that to buyers and anybody looking for a place. Lots of folks cant afford shit and prices keep going up. Constant bidding wars for anything in the middle class market range.

Also nobody said anything about being "starved", like I said not nearly as bad as other places. But there's not enough housing for what's needed and it's only getting worse.

Homes continue to rot away in parts of Chicago and every other Rustbelt city.

There might be a shortage of housing in desirable locations, but that's a local issue, not a nationwide one.

Rotting homes doesn't automatically mean there's no overall housing affordability problem in a metro area.

Obviously those homes in disrepair need a lot of money put into them to be habitable, so it's not like they're just sitting there ready for occupancy. And most people aren't willing to or can afford a major renovation. What's available is still becoming increasingly unaffordable, and I can think of many areas that were previously considered undesirable that have shot up in value. But also the higher prices in Metro Detroit has lead to a lot of home renovations happening across the city because it makes a lot more sense now. The land bank for example doesn't have nearly the inventory they used to, people took the homes.

Uh, maybe you didn’t see the houses, but I sure did. I am intimately familiar with the housing stock that was demolished because I managed the reporting for $300 million in NSP funds between 2010 and 2015 for Michigan. The houses demolished were unsalvageable, dangerous, and unfit for occupancy and would’ve continued to decay and drag down their neighborhoods. It’s not like they were tearing down houses people wanted to live in or were even capable of being occupied. They were long abandoned and weren’t part of the “supply”. Also, the program rehabbed thousands that could be saved. That program is one of the reasons several of Detroit’s neighborhoods are as strong as they are today.

Sorry, they were definitely tearing down houses that could have been rehabilitated. If there truly was a housing shortage then why not establish a program to fund housing rehabilitations? The only reason to demolish housing at that scale is because you have no faith that the market will absorb the supply.

Unless you have supports for your claims, I’d sit this one out.

What support is needed? If there was a housing shortage then why did the government have to spend money demolishing the houses in the first place? If the housing was obsolete then there would have been a market for developers to tear down and rebuild housing.

Anyway, the city of Detroit was absolutely tearing down housing that could have been rehabbed. I will stand by that point. Now were they tearing down housing that was likely to be rehabbed and absorbed by the market? No, they were not.

Metro Detroit has nothing remotely approaching a housing shortage.

There has been widespread housing demolition, usually perfectly good housing that was occupied just a few years ago. The exact same housing typologies are very desirable in the right area, but near-worthless in the wrong area.

A basic bungalow in Royal Oak or Berkley will be relatively valuable, while the same bungalow around 7 Mile and Gratiot will be near-worthless. The values are so low that it's considered good public policy to spend 30k in taxpayer money to remove the house.

Let's make two facts clear:

1. Renovations often cost more than new construction. That's doubly true if the structural elements are diminished.

2. The point about location within the metro is absolutely true. Value in a mostly-destroyed neighborhood in a downtrodden (if starting to revive) city is very different from value in a more viable area.

As mhays mentioned, rehabbing a bunch of prewar homes is cost prohibitive. No one would recoup the costs and the maintenance on an old house like that requires a certain socioeconomic status and that's unlikely in many of these derelict neighborhoods. On a personal note, we just cleaned out my wife's aunts house (1960's era ranch) in a working class neighborhood. It has serious structural issues and needs to be gutted but since her area has only so much market potential, anyone who buys the house will tear it down and rebuild.

It's cost prohibitive when property values do not keep pace with cost of maintenance, yes. But that doesn't happen wide scale in places with housing shortages because of laws of supply and demand. That's why tract houses in northern California sell for more than mansions in places like Houston and Detroit.

These are postwar bungalows, and sometimes ranches. The majority of recent abandonment in Detroit is now in the fringe postwar neighborhoods.

Again, the exact same homes are renovated in other neighborhoods in the metro area. They aren't abandoned bc they're too expensive to renovate, they're in neighborhoods with near-zero demand, so when there's a foreclosure or granny dies and the heirs are unknown or disinterested, they're often toast.

^ exactly.

