Home affordability – Shana, my wife and she’s an amazing real estate broker, and I just happened to be sitting next to her. And what we’re doing here is talking about home price affordability and how it’s going through the roof and how it’s really a problem in a lot of locations.
So some of these places where this happens to exist is we’re in Breckenridge right now and this is one of those key areas where that same thing is happening, that phenomenon. And what it is, is that, you know, it’s a nice place and people with a lot of money want to be here.
And what that’s doing is causing a problem where the local workforce can’t live in the same city, the people that they work and they can’t they can’t live within the city.
And we were talking yesterday with with the manager of the Blue Soss Blue Sauce Italian restaurant is really good, by the way. And he was saying most of the local workers have to drive at least forty five minutes into Breckenridge to work.
And you can see if they had a weather issue and they had snow, you know, most likely they’re not going to able to get here. So it’s that causes a whole other problem, right. Open and stay open as a business if your workers can’t get here. So, yeah.
So that’s a problem that we see, whether it’s here, whether it happens to be like Denver had the same problem for quite a while, whether it happens to be San Francisco, these types of things are happening all across the country in
different places where the traditional workforce for service industry can get into to live in that same market that they work in here.
We heard something. We certainly did. So they’re trying to solve this problem in different ways. So we saw in Montana how they were trying to handle that, were in each kind of new subdivision that they were putting in allotments, that they had to have a certain amount of what they called affordable housing.
And that was a really difficult word to kind of describe, because what we saw in Montana and specifically in Bozeman is they would have single family residential. Right. And what we’re kind of price points in some of the neighborhoods.
And then they put these townhomes in there, you’re going to see six to eight hundred thousand homes.
And then they would put in the what they call a park like multifamily. But it could be a nice duplex type, a fourplex, something like that. And they’ll have them just, you know. Squeezed right into a community, so you’ll have single family homes and across the street have these what they call multifamily buildings, which I think we look at that differently in our market, and they would say it was affordable housing.
But the weird thing was that was not really a no. It was just a smaller place that was pretty much the same exact cost or marginally different. And it was really kind of weird.
Hundred thousand for a home you’re going to see probably five hundred thousand for these units. Yeah.
And they were just smaller and crammed together. And I think they were actually making more per Pallot for Homesite than than the other way. It was really weird. And then if we transfer over here to what they’re kind of doing in Breckenridge, you describe that just a little bit. OK, so in Breckenridge, they’re doing more or less the same type of thing.
And but they’re keeping the price kind of even lower. And it was really crazy because this manager talk specifically about one place that he wanted to get into and they were building like three million dollar homes and they have a deed restriction on certain amount of the homes in that area where the people had to were able to live in it arbitrarily kept the price of those homes low forever so that it had to be where the local service worker could live in that same home.
Now, that’s really a crazy concept to me, because now all of a sudden you have this three million dollar home and somebody has to build another three million dollar home and then let the local service worker live in it for this arbitrarily low price. And they talked about being like three hundred thousand dollars. So I would have no earthly idea how you could even build this structure. To let this person live in would just like the materials now, it’s possible that I got didn’t we didn’t get all the information.
That doesn’t seem right that you would have something appreciate like that. And then I don’t know.
The whole appreciation of it didn’t make sense to me while they were restricted to to be kept low arbitrarily so that people could end up living in these properties and live and work and be close to to this. But then it’s also very weird. How do you pick the person that gets to live in this three million dollar home that’s three hundred thousand dollars and select that person over the other person that happens to live down the road in this affordable housing? That’s not the same thing. So it’s creating this real weird system that is arbitrarily keeping prices low. But then you’re favoring one set of person over another.
Right, because like only one person gets to live in this multimillion dollar home for this ultra low price. Now, they said that they can only live in they can only own one. There are some restrictions. And the ones that initially came up as you can only own one property, it has to be this one you can’t have it can’t be a second home. You have to live here. You have to make less than a certain amount. You have to be a service worker. And there were like all these different thresholds.
And if you guys remember, maybe it was last week we talked about a local builder, D.R. Horton, in our area that had these crazy restrictions on, you know, that they were putting out there, that you couldn’t have another home, a second home. Right. To purchase in there. So I don’t know, maybe it’s a trend that we might start seeing across the country, right?
Yeah, well, it brings up a whole other list of problems because I was sitting there reflecting on this for just a little bit. And imagine that this service worker that’s afforded this home and so this home is now like a three hundred thousand dollar home, accepted housing amenities of a three million dollar property. So now play this forward in
your mind. Imagine this person that’s making the amount of money to be able to afford a three hundred thousand dollar home. And now this home is huge. So they’re going have high utility bills. I don’t know how they’re going to pay themselves the upkeep. Imagine.
Yeah, like, so now everyone puts out, you know, Christmas decorations and you don’t have quite the amount of money to put that out. I imagine your pool. How are you going to keep up with your pool? Like there’s all these things, the landscaping, if you have these nice trees go out, got something, doesn’t it’s really, really difficult. It’s put unnecessary pressure on this person who can’t afford those types of things to even maintain their living of what it is now.
It doesn’t then it causes this long term problem that this person can’t withhold or can’t keep up. And then we’re also talking about, well, where are these people coming from? And they used to go from other locations so they would stay normally forty five minutes away in this other town.
I can’t remember the name of that town you said. Yeah. So he he mentions the city and then I feel bad for this other city. Right. This other city was seeing growth themselves as they weren’t there. Yeah. They’re taking this growth arbitrarily and redistributing it to somebody else.
So imagine if you’re the person who owns property in that city and you were seeing growth and all of a sudden people like, wait a minute, I can get a house for, like, nothing in this city because it’s being subsidized by somebody else. So that’s for us to report on it, for you to decide what is right. But it is it is definitely occurring. And, you know, imagine that you lived in Salina or Prosper ten years ago and you wanted to see the growth going towards you.
But then people are getting subsidized and anyways. It’s a thing and we reported on it, and you have just a little bit more information, I might not have got all those facts correct, but we came close to it a little further if.
Well, if anyone wants to fact check us, please go ahead. Specifically me, I’m all in ticket fact checking and I just it doesn’t make sense in my mind. How can work?
Well, somebody it’s getting paid for by your tax dollars is what’s happening, is it doesn’t come out of the. Does it come out of thin air? Somebody is ultimately paying for it and it’s raising the prices of the other homes in that neighborhood. And it’s lower in this other one that’s getting subsidized by those.
And I don’t know, would that create ill will within your community if you have this person that had a deed, restricted property that was 10 percent of the price of yours, how would that feel? Are they really a true member of that community? Are they getting all the things that they really want? Are they now outsiders? I don’t know. These are weird things that I don’t know how it would fit in.
Imagine that kid going to school and it’s like, oh, the parents are like, oh, yeah, that kid lives in the restricted house. I don’t know. These are things that we’re going to have to tackle as a society and figure out what’s happening and what’s really the best thing to do.
