I was one of the lucky ones.  Yes, I grew up in a house.  Many of my friends did. I did have friends who lived in apartments.  For some, their parents owned the two or three flat and rented out the other floors.  Some rented the apartment. But that is not why I say I am one of the lucky ones.

I am one of the lucky ones because at about age seven I understood how a house was procured for living and what it took to continue to living in that house.  I also learned about the different ownership situations on apartments.

Besides my grandfather being a blue collar worker, paper cutter, he was also a part time real estate agent.  He and his brother owned their own real estate company. It was a small business and he ran it out of his house.  I remember there were two phones, one which was the personal or home number and the other, the other was the real estate office number, KI5-4747.  The Kildare avenue exchange office and the four digit number. The label did not have the area code printed, but we knew it was 312. I

Our Saturday visits brought us from our home in the south suburbs of Chicago to my grandparents house on the north side of Chicago. The drive as about an hour give or take through city streets and neighborhoods.  The highlight was passing Midway Airport on Cicero avenue.   Depending on how we got there we passed the Ford City Mall, but we saw factories, Cracker Jack, Tootsie Roll, then there were numerous trucking companies and terminals, two horse racing tracks, numerous houses and small businesses.  Even an eye doctor with a neon eyeglasses shaped sign.

On these trips we were able to see the different architectural styles on the houses. There were bungalows (we never used the term ranch house), split level, and multiple family buildings, two, three or six apartments to a building.  Depending on how high the water table was most houses had walkouts to the main floor and some even had basement doors.

What was very much in common on those trips were that the houses did not have attached garages. This may be why during the Cubs and White Sox games on radio and television we heard the ads for Danley's Garage World.  As many before and many after, my parents bought their house without the garage, built equity and saved money and then proceeded to have a garage built.  I watched much of my section of town evolve in that way.  The lawn mower would be kept under a tarp until the garage was built and the rest of the gardening items kept in the basement, which was unfinished.

As this was before Zillow.com, Homes.com and Redfin.com and the internet, part of the Saturday experience was going through my grandfather’s real estate magazines to see how much houses were going for in different neighborhoods.  The talk would extend to mortgage rates, property taxes and insurance. By the time I was seven I knew what a good interest rate was, how as a rule the suburbs at the time had cheaper property taxes than the city, how insurance rates were determined, and how municipalities controlled zoning laws for building houses.

There were multiple ways that house were built since the end of World War II.  It should be noted that at that time the men of America were much better with tools than they are today.  Many houses were built simply with minimal spaces.  Kitchen living room, bathroom (yes, just one in many cases), and two or three bedrooms.  Depending where you were you either had basements or the house was built over a crawl space or on a slab.  A simpler construction was the shell build and the new owner would finish the inside. As we got to the late fifties and early sixties a half bath was added to many of the houses and also a dining room.

In other words, the less that house contained the less it would cost.  But as I learned the hard way during the late 1980’s municipalities started not liking houses without garages.  So the zoning requirement to include an attached one car garage started popping up.  I saw this first in St. Francis, MN, a small, originally rural town turned bedroom community in norther Anoka County.  The town wanted to make affordable housing.  I asked why the requirement instead of a future investment.  The cost of building the house was increased by at least $20,000 back then.  A town official told me they did not want to deal with items stored outside.

This “look” defined with zoning requirements is an excuse that the municipal leaders use to create new construction to be higher than what many can afford.  This happens because property taxes are tied to house valuations.  These leaders have decided to maximize the property tax value per square foot versus offering restraint and just do the basics.  These zoning requirements in many locations are defined to limit who moves into their towns.

It should also be noted that the purchase of housing in many cases is not paid for with cash.  This also adds to the ridiculously obnoxious prices. Understanding housing prices requires that many if not most consider the price based upon the monthly payment amount.  That amount includes the cost of the building divided by the number of payments. Then add in the interest amount and the insurance, both which are required to have when a loan is involved.  Then add in taxes and fees.  It is the taxes and fees number that is making an area expensive if they keep going up.  The price of the house is affected by the location and demand, the government requirements for purchase, then add insurance and property taxes.

Now listen to the politicians regarding housing affordability.

Iowa Senate Candidate Josh Turek has stated on his web site https://turek4iowa.com/platform/:

Iowa Senate Candidate Ashley Hinson on her web site https://ashleyhinson.com/issues/:

Help more families become homeowners by allowing first-time home buyers to save tax-free for a down payment through the First Home Savings Opportunity Act and ensuring large institutional investors cannot buy up single-family homes in Iowa neighborhoods.

Looking at their ideas here are some thinking points.

Raising the minimum wage as Turek proposes has never lowered a cost or made anything more affordable.  This is also a big risk in the new buzzword era of AI and also improved automation and remote communication capabilities that will eliminate the lower paying jobs especially for those trying to get a start or restart in life. This also has a negative consequence for receiving certain welfare benefits.  All one has to do is look at the Quad Cities and see the economic strength on the Iowa side compared to the Illinois side. If wages go up, what new miracle cash supply pays them?

The First Home Savings Opportunity Act looks to be more of a political speaking point than an actual solution.  The problem one is too many people do not understand how real estate transactions work in the United States. The basics are as follows:

Here is the price of the property.  Conventional lenders like to have a twenty percent down payment.  The loan then gets made for 10, 15, up to 30 years.  An amortization schedule is created and payment are based upon the schedule plus estimates on taxes and insurance.  If a house is $100,000, then twenty thousand dollars would be the desired down payment.

There are programs such as FHA and Veteran Administration loans that change the down payment.

Some credit unions offer zero down by allowing to finance the down payment on a separate loan if the house is within a certain value level.

Can houses be found for that price?  Yes.  Just go to the right location and bring your tool belt and security system.  However, I do not see where this brings the house price down or makes ore affordable.  It is always a consequence with government tax credit or subsidy that prices edge up the amount of the credit or subsidy.  Good political statement, unfortunate results.

Banning large institutional investors and Wall street private equity firms from purchasing up homes sounds good on the surface.  This ban would affect prices, but up or down not sure.  It would create a softened demand by reducing potential purchasers, but how many purchasers that would be?  It could also be said that these institutional investors bailed some distressed homeowners.

Banning foreign purchasers based upon country affiliation should be able to be done in the name of national defense, but depending on who and how much this could be in the courts for a while.  It would be necessary that the wording be done properly to get it out of the federal government’s control as tenth amendment issues can be easier to implement depending on both state and federal constitutional language.

How does making the permitting process simpler reduce costs and speed up the building of affordable housing when as stated earlier in the article most municipalities do not want to create lower prices housing?  Again, this is a nice sound byte and talking point, but this seems outside the scope of a federal senator.

The federal government’s roll is to not create roadblocks to business and commerce.  As with anything relating to real estate, there is a supply and demand factor.  When there is a demand for housing in an area the prices go up.  When there is no demand in an area the prices go down.

What needs to be done at the federal level is to look at what the federal government has morphed into. The United States Constitution is clear in that there are a limited number of things the federal government can do. However, many things have been added to government’s plate. It is time to elect representation that will clear the plat before this country seems nothing like the area of freedom the founders envisioned.

One additional note. When watching an episode of the TV show Bull, it is mentioned in the episode that 75% of the people in New York City rent.  That was not envisioned by our founders.  The founders had originally limited the right to vote to male property owners.  Leave the gender aside in this discussion.  Property owners.  They felt it important that people owned property to say how the property, or the country as owned by, would be legislated, knowing that they had to protect their skin in the game but also property owners historically take better care of their property.

Two candidates, no solutions in their control.