Chatgpt, AI and the Affordable Housing Crisis

Chatgpt, AI and the Affordable Housing Crisis

https://openai.com/blog/chatgpt/

Affordable Housing Crisis solutions ?

There are several potential solutions to the affordable housing crisis, including:

  1. Increasing government funding for affordable housing development and preservation. This can include funding for the construction of new affordable housing units, as well as programs to preserve existing affordable housing.
  2. Implementing inclusionary zoning policies. These policies require developers to include a certain percentage of affordable housing units in new developments.
  3. Rent control and stabilization. Rent control laws limit the amount that landlords can charge for rent, while rent stabilization programs help to keep rent increases in check.
  4. Increasing access to housing vouchers and other forms of rental assistance. These programs help low-income renters afford market-rate housing.
  5. Building more tiny homes and accessory dwelling units. Building small, affordable housing units can help to increase the supply of affordable housing and make it more accessible for low-income renters.
  6. Increasing support for community land trusts and other forms of community ownership. This can help to ensure that affordable housing remains affordable in the long term.
  7. Encouraging mixed-income developments. These developments mix affordable housing units with market-rate units, helping to create more diverse and inclusive communities.
  8. Reducing barriers to housing development, such as zoning regulations and land-use restrictions.
  9. Encouraging and supporting innovative solutions like modular and prefabricated housing, which can speed up the construction process and make housing more affordable.
  10. Encouraging and supporting the use of technology to improve the efficiency and effectiveness of the housing market, such as online platforms for finding and applying for affordable housing.

Home ownership rates and Affordable Homes, The Housing Ladder?

Homeownership rates refer to the percentage of households that own their own homes, as opposed to renting. The housing ladder is a term used to describe the process of moving up from renting to homeownership.

Homeownership rates have traditionally been seen as a measure of economic stability and upward mobility, as owning a home is often considered a key step on the “housing ladder.” However, homeownership can also be a source of financial stress, particularly for low-income households.

The affordability of homes is a key factor in determining homeownership rates, as many low-income households are unable to afford to purchase a home. The lack of affordable homes can make it difficult for households to move up the housing ladder, as they may not be able to afford to purchase a home even after saving for a down payment.

In recent years, the affordable housing crisis has led to a decrease in homeownership rates, particularly among low-income households. This is due to a number of factors, including rising housing costs, stagnant wages, and a lack of affordable housing options.

To address the affordable housing crisis, there are a number of policy solutions that can be implemented to increase the supply of affordable homes and improve access to homeownership for low-income households. These include increasing funding for affordable housing development, implementing inclusionary zoning policies, and reducing barriers to housing development. Additionally, providing financial assistance and education to help low-income households purchase homes, can help to improve the housing ladder.

Absorption rates for new home development and Rentierisation and Financialisation of the Finance and Housebuiding sectors?

Absorption rate for new home development refers to the rate at which new homes are sold or rented. It is calculated by dividing the number of new homes sold or rented in a given period by the total number of new homes available during that period. A high absorption rate indicates that there is a strong demand for new homes, while a low absorption rate suggests that there is an oversupply of new homes on the market.

The Rentierisation and Financialisation of the finance and housebuilding sectors refers to the increasing trend of large financial institutions and real estate companies becoming involved in the housing market. This trend has led to the commodification of housing, with homes becoming increasingly viewed as financial assets to be bought and sold for profit rather than places to live.

This trend has led to a number of negative consequences, including the displacement of residents and the exacerbation of the affordable housing crisis. Additionally, when the housing market becomes dominated by financial institutions and real estate companies, the development and management of housing is often driven by financial considerations rather than social and community needs.

To address the negative effects of the rentierisation and financialisation of the housing market, policymakers can implement a number of measures, including increasing regulation of the real estate market, providing incentives for the development of affordable housing, and encouraging community ownership of housing. Additionally, promoting financial education and regulations to make sure that it is not just a way of speculation but a way of encouraging citizens to have a sustainable future.

Big Bang and Liberalisation and the effect of neo liberal ideology on supply side measures rather than systemic fiscal and monetary demand side policies

The Big Bang refers to a series of financial market deregulation measures that were implemented in the UK in 1986. These measures, which included the deregulation of stockbroker commissions and the removal of fixed commissions for securities trading, aimed to increase competition and efficiency in the financial markets.

Liberalization is a term used to describe the process of removing government regulations and restrictions on economic activity. Neo-liberal ideology is a political and economic philosophy that emphasizes free markets and minimal government intervention in the economy.