Rust belt metros may have a "housing in a desirable location" shortage, but to claim that there's an outright shortage of housing, while thousands of housing units continue to rot away, is a stretch.

A lot of people here are missing the point. Just because a house is still standing or recently occupied doesn’t mean it’s financially viable. The cost to bring many of these homes up to code is way beyond what the average buyer can afford, especially in today’s interest rate environment. Renovating a $30k house that needs $100k+ in repairs just to become livable, in a neighborhood where the finished home might still only appraise at $60k, is a financial loss for nearly anyone but a nonprofit or the government. That is why so many properties end up abandoned or demolished. It’s not because there’s no demand, it’s because the math doesn’t work.

The idea that Detroit “has nothing remotely approaching a housing shortage” is flat-out wrong. The University of Michigan’s Poverty Solutions research team showed that Detroit has about 24,000 fewer habitable housing units than it has households. That’s a real shortage. The 2024 Statewide Housing Needs Assessment from MSHDA confirms this, stating clearly that demand is outpacing supply in metro areas like Detroit and that most of Michigan’s housing stock is aging and often unfit for modern needs. So no, vacant homes do not mean there’s no shortage. Most of them are not livable or financially practical to restore.

Detroit also didn’t just demolish everything, either. Michigan State University studied the city’s use of federal Neighborhood Stabilization Program (NSP) funds and found that nearly half the money went to rehabbing homes, while only about 20 percent went to demolition. These efforts were effective at keeping neighborhoods from further decline, even if they weren’t enough to spark full-scale revival. So the idea that the city didn’t try rehab, or that all these houses could have been saved, just isn’t true.

This isn’t a matter of opinion. It’s supported by multiple independent studies, including from MSU, the University of Michigan, and the state itself. What’s actually happening is a structural shortage of viable housing, not a lack of raw buildings. What people want is safe, up-to-code housing in areas where their investment won’t vanish. Detroit needs more of that, not just more neglected structures sitting in limbo that won’t even pass financial underwriting for rehab. Thinking there’s no shortage because developers aren’t rehabbing homes in droves is delusional.

I actually tend to agree with the posters who say there is a housing shortage in the midwest. I think broadly prices are more attainable in the midwest so it doesn't feel like there is a shortage to the, probably upper-middle class/affluent posters, on this forum. But, the data bears out the midwest is building at similar rates to NYC/SF/LA/BOS based adjusted for population. This economist has some really good analysis on the topic. Also interesting that earlier this year the only housing market with double-digit price growth was Canton Ohio:

https://kevinerdmann.substack.com/p/...tragedy-canton
https://kevinerdmann.substack.com/p/...about-2008-and

:???:

I agree with all of this, except for the wildly incongruous last sentence.

You just described exactly why there's no demand. The math doesn't work. The math would work if there were even modest demand (which is why you can't find abandoned bungalows in low value, declining suburbs like Redford and Eastpointe, but you can in large swaths of Detroit). A 30k house is obviously near-worthless. The land alone should be 100k.

And the bolded is why it seems to me that the Rustbelt has more of a desirable location shortage than a true housing shortage.

If the innumerable undesirable areas of the rustbelt's cities hadn't become so undesirable over the last 75 years, they wouldn't have collectively thrown away millions of housing units into the trash can as they did.

huh? there can still be demand for affordable housing. that people can't afford what a developer would have to charge to achieve a reasonable ROI on renovating a crumbling historic house doesn't mean there isn't demand for houses that people can actually afford.

You have an incredibly strange and myopic perception of what demand is. Just because someone wants something doesn’t mean they can afford it or justify the cost of making it usable. Wanting a 1998 Toyota Land Cruiser doesn’t mean you can afford to both buy it and restore it into a reliable daily driver. There’s plenty of demand for those trucks, but they sit on Craigslist because the cost of restoration exceeds what most people can justify until a dentist or an orthodontist decides to make it a pet project.

