HousingWire Daily Mike Simonsen on the housing affordability crisis
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May 15, 2025 Mike Simonsen, President of Altos Research, dives deep into the housing affordability crisis, highlighting systemic factors and local challenges. He discusses how current policies favor existing homeowners and examines the dramatic price-income gap. The conversation contrasts starkly between California and Texas, showcasing how differing tax structures impact housing dynamics. Simonsen also explores innovative solutions like the land value tax, aimed at promoting development and addressing property hoarding in urban areas.
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Housing Unaffordable By Design
- American housing policies are designed to protect homeowners' wealth, leading to high home prices.
- Zoning laws and mortgage interest deductions keep homes valuable but limit affordability.
Four Vectors Affect Affordability
- Housing affordability is affected by four main factors: home prices, mortgage rates, insurance, and taxes.
- Surprisingly, higher taxes can increase market turnover and improve affordability for young families.
Price-to-Income Ratios Reveal Affordability
- Price-to-income ratio shows housing affordability relative to residents' earnings.
- Low inventory allows markets to remain unaffordable to most but expensive to a few who can buy.