By Adam Frisch, Managing Principal, Lee & Associates Residential NYC
Unfortunately, cities on both coasts are currently experiencing serious issues with homelessness. From New York City and San Francisco to Portland and Seattle, property in these locations is being devalued because governments are ill-equipped to deal with the unexpectedly large homeless populations. It seems that many governments are providing services to the homeless that perpetuate the problem rather than assist these individuals in finding jobs or affordable housing.
These days, the popular opinion (among younger people in particular) seems to be that property owners are greedy and raise rents too high which explains the homelessness problem. I would argue that there are so many restrictive laws in place regarding housing development that many developers have simply ceased their attempts to build new housing.
This is a huge loss across the board because if new housing were being built, the cost of housing would actually decrease! New Yorkers will surely remember when Amazon’s second headquarters nearly moved to Queens. It was widely believed that if Amazon had opened an office there, then a number of developers would have followed, causing the price of housing to increase. The laws of supply and demand dictate that this is simply not the case. Additional residential units on the market would have actually caused the price of housing to drop. There seem to be a number of misconceptions surrounding the price of housing and I truly believe that if we are able to clear these up on a governmental level, it will be a great boon for the homeless population and the real estate community alike.