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How Housing Instability Is Inspiring Creative Solutions

It’s no secret that the cost of living has skyrocketed in recent years across the country, especially in major cities, and wages aren’t keeping up. While increased living costs are problematic on their own, it’s also becoming more difficult to find affordable housing. For those unable to afford a traditional mortgage, do alternative solutions exist?

The housing market crash of 2008 did more than just bring housing values down. It also helped spawn the temporary housing boom that made Airbnb a household name. In many areas, the housing landscape is saturated with these short-term dwellings, leading prospective home buyers and renters alike scrambling for solutions. Popular tourist destinations have been hit especially hard by short-term rentals: In New Orleans, for example, there were nearly 5,000 properties listed on Airbnb in 2018. That high amount of short-term rentals has made the affordable housing search even more difficult for local residents.

But it’s not all bad news where housing options are concerned. In the wake of widespread housing instability, multigenerational living, co-housing, and DIY home restoration are taking center stage. These creative solutions are fueling a new wave of innovation and may help counteract the impact of the housing crisis.

The Generational Question

When it comes to the current affordable housing crisis, those struggling to survive often look for someone to blame. And rather than the government, which hasn’t raised the federal minimum wage since 2009, (and even then to a paltry $7.25 per hour) many within older generations are pointing their finger at millennials. The generation of young people born between 1981 and 1996 have been called entitled, lazy, and worse.

Millennials are also taking the brunt of the blame for effectively “killing” homeownership, even though the generation has been among the hardest hit by the affordable housing crisis. In fact, millennial homeownership was found in 2015 to be 8 points lower from previous generations at the same age. This is due to a variety of factors, most notably the fact that many millennials are living with hefty student loan debt.

But that’s only a small part of the picture regarding the millennial housing search. Many young professionals are having to move back in with their parents, or are even taking on the role of caregiver for aging relatives. Multigenerational living gives young people the chance to save money on housing costs, and gives their elderly or infirm relatives a better option than retirement homes.

From Tiny Homes to Cooperative Living

Cooperative living doesn’t always mean living with relatives, however. In major metropolitan areas and tech hubs such as San Francisco, co-housing and co-working hubs are becoming increasingly common. Cooperative housing is akin to hostels in the sense that individuals typically sleep in dorms while sharing a kitchen, bathroom, and common area. Rent costs for a cooperative living space tend to be significantly lower than average area rates.

Another alternative housing option that’s gaining traction is the tiny house movement. Tiny homes are rooted in the ideas of minimalism and simplicity, typically comprising less than 400 square feet in total. Living in a tiny home may also provide a way to effectively protest capitalism, as your living costs decrease along with your ability to fill your home with possessions.

Home Ownership and Renovation

Along with cooperative living and tiny homes, the renovation of fixer-uppers may be a viable option for those looking for affordable housing. But DIY renovation can be a hefty endeavor. For starters, buying rather than renting likely means securing a mortgage and coming up with a down payment. You’ll also want to have your prospective home inspected for issues such as a leaky roof and the presence of mold or asbestos.

Once your mortgage is in place for your fixer-upper, the real work begins. Older homes may require a bit more work than newer construction. For instance, if your home was built in the 1970s or earlier, there’s a possibility that your insulation or drywall contains asbestos. Exposure to asbestos is hazardous to your health and can cause scarring of the lungs and various types of cancer, including mesothelioma.

Fortunately, DIY renovation isn’t all about potential hazards, but it can be time-consuming as well as rewarding. Everything from updating kitchen appliances to removing old wallpaper may take several days or even weeks to complete. You may also come across road bumps such as switching out outdated appliance hookups or repairing a damaged wall surface prior to applying new wallpaper or paint. Patience and the ability to adapt to potential challenges are key when renovating a home, no matter its age.

Final Thoughts

Whatever your income and lifestyle, you still have plenty of options in today’s often-volatile housing market. The modern housing landscape is more versatile than ever before, and creativity reigns alongside traditional home ownership. From cooperative living to DIY renovation, those seeking affordable housing can think outside the box in every corner of the country.

Posted by jhamilton at August 6, 2019 2:24 PM
Comments
Comment #447115

A common mistake in home buying is taking 30+ years to pay for it. The total cost can become 2 or 3 times the original cost. IF you get a 30 year loan, tripling the monthly payment can reduce the pay-off from 30 years to only 5 or 6 years (depending on the interest rate).

Here’s a handy APR Loan spreadsheet, which you can use to:

  • calculate loan payments;
  • show the effect of extra principal payments;
  • show the interest paid (monthly and overall);
  • show a graph of principal and interest;
  • allow extra payments on principal (of varying amounts) to be entered each month;
  • show the formulas used;
  • allow specification of the start year and month;
  • show the final payment (pay-off) month and year;
  • show the principal remaining;
  • show the total cost (principal + interest);
Look at the principal and interest graph. Most of the interest is paid at the beginning of the loan, which is why reducing the principal as fast as possible, and making a down payment that is as large as possible, is so important. It is only near the end of the loan that a majority of each monthly payment is principal, instead of interest. People should know how APR loans work before getting into debt.

Posted by: d.a.n at August 9, 2019 8:13 AM
Comment #447132

“People should know how APR loans work before getting into debt.”

You are absolutely correct d.a.n. Knowledge is still power; and ignorance is still costly.

Our schools should be teaching students practical things that will serve them well for their entire life. With a liberal education, future voters can more easily distinguish a “scam” from truth more easily. The 20 some people running for president on the Democrat ticket are mostly “scam artists”. They rely on ignorance to propel them into high office from which they can plunder the pockets of the very people they scammed.

Posted by: Royal Flush at August 9, 2019 2:57 PM
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