[00:00:00] Eric Goranson: It's around the house when it comes to remodeling and renovating your home. There is a lot to know though. We've got you covered. This is around the house. Welcome to Around the House Show. This is where we help you get the most outta your home through information and education. Thanks for joining us.

[00:00:32] Eric Goranson: Happy midweek special. Wanted to talk today a little bit about some of our housing issues that we have and, uh, of course homelessness and the cost of housing these days. And I think we're looking at this thing completely wrong in most places across the us and if we're looking at it completely wrong, we're not gonna fix it.

[00:00:54] Eric Goranson: So let's break this down a little bit. You know, I live outside of Portland, Oregon and [00:01:00] we of course have a massive. Homeless population out there, and there is such a common belief that we just need to build more houses for these people. But the problem is, is that we are not dealing with the drug addiction and mental illness that plagues most of them.

[00:01:17] Eric Goranson: That keeps 'em out of shelters. If you're gonna walk around in our city here, for instance, and this is very common on the west coast, you can see this in almost every major west coast city. They are letting people camp outside, camping in streets, camp in people's yards. It is kind of an anarchy free for all as far as how that goes, and it can take sometimes six months to a year to get people at your city government to get them to move even when they're on your own property, which is crazy to me.

[00:01:49] Eric Goranson: But the problem we have is we've got a problem with, first, we've got a mental illness and drug addiction problem where these people would much rather self medic. Then be in a [00:02:00] shelter or be in housing. So to really fix that, we need to get that dealt with first. And I think there's ways to do that. I think if we were to change a little bit of the criminal justice system of how we look at things, instead of getting people for trespassing and loitering and those kind of things, maybe we get them into a.

[00:02:18] Eric Goranson: Program that gives them the help they need. Because after all, our goal at the end is to make these people get back to being, you know, contributing members of society and not ruining the environment like we see out there now. I mean, that is ironically the biggest thing that we see in our cities on the West coast, for instance, is the environmental damage that is done to parks, nature areas.

[00:02:41] Eric Goranson: It. It is super fun to clean up eligible type stuff here that you're seeing where they're burning car parts for heat and these areas that were, where animals lived are now very inhabitable for those animals and stuff. So it's a major, [00:03:00] you know, ecological disaster on top of. You know, the the humanitarian part of it.

[00:03:05] Eric Goranson: But really what we need to start doing is look at how our cities are creating affordable housing. First off, like I said, we need to deal with the homeless and mental illness and drug addiction, and I think those are three different things. There's a percentage of people out there that just need a place to stay and are looking for a place to stay.

[00:03:24] Eric Goranson: I'm not denying that at all. But a majority of those need to have, you know, um, some help and, uh, something that's going to be, you know, from our medical community and that's gonna be the first thing. But really affordable housing is something that I'm seeing, for instance, in West coast cities where cities are building quote unquote affordable housing.

[00:03:46] Eric Goranson: But because the city is involved, it costs three, maybe four times as much as if you had the private sector Do. And that's where the problem rises because you've got all the bureaucracy of having a city [00:04:00] government be a building company. You're never gonna get that one having that done because you could literally build three or four times houses.

[00:04:11] Eric Goranson: Or rental units or just units. If you had the private sector, do it because there is so much red tape that's going on there. And then you start looking at some cities. And Portland is another great example. I'll use it here, but this goes all up and down across the US in certain areas we have, if I'm going to buy a house, let's say in the city and it has had a fire, it's uninhabitable, maybe it was, you know, just absolutely destroy.

[00:04:39] Eric Goranson: If I'm gonna go tear that down and put a house or two on it, my city development fees could be 60 or $80,000. That's the fee that I have to pay to the city to get the building permit and get that done. Now, there's also fees to hook up the, the power and water and sewer, and I get [00:05:00] that some of that stuff.

[00:05:01] Eric Goranson: But really, if you look at it, sometimes these fees can be an excess of a hundred thousand dollars. Now if the city is charging a hundred thousand dollars in fees, there is absolutely no way you're gonna win that housing battle as well. So these are problems that we're gonna have to really start figuring out because it's so counterintuitive to what I would call common sense.

[00:05:25] Eric Goranson: Now, another thing that we need to work out, Is what we call our urban growth boundaries in many areas, and that is an area where they have tried to keep urban sprawl from happening where there is an designated area that you can build homes, and there's an area outside of that that they're trying to keep as forest nature, farmland, whatever that is outside of your urban area.