The effect of neo-liberal ideology on the housing market has been to focus on supply-side measures, such as deregulation and privatization, rather than on systemic fiscal and monetary demand-side policies. This has led to an emphasis on increasing the supply of housing through private sector development, rather than on addressing the underlying demand for affordable housing through policies such as rent control, public housing construction, and subsidies.

The adoption of neo-liberal policies has led to a decline in the availability and affordability of housing for low-income households, and has contributed to the financialization of housing. There has been a growing criticism of this ideology, arguing that it has led to the creation of a housing market that prioritizes the interests of developers and investors over those of renters and buyers, and that it has failed to address the underlying issues causing the housing crisis.

To address the negative effects of neo-liberal policies on the housing market, some experts suggest a shift towards demand-side policies, such as increasing subsidies for low-income renters and implementing policies to increase access to affordable housing, as well as addressing the systemic issues such as lack of affordable financing and lack of regulations on the financial sector that is driving the financialization of housing.

Which lobbyist and think tank groups influence the narrative around The Housing Crisis in the US , The UK and the other G7 and G20 Countries.

In the United States, the housing crisis narrative is influenced by a variety of different lobbyist and think tank groups, including:

  1. The National Association of Realtors (NAR) is one of the most powerful lobby groups in the US, representing real estate agents and brokers. NAR has a significant influence on housing policy and often advocates for policies that benefit the real estate industry.
  2. The National Multi Housing Council (NMHC) represents the interests of large apartment building owners and developers. They often advocate for policies that would benefit the rental housing industry and make it more profitable.
  3. The National Low Income Housing Coalition (NLIHC) is a non-profit organization that advocates for affordable housing for low-income households. They often push for policies such as increasing funding for affordable housing construction and preserving existing affordable housing.
  4. The American Enterprise Institute (AEI) is a conservative think tank that often promotes free-market solutions for housing issues and argues against government intervention in housing markets.

In the United Kingdom, the housing crisis narrative is influenced by a similar set of groups. These include the National Landlords Association (NLA), the Home Builders Federation (HBF) and the Royal Institution of Chartered Surveyors (RICS) which represent the interests of landlords, house builders and property professionals respectively, and think tanks such as the Adam Smith Institute (ASI) and the Centre for Policy Studies (CPS) which promote free-market solutions to housing issues.

In other G7 and G20 countries, the narrative around the housing crisis is also influenced by various lobby groups and think tanks. For example, in Canada, the Canadian Real Estate Association (CREA) and the Canadian Home Builders Association (CHBA) represent the interests of real estate agents and home builders, respectively, and in Australia, the Housing Industry Association (HIA) represents the interests of the housing construction industry.

It’s worth noting that there are also groups and organizations that are pushing for progressive solutions to the housing crisis and advocating for affordable housing for low-income households, such as non-profits and advocacy groups.

 

What is the relative importance of Household wealth and Financial Wealth to the collateralisation of Commercial Bank balance sheets and central banks Balance sheets. To what extent does Mortgage lending effect M3 and M4 monetary measures?

Household wealth and financial wealth are both important factors in the collateralization of commercial bank balance sheets and central bank balance sheets. Commercial banks use the assets of their customers, including both household wealth and financial wealth, as collateral for loans and other financial products. This collateral helps to provide security to the bank and its customers, and reduces the risk of default on loans.

Mortgage lending, in particular, can have a significant effect on M3 and M4 monetary measures. M3 and M4 are measures of the money supply that include a broader range of assets than traditional measures such as M1 and M2. M3 includes M2 plus long-term time deposits and institutional money market funds, and M4 includes M3 plus other deposits held by non-financial corporations.

Mortgage lending can impact M3 and M4 measures by increasing the amount of money in circulation. When a bank makes a mortgage loan, it creates new money by crediting the borrower’s account. This new money can then be used to purchase goods and services, which in turn can boost economic growth. Additionally, mortgages are often securitized and sold to investors, which in turn can create new financial products and increase the financial wealth.

However, it’s worth noting that excessive mortgage lending, particularly risky or subprime mortgages, can also increase the risk of defaults and financial instability. This is why, Central Banks and regulatory authorities closely monitor the mortgage market and have put in place regulations to mitigate these risks.

In summary, both household wealth and financial wealth are important factors in the collateralization of commercial bank balance sheets and central bank balance sheets, and mortgage lending can have a significant effect on monetary measures such as M3 and M4. However, it’s important to keep an eye on the mortgage market to mitigate risks associated with mortgage lending.

What were the detrimental aspects of de mutualisation of Building Societies in the UK .

The de-mutualization of building societies in the UK refers to the process of converting building societies, which are mutual organizations owned by their members, into publicly traded companies. This process began in the late 1980s and continued into the 1990s.

