This Appreciation Leaves Homeowners With The Illusion Of Greater Wealth

A report from Market Place. “The U.S. Supreme Court, in a 6-3 vote, upheld a law in the small southern Oregon town of Grants Pass on Friday that bans people from sleeping or camping in public places such as city parks, streets and sidewalks or in their cars. That’s one extreme result of the ongoing housing crisis in this country — a crisis of affordability. Additionally, the National Association of Realtors reported that pending home sales — a harbinger of housing market health — fell by about 2% in May. According to Lawrence Yun at the NAR, the spring home-selling season is wrapping up, and if you’re the chief economist for the country’s real estate agents, you can say goodbye to it with a Bronx cheer. ‘Home sales activity for spring 2024, it was a sluggish disappointment,’ Yun said. ‘Pending contracts — lowest ever since we began our measurement from 2001.’ Meanwhile, the sale prices listed on those contracts are the highest in U.S. real estate history.”

KDVR in Colorado. “Friday’s U.S. Supreme Court ruling on urban camping bans ‘clears the way’ for Aurora’s new ‘tough love’ approach to addressing homelessness, Mayor Mike Coffman said. ‘I think it was the right decision,’ Coffman said. ‘I also do think that communities ought to do what the city of Aurora does and that is have a place for people to go.’ On Monday, Aurora enacted a camping ban that is more strict than its previous one. It will go into effect in about a month. ‘We’re going to have a much tougher policy when it comes to illegal camping on the I-225 corridor. For the first time, people will be ticketed for trespass,’ Coffman said.”

“However, critics argue the Supreme Court’s decision is a step toward criminalizing homelessness. ‘There’s not an alternative to surviving. You have to sleep, you have to cover yourself, you have to do those things,’ said Terese Howard, an organizer with Housekeys Action Network. Howard said a better alternative to camping bans would be for cities, states and the federal government to invest in long-term housing solutions for unhoused people. ‘We know that roughly 90% to 99% of people who are houseless want housing. It’s not a choice, it’s a matter of availability. So to criminalize someone is not a solution,’ she said.”

“In Denver, Mayor Mike Johnston’s ‘All In Mile High’ initiative aims to house 2,000 people by the end of the year. A spokesperson for the mayor’s office said the city does not need U.S. Supreme Court ‘guidance to know the right way to address homelessness is through compassion and humanity. In Denver, we believe people should sleep in their own beds, not street corners. That’s why we have spent the last 12 months moving more than 1,600 people indoors, including 536 individuals who are now permanently housed.'”

NBC Los Angeles. “Local governments will be allowed to enforce bans on unhoused people sleeping outdoors, the United States Supreme Court ruling decided on Friday. The decision is expected to largely influence the west coast and California particularly, which has about a third of the homeless population in the United States (181,000 people) and more than half of all ‘unsheltered individuals with chronic patterns of homelessness’ in the nation (53,169 people.) Los Angeles Mayor Karen Bass said the Supreme Court’s decision is ‘disappointing’ and called it a ‘crisis.’ ‘This ruling must not be used as an exclusive for cities across the country to attempt to arrest their way out of this problem or hide the homelessness crisis in neighboring cities or in jail. The only way to address this crisis is to bring people indoors with housing and supportive services.'”

“According to The Los Angeles Homeless Services Authority (LAHSA), the number of homeless people in LA went from 41,980 in 2022 to 46,260 in 2023. Simultaneously, California had the largest increase with nearly a thousand more individuals with chronic patterns of homelessness. ‘It is frustrating to have more people fall into homelessness even as we are investing hundreds of millions of taxpayer dollars and resources into efforts to bring people inside,’ L.A. County Supervisor Janice Hahn said last year.”

