We complain constantly about a lack of affordable housing. But there are 137 million spare bedrooms in the United States. We should make at least a few of them available for their intended purpose.
I am one of those over-50 people living in a 3-bedroom house with my husband. The house is tiny because we live in Silicon Valley and we can't afford to move. We have one bathroom so having a roommate is a non-starter. But even if we had a bigger house, I would not have a roommate. I had roommates throughout my 20s and I still remember to joy I felt when I realized I made enough money to rent a place on my own. Having roommates is stressful and annoying even if you generally get along. Living with a renter would be even worse because now you have a landlord-tenant relationship but the person is sharing your physical space. No thanks!
Could this be incentivised in Australia by waiving tax on the income from renting spare bedrooms and confirming it doesn’t affect the Principal Primary Residence status for CGT?
Room-vs-house is the type of topic that benefits from non-planners.
It reminds me of years ago when technologists working in edge computing were getting involved in mobility-as-a-service, and they started coming up with scenarios where an AV owner could be a fractional MaaS participant, making seats in the vehicle available for rent during office hours. Let the car work for you, not just as a SOV uber, but seat by seat. It didn't take long for tech to advance to the point where that fractional use idea would work in non-AVs. It's something that transportation engineers & city planners & policy wonks wouldn't think of, but has huge impact on those professions.
Another problem is that the Way banks lend on Construction the land under a house can only be worth a fraction of the total homes value - as land gets more valuable in build out areas that are adding population. People have to build bigger homes in order to get a mortgage. It really is a perverse incentive away from reasonably sized entry-level homes, and there are plenty of older people who would love to downsize.
A lot of private homeowners don’t want to rent out their houses because they’ll get caught up in increasingly restrictive tenant rights laws that prevent evictions for those not paying or mandate that anyone can move in with them, regardless of criminal background. Seems like there could be a financial solution to this if you had a third-party manage the lease outs and takes full responsibility for enforcing rules.
Getting better utilization of bedrooms is a short-term opportunity. The long-term challenge is an important sector of the economy structured by regulation and custom to produce the wrong product fit to market, year after year. In 1959, Chevrolet held a 50% market share of passenger cars, unimaginable today. Yet, US housing production of single-family product has completely swamped all other product types for several generations. Many policy levers exist, but they are difficult even assuming a national government of rational policymakers.
This is important. We aren’t using housing efficiently. Building and more building and taking up open space and natural resources is the American way. Our state government is pushing us in this direction. I really appreciate you looking into other options like this.
Zoning laws need to support dividing a house up into separate units.
I am one of those over-50 people living in a 3-bedroom house with my husband. The house is tiny because we live in Silicon Valley and we can't afford to move. We have one bathroom so having a roommate is a non-starter. But even if we had a bigger house, I would not have a roommate. I had roommates throughout my 20s and I still remember to joy I felt when I realized I made enough money to rent a place on my own. Having roommates is stressful and annoying even if you generally get along. Living with a renter would be even worse because now you have a landlord-tenant relationship but the person is sharing your physical space. No thanks!
Could this be incentivised in Australia by waiving tax on the income from renting spare bedrooms and confirming it doesn’t affect the Principal Primary Residence status for CGT?
Room-vs-house is the type of topic that benefits from non-planners.
It reminds me of years ago when technologists working in edge computing were getting involved in mobility-as-a-service, and they started coming up with scenarios where an AV owner could be a fractional MaaS participant, making seats in the vehicle available for rent during office hours. Let the car work for you, not just as a SOV uber, but seat by seat. It didn't take long for tech to advance to the point where that fractional use idea would work in non-AVs. It's something that transportation engineers & city planners & policy wonks wouldn't think of, but has huge impact on those professions.
This is something that attacks policy could provide some direction and incentive for
Another problem is that the Way banks lend on Construction the land under a house can only be worth a fraction of the total homes value - as land gets more valuable in build out areas that are adding population. People have to build bigger homes in order to get a mortgage. It really is a perverse incentive away from reasonably sized entry-level homes, and there are plenty of older people who would love to downsize.
A lot of private homeowners don’t want to rent out their houses because they’ll get caught up in increasingly restrictive tenant rights laws that prevent evictions for those not paying or mandate that anyone can move in with them, regardless of criminal background. Seems like there could be a financial solution to this if you had a third-party manage the lease outs and takes full responsibility for enforcing rules.
Getting better utilization of bedrooms is a short-term opportunity. The long-term challenge is an important sector of the economy structured by regulation and custom to produce the wrong product fit to market, year after year. In 1959, Chevrolet held a 50% market share of passenger cars, unimaginable today. Yet, US housing production of single-family product has completely swamped all other product types for several generations. Many policy levers exist, but they are difficult even assuming a national government of rational policymakers.
Bill, thank you for this compelling and thought provoking essay on the housing paradox. best, Scott
This is important. We aren’t using housing efficiently. Building and more building and taking up open space and natural resources is the American way. Our state government is pushing us in this direction. I really appreciate you looking into other options like this.