December 3 is National Roof over your Head Day. In 2,000, it was estimated that between 2.3 and 3.5 million Americans experienced homeless in any given year—about 1% of the population. But for the vast majority of us—99.5% at any time, having a roof over our heads is something we take for granted. December 3 is set aside for us to remember and be grateful for this simple necessity.
While having a dry place to sleep is the norm, owning that roof is increasingly difficult. For many people just starting out, a combination of college debt and steep housing prices is making it hard to enter into the realm of home ownership. In 2015, rent increased at the highest level in seven years, and housing prices increased by 6%. Now, mortgage rates are going up. No wonder so many Millennials are sleeping in their parents’ basement!
One reason for the increase in housing prices is that during the housing crisis in 2008-09, many houses were abandoned and neglected. Then, for safety reasons, they were torn down. All in all, 1.7 million housing units were condemned and destroyed back then, and the construction industry hasn’t kept up.
Where there is a decrease in supply, prices go up, assuming demand hasn’t changed. This is one of the basic laws of economics.
- While there seems to be a shortage of housing right now, the Baby Boomer generation is retiring now, and many are downsizing. What effect do you think this will have on housing prices, long-term?
- Many people are opting to build their own “tiny houses”, and live in unusual places. Does this lifestyle appeal to you? What do you think motivates people to adopt it?
- Famously, New York City and some parts of California have laws preventing landlords from raising rents on existing renters. What do you think might be some of the unintended consequences of preventing landlords from making decisions according to the laws of supply and demand?
National Roof Over Your Head Day . [Digital Image]. (2016). Retrieved from https://www.prescottenews.com/index.php/feeds/item/28904-national-roof-over-your-head-day