775: BiggerNews: Rent Unaffordability Crosses Dangerous New Threshold w/Lu Chen and Thomas LaSalvia

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 6 June 2023

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

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Summary

Rent prices have steadily risen for as long as we can remember. But, few of us would have ever expected the unimaginable rent hikes of 2020-2022. With major metros seeing double-digit year-over-year rent percentage bumps, residents were forced to throw a larger chunk of their income toward housing. Now, with higher rent prices than ever before, America has become “rent-burdened,” and a dangerous threshold has been crossed. What’s causing this rise in rents? Are investors to blame? And what’s a solution that could benefit builders, buyers, and renters? We’ve got Lu Chen and Thomas LaSalvia from Moody’s Commercial Real Estate division to give us their findings. Lu and Thomas’s team have been tracking rent prices carefully, logging which cities have seen the most significant price increases, which are becoming increasingly unaffordable, and what can be done about the problem. With a lack of housing supply and inflation eating away Americans’ income, what can everyday investors like us do? Thankfully, there is a solution to this problem that could help curb unaffordability while presenting a profit for investors. Lu and Thomas go over exactly what would have to happen to return to a normalized, affordable housing market and what’s hurting our efforts to get there. Plus, with rents becoming unaffordable for many young Americans, our Dave duo asks, “Is real estate still safe to invest in?” All that and more in this edition of BiggerNews! In This Episode We Cover America’s “rent-burdened” status and why prices have crossed a critical threshold Real estate markets that have seen the largest increase in rent over the past three years Luxury housing and how its development is hurting the effort to increase affordable housing Whether or not investors are to blame for rents skyrocketing “Inclusionary housing” and how investors can fill the affordable housing need while making a profit Whether or not real estate is still safe if renters get priced out of the market And So Much More! Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-775 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the Bigger Pockets Podcast, SHELP, 775.
0:04.0	The problem here, it's not so much the rent level, it's the pay set which they've increased.
0:10.6	And these households, particularly lower income households, when you deal with something
0:14.8	like apartment leases which are only about a year, they're going to get quite the shock,
0:19.4	especially because their income isn't going to keep pace nearly to those types of levels,
0:24.2	to which the rent can be increased.
0:27.0	Go on out everyone, it's David Green, your host of the Bigger Pockets Real Estate Podcast
0:30.5	here today in Hawaii, recording with the other Dave, my partner in capitalism, not partner
0:37.1	in crime, different PIC, Dave Meyer.
0:39.8	And we are here bringing you the information that you need to make money in real estate
0:44.1	and find financial freedom.
0:45.7	Today is an awesome show where Dave and I are interviewing Luchin and Tom Lasselvia from
0:51.2	Moody's Analytics talking about the housing unaffordability problem crisis.
0:57.3	How would you market Dave?
0:58.5	Yeah, I think either one, we all know that housing has become really unaffordable.
1:04.5	This is impacting both first time home buyers, people are just trying to buy a home.
1:08.5	And for investors too, it's become really challenging to afford most markets in the
1:14.2	country right now.
1:16.1	And Tom and Loo provide some information, not just about housing unaffordability, but
1:21.1	rent unaffordability and how that's impacting everyone, including real estate investors,
1:27.4	many of whom who have benefited from the increase in rents, but they also provide some really
1:31.9	interesting perspectives about why fixing these unaffordability problems is really in everyone's
	...

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