There were several detrimental aspects of de-mutualization of building societies in the UK:

  1. Loss of member control: Building societies were traditionally controlled by their members, who were able to participate in decision-making through the election of board members and the approval of major decisions. When building societies were de-mutualized, control was transferred to shareholders, who may not have had the same interests as the members.
  2. Short-term focus: Publicly traded companies are often under pressure to deliver short-term financial results to shareholders. This can lead to a focus on short-term profits at the expense of long-term stability and sustainability.
  3. Risk-taking: De-mutualized building societies were able to access more capital, which can increase the level of risk-taking. Some de-mutualized building societies got involved in high-risk activities such as derivative trading, which led to significant losses.
  4. Reduced lending to low-income borrowers: Building societies had traditionally been a source of mortgages for low-income borrowers, but many de-mutualized building societies reduced their lending to this group as they focused on more profitable customers.
  5. Loss of community ties: Building societies were often deeply embedded in local communities and were seen as a trusted institution. The de-mutualization process led to the loss of these community ties, which can have a detrimental impact on the local economy.
  6. Distribution of windfall gains: The conversion of building societies into plc’s resulted in the distribution of windfall gains to members, rather than the reinvestment of these funds into the society for the benefit of all members.

Overall, the process of de-mutualization of building societies in the UK has been criticized for leading to a loss of member control, a short-term focus, increased risk-taking, reduced lending to low-income borrowers, and the loss of community ties.

Are central bank digital currencies , vaccination passports and social points systems within the policy objectives of the United Nations sustainability goals.

Central bank digital currencies (CBDCs), vaccination passports, and social points systems can be seen as having potential implications for the United Nations’ sustainability goals.

CBDCs, which are digital versions of fiat currencies issued and backed by central banks, can have the potential to increase financial inclusion and accessibility, especially for those who are unbanked or underbanked. This aligns with the United Nations’ goal of providing universal access to financial services and reducing poverty.

Vaccination passports, which are digital certificates that confirm an individual has been vaccinated, can help to ensure that people are able to travel safely and resume their lives, which aligns with the United Nations’ goal of ensuring healthy lives and well-being for all.

Social points systems, which are digital systems that assign points to individuals based on their behavior, can be seen as having potential implications for the United Nations’ goal of promoting sustainable consumption and production patterns. These systems can incentivize individuals to engage in sustainable behaviors, such as recycling or using public transportation, by rewarding them with points or other benefits.

However, it’s worth noting that there are also potential downsides and risks associated with these technologies. For example, there is a risk of exclusion, discrimination and privacy concerns related to these systems and they may not be inclusive to all segments of the population. Therefore, it’s important to carefully consider and address these risks when implementing these technologies.

In summary, central bank digital currencies, vaccination passports, and social points systems can have the potential to align with some of the United Nations’ sustainability goals, but their implementation must be done in a way that takes into account potential downsides and risks, and that is inclusive and addresses the social and economic inequalities.

How influential have UN land value capture policies been as measured by local planning policies adopted at Country (National Planning Policy Framework ) and city mayoral levels. ( London GLA ) for example.

The United Nations (UN) has recognized the importance of land value capture policies as a means of financing sustainable development and addressing social and economic inequalities. However, the influence of these policies at the local level, such as country (National Planning Policy Framework) and city mayoral levels, varies depending on the country and the political context.

For example, in the United Kingdom, the National Planning Policy Framework (NPPF) has been influential in shaping local planning policies, but the specific policies related to land value capture have not been given a significant emphasis. The NPPF includes policies related to the capture of land value uplift resulting from public investment, such as the Community Infrastructure Levy (CIL), which is a charge on new development used to help fund infrastructure. However, the CIL has been criticized for not being effective enough in capturing land value uplift, and it’s not widely adopted by local authorities.

In London, the Greater London Authority (GLA) has been more proactive in implementing land value capture policies, through the London Infrastructure Plan 2050, which includes a range of policies to capture land value uplift, such as the London CIL, the Mayoral Community Infrastructure Levy, and the Mayoral Development Corporation. These policies aim to fund the development of infrastructure, such as housing and transport, and to fund the regeneration of deprived areas. The GLA also has a planning policy on viability, which is designed to ensure that developers contribute a fair and reasonable share of their profits to the provision of affordable housing and other community benefits.

Overall, the influence of UN land value capture policies can be measured by the extent to which they have been adopted and implemented at the local level, but it’s important to note that the adoption and implementation of these policies is often influenced by a range of factors, such as the political context, the availability of funding, and the capacity of local authorities to implement them.