The Union Tribune in California. “For years, whenever San Diego County residents complained about growing numbers of encampments, elected leaders often gave the same response: We can’t push people off public land if shelter isn’t available. That was due to a federal appeals court decision, Martin v. Boise, that tied the ability to cite those living outside with having beds to offer. Now the U.S. Supreme Court has thrown out that rule. The ruling will likely not have an immediate effect on San Diego, which passed a partial camping ban a year ago, but it nonetheless gives officials countywide more flexibility when clearing sidewalks. Both the San Diego City Council and the County Board of Supervisors had symbolically signed onto the case brought by the small Oregon city of Grants Pass.”

“‘This ruling brings much-needed clarity to how the City can enforce our laws,’ Mayor Todd Gloria said through a spokesperson, ‘however, it will not change our strategy on homelessness.’ Alysson Snow, a law professor and head of the Housing Rights Project at the University of San Diego, argued that the decision could nonetheless boost enforcement. ‘They would not have to make as concerted an effort to make sure that there’s housing available,’ Snow, who is also part of the Lemon Grove City Council, said before Friday’s announcement. ‘They would just clean up the streets every day and hand out fines like they were candy.’”

CBS News in California. “The U.S. Supreme Court on Friday ruled 6-3 on the contentious Grants Pass v Johnson case that placing restrictions on unhoused people and where they can sleep is not ‘cruel and unusual’ criminalization of homelessness. The decision is being supported by city leaders in San Francisco that have decried the restrictions placed on them regarding encampments. San Francisco Mayor London Breed praised the ruling. ‘This decision by the Supreme Court will help cities like San Francisco manage our public spaces more effectively and efficiently,’ she said in a statement, adding that her administration has made ‘significant investments in shelter and housing. But too often these offers are rejected, and we need to be able to enforce our laws, especially to prevent long-term encampments,’ she said.”

“Gov. Gavin Newsom also weighed in on the decision on Friday. ‘This decision removes the legal ambiguities that have tied the hands of local officials for years and limited their ability to deliver on common-sense measures to protect the safety and wellbeing of our communities,’ he said in a statement.”

From Mises.org. “I attended a neighborhood association meeting recently on the inner west side of San Antonio, Texas. The concerns were probably not unlike those of residents in other United States urban centers: crime, public intoxication, vagrancy, etc. One that drew a notable response from the local councilwoman was the cost of housing. This issue provides a good example of how actions of the federal government trickle down and leave collateral damage in our neighborhoods. Housing is a basic good, susceptible to normal market fluctuations just like any other. When government intervenes, though, things get a little more volatile.”

“Out in California, regulations are stifling the addition of more housing. Rent controls do the same. The overarching problem in every state for the last several years, however, has been unstable monetary policy coming out of Washington, DC. Since the dollar has been devalued, it has simply taken more money to buy stuff. Plus, it has compelled more investors to enter the housing market. It’s a safer, less risky investment than an untested invention or new product line. This arguably explains the widening discrepancy between price growth and that of population.”

“The sixteen hundred square foot, three-bedroom, two-and-a-half bath house I bought with my girls’ mom in 2003 (which I later rented out for several years) cost us roughly $100,000. Zillow now lists it for $265,000. Over that time, the population of Bexar County has grown by just under half. That’s 265 percent versus 43 percent. This appreciation leaves homeowners with the illusion of greater wealth. When they look to cash in, they find that the market around them has moved up as well. Further burdened by rising interest rates, they hunker down, and the market for new homebuyers tightens. This creates an opportunity for local officials to swoop in like heroes and try to fix things.”

“When some of the residents at the neighborhood association meeting complained about homes being turned into ‘quadplexes’ (essentially makeshift apartments), the councilwoman was quick to point out the city’s ‘voter-approved investment in affordable housing’ that can be found going up all over town. One of these developments is going up practically in my backyard here on the far west side. Another is raising a stink on the far north side. Residents there complain of inevitable overcrowding in schools, increased traffic, etc. There is also a perception that more criminal activity is likely to follow.”

