Jan 15, 2025 01:07 AM
(This post was last modified: Jan 15, 2025 01:19 AM by C C.)
Long before the L.A. fires, America’s housing crisis displaced millions
https://www.eurekalert.org/news-releases/1070498
INTRO: A new USC study reveals that the challenges that led to a national shortage of affordable housing and soaring home prices were set in motion long ago — and could have been foreseen.
The researchers behind the study say that the problem will only worsen as more natural disasters — such as the devastating Los Angeles area wildfires and large hurricanes — flatten entire communities. Los Angeles County officials estimate that more than 10,000 homes and businesses have been lost so far to the fires that erupted across the region last week.
“A tightly constrained housing supply reduces resilience to absorb losses from unexpected disasters — fires, earthquakes, hurricanes and more. In Los Angeles, this lack of flexibility could rapidly intensify gentrification as relocations strain the existing housing stock,” said Dowell Myers, professor of policy, planning and demography at the USC Price School of Public Policy and the study’s corresponding author.
The study, published in the Russell Sage Foundation Journal of the Social Sciences, traces the origins of the crisis back to the early 2000s. A perfect storm of policy missteps, demographic shifts and economic forces emerged that have severely constrained housing supply, disproportionately affecting millennials and people of color.
The nation now faces a shortage of 4.5 million or more homes.
The researchers argue that the roots of the crisis began in the early 2000s when easy access to credit for young adults fueled a historic housing bubble. When the bubble burst in 2008 and led to the Great Recession, policymakers overcorrected by tightening mortgage lending standards and limiting funds for new construction.
“These measures came at the worst possible time — just as millennials, the largest generation in 30 years, entered the housing market,” said Myers, who directs the Population Dynamics Research Group at USC Price. “Young home seekers were welcomed with the lowest construction in more than 60 years.”
Using data from the U.S. Census and the American Community Survey, the researchers built a housing-demographic model that tracks how people move through different life stages with housing, such as renting and buying, over time.
They found that from 1990 to 2021, laws passed in 2010 to prevent another housing bubble unintentionally created a mismatch in the market. Stricter credit rules and limited housing supply couldn’t keep up with the millennial generation’s demand for housing. This led to shortages in rental housing first, followed by a shortage in homeowner opportunities. Many millennials delayed buying homes until after 2015, leading to a sudden rush to catch up... (MORE - details, no ads)
https://www.eurekalert.org/news-releases/1070498
INTRO: A new USC study reveals that the challenges that led to a national shortage of affordable housing and soaring home prices were set in motion long ago — and could have been foreseen.
The researchers behind the study say that the problem will only worsen as more natural disasters — such as the devastating Los Angeles area wildfires and large hurricanes — flatten entire communities. Los Angeles County officials estimate that more than 10,000 homes and businesses have been lost so far to the fires that erupted across the region last week.
“A tightly constrained housing supply reduces resilience to absorb losses from unexpected disasters — fires, earthquakes, hurricanes and more. In Los Angeles, this lack of flexibility could rapidly intensify gentrification as relocations strain the existing housing stock,” said Dowell Myers, professor of policy, planning and demography at the USC Price School of Public Policy and the study’s corresponding author.
The study, published in the Russell Sage Foundation Journal of the Social Sciences, traces the origins of the crisis back to the early 2000s. A perfect storm of policy missteps, demographic shifts and economic forces emerged that have severely constrained housing supply, disproportionately affecting millennials and people of color.
The nation now faces a shortage of 4.5 million or more homes.
The researchers argue that the roots of the crisis began in the early 2000s when easy access to credit for young adults fueled a historic housing bubble. When the bubble burst in 2008 and led to the Great Recession, policymakers overcorrected by tightening mortgage lending standards and limiting funds for new construction.
“These measures came at the worst possible time — just as millennials, the largest generation in 30 years, entered the housing market,” said Myers, who directs the Population Dynamics Research Group at USC Price. “Young home seekers were welcomed with the lowest construction in more than 60 years.”
Using data from the U.S. Census and the American Community Survey, the researchers built a housing-demographic model that tracks how people move through different life stages with housing, such as renting and buying, over time.
They found that from 1990 to 2021, laws passed in 2010 to prevent another housing bubble unintentionally created a mismatch in the market. Stricter credit rules and limited housing supply couldn’t keep up with the millennial generation’s demand for housing. This led to shortages in rental housing first, followed by a shortage in homeowner opportunities. Many millennials delayed buying homes until after 2015, leading to a sudden rush to catch up... (MORE - details, no ads)