[00:05:52] Eric Goranson: That is really good for our environment out there. I get it. But the problem is, is that artificially [00:06:00] raises rates, supply and demand on what housing costs are, because what used to be a $25,000 lot 20 years ago has now jumped because of those urban growth growth boundaries. That can be a $75,000 lot because there's no more, lots to.

[00:06:19] Eric Goranson: And thus making it more expensive. It's the whole supply and demand thing with that. So it's great for you and I or anybody else as a homeowner that our property values keep going up, but it's really hard for the people that are trying to get into housing or get into their first house. So I think we're gonna have to find some ways to work around.

[00:06:40] Eric Goranson: Maybe free up some more land, maybe work on some rezoning in areas to take what was maybe a formal commercial area and clean that out and make it residential. But I think we're gonna have to start really thinking outside the box because. These models year after year after year [00:07:00] have now created its own monster, which means it's very hard for people, especially younger people, to get into housing and even harder for people that are elderly to get into housing.

[00:07:12] Eric Goranson: I know here in my state, for instance, and I, I can only talk about what's in my area. I know your area out there has other issues as well that you're seeing on your local news, but I'm well versed in what's going on. If I was going to get my mom into Oregon's senior housing and she doesn't live in Oregon, so that's not the case.

[00:07:31] Eric Goranson: But hypothetically that could be a six year wait and the people that run it have been horrible to work with cuz I've tried to help people to get into that. So if you're trying to get a parent or something into senior assisted housing, that is something. That is a subsidized program that is literally a five or six year waiting list.

[00:07:53] Eric Goranson: It could be longer now, but there's, the problem is that we just don't have enough [00:08:00] resources for that, and I think it's one of those things where we've gotta really reevaluate and almost start over. With how we're doing this stuff to be able to fix it. Because right now there's no place in the United States that I'm seeing that's really fixing this outside of some places in the south or desert Southwest, where they are coming up with, with better solutions.

[00:08:22] Eric Goranson: But right now, here in the Pacific Northwest, on the West coast, uh, there is not an affordable place to live out here without getting way outside of a metropolitan. I mean a house that, uh, in my area that you're seeing here, you can buy a $700,000 house to tear it down, to put a house on it. How is somebody coming outta college?

[00:08:45] Eric Goranson: How is a brand new family gonna afford That takes a lot to do that. Now, as a homeowner, I've kind of enjoyed the 30% increase in home prices between, you know, the last couple years. And now here's [00:09:00] the problem that we see though. Is that that combined with the double digit inflation that we see across everything else, it's made it very hard for somebody to be able to buy a house these days.

[00:09:11] Eric Goranson: Now they tell you that your home value shouldn't be more than two and a half times your salary, which means if you're making a hundred thousand dollars, you shouldn't purchase a home of the value of 200 or $250,000. That makes it impossible to buy a home. Now, let's add insult to injury. If you wanna buy a $600,000 home, which on the West coast isn't a lot of home, your income would need to be $350,000 a year higher.

[00:09:41] Eric Goranson: And then, you know, if you look at other rules that you see out there, they say that you should aim to spend less than 28% of your pre-tax monthly income on a mortgage outta those general historical guidelines. I'll tell you what. That is almost impossible when you gotta look at what a $600,000 [00:10:00] house is.

[00:10:01] Eric Goranson: Traditionally, you'd put down, well, about what, 36,000 bucks let's say in a round number. And if you do a 30 year fixed rate at like six and a half percent, that means your monthly mortgage payment is gonna be about $3,565 a month. That is a ton of money. So I don't even know what to say for all the new and younger people coming up, except that we've gotta fix this problem.

[00:10:31] Eric Goranson: And, you know, building materials have gone up, of course, because we have taken a lot of the trades out of our schools. The great news for people in the trades is you can make six figures to be a plumber or an electrician or somebody else in the trades out there if you're working hard. The problem is, is now that labor price has gone into the price of a.

[00:10:52] Eric Goranson: Because we removed all these things and made that skilled trades person, um, somewhat of a rarity out [00:11:00] there. And we're still have more people that are aging out than we're putting in. So that deficit keeps getting larger and larger and larger. So that's one of the problems that we're seeing with what we're seeing with housing.