“One of the houses I run by in the morning, similar to mine from 2003, is renting for $1,700. The first rent I charged in 2009 was roughly half that. There’s no logical reason for the gap, and it’s certainly not affordable for a family of modest means. If they haven’t already, investors will no doubt swoop in to buy the house when the owner has reached his limit. If a quadplex doesn’t fly with the neighbors, and the market collapses under the weight of a growing glut of apartments, it’s not a stretch to guess what comes next: bankruptcy and government bailouts. We all remember the fallout the last time that happened.”

The Globe and Mail. “Last Tuesday night, in advance of this weekend’s first round of French parliamentary elections, there was a debate featuring the standard-bearers for the country’s three major political groupings. To open the proceedings, each candidate was asked to hold up a picture ‘that symbolizes your project for France.’ The French debate was held just a few hours after the Liberal Party of Canada’s stunning but unsurprising defeat in its former stronghold of Toronto-St. Paul’s, and it got me wondering: What photo would Prime Minister Justin Trudeau hold up? What story would he tell? Why does he want to win another election? What does the current incarnation of the Liberal party, made in his image, stand for? And is that what Canadians want?”

“What slogan comes to mind when voters think about the Trudeau government? ‘Announcements Over Execution’? ‘More Immigration for Higher Housing Prices’? ‘Spent More, Did Less?’ Or what the Liberals to some extent always run on, often successfully: ‘Yeah, But The Conservatives Are Worse’?'”

From ABC News. “The Coalition has for months sought to tie overseas migration to Australia’s housing crisis, with Opposition Leader Peter Dutton using his budget reply speech to compare the rate of net arrivals under Labor with the pace of residential construction. Speaking on the day of the budget reply, Shadow Minister for Housing Michael Sukkar said: ‘There have been 265,000 homes built in the first 18 months of this government, and how many migrants do you think this government brought in over that period? About 900,000.'”

From News.com.au. “The Bank of Mum and Dad has never played a bigger part in young South Australians securing their own home, with almost two thirds of homebuyers relying on family financing to achieve the Great Australian Dream. New research from Digital Finance Analytics shows that the percentage of first homebuyers seeking help from the Bank of Mum and Dad has jumped from just 3 per cent in 2010 to 59 per cent now. As if that wasn’t terrifying for parents, the average loan size for a deposit has increased from $23,000 in 2010 to a whopping $107,000 now. This is an increase of more than 365 per cent.”

“According to their research, up until 2015, parents were the only family members providing financial assistance, whereas now, about 11 per cent of those who relied on deposit money from family members got it from grandparents. Policy adviser Michael Cornish said he and his wife were already preparing for how they could support their four year-old son should he want to buy his own home in the future. Mr Cornish said he was expecting to have to support his son purchase down the track.”

“‘I can’t see any way for him to get into a house without our help or at least the help of family, and that is really a good way of entrenching disadvantage and entrenching advantage, because the children who are able to receive family support to get into housing have a massive leg up, not through any thing other than who they happen to be born to – nothing to do with their merit, nothing to do with how deserving or otherwise they are, and nothing to do with, in fact, how hard they happen to work,’ he said. ‘And that’s why something is fundamentally broken.'”

Hampshire Chronicle in the UK. “We were in yet another Government created boom-bust cycle long before the pandemic and war occurred and, like any household, business or country already laden with debt, were found wanting. These boom-bust cycles, which have taken place since the 1970s, are tantamount to state-sponsored Ponzi schemes where the vulnerable ‘have-nots’ in society find themselves even further behind the ‘haves’ when the music eventually stops. Governments sow the seeds of inflation when they over stimulate the housing market with lower Interest rates, Help to Buy schemes and Stamp Duty reductions, culminating in rapidly rising house prices. Buoyed by this, consumers are then enticed into a spending frenzy, often beyond their income, fuelling inflation in the process.”

“This, in turn, leads to the inevitable raising of interest rates, triggering a falling housing market with the rest of the Economy not far behind it which of course leads to the lowering of Interest rates, placing us straight back on this financially suicidal merry-go-round. Like musical chairs, you can only restart the music so many times. We need to get off this ride once and for all, stop using the housing market as the engine room of the Economy, and produce more.”