It’s the same with ruined houses in Detroit, except worse. These homes aren’t just old…they’re often gutted, stripped of copper, lacking plumbing, or have serious foundational issues. You can’t finance the rehab with a normal mortgage. Banks don’t underwrite those deals. Construction loans are hard to qualify for, rates are high, and most people can’t float $80K in repairs on top of a purchase price. And unlike the Land Cruiser, you can’t easily resell the finished product for a profit because the appraisals in disinvested neighborhoods are still low, no matter how nice the finish is.

So yes, demand exists, but it’s completely disconnected from practical affordability. This is exactly what housing economists describe as a market mismatch. MSHDA’s 2024 housing report explicitly says demand is outpacing supply in Michigan’s urban cores, but the available stock is often old and unaffordable to fix. And the University of Michigan found Detroit has a deficit of 24,000 habitable homes. What you’re calling “no demand” is actually a distorted market where the product isn’t usable without investment that average people can’t make, and that’s the definition of a structural shortage.

Several years back, I read an essay which explained why demand never meets the bottom of the market.

It goes back to the 1930s. Prior to this, we had "market-based" housing for the entire income spectrum, but low-income housing was shantytowns. They were massively unpopular, not just among the poor, but among everyone, because shantytowns were fire and disease hazards to the general public. So the Fair Housing Act was initially mostly concerned with establishing minimum housing quality. In effect, this established a minimum cost under which housing could be built, which meant it was impossible to build habitable structures for the bottom of the market any longer.

Arguably building codes have gone too far over time, with things like dual stairwells for apartments, elimination of SRO apartments, etc. There's certainly reform that can take place to help lower the cost per unit of new build construction. But the bottom of the market will only ever be served by public subsidy, or in some cases via depreciation.

Of course it means there isn't demand. There are bungalows in Detroit that are demolished 2-3 years after they're abandoned. I can show streets like this on Streetview. They're perfectly salvageable, but are often destroyed.

And again, these aren't historic houses, and we aren't talking total gut jobs. They're empty bungalows. The historic neighborhoods don't have much abandonment anymore.

And, in Detroit, the most likely scenario post-abandonment is the land is purchased for a nominal sum by a neighbor, thus further suburbanizing the neighborhood. There isn't present demand for infill. Why would a low income household buy in these cratering neighborhoods when adjacent areas offer the same bungalows with better safety, services, and schools?

I don't understand what this means.

Inner suburban jurisdictions in Metro Detroit are full of bungalow neighborhoods where working class and poor households successfully purchase and renovate dilapidated homes with regularity. No abandonment.

The adjacent areas of Detroit have the exact same bungalows, with the exact same conditions, sitting empty and then demolished. Tons of abandonment.

Why can lower income households afford the more expensive bungalows in the suburbs, but not the cheaper bungalows in the city? Makes zero sense. There are no gentrifers moving into Eastpointe and Redford and South Warren. These are poor(er) households, and lots of Section 8 properties. Lots of quality of life issues. The school districts are like 90% poverty. Mostly black and immigrant Arab households. Same homes, but no abandonment.

The homes in emptying areas Detroit are like 30k. That's cheaper than a slum home in a provincial Mexican city (I know, as I own a home in such a city). An ultra-poor household prolly shouldn't be in a SFH, and can't afford to maintain, so the housing is unsuitable for the poorest of the poor. And that's the only demographic willing to live in the bottom 5% of housing in Metro Detroit. There's too much housing, as reflected in the comical housing values and still unnerving current levels of abandonment.

I agree that there is upward pressure on prices in Detroit (city and metro), but it is still a far cry from being a housing crisis. But part of the story on why there is upward pressure on prices is the fact that they demolished so much housing over the past 10 - 15 years. You can still buy solid, livable houses in Detroit for less than $100k.

According to Zillow, this house sold for $75,600 yesterday: https://maps.app.goo.gl/bKCmZyn1ETppnnMs5

That's not an area with a lot of amenities or good public schools, but that house looks pretty solid. If that house were in NYC or the Bay Area it would easily go for 10 times that amount in a similarly "undesirable" neighborhood.