[00:11:17] Eric Goranson: I mean, it is a huge problem that we're gonna have to figure out. and how to deal with that there. Now if you get rid of all those first time home buyer credits and all that other stuff, and you're just going to buy a regular house, maybe it's your third or fourth house or whatever, if you're gonna buy that $600,000 house and you put 20% down, let's say that's, you know, 125 grand, your loan amount, 475,000 bucks, basically, and let's say it's down at a really cool 5% interest rate, you still have to make $115,000.

[00:11:51] Eric Goranson: Hundred $16,000 to be able to afford that. And that is if you go with the 5% interest rate, but you would have to make [00:12:00] 131%, $131,000, sorry, at a six and a quarter interest rate. So we've really got some issues out there as far as how we do homes and housing. And that's not something we're gonna fix right now, but I think we're gonna have to start having a.

[00:12:17] Eric Goranson: Conversation because with inflation going the wrong way, more and more people struggling to stay afloat. The other hard part we're dealing with is rental rates have been going up as well. You know, when you see a eight or 10% rise, In apartment rates out there for rentals, that sure doesn't help people get into housing as well.

[00:12:40] Eric Goranson: So those are some of the problems we're seeing. You know, home prices remained 8.1% higher than the previous year, and then we have, of course, the mortgage rates up more than 250 basis points at the same time period. That means you're paying so much more than you were last year for a home. And so we're gonna have to [00:13:00] really kind of think about how this goes.

[00:13:01] Eric Goranson: This was not meant to be any kind of a rant, but I'm just trying to spur some conversation with the people of how do we fix this to get this back under and, you know, under control really so people can get into housing. And I'm not saying that the government needs to build a bunch of affordable housing, it seems that that has been going sideways and is costing more than it should to do that.

[00:13:23] Eric Goranson: And just an example here in some of the cities as well, I'm. Like for instance, in my city here next to me, Portland, they have some things where if you build a high-rise, you have to have a percentage of affordable housing in there. Well, they're building a four seasons up there and they decided not to put it in there so they just pay the fine and move on.

[00:13:43] Eric Goranson: Well, that didn't do anything for adding affordable housing to it, but then that dollar figure raises those unit prices up cuz they have to pay a millions and millions of dollar fine. , then that money goes into the city coffers, and then the city spends way too much [00:14:00] on affordable housing and we're not fixing the problem.

[00:14:05] Eric Goranson: You know, I think, you know, people like Habitat for Humanity and so many other nonprofits out there have got a better answer. To be honest. I would rather see those firms get the. Those foundations, those nonprofits, and actually start doing this because I tell you what, they could 10 x what the city and governments are doing out there as far as affordable housing.

[00:14:28] Eric Goranson: And I think through, we need to be looking at that model versus relying on our elected officials to fix the problem for us, because I think there's just too, Too many hands in the pot trying to do this. All right guys, well that's enough about this today. Just something to think about. If you want to sense com some comments on this head over to around the house online.com, I'd love to continue the conversation there Over on social media or even on around the House Nation, this is designed to be not a political conversation today.

[00:14:57] Eric Goranson: I was just really trying to see how do we fix [00:15:00] housing? Housing price. And make it affordable for kids, for parents, anybody else out there trying to either get into or stay into their house? Now, coming up this weekend, we got a great show on around the house, uh, radio show. We're gonna have a lot of fun. Uh, I've got Eric Ani for Mechanical Hub.

[00:15:20] Eric Goranson: He's a big social media influencer, plumber. He is also in the mechanical world, so he's H V A C as well. We'll be talking with him and then I'm gonna be tackling some home security stuff as well. As some other projects around your house on Saturday that you don't wanna miss all coming up this weekend on around the house.

[00:15:40] Eric Goranson: All right, everybody, have a great rest of the week. Happy midweek. Enjoy yourself. We're changing the clocks this weekend for you that do in the United States. So we are dealing with the daylight savings, time change. And, uh, well make sure and check those smoke detectors and carbon monoxide detectors.

[00:15:57] Eric Goranson: Change those batteries. Make sure they're tested, make sure they're working. [00:16:00] And if not, call your local firefighter. I betcha that they will be happy to come out and help you. Check. To make sure yours are working correctly. All right, have a great rest of the week everybody. Thanks again for listening to Around the House