If the Theory of aggregated Credit (Werner) is applied to the Affordable Housing crisis, which policy measure would have been more successful in tackling housing inequality, and wealth inequalites. What proportion of the UK and US populations are net receivers of Interest and have a positive networth with Financial as well as residential property wealth.

The theory of aggregated credit, proposed by Richard Werner, suggests that credit creation by banks plays a crucial role in economic development and that the availability of credit is the main determinant of economic growth. According to this theory, increasing the availability of credit to low-income households and communities can help to address housing inequality and wealth inequality.

If this theory were applied to the affordable housing crisis, one policy measure that would have been more successful in tackling housing inequality and wealth inequalities would be to increase the availability of credit to low-income households and communities. This could be done through a variety of measures, such as:

  1. Increasing access to affordable mortgages: By making it easier for low-income households to obtain mortgages, more people would be able to afford to buy a home.
  2. Increasing access to affordable rental housing: By making it easier for low-income households to obtain rental housing, more people would be able to afford to rent a home.
  3. Increasing access to affordable home improvement loans: By making it easier for low-income households to obtain loans for home improvement, more people would be able to improve their homes, which could help to address housing inequality.

According to the most recent data available, in the UK, the proportion of the population that is a net receiver of interest, with a positive net worth with financial as well as residential property wealth, is around 20-25%. In the US, the proportion is slightly higher around 40-50%. However, It’s worth noting that these figures are estimated and may vary depending on the data source and the time period.

Soft bank have invested in two high profile corporate failures, Greensill Capital and Katerra to what extent are supply chain finance and monopoly last man standing business models related to a trend towards Monopoly rentier capitalism?

Supply chain finance and monopoly last man standing business models have been linked to a trend towards monopoly rentier capitalism.

Supply chain finance is a type of financing that allows companies to borrow money using their accounts receivable, such as invoices from their suppliers, as collateral. This type of financing can create a concentration of power among a small number of large companies, as they are able to use their scale and market power to access financing on favorable terms. This can lead to the suppression of competition and result in a situation where a few large companies are able to extract monopoly rents, or excess profits, from the market.

Monopoly last man standing business models, often referred to as winner-takes-all or network effects, refer to a situation where a single company or a small group of companies are able to dominate a market by virtue of their size and market power, which allows them to extract monopoly rents from the market. This can happen when a company’s product or service becomes so popular and widely used that it becomes difficult for other companies to compete, creating a barrier to entry.

SoftBank’s investments in Greensill Capital and Katerra, both of which have recently experienced high-profile failures, can be seen as an example of this trend towards monopoly rentier capitalism. Both Greensill Capital and Katerra were involved in supply chain finance and had aspirations to become dominant players in their respective markets, but ultimately failed to do so due to a combination of factors including fraud and mismanagement. This highlights the

elaborate on fraud and mismanagement allegations in the Greensill and Katerra examples.

Greensill Capital was a UK-based supply chain finance company that collapsed in March 2021. The company had been facing financial difficulties due to the COVID-19 pandemic and the withdrawal of support from one of its main investors, SoftBank. After the collapse, it was revealed that the company had been engaged in fraudulent activities, such as misstating its financials, and had been providing loans to companies with poor credit ratings.

The Financial Conduct Authority (FCA) and the UK’s Insolvency Service have both launched investigations into Greensill’s activities. There are also allegations that the company’s founder and former CEO, Lex Greensill, had close ties with the UK government, which led to him gaining access to sensitive information and providing loans to companies with poor credit ratings.

Katerra is a US-based company that designs, manufactures and builds structures such as homes and offices, it was founded in 2015 and raised more than $1 billion in venture capital. The company was also backed by SoftBank but had to file for bankruptcy in April 2021. The company faced a number of issues, including cost overruns, delays, and defects in its projects, as well as allegations of mismanagement and financial impropriety.

It was reported that Katerra had a “frantic” culture where projects were pursued without proper

What is the Uber business model what would uberisation of the Private Rental Sector and For profit soical housing sector look like . Blackrocks investment in Single Family homes in the US and their residential investment arms along wth Llyods bank seeem to be coincidental with a regulatory landscape which creates higher barriers for smaller scale landlords. Is there evidence for this.

The Uber business model is based on the use of a mobile app to connect customers with drivers who provide transportation services. The company operates as a platform that connects drivers and riders, and it makes money by taking a commission on each ride.

The “Uberization” of the private rental sector and for-profit social housing sector would involve the use of a similar platform-based model to connect landlords and renters. This could involve the use of a mobile app or website that allows renters to search for and book rental properties, and landlords to list and manage their properties. The platform would make money by taking a commission on each rental transaction.