This house sold for $60k last week: https://maps.app.goo.gl/oXqAxkzDFGMVaWbW9

Again, not an affluent area but the house is solid. It would easily go for 10x that amount in cities with true housing shortages.

For starters, those are livable houses capable of being financed by average people with regular mortgages. And drawing correlations between the housing markets in the Bay Area & NYC and Detroit is beyond a stretch, for numerous reasons, not least of which is median income in those regions, their lack of widespread decay and abandonment of single family housing stock, and their global investments in housing. If there was not demand not being met in Detroit, it would be in a situation like Austin and Florida right now, which are seeing price declines (because they've over built), which is not happening in Michigan and Metro Detroit.

According to Redfin (March 2025):

But hey, what's facts got to do with anything these days, anyway?

Markets are dynamic. Cherry-picking short term trends does not make a crisis.

Metro Detroit does not have low median incomes, or home prices. There's plenty of money, and demand.

But the areas that are being abandoned have incredibly low prices and demand, hence the point. Something is wrong when home prices in provincial cities in the third world are higher than a few miles from the downtown of a major U.S. metro.

Granted, it's much less of an issue than 10 years ago, when prices were really approaching 0, but it's still there. Even 100k SFH is crazytown for a metro area with a bigger economy than Frankfurt, Madrid and Montreal. These same homes are $1 million+ in Frankfurt, and apples-apples incomes are lower there.

I didn't cherry pick anything. I previously referenced the statewide housing needs assessment and several other recent studies. But I guess I should just disregard those in favor of a couple of randos on the internet who can't read or provide alternative information proving it wrong. Yeah, I think I'll disregard the State's chief market analyst and University of Michigan because of your gut feeling :worship: :koko:

If Detroit has a 'housing crisis', then that term is officially useless. San Francisco, where you literally cannot find housing that non high-income earners can afford in the entire city, has a housing crisis. Detroit has some of the cheapest real estate of any major metro in the country. People might not be able to find cheap housing in premier neighborhoods, but you're not looking at a situation in Detroit where teachers have to drive 1.5 hours into the city because they can't afford to live there.

There is a huge amount of open, buildable space left in Detroit. If there was such a housing shortage, and such huge demand to live in the city, why are we not seeing widescale redevelopment of these areas? The reality is, there are a few successful, desirable neighborhoods in the city where people have access to urban amenities. These areas are getting expensive, but the rest of the city remains cheap. This is not a city or metro-wide housing crisis. Again, in San Francisco and LA, even the rough, undesirable neighborhoods are prohibitively expensive for most people. Inner suburbs are also prohibitively expensive. So the middle class and lower middle class people end up living in far flung exurban locations, often in undesirable locations like the Central Valley for the Bay or the high desert for LA, and deal with super commutes.

When everything gets labeled as a 'crisis' it really dilutes the potency of that word.

"Prices have been going up" and "we're in a crisis" are vastly different concepts.

Further, even good data from a trusted source can be used to make the wrong argument.

Frankfurt, Madrid, and Montreal have more efficient development patterns. Huge swaths of Detroit's core are abandoned. The urban area is overbuilt (national problem). Infill at scale requires significant population growth or the existing population shifting inward, which creates the same issue, but along the fringe rather than in the core.

I like how you accuse him of cherry picking, then before that literally cherry pick random houses in Detroit. :haha:

Assuming the condition of these homes from the outside alone is pretty bold. You have no idea what the situation is inside or what's missing or needs replacing. Also the second home doesn't even look in good condition from the exterior.

"we're a family of 4 and make the median household income of our metro area and cannot purchase a family-size home anywhere here unless we hit the Powerball."

Now that's a housing crisis.



"we're a family of 4 and make the median household income of our metro area and cannot purchase a family-size home here in an area we like."

That's something else.



The major rustbelt metros have plenty of very affordable housing for the middle class, it's just generally located in socially dysfunctional no-go zones that are avoided like the plague by everyone who isn't dirt poor. These types of places have largely been eliminated from the coastal big boys because of their very real housing crisis.