BlackRock’s investment in single-family homes in the US and their residential investment arms, along with Lloyds bank, seem to be coincidental with a regulatory landscape which creates higher barriers for smaller scale landlords. These institutions have been buying up large portfolios of single-family homes, which can be rented out to individual tenants. This trend is known as institutionalization of the rental housing market, which is characterized by large-scale real estate investors buying up large numbers of homes and renting them out, often through property management companies.

There is evidence that this trend is having an impact on the rental market, as smaller landlords are facing increased competition from these institutional investors, who can offer more favorable terms and better services. Some experts argue that this could lead to a reduction in the availability of rental housing for low-income households, as these institutional investors tend to focus on higher-income renters. However, others argue that this trend could lead to increased efficiency and stability in the rental market, as these institutional investors have the resources and expertise to manage large numbers of properties.

what are the major trends in housing tenure and domestic debt over the past 40 years in the UK and the US

Over the past 40 years, there have been several major trends in housing tenure and domestic debt in both the UK and the US:

  1. Increasing homeownership: In both the UK and the US, homeownership rates have been on the rise over the past 40 years. This has been driven by a combination of factors, including low interest rates, government policies to promote homeownership, and changes in societal attitudes towards homeownership.
  2. Increasing levels of mortgage debt: Along with the increase in homeownership, there has also been an increase in the levels of mortgage debt in both the UK and the US. This is due to the fact that more people are buying homes, and they are borrowing more money to do so.
  3. Increasing rental prices: In the UK and the US, rental prices have been increasing over the past 40 years, driven by a combination of factors including a growing population, a lack of new housing construction, and an increase in demand for rental properties.
  4. Increasing levels of household debt: In both the UK and the US, levels of household debt have been rising over the past 40 years, driven by a combination of factors such as low interest rates, easy access to credit, and changes in societal attitudes towards debt.
  5. Increasing inequality in housing tenure: In both the UK and the US, there has been an increase in inequality in housing tenure over the past 40 years, with a growing number of households becoming trapped in the rental market and unable to afford to buy a home, while others are able to accumulate significant levels of housing wealth.
  6. Increasing vulnerability of renters: Both in the UK and the US, renters have become increasingly vulnerable to evictions and displacement, with rising rents, the lack of affordable housing and the COVID-19 pandemic exacerbating this trend.

Overall, these trends have led to a more complex and challenging housing market in both the UK and the US, with a growing number of households facing difficulties in securing affordable and stable housing, increasing levels of debt and increasing inequality.

Generation Debt, Generation Rent and Gen Z , what hope is there of redressing the Grip of an Oligarchical Financial Rentier Class upon policy formulation which honours democratic ideals of one person one vote rather than one dollar one vote? Will the Anti Monopoly Georgist principles of the Landlords Game be played or the Monopoly rules of Darrows Board Game continue the new Gilded Age.

The terms “Generation Debt,” “Generation Rent,” and “Gen Z” refer to different groups of people who are facing different challenges in the housing market. Generation Debt refers to the generation of people who have taken on a significant amount of debt, often in the form of mortgages, in order to buy a home. Generation Rent refers to the generation of people who are unable to afford to buy a home and are instead renting. Gen Z is the youngest generation that is entering the housing market and facing similar challenges as the previous generations.

The hope of redressing the grip of an oligarchical financial rentier class upon policy formulation that honors democratic ideals of one person one vote rather than one dollar one vote is a complex issue and there’s no single solution that can address it. However, some possible solutions that have been proposed include:

  1. Implementing policies that promote affordable housing: Such as rent control, inclusionary zoning, and social housing.
  2. Tax reform to reduce the concentration of wealth and power: Such as progressive taxation and wealth taxes, which would help to redistribute wealth and reduce the gap between the rich and the poor.
  3. Land value taxation: The Georgist principle that states that the value of land should be taxed rather than the structures built on it, would increase the affordability of housing and reduce the concentration of wealth.
  4. Increasing access to credit: By making it easier for low-income households to obtain mortgages, more people would be able to afford to buy a home, and this will also help to increase the supply of affordable rental housing.
  5. Regulating and restricting the activities of monopolies: By implementing regulations that restrict monopolies and promote competition, it would reduce the concentration of wealth and power, and increase the availability of affordable housing.

It’s worth noting that these solutions require a combination of political will and public support to be implemented and sustained. The Anti-Monopoly Georgist principles of the Landlords Game may be played, but it’s uncertain if it will be enough to change the current rules of Darrows Board Game, that continues the new Gilded Age.

 

Share:

Author: rogerglewis

Real Estate Entrepreneur. http://www.realrld.com/

Leave a Reply